Aaron Sansoni Group International Pty Ltd v Manti

The power of the Court in relation to costs is well established. Section 43 of the Federal Court of Australia Act 1976 (Cth) gives the Court a wide discretion in awarding costs. The exercise of the Court's discretion is not without principles or practices; it must be exercised judicially (Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27; (2016) 247 FCR 61 at [305] per Bennett, Besanko and Beach JJ). The ordinary rule is that costs follow the event, although a successful party may be awarded less than its costs, or costs may be apportioned, based upon success on the issues (Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) (2015) 327 ALR 192; [2015] HCA 53 at [6] per French CJ, Kiefel, Nettle and Gordon JJ; Les Laboratoires Servier at [297] to [298] and [303]).

1. In the context of contempt proceedings, ordinarily costs will follow the event, and it is not uncommon for the contemnor to be ordered to pay the costs of the proceedings: see Rolph, D, Contempt (Federation Press, 2023), p 817 and the cases there cited.
2. It is common practice in such cases for costs to be awarded on an indemnity basis: Kazal v Thunder Studios Inc (California) [2017] FCAFC 111; 256 FCR 90 (Kazal) at [192]-[195] per Besanko, Wigney and Bromwich JJ. In Kazal, the Full Court stated at [195]:

There is no doubt that this Court has a discretion to award indemnity costs to a party bringing contempt proceedings. In many contempt cases there will be powerful discretionary considerations favouring the award of indemnity costs. If there is a variable practice in that regard, this is a case falling within the category for which an indemnity costs order would be entirely appropriate. No express reason was advanced in this case for departing from the at least common approach of awarding costs on an indemnity basis. ...

1. However, there is no general principle or rule of law that costs are to be awarded on an indemnity basis in such cases: Metcash Trading Ltd v Bunn (No 6) [2009] FCA 266 at [16] per Finn J; Tax Practitioners Board v Hacker (No 3) [2020] FCA 1814 at [172(1)] per Rangiah J.
2. An example of a contempt case in which the applicant was partially successful is Australian Competition and Consumer Commission v World Netsafe Pty Ltd [2003] FCA 1501; 133 FCR 279 (World Netsafe). In that case, the applicant (the ACCC) brought a contempt application against the second respondent (Mr Butler). Mr Butler was found guilty of two of 11 counts of contempt: see [3]-[8]. In relation to costs, Spender J ordered the ACCC to pay one-third of the costs of Mr Butler assessed on a party and party basis: at [47].

1. I start with the costs of the hearing on 28 February 2025. The contempt application was originally scheduled for hearing on that date. The hearing needed to be adjourned because Mr and Ms Manti filed a substantial body of material shortly before the hearing. In these circumstances, I consider it appropriate that Mr Manti pay ASGI's costs of that hearing. I do not consider it appropriate for there to be an order against Ms Manti as her role in the litigation was very limited. I will deal with the question whether the costs should be on an indemnity basis later in these reasons.
2. Insofar as ASGI submits that the costs of the application to re-open should be dealt with separately, I do not accept that submission. I consider that those costs should be treated as part and parcel of the costs of the contempt application rather than being treated as a discrete event.
3. I turn now to consider the balance of the costs of the contempt application. I note that one of the charges against Mr Manti (charge 3) was adjourned indefinitely rather than being determined. I do not consider it practical to reserve the costs of that charge for later determination, as it would be difficult to identify the costs specifically referable to that charge. Accordingly, I will deal with the costs of the contempt application "to date", which will include the costs referable to charge 3.
4. The starting position is that costs should follow the event. Consistently with World Netsafe, in the circumstances of this case I consider it appropriate to have regard to the outcome of each charge. In relation to Mr Manti, of the charges that were pressed, ASGI was successful in relation to two charges and unsuccessful in relation to two charges. One option would be: to make a costs order in ASGI's favour for the charges in respect of which it was successful; and for there to be no order as to costs in respect of the charges that Mr Manti successfully defended (in circumstances where he is unrepresented and therefore did not incur legal costs). Insofar as Mr Manti sought an order for reimbursement of expenses, these appear to be de minimis and I do not consider it necessary or appropriate to make such an order. In relation to charges 3 and 4, the position is less straightforward, as these charges were not determined. Having regard to the circumstances in which these charges were not pressed or adjourned indefinitely (see the transcript of 21 March 2025 at pp 15, 21, 62-65), I think the costs associated with these charges are best seen as part and parcel of the overall contempt application; therefore, I do not consider that they need to be dealt with separately. In relation to Ms Manti, one charge was successful and one charge was unsuccessful. One option would be to make a costs order in ASGI's favour in respect of the successful charge and no order as to costs for the unsuccessful charge (in circumstances where Ms Manti was not represented by a lawyer and therefore did not incur legal costs).
5. However, the options discussed above would be difficult to deal with on a taxation of the costs. In my view, it would be simpler and preferable to adopt a broad-brush approach and to make a costs order in ASGI's favour for a proportion of its costs. Adopting such an approach, I consider it appropriate that ASGI have a costs order in its favour for half of its costs of the contempt application against Mr Manti and half of its costs of the contempt application against Ms Manti. In circumstances where Ms Manti did not play an active role in the relevant events and conduct, I consider that the costs relating to the contempt application against Ms Manti should be payable by Mr Manti and not by Ms Manti. In summary, for these reasons, there should be an order that Mr Manti pay half of ASGI's costs of the contempt application.
6. I next consider whether the costs discussed above should be determined on an indemnity basis, as sought by ASGI. In my view, in the present case, the contempt application is best characterised as an interlocutory skirmish that forms part of the overall proceeding (which arises out of Mr Manti's dismissal as an employee or officer of ASGI). The contempt application seemed to me to be somewhat of a distraction from progressing the proceeding. To the extent that it had utility, it was in exposing some of the factual detail that will be relevant to the proceeding generally. Having regard to these matters, I consider it appropriate that the costs be on a party and party basis rather than on an indemnity basis.
7. ASGI seeks to have the costs taxed forthwith (or determined on a lump sum basis forthwith) rather than being taxed at the end of the proceeding. Rule 40.13 of the Federal Court Rules 2011 provides that, if an order for costs is made on an interlocutory application, the party in whose favour a costs order is made must not tax those costs until the proceeding in which the order is made is finished. As indicated in the note under that rule, the Court may depart from that position and make an order that the costs be taxed immediately. This is commonly done in contempt applications. In the circumstances of this case, where (as indicated above) I consider that the contempt application is best characterised as an interlocutory skirmish that forms part of the overall proceeding, I consider it appropriate that the costs be taxed at the end of the proceeding.

1. For these reasons, I will make costs orders as set out in [5] above.

I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Moshinsky.