BJEK Pty Ltd as Trustee for the EL and SL Fogarty Family Trust v Henbury Cattle Co. Pty Ltd & Ors [2025] NTSC 89

BJEK Pty Ltd as Trustee for the EL and SL Fogarty Family Trust v Henbury Cattle Co. Pty Ltd & Ors [2024] NTSC 65; Roussos v Amaca Pty Ltd [2024] NTSC 20; Cullen v Trappell [1980] HCA 10; (1980) 146 CLR 1; Flower & Hart (a Firm) v White Industries (Qld) Pty Ltd [2001] FCA 370; (2001) 109 FCR 280, referred to.

BJEK Pty Ltd as Trustee for the EL and SL Fogarty Family Trust v Henbury Cattle Co. Pty Ltd & Ors [2025] NTSC 89

BJEK PTY LTD AS TRUSTEE FOR THE EL & SL FOGARTY FAMILY TRUST

• [1] The Defendants make application for an order for interest on costs, absent any agreement. The Defendants relied on the affidavit of Michael John McKillop Grove made 21 July 2025. The Plaintiff relied on the affidavit of James Michael Cudmore made 26 August 2024. I take those affidavits as read.

• [2] The background to this matter is set out in the most recent decision of Luppino AsJ in BJEK Pty Ltd as Trustee for the EL and SL Fogarty Family Trust v Henbury Cattle Co. Pty Ltd (ACN 169 887 629) & Ors.[1]
• [3] A costs order was made in this proceeding on 27 October 2021, at the end of a civil trial determined essentially in the Defendants' favour. A summons for taxation and a bill of costs was filed on 29 December 2023, some two years and two months later. The bill comprised some 1,745 items and 209 items of disbursements. The bill of costs claimed interest on each and every item at the rate applying at the time the claimed item was performed. Thus, the interest rates varied according to the prevailing rate at any given time as the bill covered multiple years of work. The claim for interest totalled $283,799.12 for the professional costs items and $207,518.29 for the disbursements. The Plaintiff objected, amongst other grounds, to each and every item for which interest had been claimed. Luppino AsJ, as the Taxing Master,[2] decided to clarify the issue in respect to the claim of interest through written decision. This was done in the event that the matter proceeded to taxation (i.e. the Interest Judgment). In short, Luppino AsJ found that the manner in which the Defendants had calculated interest was inappropriate and 'it is cumbersome and complicated and would greatly extend the time required for taxations, especially in a matter such as this where there is a sizeable bill of costs extending to costs incurred over a period of many years'.[3] Rather, it was more appropriate to set one rate which was a fair average over the whole period in which costs were incurred. Such an approach was consistent with taking a broad and practical approach to the award of interest.[4] Luppino AsJ determined an appropriate interest rate would be 7% per annum.
• [4] Additionally, Luppino AsJ also considered what effect the delay in filing the summons for the taxation should have on any interest which should be awarded. His Honour determined that 'if the summons had been issued within what I have determined to be a reasonable time I would have awarded the interest from the date of the costs order (ie. 21 October 2021). Instead, interest is to run from six months before the filing of the summons namely, from 29 June 2023'.[5] That is, the commencement for the calculation of interest was delayed some 14 months from when it otherwise would have applied.
• [5] The taxation hearing was then adjourned to 28 August 2024, with further orders for the filing and service of an amended bill of costs and for filing of any further affidavit material. It would appear that at about the time of the next court date, the Plaintiff was intending to seek an adjournment following the recent receipt of the Defendants' amended and renumbered bill of costs on 23 August 2024.[6] Subsequently, and it seems before the Plaintiff could press its request for an adjournment, the Court advised the parties on 27 August 2024 that the taxation hearing would need to be adjourned to a later date due to illness of the Taxing Master. The parties agreed to a subsequent date of 11 November 2024. That hearing was subsequently vacated again due to the unavailability of the Court. The parties were advised that a listing in January 2025 would be required. Following an indication of the various availability of the parties, the taxation hearing was listed for 17 March 2025.
• [6] On 17 March 2025, prior to the formal commencement of the taxation hearing, the parties agreed to consent orders for costs and interest. Pursuant to those orders, the Plaintiff was to pay the Defendants' costs in the amount of $1,010,000 of and incidental to the Plaintiff's claim and the First Defendant's counterclaim. The parties also consented to an order in the following terms (additionally, with liberty to apply):

Interest on costs is as to be agreed, or in the absence of agreement is to be determined by the Court, in accordance with the Reasons for Decision from Associate Justice Luppino dated 29 July 2023.

• [7] The Plaintiff paid the Defendants' costs on 22 May 2025. There was no agreement as to interest on the costs, and the Defendants exercised their liberty to bring this application. As noted above, Luppino AsJ's decision did two things: it indicated an appropriate rate of interest would be 7% per annum and that interest should commence 6 months from the date of the filing of the summons for taxation (i.e. 23 June 2023), rather than the date of the costs order. In short, his Honour set out for the parties how he intended to exercise his discretion in terms of interest once the costs were actually taxed. I agree with his reasoning and I, if necessary to do so, adopt it.
• [8] On this application, there was no substantial dispute between the parties in respect to the rate of interest. Rather, argument centred on the period over which that rate was to be applied.
• [9] The Defendants submitted that, in accordance with the Interest Judgment and the consent order, the amount of interest owed was simply a matter of arithmetic calculation. That is, costs were agreed at $1,010,000, the interest rate was 7% per annum, 29 June 2023 to 22 May 2025 is a period of 693 days, interest accrued at $193.70 per day, thus 693 days x $193.70 per day = $134 234.10. It was submitted that this was the interest which is owed.
• [10] The Plaintiff submitted that due to various delays which should lie at the feet of the Defendants, the taxation could have proceeded on 14 or 15 May 2024 - some several months before it actually did. The delays, the Plaintiff submitted, were due to the manner in which the Defendants framed the bill of costs. In particular, in respect to the claims for interest. That delay, it was further submitted, ought not prejudice the Plaintiff and it should not be liable for the further 8 months it took to conclude the taxation (i.e. from mid-2024 to March 2025). Lastly, it was submitted that the Court should exercise its discretion and order interest to be calculated from 29 June 2023[7] to a date in mid-2024[8], by which the taxation ought to have concluded. That is, the Court should exercise a discretion to keep the start date of the interest calculation to be the same as determined by Luppino AsJ but ending the interest period in mid-2024.
• [11] In response, the Defendants submitted that interest on costs was payable only by virtue of Rule 59.02(3) and the entitlement is not discretionary. Furthermore, it was submitted that interest on costs is not costs such that a general discretion could be applied in terms of a reduction. Essentially, it was submitted that there is no power which entitles the Taxing Master to determine an express end date to the entitlement to interest or otherwise generally reduce an award of interest using a general discretion.

• [12] Rule 59.02(3) provides that a judgment debt carries interest from the date of judgment at the relevant rate fixed by s 52(2)(a) of the Federal Court of Australia Act 1976 (Cth). However, despite that rule, Rule 63.74 confers on the Taxing Master a discretion to fix a rate of interest payable in respect of the taxed costs and the date from which interest runs.[9] "Taxed costs" is defined as the costs taxed in accordance with Order 63.
• [13] As noted above, in the circumstances and for the purposes of the first limb of Rule 63.74, Luppino AsJ ascertained that the reasonable rate of interest was 7% per annum. In respect to the second limb, Luppino AsJ determined that due to the delay by the Defendants in filing the summons for taxation, he would order interest to run from six months before the date of the filing of the summons.
• [14] There is no express Rule which entitles the Taxing Master to determine an "end date" to the entitlement to interest. Rule 63.74 only allows the fixing of a date from which interest will run. As at the date of the decision, taking into account the Defendants' delays, Luppino AsJ indicated that would be 6 months before the filing of the summons (assuming the matter went to taxation).
• [15] Luppino AsJ's reasons were delivered on 30 July 2024. It is correct to imply that the Court would have anticipated the taxation hearing to go ahead in August 2024 as listed. However, that hearing was subsequently delayed in part by the Court's unavailability and then subsequently to accommodate both parties' availabilities. The Court, at the time of its decision, was aware of the reasons for the delay prior to 30 July 2024, although the primary focus appears to have been on the approximately 2 years and two-month delay in filing the summons.
• [16] Given the manner in which this matter proceeded, the fact that it did not proceed to taxation and noting the terms of the consent order, I agree with the Defendants. Namely, that there is no discretion to set an end date to which interest is payable. Had the matter proceeded to taxation and the costs taxed, the Court may well have exercised its discretion to address the various delays allegedly caused by the Defendants, through utilising the Court's general discretion under Rules 63.03(1) and 63.34(5)(c) in respect to costs. However, the matter did not proceed to taxation. Subject to one possibility which is further discussed below, the only conceivable way to accommodate the Plaintiff's submissions would be to vary the date from which interest was to run to some later date and thereby depriving the Defendants of a further 8 months of interest.
• [17] Having considered the matter, I do not think that there is sufficient reason or justification to revisit Luppino AsJ's decision in terms of varying the time from which interest should run. To do so would be contrary to the consent order which provided that the Court was to determine interest on costs in accordance with Luppino AsJ's reasons, and which expressly found that interest should run from a particular date.
• [18] However, there remains one further possibility. That is, notwithstanding the consent order for costs and that interest on costs be 'determined by the Court in accordance with the Reasons for Decision from Associate Justice Luppino dated 29 July 2023', whether there exists any other discretion (additional to that in Rule 63.74) to vary the amount of interest on costs and which does not infringe on Luppino AsJ's reasons (or at least is not contrary to those reasons on the basis that it was not dealt with by the reasons). That is, whether the Court has any subsequent discretion to vary an amount of interest on costs calculated in accordance with Rule 63.74 (assuming the matter went to taxation).
• [19] As noted above, Luppino AsJ's reasons focused primarily on the delay of the Defendants in filing the summons for taxation. However, Luppino AsJ did recognise the delay in the approach for claiming interest in the manner the Defendants did. The Court stated:[10]

...An award of interest on costs is a compensating award, that aware should not be made in a way that would unfairly confer an advantage on the Defendants. What the Plaintiff refers to there is that the combination of the Defendants' claim of interest on every item of costs from the date that each item was incurred, coupled with the delay in filing the Summons, is unfairly advantageous to the Defendants. With that, and in cases where there is significant delay, I broadly agree.

• [20] In considering the matter, the starting point is perhaps to acknowledge that "costs" is defined in Rule 63.01 and it does not include interest.[11] There appears a discussion in 'Law of Costs' by Dal Pont in respect to a slightly different issue. Namely, whether the general statutory costs discretion confers a power to award interest on party and party costs, particularly where there is no power to award interest at all. As Dal Pont highlights, there is conflicting authority but recent authority (certainly in NSW) to the effect that it is not likely that the general costs discretion authorises the grant of interest on costs.[12] By extension, I doubt that the general costs discretion could be used to adjust an award of interest once ascertained in accordance with Rule 63.74. Such an approach would be particularly rare in any event, given that Rule 63.74 provides its own "in-built" discretion and consideration only arises here by virtue of the unique circumstances.[13]
• [21] In my opinion, the better view is there is no discretion to be applied in the award of interest on costs other than expressly provided under Rule 63.74.
• [22] I therefore agree with the Defendants. The appropriate amount of interest on the $1,010,000 of costs, namely 7% per annum for the 693-day period, is $134,234.10.
• [23] The Defendants also seek their costs of and incidental to the assessment of the quantum of the interest on costs, payable by the Plaintiff to the Defendants and on an indemnity basis.
• [24] In respect to the costs of this application, I see no reason why the ordinary rule should not apply. That is, costs should follow the event. However, I do not consider that the costs should be awarded on an indemnity basis. The issue as to whether the Court could exercise a discretion in respect to interest on costs, given the circumstances, warranted due consideration, and it was not unreasonable for the Plaintiff to require the matter to be determined by the Court absent agreement between the parties.
• [25] I therefore make the following orders:
  1. The Plaintiff is to pay the Defendants' interest on costs in the amount of $134,234.10 within 21 days from the date of this judgment or by a date as agreed between the parties.
  2. The Plaintiff is to pay the Defendants' costs of and incidental to this application for the assessment of the quantum of the interest on costs payable by the Plaintiff to the Defendants, on the standard basis, such costs to be agreed or taxed in default of agreement.

[1] [2024] NTSC 65 ('the Interest Judgment').

[3] The Interest Judgment at [20].

[4] Citing Roussos v Amaca Pty Ltd [2024] NTSC 20 at p 112, citing Cullen v Trappell [1980] HCA 10; (1980) 146 CLR 1 at 22.

[5] The Interest Judgment at [30].

[6] See: Affidavit of James Michael Cudmore made 26 August 2024.

[7] The date 6 months before the summons was filed as determined by Luppino AsJ.

[8] Not the date on which the costs were actually paid.

[9] See: The Interest Judgment at [10].

[10] The Interest Judgment at [16].

[11] See G E Dal Pont, Law of Costs (5th Ed, 2021), 19.27, p 745.

[12] See also Flower & Hart (a Firm) v White Industries (Qld) Pty Ltd [2001] FCA 370; (2001) 109 FCR 280 at 294. Notwithstanding that Dal Pont makes the point that there may be good reason for the general discretion in respect to costs to allow an award of interest (in the absence of a power to do so) because interest is seen as being compensatory in nature and it fosters the indemnity principle that underlies costs orders. See G E Dal Pont, Law of Costs (5th Ed, 2021), 19.27, p 745.

[13] Namely, that parties agreed to an order that interest be calculated in accordance with Luppino AsJ's reasons.