Australian Securities and Investments Commission v GetSwift Limited

Federal Court of Australia|2021-12-20|Before: Mr J, Lee J

Subject to order 2: (a) Mr Eagle pay 7.5% of ASIC's costs of the proceeding; and (b) GetSwift Ltd, Mr Hunter and Mr Macdonald pay 92.5% of ASIC's costs of the proceeding.
ASIC pay the defendants' costs thrown away by reason of Order 1 being made today rather than on 26 November 2021. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

(Delivered ex tempore, revised from the transcript)

A INTRODUCTION AND BACKGROUND 1 On 10 November 2021, I delivered judgment in respect of the question of liability in this proceeding and ordered that the parties provide agreed or competing minutes of order to reflect my reasons: see Australian Securities and Investments Commission v GetSwift Limited (Liability Hearing) [2021] FCA 1384 (liability judgment). Those orders have now been entered. An outstanding issue remains as to whether a costs order should be made in respect of the liability aspect of the proceeding, and if so, what that costs order should be. 2 Before turning to the substantive issue as to costs, however, it is convenient to recall the steps that occurred following the delivery of the liability judgment. On 24 November 2021, my Associate received an email foreshadowing a timetable "for the filing and service of written submissions as to costs, and, if it is required, to fix a time for oral argument as to costs". I directed my Associate to respond to the parties stating that I did not propose to order a timetable for the filing of further submissions and intended to hear any argument as to costs at the hearing for the entry of orders listed on 26 November 2021. The parties were also referred to [2617] of the liability judgment, in which it was said: My preliminary view is that costs should follow the event against each of the defendants, but I will receive any oral submissions on costs generally and, in particular, as to whether costs should be recovered by ASIC in relation to the misleading and deceptive conduct case (which always seemed to me to be an exercise in supererogation). 3 When I received a copy of the orders from ASIC prior to the hearing on 26 November 2021, I must confess, I was surprised by the absence of two things: first, any attempt to seek an order whereby the costs would be assessed in some way which did not contemplate a formal taxation process in the absence of any agreement; and secondly, a mechanism by which an order would be made that the costs sought be payable forthwith. 4 Despite the form of order advanced, at the hearing on 26 November 2021, there seemed to be some confusion as to precisely what costs order ASIC was seeking, with some suggestion that it was ASIC's intention to seek a forthwith costs order. It was because of this confusion, and notwithstanding my misgivings as to why such an order had not been sought on 26 November 2021, that I made orders allowing for any application for a forthwith costs order to be filed, and for the parties to put on submissions in support of the orders sought or opposed.

B THE COSTS APPLICATION 5 By way of interlocutory application dated 3 December 2021, ASIC seeks the following orders: 1. Pursuant to section 43 of the Federal Court of Australia Act 1976 (Cth) (FC Act), following the making of final orders in the proceeding: a. Mr Eagle pay 7.5% of ASIC's costs up to and including delivery of judgment in this proceeding on 10 November 2021, as agreed or taxed; and b. GetSwift Limited, Mr Hunter and Mr Macdonald be jointly and severally liable for, and pay, the balance of ASIC's costs up to and including delivery of judgment in this proceeding on 10 November 2021, as agreed or taxed. 2. Alternatively to paragraph 1 above, pursuant to section 43 of the FC Act, following the making of final orders in the proceeding, the defendants pay ASIC's costs up to and including delivery of judgment in this proceeding on 10 November 2021, as agreed or taxed, apportioned as follows: a. GetSwift Limited pay 52.5%; b. Mr Hunter pay 20%; c. Mr Macdonald pay 20%; and d. Mr Eagle pay 7.5%. 6 As would be evident, and consistently with a number of mysteries which have occurred in relation to ASIC's conduct of this proceeding, ASIC have not taken up the invitation to seek an order that costs be payable forthwith; nor have they sought any mechanism for the efficient assessment of those costs. In any event, the application is made and I must deal with it.

C CONSIDERATION 7 As to whether the substantive costs orders should be made, two questions arise: (1) should a costs order be made at this stage of the proceeding? and (2) if so, who should pay what? I will deal with each of these issues in turn.

C.1 Whether a costs order should be made at this stage of the proceeding? 8 The defendants submit that given ASIC is not seeking any order for payment forthwith, and it accepts its costs cannot be taxed until after the finalisation of the proceeding, there is no utility in making a costs order now (as opposed to after a hearing on penalty). I have given consideration as to whether or not I should make a costs order at this stage of the proceeding or leave all orders as to costs until the conclusion of the proceeding. In all the circumstances, I am inclined to adopt the former course. 9 Above all, while the liability judgment only dealt with one aspect of the proceeding, it was of a mammoth scale. I have also given leave to appeal the liability judgment. I have no idea, at present, if an appeal will be lodged, and if it is, when that appeal will be heard. Nor do I know if there will be further delays following that appeal. In my view, the interests of finality render it appropriate to make a costs order in respect of the liability aspect of the proceeding, even if the effect of such an order is unable to be realised until sometime in the future. Needless to say, if my liability findings were set aside, then a new costs order would be made, unless, heaven forfend, the matter was sent back for a retrial.

C.2 Who should pay what? 10 The real question is whether or not I should seek to apportion the costs between the unsuccessful defendants other than Mr Eagle (given ASIC and Mr Eagle have reached an agreement that Mr Eagle should pay 7.5 per cent of ASIC's costs of the proceeding). 11 The parties referred me to the judgment of Nicholas J in Australian Securities and Investments Commission v Vocation Limited (in liq) (No 2) [2019] FCA 1783; (2019) 140 ACSR 382. In that case, his Honour held (at 404 [88]) that there was to be a 10 per cent discount of ASIC's costs to reflect issues in respect of which ASIC was unsuccessful and then said the following in relation to an apportionment of the 90 per cent balance (at 405 [89]-[90]): 89. It was also submitted on behalf of each of Mr Dawkins and Mr Gréwal that Mr Hutchinson should be ordered to pay a considerably larger proportion of ASIC's costs than them. I accept that it would not be appropriate to order that each of the individual defendants pay an equal proportion of ASIC's costs. I say this because ASIC's case against Mr Hutchinson was more extensive, and met with more success, than that brought against Mr Dawkins and Mr Gréwal. 90. In my view the interests of justice require that Mr Hutchinson pay a significantly greater proportion of ASIC's costs than either Mr Dawkins or Mr Gréwal should be required to pay. In all the circumstances I think Mr Hutchinson should be required to pay 50% of ASIC's costs and that Mr Dawkins and Mr Gréwal should each be required to pay 25% of such costs. 12 The defendants emphasised that his Honour ordered apportionment notwithstanding the evidence and issues in the claims against the three defendants were largely overlapping. 13 ASIC contends that, as a general proposition, multiple respondents are jointly and severally liable for the costs of the successful party. It is said that this flows from the rationale that because the successful party is prima facie entitled to the costs of the action, that party should not lose that entitlement if one of the parties against whom the costs orders are made cannot, or will not, meet its share of the cost burden. 14 It is trite that the Court has a broad power in relation to costs under s 43 of the Federal Court of Australia Act 1976 (Cth) (Act). It has often been remarked that the discretion as to costs is unfettered, but that s 37N(4) of the Act requires the Court to take into account any failure by a party to comply with the overarching purpose of civil practice and procedure provisions, namely, to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible: see 37N(1). Although there were differences in the case advanced by ASIC against each of GetSwift, Mr Hunter and Mr Macdonald, the allegations were highly intertwined and were almost identical in their cardinal elements. In my view, the appropriate order is that GetSwift, Mr Hunter and Mr Macdonald each pay ASIC's costs. 15 The point is made, however, that ASIC has not sought payment by GetSwift, Mr Hunter and Mr Macdonald of the whole of the costs, but only the "balance of ASIC's costs" (that is, the 92.5 per cent which is not the subject of the costs order made against Mr Eagle). In the circumstances, it seems to me appropriate that the costs ASIC obtains against GetSwift, Mr Hunter and Mr Macdonald should only be in relation to 92.5 per cent of the proceeding. 16 Finally, given that I could have dealt with these issues when the matter first came back before me following the delivery of judgment, it is also appropriate to order that the costs of the defendants on the issue of costs from 26 November 2021 be paid by ASIC.

D CONCLUSION AND ORDERS 17 Accordingly, I make the following orders: (1) Subject to order 2: (a) Mr Eagle pay 7.5% of ASIC's costs of the proceeding; and (b) GetSwift Ltd, Mr Hunter and Mr Macdonald pay 92.5% of ASIC's costs of the proceeding. (2) ASIC pay the defendants' costs thrown away by reason of Order 1 being made today rather than on 26 November 2021. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Lee.

Federal Court of Australia Act 1976(Cth)ss 37N(1), 37N(3), 43

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