Frigger v Professional Services of Australia Pty Ltd

Fewin Pty Ltd v Burke (No 3) [2017] FCA 693

Geneva Laboratories Ltd v Prestige Premium Deals Pty Ltd (No 5) [2017] FCA 63; 122 IPR 279

Hadid v Lenfest Communications Inc [2000] FCA 628

Hamod v New South Wales [2011] NSWCA 375

Hancock v Rinehart (Lump sum costs) [2015] NSWSC 1640

Harrison v Schipp [2002] NSWCA 213; 54 NSWLR 738

Hislop v Paltar Petroleum Ltd (No 4) [2017] FCA 1632

Innes v AAL Aviation Ltd (No 2) [2018] FCAFC 130

Stevenson v Zafra Pty Ltd [2021] WASCA 181; 58 WAR 383

PROFESSIONAL SERVICES OF AUSTRALIA PTY LTD (ACN 082 879 641)

1. In accordance with paragraph 2 of the orders of 15 November 2024 the plaintiffs pay the defendants' costs of the proceeding, including all costs ordered to be in the cause or reserved, fixed in the sum of $88,000.
2. Paragraph 6 of the orders of 9 December 2022 be varied such that the costs of the interlocutory application for security for costs be included in the lump-sum costs of the proceeding referred to in paragraph 1 of these orders.
3. The sum of $35,000 paid into Court as security for the defendants' costs of the proceeding in accordance with paragraphs 2 and 3 of the orders of 9 December 2022 be paid out of Court to or at the direction of the defendants.
4. The defendants have liberty to apply for further or other order with respect to paragraph 3 of these orders on 48 hours' written notice.

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

1. These reasons concern determination of the lump-sum costs of the proceeding in accordance with final orders made dismissing the plaintiffs' originating process.

1. On 15 November 2024 orders were made requiring the parties to file and serve minutes of proposed orders for lump-sum assessment, affidavits and written outlines of submissions in support of the proposed orders and assessment. These orders were consistent with the procedure for determination of lump-sum costs in accordance with paras 4.10 to 4.15 of the Costs Practice Note (GPN-COSTS).
2. No minute of proposed orders, costs summary supported by an affidavit or written submissions were filed and served by the defendants. Rather, 14 days after the time for filing and serving the materials, the defendants filed an affidavit of Mr Eastwood sworn 13 December 2024 and an affidavit of Mr Stephenson sworn 6 December 2024. Each of these affidavits annexed a draft bill of costs in Form 127 under r 40.18 of the Federal Court Rules 2011 (Cth). The draft bill annexed to Mr Eastwood's affidavit totalled $66,105.70 and the draft bill annexed to Mr Stephenson's affidavit totalled $68,888.61. Therefore, defendants have not filed a 'costs summary' and affidavit in support contrary to para 4.10 to 4.12 of GPN-COSTS. Moreover, the affidavits are in a form that is contrary to para 4.11 which provides that a costs summary must be 'clear, concise and direct and not resemble a bill of costs in taxable form'. Further, no minute of proposed orders, 'costs response' supported by an affidavit or written submissions were filed by the plaintiffs. It follows that none of the parties has complied with the orders of the Court or paras 4.10 to 4.15 of GPN-COSTS.
3. Notwithstanding the parties' failure to comply with orders and the practice note, the question of the determination of the lump-sum costs was heard on 23 April 2025. At that hearing, the parties made oral submissions in support and in opposition to the determination of a lump-sum. The defendants claim a lump-sum of $134,994.31 ($66,105.70 plus $68,888.61) in accordance with the draft bills of costs annexed to the affidavits of Mr Eastwood and Mr Stephenson.
4. Neither the defendants nor the plaintiffs made any submissions that were of any real assistance to the Court. Further, as will be explained, the affidavit evidence is of limited utility in determining an appropriate lump-sum. Nonetheless, sufficient evidence can be gleaned from the affidavits which, taken with the Court's observations of the proceeding and experience, permits the determination of a lump-sum of legal costs that is proportionate to the nature of the proceeding by a process that is logical, fair and reasonable.

1. Notwithstanding the paucity of the parties' submissions, the principles applicable to the assessment of lump-sum costs awards in this Court are relatively well-established. These may be summarised as follows.

(1) As costs were awarded without any further description, the costs are to be as between party and party: r 40.01 of the Rules. The dictionary to the Rules defines those costs as 'only the costs that have been fairly and reasonably incurred by the party in the conduct of the litigation'. See, also, Hislop v Paltar Petroleum Ltd (No 4) [2017] FCA 1632 at [6] (Gleeson J).

(2) Determination of a lump-sum is not the result of a process of taxation or assessment of costs. The lump-sum can only be fixed broadly having regard to the information before the Court: Harrison v Schipp [2002] NSWCA 213; 54 NSWLR 738 at [22] (Giles JA); Beach Petroleum NL v Johnson (No 2) [1995] FCA 350; 57 FCR 119 at 124 (von Doussa J); Hadid v Lenfest Communications Inc [2000] FCA 628 at [35] (Lehane J). That is, the Court is not required to undertake a detailed examination of the kind that would be appropriate to a taxation or formal costs assessment as to do so would defeat the purpose of making a lump-sum order: Bitek Pty Ltd v IConnect Pty Ltd [2012] FCA 506; 290 ALR 288 at [23] (Kenny J).

(3) Determination of the lump-sum involves estimation and not arithmetic: Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2014] FCA 346 at [17(e)] (Foster J). The sum of costs fixed should be proportionate to the nature, including the complexity, of the case: Bitek at [18]. See, also, Hislop at [7].

(4) The starting point for the determination is the charges rendered or estimated by the solicitors for the party entitled to costs. There may be an impressionistic discount of those costs in order to take into account the contingencies that would be relevant in any formal costs assessment. But, the approach taken to determining the lump-sum must be logical, fair and reasonable: Beach Petroleum at 124; Hamod v New South Wales [2011] NSWCA 375 at [820] (Beazley JA, Giles JA and Whealy JA agreeing); Bitek at [18]; Innes v AAL Aviation Ltd (No 2) [2018] FCAFC 130 at [17] (Tracey, Bromberg and White JJ).

(5) While it is the usual practice of the Court to apply a discount when determining a lump-sum, 'that does not mean that the Court must apply a percentage discount to the sum sought by the successful party and the Court "must be astute not to cause an injustice to the successful party" by applying "an arbitrary 'fail safe' discount on the costs estimate submitted to the court". Thus, if the court can be confident that there is little risk that the sum includes costs that might be disallowed on assessment, the case for a discount is seriously undermined.': Hancock v Rinehart (Lump sum costs) [2015] NSWSC 1640 at [56]- [57] (Brereton J).

(6) In determining the lump-sum the Court is entitled to take into account the evidence that is before it, its own observations of the proceeding and the judge's own experience. The Court may have regard to any applicable scale of costs which regulates the recoverable amount on party and party basis: AAL Aviation at [18]; Fewin Pty Ltd v Burke (No 3) [2017] FCA 693 at [61] (Markovic J); Hislop at [12]. Although scales may provide assistance and will usually be influential, the Court is not bound to apply strictly any applicable scale of costs: Geneva Laboratories Ltd v Prestige Premium Deals Pty Ltd (No 5) [2017] FCA 63; 122 IPR 279 at [86(8)] (Bromwich J).

1. The originating process was filed on 1 July 2022. At that time the Australian Securities and Investments Commission was the defendant in the proceeding. On 17 August 2022 an order was made to the effect that ASIC cease to be a party to the proceeding and on 31 August 2022 an order was made to the effect that the present defendants be joined as the defendants to the proceeding. On 13 September 2022 the defendants' legal representatives filed a notice of acting and appointment of lawyer.
2. Mr Eastwood deposes in his affidavit of 26 October 2022 that the defendants had retained his firm and intended to retain Mr Stephenson as counsel in the proceeding. In his affidavit of 24 April 2023 Mr Eastwood deposes that Mr Stephenson and his firm were retained on the basis of the scale of costs relevant to the work undertaken under Sch 3 of the Rules and the National Guide to Counsel Fees issued on 28 June 2013 with effect from 1 July 2013. Mr Eastwood deposes in his affidavit of 13 December 2024 that he was instructed by the second defendant on her own behalf and on behalf of the first defendant. Further, a costs agreement was not made between Mr Eastwood and the defendants. Mr Stephenson deposes in his affidavit of 6 December 2024 that he was retained by Eastwood Law. Further, that he has not made a written costs agreement with the defendants. There was no evidence of Mr Eastwood or Mr Stephenson having rendered invoices for legal costs to the defendants.
3. In the context of a taxation of costs, a taxing officer is to allow costs for the work done on or after 1 August 2011 in accordance with Sch 3 of the Rules: r 40.29. Items 1 to 11 of Sch 3 set out a number of items and maximum amounts of costs for those items. The draft bills of costs annexed to the affidavits of Mr Eastwood and Mr Stephenson are prepared to accord to those items. However, Item 12 provides that where the lawyer has not charged the client on a time costing basis, Items 1 to 11 do not apply and a fair and reasonable amount will be allowed having regard to the following:

(a) the complexity of the matter;

(b) the difficulty or novelty of the questions involved;

(c) the skill, specialised knowledge and responsibility involved;

(d) the work actually done by the lawyer;

(e) the extent to which the work was reasonably necessary;

(f) the period during which the work was done;

(g) the time spent on performing the work;

(h) the quality of the work;

(i) the number and importance of the documents prepared and read, regardless of length;

(j) the amount or value of money or property involved;

(k) the terms of the costs agreement between the lawyer and client; and

(l) any other relevant matter.

1. The affidavit evidence does not demonstrate that Mr Eastwood or Mr Stephenson have charged or were entitled to charge on a time costing basis. Therefore, if Sch 3 were directly applicable, the party and party costs in this case would be taxed on the basis of a fair and reasonable amount under Item 12.
2. Part 1 of the Legal Profession Uniform Law Application Act 2022 (WA) came into operation on 14 April 2022 and the balance of that Act came into operation on 1 July 2022. Consequently, by operation of s 7(1) of that Act, the Legal Profession Uniform Law (WA) also came into operation on 1 July 2022. The provisions of that Act and the Uniform Law are relevant to identifying the starting point for the determination of a lump-sum; namely, the amount charged or an estimate of the amount that could be charged for the work performed in the proceeding on behalf of the defendants.
3. Section 172(1) of the Uniform Law provides that a legal practice must, in charging legal costs, charge costs that are no more than fair and reasonable in all the circumstances and that in particular are proportionately and reasonably incurred and proportionate and reasonable in amount. In considering whether legal costs are fair and reasonable regard is to be had to similar matters to those described in Item 12 of Sch 3 of the Rules: s 172(2). Further, in considering whether legal costs are fair and reasonable, regard must also be had to whether the legal costs conform to any particular requirements of Pt 4.3 of the Uniform Law, the Uniform Rules and any fixed costs legislative provisions: s 172(3). Subject to complying with obligations for costs disclosure and certain formal requirements, a costs agreement is prima facie evidence that legal costs disclosed in the agreement are fair and reasonable: s 172(4).
4. As there was no costs agreement in this case, the fair and reasonable legal costs the law practice was entitled to charge the defendants must be determined having regard to the matters described in s 172(2) and s 172(3) of the Uniform Law. For the purposes of s 172(3), the expression 'fixed costs legislative provision' means, amongst other things, 'a determination, scale, arrangement or other provision fixing the costs or maximum costs of any legal services that is made by or under the Uniform Rules or any other legislation': s 6. But, it is not clear if 'any other legislation' extends to Sch 3 of the Rules as Commonwealth, as opposed to State, legislation. In the absence of any submissions on the subject, it may be assumed, without deciding, that in the absence of a costs agreement within the meaning of the Uniform Law, a lawyer acting in a Federal Court proceeding, will be entitled to charge a 'fair and reasonable' amount and the assessment of that amount would be guided by the matters in Sch 3 of the Rules: Stevenson v Zafra Pty Ltd [2021] WASCA 181; 58 WAR 383 at [286]- [289] (Buss P, Murphy JA and Hill J).
5. However, s 174 of the Uniform Law contains a requirement for a law practice to provide the client with information in writing disclosing the basis on which legal costs will be calculated in the matter and an estimate of the total legal costs and certain other information: ss 174(1), 174(2), 174(6). The other information includes that the client has a right to negotiate a costs agreement with the law practice, negotiate the billing method, receive a bill and request an itemised bill and seek assistance from the designated local regulatory authority in the event of a dispute about legal costs: ss 174(2)(a), 179, 187, 198. Similar obligations apply where the law practice intends to retain another law practice on behalf of the client: s 175. The term 'law practice' includes a barrister or any other sole practitioner: s 6. Section 178(1) of the Uniform Law provides, relevantly, that if a law practice contravenes the disclosure obligations of Pt 4.3, the client is not required to pay the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority.
6. There was no evidence before the Court to the effect that there had been costs disclosure in accordance with the Uniform Law. Mr Stephenson submits that there has not been such disclosure as it was not required under the Uniform Law because there was no costs agreement. I do not accept that submission. The cost disclosure requirements in s 174 apply irrespective of whether or not the law practice has entered into a costs agreement with the client. However, I am also not prepared to accept his submission that there has not been costs disclosure by Mr Eastwood's law practice because the affidavit evidence of Mr Eastwood is to the effect that he and Mr Stephenson were retained were on the basis of the scale of costs relevant to the work undertaken under Sch 3 of the Rules and the National Guide to Counsel Fees. That evidence suggests that, at least, information about the basis upon which legal costs would be calculated was provided to the defendants.
7. In any event, non-compliance with the obligation to provide costs disclosure does not mean that there was not an entitlement to be paid a fair and reasonable amount for legal costs, only that the defendants are not required to pay the legal costs until they have been assessed or any costs dispute has been determined. Therefore, irrespective of whatever the position may be vis-a-vis the defendants and their lawyers, the defendants have a present, future or contingent obligation to pay their legal representatives a fair and reasonable amount for the legal costs of the proceeding.
8. Nonetheless, there is no evidence before the Court of an estimate of the fair and reasonable legal costs that the law practice is entitled to be paid in all the circumstances for the purposes of s 172(1) of the Uniform Law. Therefore, there is no direct evidence of a cost estimate that might serve as a useful starting point from which to determine an appropriate lump-sum amount.

Appropriate scale as a guide to fair and reasonable legal costs

1. As already mentioned, it may be assumed that, for the purposes of the Uniform Law, the defendants' legal representatives are entitled to charge the defendants a fair and reasonable amount and that amount is to be determined using Sch 3 of the Rules as a guide. Items 1 to 11 of Sch 3 contemplate legal costs charged on a time costing basis and, at the relevant time, a maximum hourly rate for work requiring the skill of a lawyer of $720. In general, a fee charged on a time costing basis may also be regarded as a guide to a fair and reasonable fee provided the rate and time is fair and reasonable in the circumstances. Therefore, amounts that could be charged for time under Items 1 to 11 of Sch 3 may provide a useful guide to assessing a fair and reasonable amount under Item 12.
2. Nonetheless, insofar as the draft bills of costs annexed to the affidavits of Mr Eastwood and Mr Stephenson may be used as a guide to determination of a fair and reasonable lump-sum, it must be kept in mind that the maxima of the Items described in Sch 3 of the Rules apply to all registries of the Court in all States and Territories. Therefore, those rates may not necessarily reflect fair and reasonable rates for legal costs incurred in the conduct of litigation in the Court in Westen Australia.
3. The proceeding is a matter to which the Federal Court (Corporations) Rules 2000 (Cth) apply. A proceeding commenced under the Corporations Act 2001 (Cth) and the Corporations Rules involves an application for specific relief under the provisions of the Corporations Act. As a Corporations Act matter, it is a proceeding that could have been commenced and determined in the Supreme Court of Western Australia. At the relevant time, the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 (WA) applied to regulate the legal costs that a law practice could charge without a costs agreement in proceedings, including for Corporations Act matters, in the Supreme Court. Under that determination the maximum allowable rates for a senior practitioner (a practitioner permitted to practice on his or her own account for five years or more) was $506 per hour, for a junior practitioner the maximum was $374 per hour and for counsel the maxima were $473 per hour or $4,730 per day. The Supreme Court Contentious Business Determination is indicative of fair and reasonable rates for legal costs incurred in the conduct of litigation in a Corporations Act matter in a superior court in Western Australia.
4. In the draft bill of costs annexed to Mr Eastwood's affidavit he has estimated the legal costs of a solicitor on a time costing basis using hourly rates of $660 and $539 (inclusive of GST). Those rates are higher than the maximum permitted for a senior practitioner under the applicable Supreme Court Contentious Business Determination, but less than the maximum permitted under Item 1.1 of Sch 3 of the Rules.
5. In the draft bill of costs annexed to Mr Stephenson's affidavit he has estimated the legal costs of a barrister on a time costing basis using an hourly rate of $530 per hour and a daily rate of $4,200 per day (each exclusive of GST). That hourly rate is higher and the daily rate lower than the maxima permitted under the applicable Supreme Court Contentious Business Determination. Otherwise, the hourly and daily rate is the highest applicable rate for junior counsel under the National Guide to Counsel Fees.
6. To the extent that the draft bills of costs annexed to the affidavits of Mr Eastwood and Mr Stephenson may be used as a guide to the determination of a lump-sum, for the reasons that follow, the time costing rate of $660 per hour for Mr Eastwood and $539 per hour for Mr Hu (each inclusive of GST) do not reflect fair and reasonable rates for all party and party legal costs incurred in the conduct of the litigation in this proceeding.

(1) In general, applications under the Corporations Act are not complex and may be conducted without pleadings, on affidavit evidence and with limited or no discovery. This proceeding was not complex and that simplified procedure was used.

(2) While it was appropriate to instruct counsel, due to the lack of complexity of the proceeding, on a party and party taxation of costs it is not appropriate to allow for a senior practitioner to perform all the legal work involved in the proceeding.

(3) Further, the rates used exceed the applicable maxima in the Supreme Court Contentious Business Determination. The rates in that determination reflect fair and reasonable maxima for litigation involving the same kind of proceeding and subject matter as this proceeding in Western Australia.

Otherwise, the hourly and daily rates for counsel are indicative of fair and reasonable hourly and daily rates for superior court work in Western Australia at the relevant time and accord with the National Guide to Counsel Fees.

1. As already mentioned, the proceeding was not complex. It was ultimately resolved on a statement of agreed facts and the determination of relatively straightforward separate legal issues which largely involved questions of statutory interpretation. Before orders were made for the relevant issues to be tried separately, a trial of the substantive legal and factual issues had commenced and was adjourned part heard after two days. The factual issues in contest were also not complex. The principal issue was whether a signature on a single document was genuine.
2. Before the substantive trial commenced, the defendants filed two short affidavits of the witnesses they intended calling at the trial and short written submissions. The plaintiffs also filed two short affidavits of the witnesses they intended calling at the trial together with the documents upon which they intended relying and short written submissions. The parties also prepared and exchanged written objections to evidence. The parties also filed further short written submissions before the hearing of the separate issues.
3. Aside from the part heard trial and hearing of the separate issues, the plaintiffs filed six and the defendants two interlocutory applications and there were also routine case management hearings. There were no orders for pleadings or discovery, but the parties filed lists of issues and the defendants were required to produce certain documents for inspection as a consequence of orders made after a contested interlocutory hearing.
4. On 3 October 2022 the plaintiffs filed an interlocutory application for an expedited hearing and supporting affidavit of Mrs Frigger and outline of submissions. That application was dealt with at a routine case management hearing on 12 October 2022 at which directions were made for completion of all interlocutory steps before a trial. The costs of that hearing were ordered to be in the cause and the hearing was approximately 30 minutes. Mr Stephenson appeared for the defendants.
5. On 8 November 2022 the defendants filed an interlocutory application for security for costs and supporting affidavit of Mr Eastwood and submissions. The plaintiffs filed an affidavit of Mrs Frigger and submissions in opposition. That application was heard on 29 November 2022 and orders were made on 9 December 2022 by which the plaintiffs were ordered to provide security for the defendants' costs in the sum of $35,000 and to pay the defendants' costs of the application to be taxed. Mr Stephenson appeared for the defendants on the hearing of the application.
6. The defendants now request the Court to determine the costs of the application for security for costs as part of the lump-sum costs of the proceeding rather than have those costs assessed separately on a taxation. Having regard to the orders made on 15 November 2024 and the reasons for those orders, it is appropriate and in the interests of the administration of justice to vary the interlocutory order made on 9 December 2022 to include the costs of that application in the determination of the lump-sum costs of the proceeding.
7. On 1 February 2023 the plaintiffs filed an interlocutory application for the defendants to produce certain documents for inspection. The plaintiffs also filed affidavits of Mrs Frigger sworn 1 and 2 February 2023. That application was heard on 10 February 2023 at a hearing of approximately two and a half hours and the defendants were ordered to produce certain documents and the costs of the application were reserved. There was also a routine case management hearing at which case management orders were made with no order as to costs. Mr Stephenson appeared for the defendants at that hearing.
8. On 16 February 2023 the defendants filed a notice for the plaintiffs to produce documents at the trial. On 27 February 2023 the defendants filed an application for the plaintiffs to produce certain documents and an affidavit of Mr Eastwood in support. The plaintiffs filed an affidavit of Mrs Frigger of 27 February 2023. That application was heard on 28 February 2023 at a hearing of approximately one and half hours along with other pre-trial matters. Mr Stephenson appeared for the defendants at that hearing. On 28 February 2023 orders were made requiring the plaintiffs to produce certain documents for inspection and costs were reserved.
9. On 2 March 2023 the trial commenced and it was adjourned part heard on 3 March 2023. Mr Stephenson appeared for the defendants and Mr Eastwood attended as his instructor.
10. On 7 March 2023 the plaintiffs filed an application for leave to adduce expert evidence at the continuation of the trial and an affidavit of Mrs Frigger in support. On 21 March 2023 there was a routine case management hearing at which that application was listed for a hearing on 24 April 2023 with costs reserved. The case management hearing ran for approximately 30 minutes. Mr Eastwood appeared for the defendants at that hearing. The plaintiffs filed a further affidavit of Mrs Frigger and expert report on 6 April 2023. On 24 April 2023 the defendants filed a further affidavit of Mr Eastwood in support of an application to re-list the application for security for costs to apply for further security with respect to the continuation of the trial. At the hearing on 24 April 2023 orders were made granting the plaintiffs leave to adduce expert evidence and to recall a witness that had given evidence at the trial. Orders for directions were also made with respect to the defendants' application for further security for costs and the costs were ordered to be in the cause. The hearing was approximately one and a half hours in duration. Mr Stephenson appeared for the defendants at that hearing.
11. On 1 May 2023 the defendants filed a minute of proposed orders for further security for costs and submissions in support. On 2 May 2023 the plaintiffs filed an application for leave to adduce the evidence of another witness.
12. The matter was listed for a further case management hearing on 19 May 2023 to consider the question of whether it would be expedient to identify separate issues and determine those issues rather than have a continuation of the trial and deal with the various interlocutory applications that had been filed since the trial was adjourned. That hearing had a duration of approximately one hour. Mr Stephenson appeared for the defendants at that hearing. On 23 May 2023 orders were made for the trial of separate issues and reasons given for that decision the following day.
13. On 25 May 2023 the plaintiffs filed an application to re-open and set aside the orders that had been made for security for costs. That application was supported by an affidavit of Mrs Frigger filed on 8 May 2023 and submissions filed on 8 and 30 May 2023. That application was ultimately heard on 3 July 2024 and dismissed by orders made on 15 November 2024. The plaintiffs were ordered to pay the defendants' costs of that application on a lump-sum basis.
14. On 2 June 2023 there was a routine case management hearing of approximately 15 minutes in duration. At that time the defendants' application for further security for costs was not pressed and the costs of that hearing were ordered to be in the cause. Mr Eastwood appeared for the defendants at that hearing.
15. On 28 June 2023 there was a hearing of the separate questions and judgment was reserved. Mr Stephenson appeared for the defendants and Mr Eastwood attended as his instructor.
16. On 14 August 2023 the plaintiffs filed an application for production and inspection of certain documents into the custody of the Court and a supporting affidavit of Mrs Frigger. That application was dismissed by administrative order made on 17 August 2023 with no order as to costs.
17. The plaintiffs filed affidavits of Mrs Frigger on 4 and 28 December 2023 and 11 April 2024. These affidavits were filed without leave and were not relevant to the judgment reserved on 28 June 2023.
18. On 26 April 2024 orders were made in respect of the separate issues and reasons for those orders delivered.
19. On 2 May 2024 the defendants filed a minute of proposed orders for dismissal of the proceeding and for costs. The plaintiffs also filed a minute of proposed orders. On 1 July 2024 the plaintiffs filed submissions. On 3 July 2024 there was a hearing regarding final orders and orders for costs in the proceeding. The duration of that hearing was approximately one and a quarter hours. Mr Stephenson appeared for the defendants at that hearing. On 15 November 2024 final orders were made, including orders for assessing lump-sum costs, and reasons were published for those orders.
20. On 23 April 2025 there was a hearing regarding determination of the lump-sum legal costs. The duration of that hearing was approximately two hours. Mr Stephenson appeared for the defendants at that hearing.
21. There were three other routine case management hearings on 17 August 2022, 31 August 2022 and 28 September 2022. The defendants appeared, by Mr Eastwood, on 31 August 2022, but no order was made as to the costs of that hearing. There was no appearance by the defendants at the other hearings.

1. Regarding the draft bills of costs annexed to the affidavits of Mr Eastwood and Mr Stephenson these are of limited utility as guides to the determination of a lump-sum for the reasons given earlier and for the following additional reasons.

(1) Mr Eastwood's draft bill and Mr Stephenson's draft bill have an inconsistent approach to GST. Mr Eastwood's draft bill primarily uses a GST inclusive rate of $660 per hour for amounts itemised under Item 1.1 of Sch 3. Otherwise, it is not possible to determine how amounts itemised under Item 2 or Item 3 (preparing or reading documents) have been calculated as these do not appear to correspond with the applicable rates (per word) set out for Item 2 and Item 3 of Sch 3 and it is not clear whether the amounts itemised are inclusive of GST. On the other hand, Mr Stephenson's affidavit uses a GST exclusive rate of $530 per hour.

(2) Regarding GST, the draft bills indicate that the first defendant is not entitled to claim input tax credits, but the second defendant may be entitled to do so. In accordance with para 6.6 of GPN-COSTS, if the costs applicant is not entitled to claim input tax credits, disbursements should be claimed in the amount incurred inclusive of GST (Mr Stephenson's counsel fee), Item 1.1 should be claimed in the amount inclusive of GST (Mr Eastwood's legal practice) and all other items should be claimed in accordance with Sch 3 (Mr Eastwood's legal practice). As there is inconsistency in the treatment of GST, it is quite unclear whether the defendants contend that they will, through the second defendant, be able to claim an input tax credit with respect to the legal costs when invoices are ultimately rendered and paid for the legal costs of the proceeding. In these circumstances, it is not clear if it is appropriate to make an allowance for GST.

(3) The rates of $600 and $490 (excluding GST) for most of the items identified in Mr Eastwood's draft bill are excessive because, for the reasons already given, the vast majority of the legal costs described in that bill were for junior practitioner work. It was not fair and reasonable, for example, for a senior practitioner to instruct counsel at interlocutory hearings or the trial or to undertake tasks such as preparing affidavit evidence or producing documents in response to an order to do so. Having regard to the nature of the proceeding, this was legal work that could be adequately and properly performed by a junior practitioner given experienced counsel was briefed.

(4) In the case of Mr Eastwood's draft bill of costs, it also contains a significant number of items which, while not necessarily unreasonable in an assessment as between solicitor and client, may not properly be for legal costs fairly and reasonably incurred in the conduct of the litigation. As examples, there are a number of items for travel that are itemised as legal costs and there is an item for consultation with an expert that was not ultimately called as a witness. There are items that do not appear to relate to this proceeding, but to an application for leave to appeal from the orders made on 23 April 2024. There are also numerous items relating to reporting to the client and conferring with counsel. While some degree of reporting, obtaining instructions and conferral may be fairly and reasonably incurred in the conduct of the litigation, the descriptions in the items in the draft bill do not permit an assessment to be made about the fairness and reasonableness of those items.

(5) In the case of Mr Stephenson's draft bill of costs, a significant proportion of the work described in that draft is not for counsel work but for solicitor work. For the reasons already given, the majority of that work was junior practitioner work. Further, there is duplication between the work itemised in Mr Stephenson's draft bill and the work itemised in Mr Eastwood's draft bill. As examples, both draft bills include items for drafting the application for security for costs and affidavit in support and items for preparing the affidavits of the witnesses upon whose evidence the defendants intended to rely at trial.

(6) Mr Stephenson's draft bill of costs also has duplication of the legal work itemised within the document. As an example, Mr Stephenson has itemised fee on brief (which includes the first day of trial) and separately itemised the first day of trial. Additionally, there is a large amount of work itemised as general work that falls within the legal work that would usually be included in fee on brief or preparation for trial. It is fair and reasonable for an allowance to be made for Mr Stephenson's preparation for trial, but that cannot be claimed more than once under different items in the draft bill.

It follows that, except as to identify broad categories of work performed, the time spent performing that work and the rates applied, the draft bills of costs are not particularly helpful and cannot be relied upon to any significant extent as a starting point for determination of a lump-sum.

1. Taking into account the unreliability of the draft bills of costs and the various matters to which reference has been made earlier, it is appropriate to apply a large discount to the amount the defendants have claimed as a lump-sum based on those bills. It is also appropriate to rely more heavily on the Court's own observations in the proceeding and experience in the determination of the lump-sum and to give due weight to the hourly and daily rates in the Supreme Court Contentious Business Determination as indicative of fair and reasonable rates for superior court work in Western Australia. In all the circumstances, a fair and reasonable amount for the defendants' costs incurred in the conduct of the litigation, including the costs of the security for costs application, costs in the cause, costs reserved and counsel's fees and other disbursements, is $88,000 (inclusive of GST).

1. For the foregoing reasons there should be an order fixing the legal costs payable by the plaintiffs to the defendants in the sum of $88,000. There should also be an order clarifying that the lump-sum includes the costs of the security for costs application and costs ordered to be in the cause or reserved throughout the course of the proceeding. In addition, an order should be made for payment out of court of the amount paid in as security to or at the direction of the defendants.

I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Feutrill.