Benjamin Hornigold Ltd v John Bridgeman Limited

1. Peter Aardoom pay the costs of the plaintiff's application for non-party costs, fixed in the sum of $5,427.65.
2. Rule 40.14 of the Federal Court Rules 2011 (Cth) be dispensed with, and the costs payable pursuant to orders 1 and 2 be taxed forthwith.

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

Delivered ex tempore, revised from transcript

1. The plaintiff in this matter seeks a non-party costs order against Mr Peter Aardoom in relation to an interlocutory application for further discovery, which was filed on 11 September 2025, and a case management hearing on 17 October 2025. The plaintiff relies on an affidavit of Michael Russell Catchpoole dealing with the Costs Practice Note, of 27 October 2025 (Costs Summary Affidavit), and a further affidavit of Mr Catchpoole of the same date, dealing with liability for costs. Exhibited to that affidavit was exhibit MRC-22, and that was marked exhibit MRC-22 when the matter came before me on 3 November 2025.
2. Mr Aardoom relies on three affidavits, filed on 25 September 2025, 29 October 2025 and 15 December 2025. Mr Aardoom was granted leave to represent JB Markets Limited, the fourth defendant, on 10 September 2024, after a hearing on an interlocutory application dated 9 July 2024. Mr Aardoom was granted limited leave to carry on the proceedings on behalf of the fourth defendant otherwise than by a solicitor, limited to the filing of a defence, the filing of evidence on which the fourth defendant intends to rely and filing any further interlocutory application and supporting evidence seeking leave for Mr Aardoom to represent the fourth defendant going forward. This non-party costs application arises out of an application for discovery which was dismissed with costs on 12 September 2025.
3. Around that time, it became clear that Mr Aardoom, who was granted leave to carry on the proceedings on behalf of the fourth defendant, was no longer a director of the fourth defendant. That directorship ceased on 1 July 2025 (see exhibit MRC-22, page 6). Mr Aardoom appeared in Court on 8 August, on 5 September and on 12 September in relation to the application for discovery, and he had also signed a list of documents on behalf of the company on 23 July. The plaintiff submits that the actions of Mr Aardoom in acting on behalf of the company when he was no longer a director is a factor that should, firstly, move this court to make a non-party costs order pursuant to s 43(1) of the Federal Court of Australia Act 1976 (Cth), secondly, to make such an order on an indemnity basis, and thirdly, to make an order for lump sum costs payable forthwith.
4. In relation to the liability for costs, the discovery application was dismissed with costs, and those costs are now sought against Mr Aardoom. The plaintiff submits that one of the cases in which a non-party costs order is warranted is where the party is insolvent or a person of straw, where the non-party has played an active part in the litigation, and the person on whose behalf they are acting has an interest in the subject of the litigation: Knight v FP Special Assets (1992) 174 CLR 178 at 192-193. The plaintiff submits that the discretion to order a non-party costs order should take into account the fact that Mr Aardoom acted on behalf of JB Markets when not a director, and submitted on 5 September 2024 that JB Markets had "effectively run out of money". Mr Aardoom, it is submitted, was not acting on behalf of the company in taking the actions that he did since 1 July 2025.
5. In relation to indemnity costs, the plaintiff submits that there should be some special or unusual feature to justify departure from costs being awarded on a party/party basis and points to the categories set out in Colgate-Palmolive v Cussons Pty Ltd (1993) 46 FCR 225 at 233-4. It is submitted that Mr Aardoom both made irrelevant allegations of fraud and misconduct that caused loss of time to the court and other parties. Further, it is submitted that Mr Aardoom knew that the basis upon which he had been granted leave to carry on proceedings on behalf of JB Markets was that he was its sole director, and when that ceased he did not immediately inform the court. The plaintiff contends that it should not have been put to the costs of resisting the discovery application and have to respond when it found out about Mr Aardoom's change of status, and for those reasons the discretion to order indemnity costs should be exercised.
6. In relation to whether those costs should be paid as a lump sum payable forthwith, the plaintiff notes that Mr Aardoom is not a party, and so there is an exception to the usual rule that interlocutory costs orders are not taxed until the conclusion of proceedings: See r 40.13 Federal Court Rules 2011 (Cth). That is because, after this date, Mr Aardoom will not be exposed to any other costs orders, nor will he be participating on his own behalf in the proceedings.
7. The plaintiff has calculated the lump sum costs claimed in the Costs Summary Affidavit. Those are costs of and incidental to the interlocutory application filed on 11 September 2025 and the case management hearing on 17 October 2025, on an indemnity basis, fixed in the sum of $24,622, and the costs of this application being fixed in the sum of $5,427.65. In his affidavits responding to the plaintiff's application, Mr Aardoom points to a number of factors. One is that, at the time leave was granted, he was the sole director and a shareholder of the company, and that he did not choose to be a part of these proceedings, with JB Markets being in the position of one of the defendants.
8. Mr Aardoom, throughout these proceedings, has pointed to other circumstances which he says make these proceedings unfair or proceedings that should not have been brought. He says that he had no idea that he could be held personally liable for costs in these proceedings, and that latitude should be afforded to him as a person who is self-represented. He says that he and his wife have exhausted their savings, and have sold their house, and are in difficult personal circumstances. He has provided an outline, in his affidavit of 15 December 2025, of the difficulties that he and his wife face in their financial circumstances.
9. Mr Aardoom points to a claim brought by Mr McAuliffe, who likewise has been seeking to represent one of the companies in these proceedings without a solicitor, that Mr McAuliffe has filed a claim in the Brisbane registry of the Supreme Court against the ASX, the plaintiff and others, and that JB Markets would be seeking to join it. He said that this might result in a set-off against the current costs order on the discovery motion. Mr Zhu, who appears for the plaintiff, has handed up a printout from the Queensland courts, which I will mark as Exhibit 1 on this application, which shows that those proceedings were in fact discontinued on 5 December 2025.
10. Mr Aardoom has not addressed this in submissions, and it is difficult to know whether he was in fact informed of that or not. However, if JB Markets' financial position is relevant, which I do not think it is, that claim of the Queensland proceedings is not something that would alleviate that position. Mr Aardoom says that the discretion should not be exercised seven months before the trial and says, in paragraph 12 of his December affidavit, that JB Markets was a company, when it was first sued and today, "desperately trying to solve its debt problems, and had no money", and that this was known to the plaintiff. Mr Aardoom asks "why would the plaintiff sue a Company that has no money and no prospects? They pursued this case anyway. Is it even ethical? What were the motives?"
11. Mr Aardoom suggests that the appropriate outcome to this application is that costs follow the case, which, in his oral submissions, he termed, "Costs should ... follow the events," and I take that submission to mean that, in effect, they should be costs in the cause for those costs to be payable by the unsuccessful party in the final proceedings. He points to the complex nature of these proceedings and the fact that non-party costs orders are rare and exceptional. I have considered Mr Aardoom's submissions and have some sympathy for him, given that he has been seeking to represent JB Markets in a complex proceeding with no legal representation. Litigants in person have a difficult time dealing with both the substance and the practice of complex proceedings.
12. However, Mr Aardoom has been notified, both on previous occasions and today, that impecuniosity is not a ground for resisting a costs order. I take the view that Mr Aardoom's conduct of the proceedings after his removal or resignation as a director is something that should sound in liability for non-party costs. I have considered the Costs Summary Affidavit sworn by Mr Catchpoole and the documents in Ex MRC-22, and I note that that costs summary complies with the requirements of a non-party costs order and the Practice Note (GPN-Costs). I am prepared to make an order that Mr Aardoom pay those costs.
13. As to whether that should be on an indemnity basis, I take the view that Mr Hynes' submission for the plaintiff on the last occasion, backed by Mr Catchpoole's evidence that they would have objected to Mr Aardoom appearing as soon as they had known he was no longer a director, and so would have been able to avoid the costs incurred, to be a powerful one. And in those circumstances, it seems to me appropriate that the costs should be ordered on an indemnity basis. Likewise, Mr Catchpoole has taken care to ensure that the lump sum costs have been properly calculated, and I am prepared to make an order that, in all the circumstances, that lump sum costs order should be paid forthwith. I dispense with r 40.13 of the Federal Court Rules 2011 (Cth) to make that order.
14. The orders that I make are:

(1) Peter Aardoom pay the plaintiff's costs of and incidental to the interlocutory application filed on 10 September 2025 and the case management hearing on 17 October 2025 on an indemnity basis fixed in the sum of $24,622.

(2) Peter Aardoom pay the costs of the plaintiff's application for non-party costs fixed in the sum of $5,427.65.

(3) Rule 40.13 of the Federal Court Rules 2011 (Cth) be dispensed with, and the costs payable pursuant to orders (1) and (2) be taxed forthwith.

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