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[2023] FCA 1546
Federal Court of Australia
2023-12-06
McEvoy J
Original judgment source is linked above.
The applicant's submissions 8 In submitting that he should have his costs on a party and party basis, the applicant refers to r 40.04 of the Federal Court Rules 2011 (Cth) and the usual position that where a party obtains an order in its favour following the hearing of an interlocutory application, costs should follow the event. The applicant contends that it is appropriate to determine the question of costs at the conclusion of any significant interlocutory application so that the parties may have an awareness of their accumulating costs liabilities in the proceeding: Oshlack v Richmond River Council (1998) 193 CLR 72 at 97 [67] (McHugh J); Taylor (liquidator), in the matter of Heading Contractors Pty Ltd (in liq) v Heading (No 2) [2021] FCA 925 at [8], [10] (Charlesworth J). 9 The applicant submits, however, that the ordinary rule in r 40.13 of the Rules should be dispensed with in this instance and costs be payable forthwith. Rule 40.13 of the Rules provides that if an order for costs is made on an interlocutory application then the party in whose favour the order is made must not tax those costs until the proceeding in which the order is made is finished. The applicant refers to Watson v Kriticos (Costs Payable Forthwith) [2022] FCA 4, where Perram J summarised the principles in relation to when r 40.13 may be dispensed with at [7] as follows: The exercise of the discretion may be justified in a number of circumstances, including where (FKP v Spirits at [9]): (a) the final determination of the proceeding is far away: Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 13) [1995] FCA 1459 at [5]; (b) a party has been required to incur significant costs over and above those which it would have incurred had the opposing party acted in handling the proceeding with competence and diligence: Life Airbag Company of Australia Pty Ltd v Life Airbag Company (New Zealand) Ltd [1998] FCA 545; (c) following a successful amendment application, a case is essentially a new proceeding: McKellar v Container Terminal Management Services Ltd [1999] FCA 1639 at [19] and [40]; (d) a discrete issue has been resolved: Australian Flight Test Services v Minister for Industry, Science and Technology [1996] FCA 1425 at [7]; or (e) there is some reason to think that interlocutory disputation is draining the ability of one side to conduct the litigation: Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd [2016] FCA 37 at [12]. 10 The applicant submits that the discretion to dispense with r 40.13 of the Rules should be exercised in this instance, having regard to the overarching purpose of facilitating the resolution of disputes as quickly and inexpensively and efficiently as possible. He relies on six matters in support of this position, namely: (a) the final determination of the proceeding is months away; (b) the applications dealt with a distinct and discrete issue in each proceeding which is now resolved, will not need to be revisited, and so the costs of those applications are separate and distinct from the other costs in the proceeding. The applicant says that they are capable of being calculated accurately and easily and are ripe for an order that they be taxed and payable immediately; (c) the respondents have been "resoundingly unsuccessful" in the applications and that the contentions argued were "ambitious"; (d) the applicant incurred significant costs in successfully resisting the applications, including costs of both senior and junior counsel. The applicant notes that the applications raised a number of contested questions of law and the respondents subpoenaed large volumes of material from Department of Home Affairs and adduced this material in evidence; (e) the respondents have the benefit of the applicant having paid over $500,000 in security for costs of the proceedings and so the demands of justice militate strongly in favour of the applicant being permitted to tax forthwith his costs of the applications; and (f) the applicant is a natural person involved in two defamation proceedings against two presumably well-resourced sets of respondents, and where there is a statutory cap on the damages he is entitled to recover. The applicant submits that the cost of litigation is a significant burden, and that the ongoing burden is a reason to order that costs be payable forthwith.
Al Jazeera's submissions 11 Al Jazeera opposes an order that the applicant's costs be payable forthwith and submits that there is no reason to dispense with the usual rule in r 40.13 of the Rules that costs awarded on an interlocutory application must not be taxed until the conclusion of the proceeding. The Al Jazeera respondents submit that while the Court has discretion to dispense with r 40.13, the ordinary rule is only departed from where the interests of justice require such a departure: Capic v Ford Motor Company of Australia Ltd [2019] FCA 1065 at [18] (Perram J). 12 The Al Jazeera respondents submit that the six matters relied on by the applicant do not justify a departure from the usual position. They submit that it would ultimately be undesirable to make the parties go through two processes of taxation, and that there is no evidence before the Court to suggest that the applicant is in particular need of the money. The Al Jazeera respondents also submit that their conduct in bringing the application cannot be criticised and that they may succeed at trial and obtain costs orders greater than those relevant to the interlocutory application.
Nationwide News' submissions 13 The Nationwide News respondents submit that costs should be reserved, but if they are not reserved there is no occasion to order that they be paid forthwith. 14 In support of their submission that costs should be reserved, the Nationwide News respondents contend that some of the matters identified in relation to the interlocutory application, such as the applicant's connection to Australia and the delay in the renewal of his Resident Return Visa, are matters which will be the focus of attention at trial. They note that the evidence in the interlocutory application was from the applicant's solicitor by way of affidavit, outlining the evidence that is expected to be given at trial. It is contended that if after a trial different factual findings are made, then the Court may form a view in light of the further evidence that the application might have been decided differently, and that in these circumstances the respondents should have the opportunity to apply for their costs of this application. 15 If a costs order is to be made in favour of the applicant, the Nationwide News respondents oppose any order that costs be payable forthwith because doing so would mean the parties would be subject to multiple taxations, and the respondents would lose the ability to set off their costs against future costs orders. The Nationwide News respondents highlight that departure from the usual rule should only occur in special circumstances: Vasyli v AOL International Pty Ltd [1996] FCA 804. In support of their position, they make three submissions: (a) the fact that the applicant has not put on any evidence of his financial position nor any evidence of the costs he has paid in respect of the application, and on this basis they say that the Court cannot be satisfied of the alleged significant burden which either the proceeding or the application is having or has had on the applicant; (b) the applicant cannot rely on delay in support of an application that costs be payable forthwith because a number of matters that may delay a final determination of the proceeding have been initiated by the applicant, for instance the applicant's strike out application and opposing the hearing of a public interest immunity claim in relation to a subpoena; and (c) the fact that the application was unsuccessful is not enough to provide a basis for costs to be payable forthwith, and there has been no sufficient departure from the standard of reasonableness as to justify such an order.
Should costs be reserved in the Nationwide News proceeding? 16 I am not satisfied that the matters advanced by the Nationwide News respondents as to the possibility that the Court may form a different view at trial as to how the application should have been decided are sufficiently compelling to depart from the usual position that where a party obtains an order in its favour following the hearing of an interlocutory application, costs should follow the event: r 40.04 of Rules. It is appropriate to determine the question of costs at this point, being the conclusion of the separate question applications.
Should costs be payable forthwith? 17 Central to the question of whether costs should be payable forthwith is whether the interests of justice in the circumstances outweigh the policy considerations behind r 40.13 to justify such a departure: Capic at [17]; Axent Holdings Pty Ltd v Compusign Australia Pty Ltd (No 3) [2018] FCA 6 at [14] (Kenny J). These policy considerations include the "desirability of avoiding multiple taxations, the dissuasion of the pursuit of multiple interlocutory applications and a recognition that set-offs may be available where prior or subsequent cost orders are made in the opposite direction": Capic at [17]. Each case must be assessed on its own merits: Armit v Jeminex Limited (No 3) [2012] FCA 1330 at [8] (Robertson J). 18 Consideration of whether set offs may be available recognises that it is usually inappropriate to require the unsuccessful party on an interlocutory application to pay costs immediately as they may ultimately be successful: Karpik v Carnival plc [2021] FCA 1290 at [5] (Stewart J); Axent at [15] (Kenny J); Rafferty v Time 2000 West Pty Ltd (2009) 257 ALR 503 at 508 [20] (Besanko J). 19 The Al Jazeera respondents and Nationwide News respondents submit, and I accept, that the applicant's reasons do not justify a departure from r 40.13, including because: (a) the time until the final determination of the proceeding is not determinative and there is no reason to suppose there will be an inordinate delay before the final determination of the proceeding; (b) the interlocutory application dealt with a procedural question and not any discrete substantive issue in the case, and as such is precisely the kind of application to which r 40.13 is intended to apply; (c) the respondents did not act unreasonably in the conduct of the application, and being unsuccessful is not enough to justify the exercise of discretion to depart from r 40.13; (d) the fact that costs are "significant" does not impact the consideration of whether the discretion should be exercised to depart from r 40.13: Karpik at [15] (Stewart J); (e) the provision of security for costs does not impact upon the consideration of whether to dispense with r 40.13; and (f) importantly, there is no evidence that the applicant's ability to continue to prosecute his cases depends on having costs taxed forthwith: Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd [2016] FCA 37 at [12]. 20 The fact that the applicant is an individual (in the absence of any evidence as to his financial position) is not sufficient in the present circumstances to justify a departure from the usual rule in r 40.13.
Conclusion 21 There will be orders in both proceedings that the respondents pay the applicant's costs on a party and party basis. There will not be an order in either proceeding that those costs be paid forthwith. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McEvoy.
SCHEDULE OF PARTIES VID 767 of 2022
Hun
Aljazeera International
MCEVOY J: 1 By way of interlocutory applications dated 19 May 2023 brought by the respondents in VID 767 of 2022, Aljazeera International (Malaysia) SDN BHD (Al Jazeera) and others (the Al Jazeera proceeding) and the respondents in VID 768 of 2022, Nationwide News Pty Ltd and another (the Nationwide News proceeding), the respondents sought orders that the serious harm element of the applicant's causes of action in defamation be determined separately from and prior to any other question in the proceedings. Those applications were heard on 28 August 2023. On 15 September 2023 I dismissed the applications, indicating a tentative view that the applicant should have his costs of the respondents' applications: Hun v Aljazeera International (Malaysia) SDN BHD [2023] FCA 1103. 2 The parties provided proposed consent orders in each proceeding providing a timetable for the filing of submissions in relation to the costs of the applications and that the question of costs be determined on the papers. I made orders substantially in those terms providing for the filing of written submissions and that the matter of costs be determined on the papers pursuant to s 20A of the Federal Court of Australia Act 1976 (Cth). 3 The applicant filed his submissions in each proceeding on 20 October 2023; the Al Jazeera and Nationwide News respondents each filed responding submissions on 27 October 2023. 4 The applicant seeks orders in each proceeding that the respondents pay his costs of and incidental to the applications as between party and party, such costs to be taxable and payable forthwith. 5 The Al Jazeera respondents do not oppose an order that they pay the applicant's costs of and incidental to the interlocutory application on a party and party basis. They do, however, oppose an order that the costs be taxed and payable forthwith. They submit that there is no reason to dispense with the usual rule that costs awarded on an interlocutory application must not be taxed until the conclusion of the proceeding. 6 The Nationwide News respondents submit that the appropriate order is that costs be reserved, but if there is to be a costs order they say that costs should not be payable forthwith. 7 For the reasons that follow, the applicant will have his costs of the applications on a party and party basis. I decline to make an order that those costs be paid forthwith.
[1995] FCA 1459
[1996] FCA 1425
(1998) 193 CLR 72
(2009) 257 ALR 503