Federal Court of Australia

Al Muderis v Nine Network Australia Pty Ltd (Costs) [2026] FCA 491

ORDERS

THE COURT ORDERS THAT:

1.    The applicant is to pay the respondents’ costs, with those costs to be assessed on an indemnity basis from the commencement of the hearing.

2.    Costs are to be paid on a lump sum basis to be agreed or if not, the matter is to be referred to a Registrar to determine an appropriate lump sum figure, in accordance with the reasons in this judgment.

3.    The costs of the respondents’ costs application be costs in the proceedings.

4.    The costs order is stayed until further order.

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

REASONS FOR JUDGMENT

ABRAHAM J:

1    On 8 August 2025, I dismissed Dr Al Muderis’ application for defamation: Al Muderis v Nine Network Australia (Trial Judgment) [2025] FCA 909. On that day the applicant sought an opportunity to consider his position in respect to costs. Ultimately, although there is no issue that the applicant should pay the respondents’ costs, the basis on which the amount is determined is in issue. The respondents seek an order that the applicant pays costs on an indemnity basis, and that it be a lump sum award. The applicant opposes that application, and further, seeks a stay of any costs order pending resolution of his appeal.

2    For the reasons that follow:

(1)    The respondents’ costs should be paid by the applicant on an indemnity basis from the commencement of the hearing;

(2)    Costs should be in a lump sum; and

(3)    The costs order is stayed.

Indemnity costs

Legal principles

3    The Court has a broad power to award costs in proceedings, including indemnity costs, under s 43 of the Federal Court of Australia Act 1976 (Cth) (FCA Act). In exercising the discretion to award costs, s 37N(4) of the FCA Act requires the Court to take account of any failure by a party to comply with the overarching purpose of the civil procedure provisions, to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible: see s 37M(1); Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (No 2) [2017] FCAFC 116 (Melbourne City Investments (No 2)) at [3].

4    The principles relevant to an award of indemnity costs are well-established. There can be no exhaustive list of the circumstances that may warrant the exercise of the discretion. An award of indemnity costs is not a punitive measure but is designed for “compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the Court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs”: Hamod v New South Wales [2002] FCAFC 424; (2002) 188 ALR 659 at [20]; Melbourne City Investments (No 2) at [5].

5    In broad terms, an order for indemnity costs requires that some special or unusual feature arises: Cirillo v Consolidated Press Property Ltd (formerly known as Citicorp Australia Ltd) (No 2) [2007] FCA 179 at [3]; Melbourne City Investments (No 2) at [5]; Seven Network Ltd v News Ltd [2009] FCAFC 166; (2009) 182 FCR 160 at [1102]; Colgate Palmolive Co v Cussons Pty Ltd [1993] FCA 801; (1993) 46 FCR 225 (Colgate Palmolive) at 233.

6    Such circumstances may include: the making of allegations of fraud knowing them to be false, and the making of irrelevant allegations of fraud: Colgate Palmolive at 233; the giving of false evidence: Degmam Pty Ltd v Wright (No 2) [1983] 2 NSWLR 354 at 358, Linjing Fang v Xiaodan Sun (No 2) [2014] NSWSC 1194 at [22]; where allegations are made which ought never to have been made, where the case is unduly prolonged by groundless contentions: Melbourne City Investments (No 2) at [5], Roberts-Smith v Fairfax Media Publications Pty Ltd [2025] FCAFC 122 (Roberts-Smith Appeal (Costs)) at [7]; where the applicant, properly advised, should have known he had no chance of success: Melbourne City Investments (No 2) at [5]; where the applicant persists in what should on proper consideration be seen to be a hopeless case: Melbourne City Investments (No 2) at [5]; the wilful disregard of known facts or clearly established law: Colgate Palmolive at 233, Roberts-Smith Appeal (Costs) at [7]; or an imprudent refusal of an offer to compromise: Colgate Palmolive at 233. These are but examples of circumstances where orders have been made, and are not exhaustive. The question is always fact specific and turns on whether it has been established there is some special or unusual feature to warrant the exercise of the discretion.

7    In the context of defamation proceedings, the fact it was for the respondents to prove the truth of the imputations, and not for the applicant to prove the falsity of the imputations, is not decisive in terms of awarding indemnity costs: Lehrmann v Network Ten Pty Limited (Costs) [2024] FCA 486 at [29].

Submissions

8    In written submissions, the respondents sought indemnity costs on three bases. First, Dr Al Muderis instituted this action, seeking damages for Publications that he knew were substantially true and in the public interest. He then conducted the litigation in a manner that was not consistent with the overarching purpose of the civil procedure provisions, including by putting the respondents to proof of many matters which ought never to have been denied. He engaged in a range of improper conduct during the proceedings, including in: his own evidence; the way in which his former patients and medical professional colleagues were treated in the witness box; and the floating of baseless and incoherent concoction theories. It was submitted in all of the circumstances, the respondents should have their costs of the entire proceedings on an indemnity basis. Second, in the alternative, on the basis of the three offers of compromise which had been made by the respondents. The respondents submitted they should be granted costs from the date of the earliest offer where the Court accepts the applicant’s rejection was unreasonable. Third, in the alternative, indemnity costs in respect to specific case studies where it was said the factual contest was extensive and would have been avoided had Dr Al Muderis acted responsibly in the litigation and consistently with the overarching purpose, as required by s 37N(1) of the FCA Act. Although those bases were delineated in the written submissions, in oral submissions these bases (in particular, the first and third) were run together as demonstrating there are special features of this litigation warranting the departure from the ordinary rule, justifying the imposition of indemnity costs for the whole proceeding.

9    The respondents relied, inter alia, on the approach of the primary judge in Roberts-Smith v Fairfax (No 45) [2023] FCA 1474 (Roberts-Smith (No 45)) at [21]:

In my opinion, the applicant should pay the respondents’ costs assessed on an indemnity basis from the commencement of the proceedings. There is a proposition which lies at the heart of the application for indemnity costs in the circumstances of this case. It is that the relevant question is not whether there was some prospect of success by reason of there being some prospect of persuading the Court to accept facts known to be false. As the respondents put the matter, in my opinion correctly, the answer to the question of what a party, properly advised, ought to have appreciated must be based on an assumption as to the true facts known to the party. The applicant knew what had occurred at W108, Darwan and Chinartu. He knew that that would be sufficient to establish the substantial truth of the most serious imputations and that that would be sufficient to lead to the dismissal of the proceedings he brought. The fact that the power to award indemnity costs is not designed to punish is not an answer to this point. Furthermore, the applicant’s submissions that he has not engaged in any conduct which has prolonged the proceedings fails to recognise the fundamental point that he knew from the commencement of the proceedings that the most serious imputations were substantially true.

10    The respondents submitted that Dr Al Muderis’ approach to evidence in the present case is analogous to that of the applicant in Roberts-Smith v Fairfax Media Publications Pty Limited (No 41) [2023] FCA 555 (Roberts-Smith). In doing so, the respondents made submissions in relation to the imputations found to be substantially true, and what the applicant must have known about the substantial truth of the imputations at the time the proceedings were commenced. Further, the respondents submitted there were also features of this case warranting the imposition of indemnity costs that were not present in Roberts-Smith which make this a stronger case for the exercise of the discretion.

11    These features were clearly identified by the respondents in their written submissions (and addressed orally), with examples provided by reference to the judgment and transcript.

12    Those features referred to by the respondents include:

(1)    opening the case by advancing a series of propositions that the applicant must have known were false;

(2)    that the cross-examination of the applicant was necessarily long having regard to his failure to make any substantive concessions and his general demeanour in the witness box;

(3)    the adverse credit findings against the applicant (including that he was not always honest, gave false evidence and made-up evidence to suit his case);

(4)    that the applicant’s evidence was repeatedly rejected as to objective matters;

(5)    the applicant chose to file and rely on expert reports he prepared, and ascribed to the expert witness code of conduct despite his self-evident interest in the outcome of the proceedings;

(6)    the credit findings of the witnesses called by the applicant;

(7)    that with few exceptions, the applicant accused the respondents’ witnesses of lying, giving false evidence, fabricating evidence or dishonesty;

(8)    Dr Al Muderis made false allegations of concoction;

(9)    the credit attacks on the journalists, which were rejected; and

(10)    that the applicant’s approach to the litigation increased the length and complexity of the trial (e.g. he opposed subpoenas for medical records, changed the order of the witnesses to be called at the beginning of the hearing, repeated broad calls for documents during the hearing, and requested to tender hundreds of documents after closing submissions had been filed).

13    In respect to the first feature, that the applicant opened his case by advancing a series of propositions he must have known were false, the respondents provided examples from the transcript such as, that:

(1)    the respondents had engaged in a “malignant, dishonest and malicious campaign” against the applicant in a “single-minded … pursuit to destroy” him;

(2)    the respondents “don’t appear to comprehend the meaning of truth, they don’t appear to comprehend what an investigation entails, and they definitely have no concept of ethical practice as journalists or as human beings”;

(3)    the respondents’ case in relation to shortcomings with post-operative care was “big and bizarre”, “contradicted by document after document” and “absurd”;

(4)    the respondents’ case in relation to the downplaying of risks and complications was “ridiculous” and “beyond comprehension”;

(5)    the respondents “utterly failed to check anything as part of their investigation”; and

(6)    the respondents’ approach towards the litigation was one of “quantity over quality. Just get one of these patients right instead of adding more and more and more and more and improperly running a defence that’s hopeless. You don’t win by having a lot of bad stuff that’s just wrong”.

14    The respondents submitted the evidence that unfolded over the course of the trial bore little resemblance to the characterisations alleged in the opening submissions.

15    The respondents submitted:

In short, Dr Al Muderis instituted this action, seeking damages for Publications that he knew were substantially true. He then conducted the litigation in a manner that was not consistent with the overarching purpose, including by putting the Respondents to proof of many matters which ought never to have been denied. He engaged in a range of improper conduct during the proceedings, including in his own evidence; in the manner in which his former patients and medical professional colleagues were treated in the witness box; and in the floating of baseless and incoherent concoction theories. In all of the circumstances, the Respondents should have their costs of the entire proceedings on an indemnity basis.

16    The applicant opposed the order being made. He emphasised that his senior and junior counsel settled the originating process and it was certified by a senior solicitor. His legal representatives reviewed the medical material and were satisfied there was a proper basis for the claim and the imputations conveyed were false. It was said in that context, on the information available at the time the proceedings were commenced, the contention that Dr Al Muderis knew the publications were substantially true cannot be sustained. He submitted, given the imputations, the assessment involved an evaluative process by reference to relevant legal, professional or ethical standards. He also submitted that from a medical perspective, many professionals gave evidence that his conduct of his practice was appropriate. This case is different from those where it has been concluded that the proceedings were commenced on a knowingly false basis. The applicant distinguished Roberts Smith (No 45). He submitted none of the matters relied on by the respondents provide any proper foundation for the allegation. The applicant addressed each of the offers of compromise relied on, and submitted (for a variety of reasons) none provides a basis for indemnity costs. The applicant also submitted the individual patient case studies identified by the respondents do not provide a basis for indemnity costs. In that context, the applicant referred to the difficulty in assessing the costs in those circumstances and that patient case studies were not discrete issues separate from other issues or case studies. They are not severable from the broader issues in the proceedings.

17    The applicant submitted that although he lost the case there were matters that were arguable, and the Court had to consider the arguments and make a determination. He described what he said was the chronology leading up to the hearing and submitted there were circumstances such as the filing of the amended defence which substantially changed the hearing. He detailed aspects of the trial which he said impacted its length which were attributable to the respondents (e.g. the respondents not being ready to cross-examine, and the cross-examination of a witness being briefer than the respondents had advised).

18    The applicant relied, inter alia, on Herron v HarperCollins Publishers Australia Pty Ltd (No. 4) [2021] FCA 1021 (Herron (No 4)), where Jagot J concluded that the “fact that the respondents comprehensively established their defence of truth … does not mean that the applicants, acting reasonably, should have appreciated that the proceeding was hopeless from 28 February 2020”: at [16]. Her Honour concluded at [22]:

The real weight of the respondents’ propositions is that, having failed to persuade the Royal Commission more than three decades ago that DST was other than a dangerous experimental treatment for which there was no medical indication for any patient subjected to it at Chelmsford (when all of the relevant witnesses were available), it should have been obvious to the applicants and their lawyers that they could not now defeat the respondents’ defence of truth to that effect…In the present case, the applicants did not bear the onus. The respondents did. The respondents’ defence of truth had to come up to proof. Both the amount of evidence that the respondents had to adduce, and the extent of cross-examination of the applicants, demonstrate that enormous effort was involved in making good that defence. The defence was never bound to succeed. But for the cogency of their evidence and the efficacy of their cross-examination of the applicants, the respondents may not have been able to establish the defence of truth because the relevant events occurred decades ago, potential witnesses had died, and other witnesses could not be found. …

19    The competing authorities relied on by the parties reflect the fact specific nature of the decision.

Consideration

20    It may readily be accepted that just because a party succeeds in a case, even comprehensively so, does not on that account alone warrant an award of indemnity costs. Similarly, as illustrated in the observations in Herron (No 4) recited above, the success of a truth defence does not necessarily entail that it ought to have been obvious to an applicant that their case was doomed to fail: and see Roberts-Smith Appeal (Costs) at [5].

21    Rather, it is necessary to consider the circumstances of the case and assess whether there is some special or unusual feature which warrants a costs order being made on something other than the usual party-party basis. That is, the issue for determination is whether the respondents have established that some special or unusual feature arises to warrant the exercise of the discretion to impose indemnity costs.

22    Although the respondents relied on the outcome of the hearing and submitted it should have been obvious to Dr Al Muderis before the proceedings were instituted that the respondents would enjoy the degree of success they did, the respondents also relied on various features of the conduct of the proceeding by the applicant which they submitted warranted an award of indemnity costs. In essence, the respondents submitted the applicant conducted the litigation in a manner that was not consistent with the overarching purpose in s 37M of the FCA Act.

23    While the respondents clearly identified the features of the applicant’s conduct of the proceedings they relied on, the applicant did not address that aspect of the respondents’ application in written submissions (although some limited aspects of the conduct were addressed in oral submissions). It is not necessary for the Court to be satisfied that Dr Al Muderis knew most of the imputations were substantially true at the time he commenced the proceedings to award indemnity costs, although that may provide a basis to do so. Yet that was the focus of the applicant’s submissions (although some submissions were made orally in relation to the case studies). The applicant did not address the question from the perspective of whether the respondents had established some special or unusual feature arises which warrants granting the order sought. Moreover, in opposing the application, the applicant’s submissions at times inaccurately described my reasons, or ignored the findings therein.

24    As such, whilst the applicant relied on Herron (No 4), this case is factually dissimilar. In Herron (No 4) the only basis advanced by the respondents for indemnity costs was that from 28 February 2020 the applicants’ claims were hopeless and doomed to fail and the applicants should have known that: at [21], [23]. It followed that if the respondents could not establish that basis, the application would fail: at [23]. The observations from Herron (No 4) relied on by Dr Al Muderis must be considered with that context in mind.

25    Further, it is important to appreciate the question of the applicant’s knowledge is not confined to his subjective state of mind but encompasses whether he should have known the claims in the publications were substantially true: e.g. Herron (No 4) at [21]. For obvious reasons, there is an objective element. Although the respondents also submitted that the applicant should have known the publications were in the public interest, little attention was directed to that.

26    Turning to features in relation to the applicant’s conduct of the hearing.

27    In doing so I do not propose to refer to paragraphs of my reasons for judgment, as my reasons speak for themselves. The following reasons assume a familiarity with the reasons in the primary judgment. My conclusions on the factual matters relating to the features referred to below are evident from the primary judgment. I note the respondents referred to various findings in my reasons as examples to support their submissions.

28    It will be recalled the applicant pleaded 75 imputations. The hearing lasted 65 sitting days with the majority of that time being occupied with witness evidence in relation to the respondents’ defence of contextual truth. Another portion of the case involved the cross-examination of the individual respondents in relation to their investigation into the applicant and the impugned publications. Some imputations were not conveyed. The respondents established the defences of contextual truth and public interest.

29    First, the adverse credit findings about the applicant’s evidence (which encompasses the topics (3)-(6) at [12] above). Those findings included, inter alia, that at times the applicant was not an honest witness, gave false evidence, made up evidence to suit his case, gave inconsistent evidence, and gave evidence inconsistent with his own affidavits, documents (including from his practice) and objective evidence.

30    A finding that a witness has fabricated his or her evidence does not of itself lead to a conclusion that the party who called the witness must pay indemnity costs: Roberts-Smith (No 45) at [11]. That said, such conduct, considered in the context of the trial, may take it outside the range of ordinary cases to justify indemnity costs: Roberts-Smith (No 45) at [11]-[13], and see e.g. Barrett Property Group v Metricon Homes (No 2) [2007] FCA 1823 (Barrett Property Group and deliberate effort to mislead the Court in relation to matters of central importance which were only able to be revealed by the opposing party incurring significant costs in the preparation and conduct of the trial may take the case outside the ordinary. The reasoning in Barrett Property Group (No 2) supports the respondents’ submission.

31    Dr Al Muderis’ evidence fits that description. The nature and breadth of the topics on which adverse credit findings were made about his evidence, the circumstances in which this occurred, and the significance of the topics on which they relate to the issues for determination, is reflected in my reasons. That is, Dr Al Muderis gave such evidence in relation to matters which went to the heart of the allegations in the case.

32    As Lee J observed in Russell v Australian Broadcasting Corporation (No 4) [2023] FCA 1279 at [14]:

It is obvious, but worth remarking, that it is fundamental to the just resolution of disputes that a witness tells the truth.

33    Also apparent from my reasons, as the respondents submitted, I also made adverse credit findings against other witnesses called by Dr Al Muderis, with the nature of those findings being relevant to this assessment of whether special or unusual features arise to justify the granting of an indemnity costs order.

34    Second, at the same time, with few exceptions, the applicant challenged the credit of the witnesses called by the respondents in relation to the contextual truth defence, variously accusing them in cross-examination of lying, giving false evidence, fabricating evidence or dishonesty. Generally, no motive was put, as explained in my reasons. That the applicant pulled back in closing submissions from some of the assertions put during the hearing does not alter that position, but rather it raises an issue of the basis on which the assertions were made. In the same vein, significant credit attacks which were made against the journalists were rejected.

35    Third, in a similar vein, during the hearing the applicant raised a concoction theory but, as explained in my reasons, did not address it in closing submissions. The nature of the allegation and the fact it was made is explained in my reasons. The respondents addressed it in closing submissions. The respondents also submitted on this application the applicant made “dozens of broad calls (seemingly in support of theories of concoction) for communications between Mr Hernandez, Ms Stewart, Mr Bruha, Mr Grant, Mrs Todd, Ms Mattiske, Mr Wynne, Mr Urquhart, Ms Ulrich and former patients who had communicated with Ms Stewart”, and that responding to them was a significant task. The concoction theory appears to have been the premise of the calls. The change in the applicant’s position is illustrated in the applicant’s approach to Mr Grant, where in closing submissions he ultimately withdrew the attack on his credibility. That the applicant denied making the allegation, and attempted to abandon or recast it in closing submissions reflects that there was no basis to it. As already explained, making allegations without foundation or knowing them to be false is recognised in the authorities to be a circumstance which may result in an order for indemnity costs: see [6] above.

36    Fourth, the applicant submitted the imputations (e.g. those alleging negligence and unethical conduct) required an evaluation of the facts by the Court, and therefore he could not have known how I would resolve those issues. That is, he could not know that the imputations were substantially true. It may be accepted that some of the imputations could be described as of a different nature from those in Roberts-Smith, in that they involved an evaluation of various concepts. Even if that were so, that of itself does not mean the applicant could not have known various underlying facts relied on to establish the imputations were substantially true. Even leaving aside for the moment the conclusions of those stings and the imputations as reflected in the judgment, there were very many factual matters which the applicant must have known were true, but nonetheless challenged their correctness. These matters are readily apparent from the reasons. The applicant wilfully disregarded facts he must have known by, amongst other things, engaging in the conduct described above.

37    The issue at the hearing was not simply whether the respondents had established the imputations were substantially true, as the applicant challenged the underlying facts relied on to establish them. That is, the issue generally was not only whether it had been established that conduct was, for example, negligent or unethical, but whether the underlying conduct had occurred. The applicant’s conduct referred to in the observations above included conduct which occurred in relation to those underlying facts, many of which should have been uncontentious in light of the evidence. I accept the respondents’ submission that the applicant’s conduct of the hearing required them to establish factual matters denied by the applicant, which ought not to have been in issue. The respondents submitted that the applicant had extensive knowledge of facts relevant to the matters that were the subject of the impugned publications, yet he denied “virtually every allegation that did not assist his case”. I accept that submission. The nature of the evidence establishing the imputations makes it plain there are many factual matters which the applicant knew or ought to have known were true. Further, given the nature of those matters, the applicant must also have known, or ought to have known that, at least, many of the imputations were substantially true.

38    It will be recalled that the respondents submitted the applicant opened his case by advancing propositions he must have known were false (with some of the examples relied on by the respondents referred to above). This included, inter alia, that the respondents in pleading their defences were acting improperly, which was also consistent with the applicant’s pleading in reply. The applicant knew, or ought to have known, that at the very least some of the propositions in his opening submissions were false (including those examples referred to above). Also as explained above, the respondents submitted the evidence that unfolded over the course of the trial bore little resemblance to the characterisations alleged in the opening submissions. That is reflected in my findings.

39    The respondents accepted the difficulties in their submission as to isolating case studies in a cost apportionment sense, and I do not propose to do so. Rather, they are reflective of the broader conduct of the trial in the manner described. In terms of case studies, one only needs to refer to Mrs Mooney, Mr Haskett, Mr Mortimer and Ms Gollan as examples which illustrate the features discussed. My reasons reflect in relation to those, and other case studies, the approach described.

40    In addition, the respondents relied on other matters which also impacted on the duration of the hearing. I refer briefly to three further submissions. First, the patients’ affidavits were often prepared without the benefit of medical records, in circumstances where the applicant had resisted subpoenas for medical records. This, the respondents submitted, led to cross-examination on topics which should not have been necessary. Second, the respondents submitted the applicant’s records were often unreliable, a matter that was plain and ought to have been uncontentious, which prolonged the duration of the trial. Third, and related to the first observation about the adverse credit findings in relation to the applicant, the respondents submitted the manner in which he gave evidence resulted in the cross-examination of the applicant being longer than it ought to have (although the respondents accepted the amount was not quantifiable). The applicant submitted that cannot be so because the estimate for cross-examining Dr Al Muderis was 10 days, and that is how long it actually took. While that is correct, the cross-examination was in a context where establishing the defences meant the respondents also had to meet the case the applicant advanced. Further, as apparent from the reasons, his cross-examination bore the features relied on by the respondents in this application.

41    As explained above, in opposing the application, the applicant relied heavily on the submission that his counsel and solicitors reviewed the medical material and were satisfied there was a proper basis for the statement of claim, that the imputations conveyed were false. There are a number of issues with that submission. First, as a general proposition, that an applicant’s lawyers, including senior counsel, signed off on the proceedings commencing cannot, without more, be a basis to conclude that indemnity costs cannot be awarded based on the applicant’s knowledge of the substantial truth of the imputations. In Roberts-Smith, the applicant was represented by counsel from the outset, and it can be inferred they also signed off on the commencement of the proceedings. Lawyers act on instructions from their client. Second, the applicant’s reliance on his lawyers having reviewed medical records available at the time is at such a general level that it is of little, if any, assistance. There is no material before me as to what those records were. Again, I made findings as to the reliability of the applicant’s medical reports (which was also addressed in the case studies and whether the imputations had been established). I made findings about the applicant’s use and the purpose of them (including the first consultation reports). Some reports were also missing. There were also other documents from the applicant’s practice in evidence (e.g. correspondence, brochures and websites). Further, the imputations are not confined to allegations of negligence or unethical conduct arising from the applicant’s medical practice, but included other topics (e.g. improper sales tactics, lying to journalists, mistreating staff).

42    The applicant also submitted that circumstances changed over time as the defence and amended defence were filed. At one level that is correct, in that by the filing of the defence and then the amended defence, the applicant had some information they did not have at the time the application was filed. Leaving aside the position at the time the proceedings were filed, by the time of the hearing the applicant was aware patients were going to give evidence in support of the respondents’ case. Affidavits had been filed. The evidence went to 33 patient case studies. This included patients not the subject of the publications (or who were anonymous in the publications). The patients are a diverse group of people, coming from diverse locations, and have been patients (or prospective patients) over many years. As apparent from my reasons, there was also other evidence which supported the respondents’ case. With the knowledge of the respondents’ case, the applicant conducted the proceedings in the manner described above. As mentioned, the applicant generally did not address the respondents’ submissions as to those features of his conduct of the hearing.

43    I am conscious the respondents bore the onus of establishing their defences. However, in establishing their defences, the respondents had to meet a case conducted in the manner reflected in these observations. The conduct described permeated the case. At the very least it resulted in the hearing being much longer than it otherwise ought to have been.

44    The respondents also bear the onus on this application. I am persuaded that special or unusual features have been established in relation to the applicant’s conduct of these proceedings warranting the exercise of the discretion to impose indemnity costs. Although the features described include knowledge of facts and imputations that were, or ought to have been, known by the applicant, they also include the conduct of the trial in that context. It is the combination of the features which establishes the special or unusual features present in these proceedings to warrant the award of indemnity costs. Whatever may be said about the situation at the time the proceeding was instituted, by the time the trial commenced, the applicant was aware of the extent of the case relied on by the respondents, including that patient witnesses were prepared to give evidence. The applicant conducted the hearing in a manner that included the features described above. In the circumstances I consider that costs on an indemnity basis ought to be awarded from the time the hearing commenced.

45    Given that conclusion I do not consider it necessary to consider the submissions as to letters of compromise, as the last was made very shortly before the hearing which effectively corresponds with the timing of the conclusion above.

Lump Sum costs order

Legal Principles

46    In Paciocco v Australia and New Zealand Banking Group Limited (No 2) [2017] FCAFC 146; (2017) 253 FCR 403 (Paciocco) at [13]–[20], the Full Court (Allsop CJ, Besanko and Middleton JJ) set out the principles to be applied in relation to the decision of whether to make a lump sum costs order. It is convenient to recite the paragraphs in full:

[13]    The Court has a general discretion to award costs under s 43 of the Federal Court of Australia Act 1976 (Cth) (the ‘Federal Court Act’). Under s 43(3), the Court may, among other things:

(a)    make an award of costs at any stage in a proceeding, whether before, during or after any hearing or trial;

…

(d)    award a party costs in a specified sum;…

[14]    Section 43 of the Federal Court Act is supported by r 40.02(b) of the Federal Court Rules 2011 (Cth) (the ‘Rules’), which provides:

A party or a person who is entitled to costs may apply to the court for an order that costs:

…

(b)    be awarded in a lump sum, instead of, or in addition to, any taxed costs;…

[15]    The purpose of such a rule is “to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation”: see Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 (‘Beach Petroleum’) at 120.

[16]    On 25 October 2016 the Chief Justice issued the Central Practice Note: National Court Framework and Case Management (CPN-1) (‘Central Practice Note’) and the Costs Practice Note (GPN COSTS) (‘Costs Practice Note’). The Central Practice Note states that the determination of the quantum of costs of a successful party (in a proceeding) should not be delayed and, to this end, the Court will, where appropriate, facilitate the making of lump sum costs orders. The Costs Practice Note provides that the Court’s preference, wherever it is practicable and appropriate to do so, is to make a lump sum costs order so as to finalise costs and avoid potentially expensive and lengthy taxation hearings. It makes clear that the Court should now proceed on the basis that taxation “should be the exception” and confined to matters which are unable to be determined otherwise: Costs Practice Note at [3.3]. The guiding principles are to reduce delay and cost when quantifying costs: Costs Practice Note at [3.1].

[17]    The Costs Practice Note provides for the Court to make use of sophisticated costs orders and procedures, and to take such steps as it considers necessary to ensure that it has the requisite level of detail to make a costs determination that is fair, logical and reasonable and to avoid orders that lead to potentially expensive and lengthy taxation hearings: Costs Practice Note at [3.3].

[18]    We emphasise that in making a lump sum award of costs, the Court in undertaking the task of assessing costs is not precluded from undertaking a close inquiry of costs relating to a particular issue or category of costs, should the Court consider it appropriate to do so: see e.g. Hudson v Sigalla (No 2) [2017] FCA 339 at [30] (‘Sigalla’). The Court is able to adopt its own procedures in inquiring into costs, is able to be flexible in how it conducts that inquiry, including by the obtaining of suitable assistance whether by referee’s report or other reporting, and is able to acquire the level of detail needed to make a determination that is fair, logical and reasonable.

[19]    Whilst the Costs Practice Note now suggests that most cases should have a lump sum costs order approach applied unless there is some characteristic that would make it unsuitable, a lump sum costs order is not mandated in all instances. In all cases it is a matter for the Court to exercise the discretion given to the Court by the Federal Court Act and the Rules as appropriate: see Sigalla at [18]-[19].

[20]    There is no particular characteristic that a case must possess for it to be suitable for the making of a lump sum costs order. Particular circumstances that may make a lump sum order especially appropriate include where in a large and complex commercial matter it would save the time, trouble, expense and aggravation of a taxation; where a taxation would require the parties to consume additional time and incur additional expenditure prolonging already protracted litigation; and generally to avoid an ongoing, counter-productive dispute as to costs, in the interests of achieving finality.

47    See also Zreika v Royal (No 2) [2019] FCAFC 237; (2019) 141 ASCR 261.

Consideration

48    The respondents submitted a lump sum order should be made. They referred to such an order having been made in Roberts-Smith v Fairfax Media Publications Pty Ltd (No 46) [2023] FCA 1630 where Besanko J observed the length of the trial was substantial and taxation of costs would be a protracted and expensive process. They also submitted a lump sum costs order would not preclude the Court from undertaking a closer inquiry of costs relating to a particular issue and the applicant could still make submissions about the reasonableness of certain costs incurred by the respondents. It was said that the present case is similar to Paciocco in that a lump sum costs order would save the “time, trouble, expense and aggravation of taxation”.

49    The applicant opposed the order. In doing so he referred to Sackl v Auslink Investments Co. Associates Pty Ltd [2022] FCA 402 where an order was not made due to issues with sufficiency of evidence. The applicant made three submissions: first, similar to Sackl, there is not enough evidence for the Court to conclude the costs are better off quantified in a lump sum; second, the significant amount of costs suggests it should be quantified by the ordinary process, given the heightened importance of precision needed when costs are this large; and third, there is increased complexity due to the two costs orders made in the applicant’s favour.

50    The Costs Practice Note (GPN-COSTS) (Costs Practice Note) at [3.3] reflects the Court’s preference for making lump sum costs orders, where appropriate. This litigation bears the features which make such an order an appropriate one. Contrary to the applicant’s submission, that the costs are significant does not render the process less apt. To the contrary, the significant costs and nature of these proceedings are features which tell in favour of such an order. This case has the features present in Roberts-Smith where the proceedings were lengthy, and where conducting a costs quantification process in the traditional sense would be time consuming and expensive, adding to what were already significant costs. The applicant’s complaint that there is insufficient evidence before the Court is of no moment because, as the applicant recognised, although estimated costs have been provided, I am not being asked to fix the sum of the lump sum costs order on the material before me. As the respondents submitted, even if the lump sum costs order is made, the procedure is such that an applicant could still make submissions about the reasonableness of certain costs incurred by the respondents. I note the Costs Practice Note envisages that the assessment as to the amount could be referred to a Registrar, who would in the ordinary course of events have been involved in any disputed process using the traditional method of assessment. I acknowledge that there are two costs orders in favour of the applicant, but I fail to see why that would render this process inappropriate. Regardless of when the process is to take place (assuming there is no agreement as to the amount), it is in my view the appropriate order.

Stay of the costs order

51    The applicant sought a stay of any costs order pending the resolution of the appeal against the primary judgment.

Legal Principles

52    I summarised the relevant principles in Viagogo AG v Australian Competition and Consumer Commission [2021] FCA 175 at [8]-[13]. See also Lehrmann v Network Ten Pty Ltd [2024] FCA 1226 at [29]-[32] (Lehrmann (Stay)).

53    Rule 36.08 of the Federal Court Rules 2011 (Cth) (FCR) provides:

(1)    An appeal does not:

a.    operate as a stay of execution or a stay of any proceedings under the judgment subject to the appeal; or

b.    invalidate any proceedings already taken.

(2)    However, an appellant or interested person may apply to the Court for an order to stay the execution of the proceeding until the appeal is heard and determined.

(3)    An application may be made under subrule (2) even though the Court from which the appeal is brought has previously refused an application of a similar kind.

54    Rule 36.08 confers a broad discretion. Generally, there must be “a reason or an appropriate case” to warrant the exercise of discretion in favour of granting a stay: Powerflex Services Pty Ltd v Data Access Corp [1996] FCA 460; (1996) 67 FCR 65 (Powerflex) at 66. It is not necessary to establish special or exceptional circumstances for the grant of a stay: Powerflex at 66.

55    Two questions must be considered. First, whether there is an arguable point on the proposed appeal: Nolten v Groeneveld Australia Pty Ltd [2011] FCA 1494 (Nolten) at [24], or some “rational prospect of success” in relation to any of the grounds of appeal: Burns v AMP Finance Ltd [2005] FCA 761 at [5]. A stay should not be granted unless the appeal is at least arguable, although it is usually inappropriate to speculate as to its prospects of success: Australian Competition and Consumer Commission v BMW (Australia) Ltd (No 2) [2003] FCA 864 (BMW) at [5]. Second, whether the balance of convenience favours the grant of a stay: Nolten at [24], [46].

56    The party seeking the order bears the onus of demonstrating a proper basis for a stay, which must be fair to all parties: Alexander v Cambridge Credit Corporation Ltd (receivers appointed) (1985) 2 NSWLR 685 (Alexander) at 694. That party must demonstrate there is a real risk that it will suffer prejudice or damage if a stay is not granted, which will not be redressed by a successful appeal: Kalifair Pty Ltd v Digi-Tech (Australia) Ltd, McLean Tecnic Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737 (Kalifair) at [18]; Flight Centre Limited v Australian Competition and Consumer Commission [2014] FCA 658 at [9(f)]. This requirement will be satisfied if a successful appeal will be rendered nugatory unless a stay is granted: Ali v Australian Competition and Consumer Commission [2020] FCA 860 at [11]; BMW at [5]; Alexander at 695; Kalifair at [18].

57    The successful party at first instance is entitled to presume the judgment appealed from is correct: Powerflex at 66; Wooldridge v Australian Securities and Investments Commission [2015] FCA 349; (2015) 106 ACSR 551 at [11]; Urban Alley Brewery Pty Ltd v La Sirène Pty Ltd (No 2) [2020] FCA 351 at [48(b)], [51].

Consideration

58    The applicant submitted his appeal is arguable, and it is not appropriate to go into greater depth on the particular merits of the grounds of appeal for the purpose of this application. He submitted there is a real risk he will suffer prejudice which would not be redressed by the success of the appeal for the following reasons.

59    First, the costs quantification process would occupy his legal representatives’ time and divert their focus from the appeal. He submitted the number of lawyers on his legal team is relatively small and this is likely to delay the prosecution of the appeal. The applicant relied on an outline of the steps involved in the costs quantification process provided by Mr Charles Ackroyd (a legal costs expert) and the affidavit of Mr Nicholas Pullen (solicitor) to support the submission. Second, the costs process will be substantial, which will be wasted if the costs order in the respondents’ favour is disturbed on appeal. Third, the respondents have not articulated any prejudice they would suffer if a stay was granted, other than that the quantification process would be delayed. He submitted this prejudice will be mitigated by the expeditious prosecution of the appeal, noting that he has prosecuted the appeal expeditiously to date. Further, he submitted there is no risk that he will not have the financial capacity to pay a costs order once the appeal is determined. He submitted it would be a waste of time when the delay would not be lengthy.

60    The respondents opposed the application submitting there is a prima facie assumption that a judgment appealed from is correct and a court should not deprive a successful litigant of the benefit of a judgment in its favour: Lehrmann (Stay) at [32]. The respondents submitted the appeal lacks sufficient merit to justify granting a stay and there is no real risk of prejudice to the applicant for the following reasons.

61    First, while the respondents did not submit that the appeal stands no prospect of success, they argued it lacks significant merit. The grounds of appeal are far-reaching and largely concern matters of fact, rather than questions of law. The respondents made submissions by reference to the evidence, the nature of the reasons, and the difficulties they say arise for the applicant. The respondents accepted it is generally not appropriate to embark on a consideration of the prospects of an appeal in determining whether the appeal raises serious questions for determination. Nonetheless, courts have observed that the position of an appellant is different from that of an applicant at first instance, in that an appellant has benefitted from a primary judgment.

62    Second, the respondents submitted the applicant has not established a real risk that he will suffer prejudice or damage, which cannot be redressed by a successful appeal, if a stay is not granted. The applicant did not claim to be unable to afford any costs award, or that meeting a costs award before the appeal proceeds would impede his ability to fund the further litigation.

63    In respect to the applicant’s submission that the costs assessment process would be distracting for his legal team, the respondents submitted the applicant’s team is in fact large. They submitted the costs argument is not so complex or time-consuming that it could be said to interfere with the conduct of the appeal. The applicant appears to wish to run straightforward arguments in relation to which of the respondents’ costs were reasonably incurred, which can be canvassed in written submissions during the costs process. This does not represent an onerous task. The second alleged prejudice that costs would be incurred during a taxation process, is also not compelling. If the applicant was successful in his appeal, he would seek his costs from the respondents, including in relation to that work.

64    Third, the respondents submitted that Dr Al Muderis’ ability to meet a costs order in relation to the first instance proceedings is unknown and costs incurred in relation to his appeal will be significant and diminish his asset pool. This favours the applicant meeting his costs obligation at the earliest opportunity. Against those matters, Dr Al Muderis did not contend that in the absence of a stay the appeal would be stifled or that there is any risk that the respondents would be unable to repay him should he ultimately succeed in reversing the trial outcome on appeal. The respondents submitted that in a favourable view of the world, if a stay is granted, the respondents would be out of pocket for another year in respect of the costs of this proceeding in which they have been vindicated. The respondents distinguished this matter from Lehrmann, which was relied on by the applicant. The respondents submitted that on the balance of convenience, a stay should not be granted.

65    After the hearing of this application, the respondents sought leave to submit further brief written submissions in relation to a topic which had been overlooked at the hearing. The applicant opposed leave being granted. I granted leave for the respondents to file a submission of no more than three pages to address the topic, with the applicant having a right to reply to it.

66    The topic raised in the submission relates to a practical consequence of a stay being ordered. In this Court, unlike many other courts, interest is not payable on a costs liability until such time as the costs are quantified and made the subject of an order of the Court: s 52(1) FCA Act, and see Stillwater Pastoral Company Pty Ltd v Stanwell Corporation Ltd (No 2) [2025] FCA 316 at [50], [51]; Facton Ltd v Erdogan (No 2) [2012] FCA 930; (2012) 99 IPR 56 at [10]. In the present matter, this is a potential prejudice to the respondents which they overlooked at the time of the application. The respondents also referred to Brady v NULIS Nominees (Australia) Limited in its capacity as trustee of the MLC Super Fund (Stay Application) [2025] FCA 588, an example of a case where this consideration was relevant when the fees were just over $12.5 million excluding GST: see at [16], [28]-[34]. The respondents submitted that given the costs they submit should be awarded, the interest on the amount at 9.6% (in accordance with FCR r 39.06) would be a significant amount per year. The respondents submitted the appeal is listed for 10 days in June 2026, and it cannot be known when it will be finalised.

67    The applicant submitted the Court should not grant leave for the respondents to rely on further submissions, but if I do, he should have leave to rely on a further affidavit in relation to events that have occurred since the hearing. The applicant submitted that no proper explanation has been provided as to why the argument was overlooked at the time of the hearing, and there are no “exceptional circumstances” warranting the grant of leave, citing Re Application by Chief Commissioner of Police (Vic) [2005] HCA 18; (2005) 79 ALJR 881 at [22]. The applicant submitted that if leave was granted, the consideration has little weight given the very fact-intensive nature of the appeal, the imminence of the appeal hearing and that both parties (but particularly the applicant, due to the smaller size of his legal team) are prejudiced by any loss of time to focus on the preparation of the appeal. The applicant submitted the general prejudice caused by the lack of availability of interest on costs, which is not special or unique to the respondents, must be compared to the specific circumstances of this case which indicate the applicant would be substantially prejudiced if the costs order was not stayed and he was forced to proceed immediately to an assessment. The applicant submitted that the respondents have continued their publication of material making serious allegations against Dr Al Muderis and at least one of his legal representatives. In the discretionary balance, the applicant submitted this conduct does not reflect well on the respondents’ attempt to resist a stay on the costs order.

68    As to the last submission on the respondents’ recent publications, it is entirely unclear why the publication of articles is relevant to the stay application. More significantly, that evidence and those submissions do not address the topic on which leave was granted to provide further submissions.

69    I do grant the respondents leave to rely on this topic. It is a relevant consideration to the exercise of the discretion. I grant the applicant leave to rely on the affidavit of Mr Nicholas Pullen dated 6 March 2026, except in relation to the material referred to in the paragraph above. The affidavit material otherwise sets out the orders made for the hearing and preparation of the appeal. It was known at the time of the hearing of this application that the appeal would be in June 2026, and the preparation is self-evident given the number and nature of the appeal grounds.

70    The application is now to be considered in the context where I consider a lump sum award is appropriate, and I have found indemnity costs ought to be paid given the applicant’s conduct of the proceedings. The lump sum costs order reduces the time and expense expended in the process.

71    Given the respondents did not submit that the appeal stands no prospect of success (although they argued that it lacks significant merit) and the applicant described it as arguable, I do not propose to address the merit of the appeal. I proceed on that assumption.

72    The primary premise of the application is that the applicant will be prejudiced in the preparation of his appeal because his legal team is smaller than that of the respondents. That submission is problematic. The issue on the submission is one of relativity. That does not assist. The number of lawyers the applicant engages is in his hands. Further, the number itself is not relevant. The submission does not address the time devoted by the lawyers to the preparation of the appeal. I do not consider this a persuasive basis to stay the order. That said, I accept that time would need to be expended in relation to the preparation and determination of a costs order on a lump sum basis.

73    I am also conscious the applicant or respondents may appeal my decision to order indemnity costs. So much was intimated at the hearing of these applications. Of course, as with the primary judgment, that it may be appealed does not stay the judgment. However, in the circumstances of this case, if that were to occur it would involve further preparation. I take that into account.

74    I appreciate that it is unknown when an appeal judgment will be delivered in the matter, although the hearing of the appeal is listed to commence in the near future. Its proximity is a relevant and, given its timing, significant consideration. Considering the relevant factors and in particular the timing of the appeal hearing, I am persuaded that in the particular circumstances of this case, the applicant has established that a stay is warranted. The matter should be stayed until the finalisation of the appeal proceedings or until further order.

75    Given the basis of my conclusion on this application, I consider it more appropriate that the parties bear their own costs, save for the costs incurred in filing the additional written submission after the hearing (not the affidavit filed). In that regard, due to the circumstances in which the applicant was required to file those submissions, the respondent should pay the applicant’s costs.

Associate:

Dated:    23 April 2026