Should the Court make an order under r 40.02(b)?
37 Rule 40.02(b) of the Federal Court Rules states that a party or person who is entitled to costs may apply to the Court for an order that costs awarded in their favour be awarded in a lump sum, instead of, or in addition to, any taxed costs.
38 Section 37M(3) of the Federal Court of Australia Act 1976 (Cth) ("Federal Court Act") relevantly provides that the civil procedure provisions of the Act and Rules must be interpreted and applied, and any power conferred by them exercised, in the way that best promotes their overarching purpose. That purpose is set out in s 37M(1), which states that:
The overarching purpose of the civil practice and procedure provisions [defined in subs (4) to include the Act and Rules] is to facilitate the just resolution of disputes:
(a) according to law; and
(b) as quickly, inexpensively and efficiently as possible.
39 The overarching purpose includes the following objectives:
(a) the just determination of all proceedings before the Court;
(b) the efficient use of the judicial and administrative resources available for the purposes of the Court;
(c) the efficient disposal of the Court's overall caseload;
(d) the disposal of all proceedings in a timely manner;
(e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.
See s 31M(2).
40 Without doubt, and perhaps with the benefit of hindsight, the best way to have promoted the overarching purpose of the civil procedure provisions of the Act and Rules would have been for the Secretary to have sought a lump sum costs order at the time judgment was handed down. Had the Secretary foreshadowed in his written submissions or in oral argument that, if he were successful, he would seek an order of this kind, the application could have been dealt with at the time of judgment and saved the parties and the Court the time and effort involved in dealing with the present application. Nevertheless, Mr Grabovsky did not complain about the delay and, based on all the evidence before me, I am satisfied that it would unnecessarily prolong the costs dispute and it would be inefficient and productive of unnecessary expense to require the Secretary to prepare an itemised bill for taxation. Having regard to the information in the table contained in the letter from the AGS to Mr Grabovsky dated 7 May 2015, extracted above at [10], which is consistent with the way the AGS presented its case, I am satisfied that, if costs were to be taxed the Secretary's bill would be likely to exceed the amount claimed.
41 As Mr Edwards submitted in his affidavit, the Secretary is seeking to recover only party and party costs and only a portion of those. The fact, for example, that Mr Grabovsky raised constitutional issues in the substantive application meant that the Secretary incurred additional costs in consulting with lawyers from the Constitutional Litigation Unit of the AGS but those additional costs have not been included in the lump sum sought. Nor does that sum include the costs associated with the futile attempts to reach agreement with Mr Grabovsky in relation to costs. What is more, the Secretary has not asked that Mr Grabovsky pay the costs of this application.
42 In all the circumstances, not only would it promote the overarching purpose of the civil procedure provisions of the Federal Court Act and Rules to make the order the Secretary seeks, it is in Mr Grabovsky's interests that the order be made. It seems to me to be highly likely, if not inevitable, that if I were not to make the order the Secretary seeks the costs that Mr Grabovsky would have to pay would exceed by a not insignificant margin the $8,500 the Secretary asks for.