Mr Hamilton's NACO application
17 Mr Hamilton instituted his application for a NACO at an early stage of the proceeding. The claim for a NACO was included in the originating application and in a number of interlocutory applications filed thereafter. In his Amended Originating Application he included a request that this application be heard at the earliest opportunity. The progress of the proceeding in this Court involved case management hearings before Rares J, as a result of which, the pleading of Mr Hamilton's claim was revisited over a period of time before Mr Hamilton's application for leave to serve the respondents outside the jurisdiction came to be determined.
18 The application for leave to serve out was brought under rr 10.42, 10.43(2) and 10.44(1) of the Federal Court Rules 2011 (Cth) as then applying. Mr Hamilton agitated to have his application for a NACO determined at the same time as his application for leave to serve the respondents outside the jurisdiction. The effect of hearing the application at that time would have been to determine the NACO application on an ex parte basis. I declined to hear and determine Mr Hamilton's NACO application in the absence of the respondents because the Court would not have the benefit of a contradictor: Hamilton v Meta Platforms, Inc (Service out of Jurisdiction) [2022] FCA 681 at [2] (Hamilton Service Out).
19 Mr Hamilton next agitated to have his NACO application determined in September 2022, by which time the respondents had been served and had appeared in the proceeding. A case management hearing was held on 21 September 2022. In advance of that case management hearing, Mr Hamilton and the respondents each filed written submissions which addressed, inter alia, the parties' respective positions on the order in which various interlocutory applications should be heard. At that time, relevantly, the interlocutory applications included Mr Hamilton's NACO application and a foreshadowed application by the respondents for a permanent stay or in the alternative a de-classing order and a strike out or summary dismissal application. Following that case management hearing, and after hearing oral submissions from the parties, I ordered that the application for a stay, which was predicated on the allegation that the proceeding was likely to bring the administration of justice into disrepute, be heard and determined before any other interlocutory applications.
20 As I understand his submissions, Mr Hamilton acknowledges that s 82(4) of the CCA does not expressly restrict the discretion as to costs under s 43(2) of the FCA Act, however, he submits that s 82(4) displaces the usual presumption that costs follow the event in matters where the requirements set out in s 82(5) of the CCA are met. Mr Hamilton submits that the legislative purpose of s 82 of the CCA is to encourage potential applicants to bring competition claims in circumstances which meet the criteria in s 82(5), and thereby creates a special costs regime that applies to such claims.
21 Against that scaffold, Mr Hamilton submits that where the s 82(5) criteria are met, the general presumption that costs follow the event does not apply, even if no NACO has been made. He submits that the criteria in s 82(5) are met because:
(1) a number of reasonable issues for trial have been established at a prima facie level (s 82(5)(a));
(2) the claims made in the proceeding raise issues significant not only to the Group Members but also to the general Australian public (s 82(5)(b)); and
(3) the disparity between the financial positions of Mr Hamilton and the respondents is such that the possibility of a costs order in favour of the respondents would have discouraged the applicant from pursuing the claims at all (s 82(5)(c)).
22 I have assumed for the purpose of testing Mr Hamilton's argument that the s 82(5) criteria are satisfied, noting that the criteria are cumulative. To be clear, it is not necessary for me to decide whether in fact those criteria are satisfied and on this costs application it would be inappropriate to do so. It is sufficient to note that had the NACO application been argued, the issue of whether the criteria in s 82(5) were satisfied, would have been the subject of serious contest. So much is evident from the conduct of the proceeding to date. For example, in relation to the criteria in s 82(5)(a), Mr Hamilton relies on findings in relation to the existence of a prima facie case that were made in the ex parte application for service out, whereas the respondents had indicated that if the proceedings were not stayed they were contemplating bringing a strike out/summary dismissal application. In these circumstances, it is likely that satisfaction of the s 82(5)(a) criteria would have been in issue. The arguments advanced by each of the parties on this application relevant to the Court's exercise of its general discretion to award costs which were directed to what Mr Hamilton contends to be the public interest dimension of the proceeding suggests that the issue of satisfaction of the criteria in s 82(5)(b) would likewise have been seriously contested.
23 Mr Hamilton's reliance on his extant application for a NACO as ousting the general presumption that costs follow the event is misplaced. Even if one were to assume for the purpose of Mr Hamilton's argument that the circumstances of this proceeding satisfied the criteria in s 82(5), I do not accept that the making of a NACO application, in the absence of a NACO being made, limits the Court's broad discretion under s 43(2) of the FCA Act so as to displace the general presumption that a successful party is entitled to costs.
24 An application under s 82 of the CCA does not operate as a prophylactic costs protection to any applicant who believes they can obtain the benefit of a NACO. The plain terms of s 82(4) make it clear that the power to make a NACO is discretionary. The discretion must be exercised by reference to the considerations in s 82(5)(a) to (c). An applicant for a NACO is not entitled as of right to a NACO even if the court is satisfied of the matters in s 82(5)(a) to (c). Absent the court being satisfied of those matters, a NACO cannot be made. It does not follow, however, as Mr Hamilton appears to submit, that where the matters in s 82(5)(a) to (c) are established, the court must make a NACO. An applicant is at risk of an adverse costs order if and until the court makes a NACO, depending on the terms on which the NACO is made. The mere fact of filing an application for a NACO does not suffice to displace the conventional costs regime. On Mr Hamilton's contended construction, s 82 would operate prophylactically to provide costs protection from the time an application is made where the criteria in s 82(5) is established. That would produce an odd result where, for example, the court after taking the s 82(5) matters into account, exercises its discretion not to make a NACO.
25 Here, a NACO has not been made. The Court's broad discretion under s 43(2) of the FCA Act, is not constrained by reasons of the extant application for a NACO and by reference to the factors in s 82(5)(a) to (c) of the CCA. The award of costs remains at the discretion of the Court. The general presumption that costs follow the event applies subject, of course, to the usual factors applying which may justify deviating from it.