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GREENWOOD J: 1 A corporation described as BUSS (Queensland) Pty Ltd is the trustee ("Trustee") of the Building Unions Superannuation Scheme (Queensland) ("BUSSQ" or the "Scheme"). The Trustee manages superannuation contributions on behalf of many thousands of members of the Scheme. On 15 March 2022, the Court made orders restricting the disclosure of commercially sensitive and confidential information relied upon in the proceedings and accordingly in these reasons I will be circumspect about aspects of the contextual facts. 2 The Scheme is an "employer-sponsored fund" for the purposes of Part 9 of the Superannuation Industry (Supervision) Act 1993 (Cth) (the "Industry Supervision Act"). The object of Part 9 is to set out rules about the representation of employers and members in relation to the management and control of such funds. 3 In that context, the Trustee of the Scheme has two equal shareholders. The applicant plaintiff, Construction, Forestry, Mining and Energy Industrial Union of Employees, Queensland ("CFMEUQ") is the "Scheme Member Body". The "Employer Body" is the respondent first defendant, Queensland Master Builders Association, Industrial Organisation of Employees ("QMBA"). 4 The number of directors of the Trustee must not be less than six and a quorum for a Board meeting is constituted by four directors. Each of CFMEUQ and QMBA appoint three directors. 5 On 17 January 2022, the three CFMEUQ directors were Ms Paula Masters (the Chair of the Board"), Ms Jacqueline Collie and Mr Michael Ravbar. The three QMBA directors were Mr Paul Bidwell, Ms Sonya Beyers and Ms Madeline Dermatossian. On the morning of 17 January 2022 between 8.00am and 11.00am, each of Mr Bidwell, Ms Beyers and Ms Dermatossian, resigned as a director by email addressed to Ms Masters as Chair of the Board. Each email sets out briefly the concerns of each resigning director. Without reciting those concerns in these reasons, it is sufficient to note that each resigning director held concerns about whether the Board was capable of acting in the best interests of the members. Ms Beyers took the view that her concerns had been confirmed by concerns expressed in a document described as a "Deloitte Board Evaluation and Capability Assessment" dated 25 August 2021 (and a response dated 25 October 2021), and concerns expressed by the industry regulator, the Australian Prudential Regulation Authority ("APRA"). 6 The Constitution for the Trustee company provides by the Articles of Association that upon a vacancy arising in the Board due to the resignation of a director, the vacancy shall be filled (by the relevant appointor shareholder) "within the time period required under the Relevant Requirements … so that Equal Representation is maintained". The term "Relevant Requirements" is defined to mean that term as defined in the Trust Deed but there is no such definition in the Trust Deed. It seems to be common ground between the parties that the term "Relevant Requirements" means the statutory time period set out in s 89(3) of the Industry Supervision Act which contemplates at s 89(3)(c) a period of 90 days within which the vacancy must be filled. Thus, the three vacancies created by the resignations had to be filled by QMBA by 27 April 2022 in order to act in conformity with the Constitution. 7 On 20 January 2022, the solicitors for the Trustee (Thomson Geer, "TG") sent a letter to the solicitors for QMBA attaching a letter from APRA raising certain matters. The letter from Thomson Geer expressed particular concerns. On 21 January 2022, QMBA's solicitors (D&D Law, "DDL") responded setting out certain proposals to address the concerns. Further exchanges occurred between TG and DDL. 8 On 21 January 2022, CFMEUQ sent a letter to each of the directors of QMBA agitating the proposition that the Trustee was unable to function without QMBA filling the three vacancies and that the interests of the members were being prejudiced. That matter was pressed again on 31 January 2022 with CFMEUQ foreshadowing proceedings by 7 February 2022 "to enforce MBAQ's obligations as a shareholder under the company's constitution including to appoint directors to the Board of [the Trustee]". 9 On 31 January 2022, QMBA sent an email to Ms Masters setting out a series of concerns and criticisms of the conduct of Ms Masters and other matters said to have led to the concerns of the three directors who had resigned from the Board. The letter also pressed the need expressed by QMBA to, in effect, "see the books" before it could be in a position to identify the right persons to be appointed to the Board to fill the vacancies. 10 On 1 February 2022, the solicitors for QMBA, DDL, sent a letter to the solicitors for CFMEUQ (Hall Payne, "HP") raising objections to contended conduct on the part of Mr Ravbar and suggesting a meeting of the shareholders on the basis of particular conditions being satisfied one of which involved the provision of information and "books" relating to the direction and management of the Scheme over a period described as the last six months. CFMEUQ's lawyers, HP, responded on 2 February 2022. They rejected the criticism made of Mr Ravbar. They reasserted that the Trustee was unable to function without the vacancies being filled. They suggested that any meeting of shareholders occur once the vacancies were filled and they asserted that the demand for access to the identified information and related documents concerning the Scheme was inappropriate. 11 On 4 February 2022, the regulator, APRA, took certain steps. 12 On 8 February 2022, CFMEUQ commenced these proceedings. By these proceedings, the plaintiff sought an order under s 140 of the Corporations Act 2001 (Cth) (the "Act") requiring QMBA to "observe and perform the constitution [of the Trustee] by appointing three directors to the board of the company to fill the current vacancies within seven days". In the alternative to that order, the plaintiff sought an order under s 233(1)(c) or s 233(1)(j) of the Act that QMBA fill the vacancies within seven days. 13 Section 140 of the Act provides that the company's constitution (and any replaceable rules) has effect as a contract between the company and each member, between the company and each director and between member and member, under which each person agrees to observe and perform the constitution and rules so far as they apply to that person. Thus, it seems, in effect, that specific performance of the contract was being sought by Order 1. 14 Section 232 of the Act provides that the Court may make an order under s 233 (concerning the relevant company) if any one of the grounds recited in s 232 are satisfied. On that assumption (or contention), an order was sought "regulating the conduct of the company's affairs in the future" (that is, an order that QMBA fill the casual vacancies within seven days; s 233(1)(c)). Alternatively, an order was sought, in the same terms, on the footing of s 233(1)(j) "requiring a person to do a specified act". 15 The proceeding was listed for an urgent case management hearing on 11 February 2022 at which the matter was listed for a final hearing on 4 March 2022. A series of procedural orders were made to enable the hearing to occur on that date. 16 On 11 February 2022, QMBA filed an affidavit of Mr Grant Galvin, the Chief Executive Officer of QMBA, in which he deposes to having been instructed by QMBA to commence a recruitment process for identifying appropriately qualified persons to join the Board of the Trustee. That process was designed to identify, he says, persons who satisfied the skills requirements required by the regulator, APRA. 17 On 11 February 2022, orders were also made joining the Trustee as a second defendant and giving leave to APRA to appear as amicus curiae. 18 On 18 February 2022, DDL sent a letter to HP advising: that on receipt of material from APRA on 4 February 2022, QMBA was "armed with adequate information" so as to properly consider who might be appointed to the Board; that the proceedings "in no way affected our client's process"; that the Trustee and Mr Ravbar for CFMEUQ had both recognised in the material that QMBA had a period of 90 days to fill the vacancies; that the proceedings were premature; and that Mr Hick, Mr Taylor and Mr Baguley had been appointed to the Board of the Trustee by QMBA so as to fill the vacancies created by the resignations. 19 On 21 February 2022, CFMEUQ, with the consent of QMBA, discontinued these proceedings on terms that the question of the costs of the proceedings be reserved for determination on the papers with submissions being filed by the parties by 28 February 2022. Submissions were duly filed. 20 Thus, the only question to now be decided in relation to the proceeding is the terms of any order as to costs. 21 It will be immediately apparent that the question of costs is to be decided in circumstances where a proceeding set down for a final hearing on 4 March 2022 was discontinued by consent on 21 February 2022 without, obviously enough, any findings on contested questions of fact or law and in circumstances where the relief sought was overtaken by the exercise of the power and the discharge of the obligation imposed by the Constitution on QMBA to fill the three vacancies. That power was exercised on or about 18 February 2022. 22 The relevant provisions of the Federal Court of Australia Act 1976 (Cth) (the "Court Act") and the Federal Court Rules 2011 are these. Section 43(1) of the Court Act confers a jurisdiction to award costs in all proceedings before the Court other than particular proceedings not relevant for present circumstances. Section 43(2) provides that except as provided by any other Act, the award of costs is in the discretion of the Court or Judge. Section 43(3) provides that without limiting the discretion conferred in relation to costs, the Court or a Judge may do any of the things recited at s 43(3)(a) to (h) including making an award of costs at any stage in a proceeding, whether before, during or after any hearing or trial and award costs in favour or against a party whether or not the party is successful in the proceeding: s 43(3)(a) and (e). As to the Federal Court Rules, rule 1.31 provides that the Court may in making any order in the proceeding have regard to the nature and complexity of the proceeding. Rule 1.32 provides that the Court may make any order that the Court considers appropriate in the interests of justice. Rule 1.33 provides that the Court may make any order subject to any conditions the Court considers appropriate. These rules are consistent with the scope of the discretion conferred by s 43 of the Court Act. 23 Although the "general statutory discretion" of the kind conferred by s 43 of the Court Act (and the Rules) has been described as "unconfined" in its "nature" (Latoudis v Casey (1990) 170 CLR 534 at 541 ("Latoudis v Casey"), Mason CJ), it does not follow that attempts to formulate principles according to which the discretion ought to be exercised operates as a fetter upon the discretion not intended by the legislature: Latoudis v Casey, Mason CJ at 541. Where a discretion is conferred in terms unconfined by the text, it must be exercised according to the subject matter, scope and purpose of the legislation: Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492, Dixon J at 505; Oshlack v Richmond River Council (1998) 193 CLR 72 ("Oshlack"), Gaudron and Gummow JJ at [22]. Hence the reference to the intention of the legislature by Mason CJ in Latoudis v Casey at 541, mentioned earlier. 24 Accordingly, in that sense, the discretion conferred under s 43 of the Court Act is not at large. It must be exercised according to settled principle and, plainly enough, it must be exercised judicially and not arbitrarily or capriciously or so as to frustrate the legislative intent: Oshlack, Gaudron and Gummow JJ at [22]; Northern Territory of Australia v Souleymane Sangare (2019) 265 CLR 164 ("NT v Sangare"), Kiefel CJ, Bell, Gageler, Keane and Nettle JJ at [24]. 25 Moreover, one of the most, if not the most important principle (NT v Sangare, the Court at [25]) guiding the exercise of the discretion is that the "successful party is generally entitled to his or her [or its] costs by way of indemnity against the expense of litigation that should not, in justice, have been visited upon that party": NT v Sangare, the Court at [25] affirming the observations of McHugh J in Oshlack at [66] and [67]; Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52, Gleeson CJ, Gummow, Hayne and Crennan JJ at [25]. 26 Thus, success on the merits in the proceeding is regarded as "the most important factor" informing the exercise of the discretion and "usually controls the exercise of the discretion": Re The Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 at 624 ("Lai Qin"). Where there has been no determination on the merits, the Court is "necessarily deprived of the factor that usually determines whether or how it will make a costs order": Lai Qin, McHugh J at 624. 27 Nevertheless, in an "appropriate case" the general statutory discretion as to costs can properly be exercised to make an order for costs even though there has been no hearing on the merits and the moving party no longer wishes to proceed with the action: Lai Qin, McHugh J at 624. Having made that observation, his Honour said this at 624 and 625: The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. … Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. … If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases [as footnoted by his Honour at footnote 7]. [citations omitted] 28 In Chapman v Luminis Pty Ltd [2003] FCAFC 162, the Full Court of this Court, Beaumont, Sundberg and Hely JJ at [7] adopted the observations of McHugh J in Lai Qin quoted above. Their Honours also adopted the observations of Burchett J in ONE.TEL Ltd v Deputy Commissioner of Taxation (2000) 171 ALR 227 at 231-232, [6], in these terms: In my opinion, it is important to draw a distinction between cases in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event or settlement so removes or modifies the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for an exercise of the court's discretion otherwise than by an award of costs to the successful party. It is the latter type of case which more often creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs. 29 In these proceedings, I am not able to conclude that one party acted "so unreasonably" that the other should bear the costs of the action. Nor am I able to conclude that one party "was almost certain to have succeeded" if the matter had been fully tried on 4 March 2022. As to that matter, even though QMBA enjoyed a 90 day period to fill the vacancies and the appointments were made well within that time, contested questions of fact were alive and consequential questions of law, concerning the effect of the resignations on the governance of the Trustee as a result of a quorum being unable to be convened. It is not clear how all of these contested questions of fact may have played out. Nor is this a case in which QMBA effectively surrendered to CFMEUQ. This is more a class of case in which a supervening event occurred where QMBA having completed its process filled the vacancies. It seems to me that this proceeding is in that class of case where there is difficulty in discerning a "clear reason" why one party rather than the other, should bear the costs. 30 Accordingly, it follows that there will be no order as to costs except with respect to one matter. 31 It seems to me that there is no good reason why the second defendant ought to be bearing the costs of being brought to Court. The appropriate order is that the plaintiff and the first defendant pay the costs of the second defendant of and incidental to the proceedings. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Greenwood.