Deputy Commissioner of Taxation v Widdup

Federal Court of Australia|2024-02-05|Before: Wigney J

Subject to orders 2 and 3 below, and except for the costs covered by order 6 made on 16 November 2022 and order 2 made on 27 April 2023, the first, second, fourth and fifth respondents pay the applicant's costs of the proceedings.
With respect to order 1, the fourth and fifth respondents are not required to pay the applicant's costs of the originating application dated 21 June 2022 and cross-claim dated 25 July 2022.
With respect to order 1 above, the first and second respondents pay the applicant's costs of the cross-claim dated 25 July 2022 on an indemnity basis for costs incurred from 24 August 2023. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

WIGNEY J: 1 The long-running dispute in this Court between the Deputy Commissioner of Taxation on the one hand, and Mr Julian Widdup and Ms Cecilia Widdup on the other, has recently come to an end. The Widdups have effectively paid the Deputy Commissioner the amounts that they had been assessed as liable to pay, which means that the Deputy Commissioner's action to recover those amounts has become largely otiose. The Widdups have also effectively abandoned their cross-claim against the Deputy Commissioner. Both the Deputy Commissioner's originating application and the Widdups' cross-claim were dismissed by consent on 30 January 2024. 2 The only outstanding issue is whether the Widdups should be ordered to pay the Deputy Commissioner's costs and, if so, on what basis.

The course of the proceedings to date 3 A detailed recitation of the background to, and nature of, the proceedings may be found in two earlier interlocutory applications in this Court: see Deputy Commissioner of Taxation v Widdup [2022] FCA 1403 and Deputy Commissioner of Taxation v Widdup (No 2) [2023] FCA 377. This judgment should be read together with those judgments. In short summary, on 21 June 2022, the Deputy Commissioner issued the Widdups with notices of liability to pay family trust distribution tax (FTDT), notices of liability to a general interest charge (GIC), notices of amended assessments to income tax, and notices of assessment of shortfall interest. On the same day, the Deputy Commissioner filed an originating application in this court which sought judgment against the Widdups in respect of their liabilities arising from the notices and amended assessments. The Deputy Commissioner also applied ex parte for, and obtained, freezing orders from a judge of this Court who was sitting as a duty judge. The freezing orders initially applied for about eight days and the matter was listed for a further hearing to determine whether the orders should be continued. 4 The Widdups in due course claimed that the freezing orders should not have been made and initially flagged that they would oppose the continuation of those orders. Instead, however, they paid money into Court. That had the effect, pursuant to the terms of the freezing orders, that the freezing orders ceased to have effect. They were eventually discharged by the Court. 5 That, however, was by no means the end of the matter. The Widdups filed an application seeking to have the money that they had paid into Court repaid to them. The basis of that application, in summary, was that the notices of liability to pay FTDT were issued without, or in excess of, jurisdiction, and that the Deputy Commissioner had engaged in conscious maladministration in both issuing the notices and applying for the freezing orders. The Widdups also claimed that the Deputy Commissioner failed to disclose material facts in the course of the ex parte hearing. To back up those claims, the Widdups filed a cross-claim against the Deputy Commissioner. The cross-claim sought a range of declarations and orders, including, relevantly, that the FTDT notices be quashed, an order that the Deputy Commissioner's originating application be dismissed, and an order that the Deputy Commissioner be permanently restrained from collecting any tax liabilities notified in those notices or otherwise. 6 The Widdups' interlocutory application for repayment of the money they had paid into court was, in due course, heard and dismissed. Judgment dismissing the interlocutory application was handed down on 27 April 2023: see Widdup (No 2). Subsequently, an application for leave to appeal that decision was dismissed on 24 August 2023: see Widdup v Deputy Commissioner of Taxation [2023] FCAFC 145. 7 It is important to emphasise that the judgment dismissing the Widdups' interlocutory application effectively rejected, albeit on an interlocutory basis, most, if not all, of the arguments and contentions that the Widdups had advanced in support of their cross-claim. In particular, the Court found that the Widdups did not have an arguable case of jurisdictional error or conscious maladministration on the part of the Deputy Commissioner in issuing the FTDT notices. The Court also found that the Deputy Commissioner could, contrary to the Widdups' contentions, rely on the conclusive evidence provisions in s 350-10(1) of sch 1 to the Taxation Administration Act 1953 (Cth), and therefore had a reasonably arguable case in respect of its action to recover the Widdups' tax liabilities based on the FTDT notices and amended income tax assessments. 8 It is also worth noting at this point that, during the hearing of the Widdups' interlocutory application in October 2022, the Widdups indicated through their counsel that they did not contest, at least in the proceedings in this Court, their liability for income tax pursuant to the amended assessments. The amended income tax assessments were, in effect, alternative assessments because the Deputy Commissioner had made it clear that if she recovered the FTDT from the Widdups, the Widdups' liability for the income tax in the amended assessments would effectively be reduced to zero by operation of s 271-105 of sch 2F to the Income Tax Assessment Act 1936 (Cth). 9 The Widdups' position in respect of their income tax liability later changed. In subsequent correspondence between the parties, the Widdups indicated that only Ms Widdup did not contest her liability for income tax. The Widdups also sought to have some of the money that had been paid into court paid or transferred to the Deputy Commissioner and applied towards Ms Widdup's income tax liability. After much correspondence between the parties, consent orders were eventually made on 22 August 2023 which permitted that to occur. An amount of $2,954,254.97 was shortly thereafter paid out of court to the Deputy Commissioner in accordance with that order. 10 One could perhaps be forgiven for thinking that, given the findings made by the court in dismissing the Widdups' interlocutory application, the Widdups would have reconsidered their positions in respect of their defence to the Deputy Commissioner's originating application and the prosecution of their cross-claim. That is particularly so given that the Full Court, in dismissing the Widdups' application for leave to appeal, found that the decision to dismiss the Widdups' interlocutory application was not attended by sufficient doubt to warrant a grant of leave to appeal. The Full Court, in that context, held that the Deputy Commissioner had a good arguable case that the conclusive evidence provisions were engaged, with the result that the production of the FTDT notices were conclusive evidence that they were properly given and that the amounts of tax stated in those notices as being payable by the Widdups were correct. 11 Regrettably, however, the Widdups continued to prosecute their cross-claim and defend the Deputy Commissioner's originating application. The first indication of any change in that regard occurred on 3 October 2023, when the Widdups lodged an interlocutory application which sought an order to the effect that the balance of the money that had been paid into court be paid to the Deputy Commissioner in discharge of Mr Widdup's liability for FTDT. The Deputy Commissioner opposed the precise form of the orders sought by the Widdups and proposed alternative orders. The Court ultimately made the orders proposed by the Deputy Commissioner on 1 November 2023, subject to a minor variation with which the Widdups agreed. On 17 November 2023, $2,042,639.92 was paid out of court and received by the Deputy Commissioner pursuant to the orders that were made on 1 November 2023. 12 The orders made on 1 November 2023 provided that the Deputy Commissioner transfer the payment which had previously been made out of court in discharge of Ms Widdup's income tax liability be applied towards the Widdups' liability for FTDT. On 22 November 2023, the Deputy Commissioner applied the sum of $2,954,254.97, which had previously been applied to Ms Widdup's income tax liability, to the Widdups' joint and several liability to FTDT. When that occurred, the Widdups' liability for FTDT and GIC, pursuant to the notices that were issued in June 2022, was reduced to $470,662.74. That amount was paid to the Deputy Commissioner on 23 November 2023. The upshot was that the Widdups no longer had any liability for FTDT or GIC pursuant to the notices that were issued in June 2022. It also followed that both the Deputy Commissioner's originating application and the Widdups' cross-claim became essentially otiose. No doubt recognising that fact, consent orders were eventually made dismissing both the originating application and the cross-claim. As indicated earlier, the only outstanding issue is in respect of costs.

Relevant principles - costs where there has been no hearing on the merits 13 The court undoubtedly has a broad discretion to award costs under s 43 of the Federal Court of Australia Act 1976 (Cth). The exercise of the discretion in relation to costs is usually relatively straightforward when there has been a hearing on the merits and the outcome of the proceedings is clear. In such cases, costs ordinarily follow the event: see Latoudis v Casey (1990) 170 CLR 534 at 543, 566 to 568; [1990] HCA 59. Where, however, there was no hearing on the merits because the moving party no longer wanted to pursue the action, usually because of some supervening event, the situation is not so clear. The general principles that guide the exercise of the court's discretion in relation to costs in those circumstances have been considered in a number of cases: see, in particular, Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6; ONE.TEL Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548; [2000] FCA 270 at [5]-[6]; Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681; [2018] NSWCA 84. The general principles established by those cases may be summarised as follows. 14 First, where there has been no hearing on the merits of an action, but the moving party no longer wants to proceed with the action, the Court cannot try a hypothetical action between the parties so as to resolve the question of costs. 15 Second, in such a case, the Court can nevertheless, in an appropriate case, make an order as to costs. 16 Third, an example of a case where the Court can make a costs order, despite the absence of any hearing on the merits, is where one of the parties had acted unreasonably in pursuing or defending the proceeding until the litigation was settled or its further prosecution became futile. 17 Fourth, another example of a case where a costs order may be appropriate in those circumstances is where it is possible for the Court to conclude, on the face of the record, that one party had been successful and the other party unsuccessful, or that one party was almost certain to have succeeded if the matter had gone to trial. 18 Fifth, "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": ONE.TEL at [6]. In the former type of case, the exercise of the Court's discretion would usually justify the award of costs to the successful party.

Should an order for costs be made in the Deputy Commissioner's favour? 19 Applying the applicable principles to the facts and circumstances of this case supports the conclusion that it is appropriate to make an order for costs in favour of the Deputy Commissioner in respect of the Deputy Commissioner's originating application and the Widdups' cross-claim. That is so for a number of reasons. 20 First, the evidence before the Court supports a finding that it was unreasonable for the Widdups to continue to defend the Deputy Commissioner's originating application and prosecute their cross-claim from at least the time the Full Court refused to grant the Widdups leave to appeal the decision dismissing their interlocutory application in respect of payment out of court, if not before. Both the first instance decision in respect of the interlocutory application and the Full Court's decision refusing leave to appeal made it clear that the Widdups did not have a reasonably arguable case of conscious maladministration or jurisdictional error on the part of the Deputy Commissioner, and that in those circumstances, the conclusive evidence provisions applied, including in respect of the FTDT notices. Both the first instance decision and the Full Court decision also make it clear that the Widdups' construction of the relevant statutory provisions concerning family trust elections which provided the basis of their cross-claim was erroneous. 21 It is true that, in the first instance decision, it was emphasised that it remained open to the Widdups to pursue their cross-claim at a final hearing given that the findings that had been made against them had been made in the context of interlocutory application. A similar observation was made by the Full Court in the context of the Widdups' application for leave to appeal. The Full Court stated (Widdup (No 2) at [41]) that: [N]otwithstanding our conclusion that no error has been shown in relation to the primary judge's evaluation of the strength of the cross-claim, it remains open to Mr and Mrs Widdup to pursue the subject matter of their cross-claim at the final hearing, provided that it is on the basis of reasonably available arguments upon proper material. (Emphasis added) 22 It may be noted that the Full Court's observation that it remained open to the Widdups to pursue their cross-claim at a final hearing was subject to an important qualification: "provided that it is on the basis of reasonably available arguments upon proper material". In their submissions in opposition to the costs order, the Widdups failed to identify any "reasonably available arguments upon proper material" which differed in any way from the arguments that had been advanced at the interlocutory stage, or in support of their application for leave to appeal. They did not identify any new material or new arguments that they could have advanced had the matter proceeded to trial. 23 In contrast, and contrary to the contention that appeared to be advanced by the Widdups, the evidence does not support any finding that the Deputy Commissioner acted unreasonably in either commencing the proceeding or defending the Widdups' cross-claim. Both the first instance decision dismissing the Widdups' interlocutory application for payment of money out of court and the Full Court's decision dismissing the Widdups' application for leave to appeal confirmed that the Deputy Commissioner had a good arguable case for recovery of the tax in the relevant notices. Moreover, the evidence indicated that the Deputy Commissioner made a number of offers to resolve the dispute and settle the proceeding, particularly after the dismissal of the Widdups' interlocutory application. The Widdups rejected those offers. 24 Second, for essentially the same reasons, and for the reasons given both in the first instance judgment dismissing the Widdups' interlocutory application and the Full Court judgment dismissing the Widdups' application for leave to appeal, this is a case where the Court can confidently conclude, from the record, that the Deputy Commissioner succeeded in the litigation, and the Widdups were unsuccessful. The Widdups have paid the full amounts of FTDT that the Deputy Commissioner claimed they were liable to pay, along with the applicable GIC. In other words, the Deputy Commissioner obtained everything she had sought in her originating application. The Widdups essentially abandoned both their defence and cross-claim.. The Deputy Commissioner was wholly successful. 25 Third, it follows that this is a case where it can be safely concluded that the Widdups, having litigated for some time, effectively surrendered or capitulated. Counsel for the Widdups effectively conceded as much in his submissions when he said that the Widdups "gave up" after the Full Court judgment. While the Widdups suggested that some of the reasoning in the Full Court's judgment came as a surprise to them, it is difficult to see why that is so. The Full Court essentially upheld the reasoning in the first instance decision. That reasoning, in turn, was largely consistent with the way the Deputy Commissioner had put her case from the outset. This is not a case where some supervening event or settlement removed or modified the subject of the dispute between the parties, except as to costs. It was a capitulation by the Widdups. 26 Counsel for the Widdups maintained that the Widdups had acted reasonably at all times. He submitted that it was the Deputy Commissioner who had acted unreasonably. The thrust of his submissions in that regard was that Ms Widdup had endeavoured to have the money which had been paid into Court applied towards her income tax liability. Her efforts, in that regard, so it was submitted, had been effectively thwarted or stymied by the Deputy Commissioner who had, so it was said, refused to consent to that occurring without attaching "unreasonable conditions". Those supposedly unreasonable conditions included requiring the Widdups to pay a proportion of the Deputy Commissioner's costs of the proceedings (as opposed to costs as assessed or taxed), or requiring the Widdups to consent to judgment being entered against them, or requiring the Widdups to enter into a global settlement, which would preclude them from pursuing their Pt IVC of the Taxation Administration Act rights. 27 The parties tendered voluminous evidence concerning their communications and correspondence, including correspondence concerning the proposals in respect of the settlement of the matter. More will be said about that evidence in the context of considering the Deputy Commissioner's contention that the Widdups should pay indemnity costs. It suffices at this point to note that I do not accept that the evidence establishes that the Deputy Commissioner acted unreasonably, nor that the Widdups acted reasonably in continuing to pursue their cross-claim, particularly after the Full Court decision. 28 For all those reasons, the Widdups should be ordered to pay the Deputy Commissioner's costs in respect of the Deputy Commissioner's originating application and the Widdups' cross-claim. 29 The question whether the Deputy Commissioner's costs should be assessed on an indemnity basis is somewhat more difficult.

Relevant principles - indemnity costs 30 The principles in respect of indemnity costs are well settled. The relevant principles were summarised in the following terms in Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 5) (2021) 151 ACSR 26; [2021] FCA 246 at [7]-[12]: The discretion to award costs on a basis other than as between party and party, including on an indemnity basis, is "unfettered, save that it must be exercised judicially and not arbitrarily or capriciously": Australian Competition and Consumer Commission v The Construction, Forestry, Mining and Energy Union (No 4) [2018] FCA 684 at [96]. The discretion must also be exercised in light of the requirement that the Court consider any failure by a party to comply with the overarching purpose of the civil practice and procedure provisions to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible: see ss 37N(4), 37M(1) of the FCA Act; LFDB v SM (No 2) [2017] FCAFC 207 at [7]. The discretion to depart from an order for party and party costs will not be exercised unless there is some special or unusual feature or the justice of the case so requires: Cirillo v Consolidated Press Property Ltd (formerly known as Citicorp Australia Ltd) (No 2) [2007] FCA 179 at [3]; Seven Network Ltd v News Ltd (2009) 182 FCR 160; [2009] FCAFC 166 at [1102]; Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (No 2) [2017] FCAFC 116 at [5]. The purpose of a costs order is to compensate the successful party, not to punish the unsuccessful one: King v Yurisich (No 2) [2007] FCAFC 51 at [19], citing Latoudis v Casey (1990) 170 CLR 534; Seven Network at [1099]. An award of indemnity costs is to "serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs": Hamod v New South Wales (2002) 188 ALR 659; [2002] FCAFC 97 at [20]; see also Kazal v Independent Commission Against Corruption and Ors (No 2) [2020] NSWSC 17 at [60]-[62]; Cirillo at [4]-[5]; Melbourne City Investments at [5]. The circumstances in which it may be found to be unreasonable for the successful party to be subjected to the expenditure of any costs are not fixed or closed, but have been found to include, relevantly: where "the applicant, properly advised, should have known that he had no chance of success" (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397 at 401; De Alwis v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 77 at [7]); where the moving party "persists in what should on proper consideration be seen to be a hopeless case" (J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (No 2) (1993) 46 IR 301 at 303); where the applicant's case was "always clearly foredoomed to fail" and "they ought to have known this to be so" (Smolle v Australian and New Zealand Banking Group Ltd (No 2) [2007] FCA 1967 at [25]); where an application is "wholly untenable and misconceived" (Henke v Carter [2002] FCA 492 at [22]); and where an applicant persists in prosecuting a proceeding without regard to the evidentiary difficulties in the case (Yates Property Corporation Pty Ltd v Boland (No 2) (1997) 147 ALR 685 at 693): see generally Melbourne City Investments at [5]; Seven Network at [1102]; Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 233. Two things should perhaps be noted about these descriptions of the types of cases in which an indemnity costs order may be warranted. First, they use expressions which suggest a high degree of certainty concerning the deficiencies in the losing party's case. It would appear not to be enough that the losing party's case was simply weak or tenuous. Second, and relatedly, the deficiencies must be sufficiently manifest and clear such that it can be inferred that the losing party would or should have appreciated them when the action was commenced or continued, at least if they had given proper consideration to, or been properly advised about, the merits of their case. In assessing whether a case can be said to "have no chance of success", or to be "hopeless" or "foredoomed to fail", and that the losing party should have known that to be the case, it is also necessary to be wary of reasoning with the benefit of hindsight. As Goldberg J said in Re Kingsheath Club of the Clubs Ltd (in liq) [2003] FCA 1589 at [5], it is "easy with hindsight to make an observation that an action has no chance of success, after the matter has been fully argued and has enjoyed considered attention of experienced solicitors and senior and junior counsel".

Should costs be assessed on an indemnity basis? 31 The Deputy Commissioner sought an order for indemnity costs from either 11 October 2022, or in the alternative, 27 April 2023. The basis of the claim for indemnity costs from 11 October 2022 was that on that day, counsel for the Widdups effectively conceded that the Widdups did not challenge or dispute their liability for income tax. That concession was made on the second day of the hearing of the Widdups' interlocutory application for repayment of the money paid into court. The basis of the claim for indemnity costs from 27 April 2023 was that the judgment dismissing the Widdups' interlocutory application was handed down on that day. 32 The thrust of the Deputy Commissioner's submissions in support of an order for indemnity costs was that such an order was warranted for two reasons. The first reason was that it was unreasonable for the Widdups to refuse to accept various proposals and settlement offers that the Deputy Commissioner had from as early as 14 October 2022 when the Widdups indicated that they did not dispute their liability for income tax. 33 The second reason was said to be that the Widdups ought to have known that their cross-claim was doomed to fail from at least 27 April 2023, when their interlocutory application for the repayment of the funds they had paid into court was dismissed. The Deputy Commissioner submitted that the Widdups' pursuit of the cross-claim after that time was "nothing more than a stubborn refusal to accept the operation of the FTDT provisions and the [Tax Administration Act]", and "this in turn led to a prolongation of the dispute between the parties as to how the money should be paid out of Court and wasted the resources of the [Deputy Commissioner]". 34 As adverted to earlier, the parties produced voluminous documentary evidence concerning their communications and correspondence, concerning the potential resolution or settlement of the matter. Lengthy submissions were also made concerning the reasonableness or unreasonableness of the respective positions taken by the parties. As has become somewhat typical in this case, those submissions were poles apart. 35 I do not propose to address the complex series of settlement proposals and their rejection at any length. It suffices to make the following brief points. 36 First, much of the early correspondence between the parties concerned how the money which had been paid into Court could be utilised or applied by the Deputy Commissioner, particularly in light of the concession by the Widdups (though later only by Ms Widdup) that there was no contest in relation to their income tax liability. The difficulty is that, even if it could be said that the stance taken by the Widdups in respect of the Deputy Commissioner's various proposals concerning the application of the funds was unreasonable, that correspondence mostly concerned, or was sent in the context of, the Widdups' interlocutory application in respect of the funds paid into Court. If the conduct on the part of the Widdups in rejecting settlement offers in that correspondence was unreasonable, it may have supported an argument that the Widdups pay indemnity costs in relation to the unsuccessful interlocutory application. The Deputy Commissioner was awarded costs in respect of the interlocutory application but did not apply for an order that those costs be assessed on an indemnity basis. It is in those circumstances difficult to see why or how the Widdups' conduct in respect of the interlocutory application could support an order for indemnity costs in respect of the cross-claim, even if it was unreasonable. 37 Second, while it would be fair to characterise some of the correspondence sent on the Widdups' behalf to be unnecessarily combative, uncompromising, and unhelpful, it is difficult to characterise the approach taken by, or on behalf of, the Widdups, at least prior to the dismissal of their interlocutory application, to be sufficiently unreasonable to, without more, support an order for indemnity costs. There is some merit in the Widdups' submission that it was not unreasonable for them to reject some of the Deputy Commissioner's proposals, at least some of the earlier proposals, because they included or attached conditions which they considered to be unreasonable or unacceptable, including conditions concerning costs and the entry of judgment. That is not to say that the Deputy Commissioner's proposals were in any sense unreasonable, as was contended by the Widdups. The point, rather, is that the Widdups' response or rejection of the proposals was not sufficiently unreasonable to warrant an order for indemnity costs. 38 There is, however, more merit in the Deputy Commissioner's contention that the Widdups' continued prosecution of their cross-claim after the dismissal of their interlocutory application was unreasonable. The Widdups' persistence in that regard demonstrated a dogged and blinkered unwillingness to accept that their interpretation and contentions about the operation of the relevant statutory provisions concerning FTDT were erroneous. That said, it was perhaps not unreasonable for the Widdups to exercise their right to apply for leave to appeal in respect of the dismissal of their interlocutory application. The interlocutory application and the application for leave to appeal raised some difficult issues and, while the Widdups' application for leave to appeal was dismissed, the application was not sufficiently unmeritorious as to warrant an order for indemnity costs. 39 Once the Full Court dismissed that application, however, it must, or at least should, have been readily apparent to the Widdups that the propositions of law that underlay their cross-claim were erroneous, and that their cross-claim was doomed to fail. Yet, they persisted with it for a number more months. The parties again tendered voluminous evidence concerning their correspondence following the Full Court judgment. I again do not propose to address that correspondence in any detail. It suffices to say that the Deputy Commissioner again put forward a number of proposals which would resolve the dispute and bring the proceeding to an end. The rejection of those proposals by the Widdups was largely the product of an unnecessarily hostile, nit-picking, and unreasonable approach. It was ultimately necessary for the Court to intervene so as to resolve what were minor and technical sticking-points. 40 Ultimately, while there is some force in the Deputy Commission's contention that the Widdups acted unreasonably following the dismissal of their interlocutory application on 27 April 2023, I am not satisfied that their continued pursuit of their cross-claim in the period from 27 April 2023 to 24 August 2023, when their application for leave to appeal was dismissed, was sufficiently unreasonable to justify an order for indemnity costs. I am, however, persuaded that the Widdups acted sufficiently unreasonably after the Full Court judgment to warrant an order for indemnity costs from that date. It follows that the costs order in favour of the Deputy Commissioner should be that the Deputy Commissioner's costs in respect of the substantive proceedings after 24 August 2023 should be assessed on an indemnity basis.

A lump sum costs order? 41 The final issue to resolve is whether it would be appropriate to make a lump sum costs order. 42 The Deputy Commissioner applied for a lump sum costs order, but did not adduce any evidence which would allow the Court to make any assessment or finding concerning her costs. The proposal advanced by the Deputy Commissioner was that there be a further hearing before either a judge or registrar for the determination of the appropriate quantum of the costs order. 43 The parties did not advance any substantive submissions as to why a lump sum costs order would be appropriate or desirable in the circumstances of this case. While the Court's general preference is that a lump sum costs order be made, if it is practicable or appropriate to do so, utilisation of that procedure is ultimately at the discretion of the judge. 44 I am not persuaded or satisfied that a lump sum costs order would be practicable or appropriate in the circumstances of this case. That is essentially because costs orders have already been made in respect of both the interlocutory application and the application for leave to appeal. Those costs orders were not made on a lump sum basis. That would mean that the determination of a lump sum costs order in relation to the originating application and cross-claim alone would be somewhat complex. Moreover, the manner in which the proceedings have been conducted to date would tend to suggest that any hearing to determine the quantum of a lump sum costs order would be protracted, difficult, and the subject of much dispute. It would not, in other words, be an efficient or effective way to determine the appropriate quantum of the costs order.

Conclusion and disposition 45 The applicants are entitled to their costs in respect of the substantive proceedings, namely the originating application and the Widdups' cross-claim. Those costs should be assessed on an indemnity basis from 24 August 2023. I will hear from the parties in respect of the precise form of the orders. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wigney.

SCHEDULE OF PARTIES NSD 466 of 2022 Respondents Fourth Respondent: FPL PARTNERSHIP PTY LTD ACN 629 515 215 Fifth Respondent: AURUM ASSET MANAGEMENT PTY LTD Sixth Respondent: FPLJCW INVESTMENT FUND LLC

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