Federal Court of Australia

PSC AMGI WSC Pty Ltd v J&P Capital Insurance Pty Ltd (No 2) [2026] FCA 219

ORDERS

THE COURT ORDERS THAT:

1.    The costs payable by the respondents to the applicants pursuant to order 4 of the orders dated 3 September 2025 be assessed on a lump sum basis in the amount of $50,000.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

COLVIN J:

1    In March 2025, two subsidiaries of PSC Insurance Group Limited (together, PSC Parties) entered into a deed of settlement and release with J&P Capital Insurance Pty Ltd, Mr Prasad and Ms Khan (together, the Respondents). Issues arose as to the performance of the deed. Broadly speaking, the PSC Parties claimed that the Respondents had failed to perform the deed in time with the consequence that the PSC Parties were not entitled to the payment of a Settlement Sum of $80,000. The Respondents disputed the construction of the terms of the deed relied upon by the PSC Parties. They maintained that they had performed the deed. In the alternative, the Respondents claimed that there was an estoppel or that, on the construction of the deed advanced by the PSC Parties, there was a forfeiture of the Settlement Sum that amounted to a penalty.

2    After a period in which there was an exchange of correspondence between the parties during which time the position of the Respondents moved somewhat, the PSC Parties sought a declaration as to the proper construction of the deed and an order enforcing further performance by the Respondents. The Respondents defended the application and brought a cross-application seeking orders, in effect, requiring payment of the Settlement Sum.

3    The parties filed affidavits setting out the history of their dealings in relation to the deed and the communications between them concerning performance of its terms. They also filed written submissions. There was a hearing at which detailed legal argument was presented. There was no cross-examination on the affidavits. On the day of the hearing, the Respondents raised a new point. It was to the effect that the case advanced by PSC Parties would result in the deed operating to impose an unenforceable penalty. On the basis that the PSC Parties would have an opportunity to put on answering submissions and any affidavits, the Respondents were allowed to raise the new point. The PSC Parties subsequently filed an affidavit and submissions.

4    The claims advanced by the PSC Parties were upheld: PSC AMGI WSC Pty Ltd v J&P Capital Insurance Pty Ltd [2025] FCA 1057. In addition to substantive relief, the Respondents were ordered to pay the PSC Parties' costs of the competing interlocutory applications assessed as one set of costs, if not agreed. The PSC Parties made application for a lump-sum costs order in the amount of $50,000. They are entitled to claim input tax credits and the lump sum amount is proposed on that basis.

5    The application for a lump sum assessment of costs was initially listed for a directions hearing that took place on 28 January 2026. Prior to that directions hearing, the solicitors for the PSC Parties had been informed that the solicitors for the Respondents in the proceedings were no longer acting. On that basis, the Respondents were notified of the hearing by an email sent to the email addresses known to the PSC Parties for each of the Respondents (Email Addresses). However, the solicitors were still on the record at the time of the directions hearing and they were not notified that it was taking place. In those circumstances, at the directions hearing orders were made listing the application for a lump sum costs assessment and for the filing of submissions and an affidavit in opposition, but reserving liberty to apply to vary the order. The orders were in the following terms

1.    The interlocutory application for a lump sum order as to costs be listed for hearing at 10.15 am on 5 March 2026.

2.    On or before 20 February 2026, the respondents do file and serve any affidavit in opposition and any submission of no more than 3 pages.

3.    There be liberty to the respondents to apply to vary order 2.

4.    The liberty reserved by order 3 may be exercised by email to the associate to the case managing judge, with a copy to be sent to the solicitors for the applicants.

6    A copy of the orders was sent on 28 January 2026 to the solicitors on the record and to the Email Addresses by my associate. The email was in the following terms:

Dear Parties

I refer to the below emails.

I note that due to an administrative oversight, the solicitors still on the record for the respondents in this matter were not formally notified of the directions hearing before Justice Colvin this morning at 9.45 am AWST.

I inform the parties that directions orders have been made by Justice Colvin in this matter today (please see attached copy). Pursuant to order 2, on or before 20 February 2026, the respondents are to file and serve any affidavit in opposition and any submission of no more than 3 pages in response to the applicant's interlocutory application for a lump sum order. I further note that pursuant to order 3, liberty has been reserved for the respondents to apply to vary order 2.

The Court has been informed by the applicants that the solicitors for the respondents no longer represent the respondents. If so, attention is drawn to the terms of r 4.04 and r 4.05 of the Federal Court Rules 2011 (Cth).

Please confirm receipt of this email.

7    The next day, notices of intention to cease acting for each of the Respondents were filed by the solicitors on the record. On 6 February 2026, notices of ceasing to act were filed in respect of each of the Respondents. The email addresses specified in those notices as the last known email addresses were the Email Addresses.

8    On 4 March 2026 an email was sent by my associate to the Email Addresses by way of reminder of the hearing to be held the following day.

9    At the hearing on 5 March 2026, there was no appearance for the Respondents.

10    Counsel for the PSC Parties sought to proceed on the basis that the Respondents had been notified of the date of the hearing by emails to the Email Addresses and by email to the solicitor on the record for the Respondents at the time the hearing date was set. It was not until early February that the solicitor ceased to act. On that basis it was submitted that the Respondents had been duly notified of the hearing.

11    In those circumstances, I accepted that there had been proper notice of the hearing. I heard short submissions and reserved my decision.

12    For the following reasons, I accept that the costs should be assessed on a lump sum basis in the amount of $50,000.

13    The application is supported by an affidavit of a practitioner employed by the solicitors for the PSC Parties. It sets out a cost summary in accordance with the Court's Costs Practice Note. The verification required by the Practice Note has been provided. The amounts incurred include disbursements totalling $8,078.82 (plus GST) which include external counsel fees for preparing written submissions on the issue as to penalties. The actual fees incurred by the PSC Parties, excluding external counsel fees are about $73,000 (plus GST), so the claim is for about 62% of actual costs (including disbursements).

14    The Court's preference is for lump sum assessment of costs, especially where the assessment can be undertaken by a judge with familiarity with the conduct of the proceedings, appropriately informed as to the reasonable costs incurred. The principles to be applied were recently summarised by Feutrill J in Frigger v Professional Services of Australia Pty Ltd (No 7) [2025] FCA 1639.

15    Of particular significance in this case are the following matters.

16    First, the amount in issue was $80,000, noting that there were also issues as to whether the Respondents had delivered up certain rights to email addresses, telephone numbers and a domain name (in the context of an underlying dispute as to the sale of a business).

17    Second, in my assessment, the application to resolve the impasse as to performance of the settlement deed was pursued by those acting for the PSC Parties with efficiency and after attempts at resolution.

18    Third, the complexity as to the issues between the parties (and consequent costs) were expanded by the alternatives advanced by the Respondents and were not attributable to any unreasonableness by the PSC Parties.

19    Fourth, there has been an appropriate reduction in the actual costs incurred to reflect the extent to which there were solicitor and own client costs.

20    Fifth, there have been additional costs incurred in having to apply for the lump sum assessment.

21    Sixth, after allowing for the extent of the overall discount to actual costs, the hourly rates charged are within a reasonable range for the experience of practitioners involved.

22    Applying the relevant principles, I am satisfied that the costs should be assessed in the amount sought, namely $50,000. There will be an order accordingly.

Associate:

Dated:    9 March 2026