Curtis-Smith v Secretary, Department of Social Services

1. The interlocutory application filed on 7 July 2016 is dismissed.
2. There be no order as to costs of the interlocutory application. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BUCHANAN J: 1 These are reasons for orders made yesterday. 2 On 22 October 2015 I dismissed an appeal by Mr Curtis-Smith which he brought under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) against a decision of the Administrative Appeals Tribunal ("the AAT") (Curtis-Smith v Secretary, Department of Social Services [2015] FCA 1115). The AAT had ruled that Mr Curtis-Smith was not eligible for the payment of an age pension. 3 When I dismissed Mr Curtis-Smith's appeal I dismissed it with costs. That was the outcome which had been sought in the submissions filed on behalf of the respondent which were dated 23 July 2015. No different order with respect to costs was sought until, on 7 July 2016, an interlocutory application was filed seeking the following orders: 1. Costs be awarded in a lump sum of $6,000.00 instead of any taxed costs pursuant to r 40.02(b) of the Federal Court Rules 2011 for work up to 22 October 2015; 2. The Applicant pay the Respondent's costs of applying for lump sum costs pursuant to r 40.02(b) of the Federal Court Rules 2011; 3. Costs also be awarded in a lump sum of $1,955.00 instead of any taxed costs pursuant to r 40.02(b) of the Federal Court Rules 2011 for work since 22 October 2015. 4 It is undoubted that costs may be ordered in a specified or lump sum to give effect to an entitlement to costs (see Federal Court of Australia Act 1976 (Cth), s 43(3)(a) and (d) and Federal Court Rules 2011 (Cth) r 40.02(b)). An example of a proceeding in which such an order was sought and granted, which was relied upon by the respondent in support of the present interlocutory application, is the judgment of Yates J on 6 November 2015 in Cameron v Secretary, Department of Human Services (No 2) [2015] FCA 1201. The respondent in that matter was represented by the same firm of solicitors and the same practitioner who have brought the present interlocutory application. Contrary, however, to a contention contained in an affidavit in support of the present interlocutory application I do not read that judgment as stating any particular principle except, perhaps, that the costs of the interlocutory application itself might be allowed. The judgment appears to me to have turned otherwise on its own facts and circumstances. 5 Rule 40.02 contemplates a number of possibilities: A party or a person who is entitled to costs may apply to the Court for an order that costs: (a) awarded in their favour be paid other than as between party and party; or (b) be awarded in a lump sum, instead of, or in addition to, any taxed costs; or (c) be determined otherwise than by taxation. 6 Apart from the possibilities stated by r 40.02 the normal position arising from the order which I made on 22 October 2015 appears to me to be stated by r 40.12 and the Rules which follow. Rule 40.12 states: If an order is made in favour of a party for payment of the party's costs, the costs must be taxed in accordance with this Part, unless the amount of costs is agreed between the parties to the order. The Rules which follow provide for a statement of the particulars of work done, provision for a taxing officer to make an estimate, provision for objection to the estimate, a confidential conference if necessary and taxation if necessary. 7 The amount now sought for costs in a lump sum consists of two separate elements. First, the respondent seeks an order for lump sum costs of $6,000 with respect to the proceedings determined by the orders made on 22 October 2015. A proposition to that effect was put to Mr Curtis-Smith by letter dated 7 December 2015. It was not accepted by Mr Curtis-Smith. Secondly, the respondent seeks a further order for lump sum costs of $1,955, being $1,500 for professional costs and the filing fee of $455 for the present interlocutory application. This sum ($1,955) relates to work done after the orders made on 22 October 2015. 8 Mr Curtis-Smith did not appear to respond to the interlocutory application, but I am satisfied that he was aware of the proceedings and had been provided with the relevant documents. No adjournment of the hearing was sought and it therefore proceeded ex parte. 9 The present application was advanced, in part, on the basis that the amounts sought were less than would be allowed on assessment or taxation. Of course, if that is so, then there could be no prejudice to the respondent, in that respect, by having its claimed costs assessed in the usual way. It became apparent, however, during the hearing of the interlocutory application that the method now selected by the respondent to crystallise the rights flowing from the order which I made on 22 October 2015, in the terms it had sought, was simply the one regarded by it as the most convenient from its own point of view. That is a slender foundation for the present application. 10 The award of costs is a discretionary matter. The discretion undoubtedly extends to directions about the method by which costs will be assessed. Amongst the advantages of the traditional practice of providing a bill of costs for assessment are that it discloses an itemised basis for the costs claimed, it permits initial assessment by an experienced taxing officer and it permits focussed objection. In the event of an objection which cannot be conciliated more detailed scrutiny in the form of taxation may follow but that is far from the usual course which is necessary. The assessment/taxation procedures under the Rules represent an efficient method of dealing with costs disputes without extending or complicating the Court processes from which an order for costs arises. 11 In the present case I was not persuaded that the ordinary processes of assessment/taxation for which the Rules provide should not be used. It may be procedurally convenient to the respondent to proceed by way of an interlocutory application such as the present, but that seemed to me to be an insufficient reason to put aside the regime which is introduced by r 40.12. 12 Accordingly, I dismissed the interlocutory application. 13 It did not appear to me that Mr Curtis-Smith had incurred any legal costs in connection with the interlocutory application. I therefore ordered that there be no order as to the costs of the interlocutory application. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.