Australian Energy Regulator v CAM Engineering and Construction Pty Ltd

1. On 4 July 2025, I delivered judgment in respect of the appropriate pecuniary penalty against CAM Engineering and Construction Pty Ltd for its admitted contraventions of the National Energy Retail Law (NSW) in proceedings commenced by the Australian Energy Regulator (AER): Australian Energy Regulator v CAM Engineering and Construction Pty Ltd [2025] FCA 737 (J). I ordered the payment of a pecuniary penalty of $250,000 and granted declarations of contravention and remedial action in the terms agreed to by the parties.
2. The remaining issue is costs. Pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth), the AER seeks an order that CAM pay its costs in a single lump sum in an aggregate amount of $288,504.93. While Mr Bateman, CAM's sole director who appeared by leave on behalf of CAM, has confirmed that CAM has "no objections to costs", the Court must be satisfied that the lump sum amount sought by the AER is reasonable in all the circumstances.

1. The relevant principles concerning the making of a lump sum costs order are well-settled. Where it is practical and appropriate to do so, the Court's preference is for such an order to be made: Costs Practice Note (GPN-COSTS) at [4.1]. Accordingly, requiring the parties to proceed to a taxation of costs should be the exception, reserved only for those matters that are genuinely unable to be otherwise determined: Costs Practice Note at [3.3].
2. The purpose of the Court ordering costs in a lump sum, instead of taxation, is to "save the parties the time, trouble, delay, expense and aggravation in having a taxation proceed on a matter": see Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120; Keen v Telstra Corp Ltd (No 2) [2006] FCA 930 at [4]; Paciocco v Australia and New Zealand Banking Group Limited (No 2) [2017] FCAFC 146; 253 FCR 403 at [15]. This Court has accepted that taxation may be a particularly burdensome process where the party liable for costs is unrepresented and otherwise has been uncooperative in the course of the proceeding: Avetmiss Easy Pty Ltd v Australian Skills Qualifications Authority (No 2) [2014] FCA 444; 315 ALR 131 at [27]- [30].
3. Where the party obliged to pay costs may be impecunious or lack the financial capacity to meet a costs order, the additional, potentially unrecoverable, costs of taxation may be a significant burden to the party entitled to its costs. This also speaks to the appropriateness of making a lump sum order: see eg, Julien v Secretary, Department of Employment and Workplace Relations (No 2) [2009] FCA 1259 at [10].
4. A lump sum costs order may be more readily granted if the amount sought would represent a discount from the amount that is likely to be awarded upon a taxation: Avetmiss at [33]. Where the Court is confident that the amount sought reflects an amount to which the party would be entitled on assessment, no further discount should be applied: Jadwan Pty Ltd v Rae & Partners (A Firm) (No 7) [2022] FCA 1174 at [13], citing Hancock v Rinehart (Lump Sum Costs) [2015] NSWSC 1640 at [57].

1. The lump sum amount sought by the AER comprises the following sub-amounts:

(a) $42,120.00 in respect of the interlocutory costs orders that were made in the AER's favour in this proceeding on 2 May 2024, 15 August 2024 and 5 December 2024; and

(b) $246,384.93 in respect of the AER's costs of the remainder of the proceeding.

1. Those amounts are explained by an affidavit of Mr Joshua Henderson affirmed on 21 July 2025 (Henderson Affidavit). Mr Henderson is a partner of Norton Rose Fulbright Australia, an experienced and senior litigator, and the AER's solicitor in this matter. His affidavit includes a summary breakdown of the actual and claimed costs in respect of each of the interlocutory costs orders and the remainder of the proceeding, prepared in accordance with the Costs Practice Note.
2. There are four matters which the AER submitted support the making of a lump sum costs order against CAM in this case.
3. First, the AER succeeded in establishing CAM's liability for contraventions of the Retail Law, and successfully obtained all of the relief which it proposed in respect of those contraventions. The penalty imposed was within the AER's proposed range, and 5-10 times higher than the range proposed by CAM. I accept the AER's submission that costs should follow the event as a result.
4. Secondly, requiring the parties to proceed to taxation would be burdensome. As I set out in the judgment (J at [5]), CAM is now unrepresented, having dismissed its lawyers just three days prior to the final hearing in order to conserve funds for ongoing litigation before the New South Wales Supreme Court. Further, I have found that CAM was not entirely cooperative during these proceedings, as exemplified by its belated admissions of liability (J at [77]-[78]). It also repeatedly failed to comply with the Court's timetabling orders, leading to otherwise unnecessary appearances, and hence the making of the three interlocutory costs orders. Those circumstances suggest that a lump sum costs order is appropriate.
5. Thirdly, CAM's financial position is presently unclear. On 29 October 2024, receivers were appointed to all of its present and after-acquired property. It no longer owns or operates the Cooranbong Gardens Retirement Village, in circumstances which are now the subject of separate litigation before the Supreme Court of New South Wales (J at [79]-[88], [97]). It is therefore a real possibility that CAM may lack the financial capacity to meet a costs order against it. I accept that the AER should not be burdened by the additional cost and delay of taxation in those circumstances.
6. Finally, the lump sum amount sought by the AER is reasonable. Excluding Counsel fees and disbursements incurred, which are claimed in their entirety, the amount sought in respect of professional costs ($218,830.28 - Henderson Affidavit at [13(a)], [19(a)]) reflects only 65% of the actual total professional costs incurred by the AER's solicitors ($336,661.99 - Henderson Affidavit at [15(a)], [17(a)], [18(a)]). That is a discount of 35%. While there may be some initial concern at the AER's incurring of fees which were in fact well in excess of the pecuniary penalty which it was able to recover in this proceeding, that is a product of the conduct of CAM in resisting what were, in truth, completely straightforward claims of contravention of the Retail Law. I am satisfied that the amount sought reflects an amount which the AER would be likely to be awarded upon a taxation of its costs. Accordingly, no further discount should be applied (Jadwan) and the amount sought is reasonable in all the circumstances.

1. The appropriate order is therefore that CAM pay the AER's costs of and incidental to the proceeding in a single lump sum, fixed in the amount of $288,504.93.

I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Sarah C Derrington.