Jenkins Sh v Australia Council for the Arts

Introduction 1 In this proceeding, the applicant, Casey Jenkins Sh, claimed damages, declaratory relief and other orders under the Australian Human Rights Commission Act 1986 (Cth) (AHRC Act) in relation to the lawfulness of a decision made by the respondent, the Australian Council for the Arts (the Council), to withdraw funding under a development grant that was awarded to the applicant for an artwork titled IMMACULATE. 2 The parties have reached a settlement of the substantive issues in the proceeding which, in addition to a public statement and apology that has been issued by the Council, will include the payment to the applicant of a settlement sum. 3 However, there remains a dispute in relation to the quantum of costs to be paid to the applicant pursuant to costs orders made in the applicant's favour on a number of interlocutory applications. The applicant now applies for orders that these costs be determined in accordance with the lump sum procedure set out in Part 4 of the Court's Costs Practice Note (GPN-COSTS). The Council opposes the assessment of the costs on a lump sum basis and maintains that, in the absence of any agreement between the parties, the applicant's costs should be taxed. 4 For the reasons set out below, I consider that it is practicable and appropriate that the costs of the interlocutory applications be determined on a lump sum basis.

Background 5 The proceeding was commenced by an originating application under the AHRC Act filed on 15 April 2021, claiming that the Council had unlawfully discriminated against the applicant contrary to the Sex Discrimination Act 1984 (Cth). The applicant sought declarations, damages and other orders under s 46PO of the AHRC Act, along with damages for defamation or injurious falsehood, breach of contract and breach of a duty of care, and a declaration that the Council's decision to withdraw funding for the applicant's artwork was unlawful or made without affording procedural fairness. 6 Relevantly, in the course of the proceeding, three interlocutory applications were determined by the Court in favour of the applicant, in relation to each of which an order was made that the Council pay the applicant's costs. (a) On 10 March 2022, the applicant filed an interlocutory application seeking orders in relation to the discovery provided by the Council pursuant to orders requiring the parties to give standard discovery. (b) On 28 June 2022, the Council filed an interlocutory application seeking orders: (i) that the applicant provide security for the Council's costs of discovery in the sum of $75,000, in the event that the Court made an order for further discovery on the applicant's interlocutory application; and (ii) pursuant to r 40.51 of the Federal Court Rules 2011 (Cth) (the Rules), that the maximum party and party costs that either party may recover be capped at $125,000. 7 Each of the discovery application and the security for costs application was referred to Judicial Registrar Edwards for hearing and determination. Judicial Registrar Edwards was also appointed as a referee to conduct an inquiry and report to the Court on whether a costs capping order should be made, and if so in what amount. 8 The interlocutory applications were heard by Registrar Edwards over two days on 12 and13 October 2022. 9 On the discovery and security for costs applications, the applicant relied on four affidavits of Mr Peter Seidel, a partner of Arnold Bloch Leibler, the solicitors acting for the applicant, and an affidavit of Mr Roman Barbera, a director of KordaMentha, an expert witness in "eDiscovery and legal technology". The Council relied on two affidavits of Ms Cilla Robinson, a partner of Clayton Utz, the solicitors acting for the Council. The parties provided written outlines of submissions on the interlocutory applications. 10 On 14 December 2022, Registrar Edwards published her decision on the interlocutory applications and provided written reasons, together with her referee report to the Court on the costs capping application. 11 On the discovery application, the Registrar accepted the evidence of Mr Barbara in relation to "fundamental and obvious" methodological deficiencies in the discovery provided by the Council, principally in relation to the failure to identify all data repositories from which potentially relevant documents might be sourced, the failure to identify several potentially relevant custodians of documents, and the application of narrow data collection filters which unduly restricted the pool of documents considered for discovery. The Registrar rejected the Council's submission that the discovery sought by the applicant was oppressive or disproportionate, noting the assistance that was available from technology assisted review or predictive coding. Accordingly, the Registrar concluded that the Council had not undertaken reasonable searches for the purpose of giving standard discovery. The matter was adjourned to enable the parties to confer, and if possible reach agreement, on "the appropriate mechanism to proceed and the orders that should be made", and the costs of the discovery application were reserved. Subsequently, on 13 June 2023, the Registrar ordered that the Council pay the applicant's costs of and incidental to the applicant's interlocutory application filed on 18 March 2022. 12 The Council's security for costs application was dismissed by Registrar Edwards in her decision made on 14 December 2022, with costs following the event. The Registrar considered that the Council had not adequately explained why the application for security for costs was not filed until 28 June 2022, when the Council had previously been aware of the applicant's financial position. The Registrar considered that the granting of an order for security would be oppressive having regard to the fact that the applicant was of limited financial means and would not be able to meet an adverse costs order against her of any substantial sum. The Registrar accepted that the applicant's discovery application was meritorious, and that an order for security for costs would have the practical effect of requiring the applicant to prosecute her case without the benefit of proper discovery. 13 In her referee report, Registrar Edwards expressed the opinion that the Court should not make a costs capping order under r 40.51 of the Rules. The referee report was adopted in whole by Hespe J on 17 February 2023, at which time an order was made that the Council pay the applicant's costs of the Council's costs capping application. 14 Accordingly, as a result of the applicant's complete success of each of the above interlocutory applications, orders were made on 14 December 2022 for the applicant to be paid her costs of the security for costs application, on 17 February 2023 for the applicant to be paid her costs of the costs capping application, and on 13 June 2023 for the applicant to be paid her costs of the discovery application. I will refer to these orders as the "Costs Orders". 15 On 30 November 2023, the parties notified the Court that the proceeding had settled, and that the parties had reached agreement on all issues except for the costs payable to the applicant pursuant to the Costs Orders. 16 On 6 March 2024, the applicant's solicitors advised the Court that, since the settlement of the proceeding, the parties had been unable to reach agreement on the quantum of costs payable to the applicant. The applicant's solicitors proposed that the costs dispute be resolved by a lump sum order "[i]n keeping with the Court's standard practice pursuant to paragraph 4.1 of the Practice Note (GPN-COSTS)". The Council's solicitors advised that the Council objected to the applicant's costs being determined on a lump sum basis. Accordingly, the matter was listed before me for a case management hearing in order to hear and determine that question.

Evidence 17 The applicant initially sought to rely on the following affidavits in support of its submissions: (a) an affidavit sworn by Mr Peter Seidel dated 21 March 2024 (Seidel affidavit); and (b) two affidavits affirmed by Mr Paul Taylor (a costs expert) dated 9 February 2024 and 20 March 2024 (referred to as the first Taylor affidavit and the second Taylor affidavit respectively). 18 The Seidel affidavit addressed some of the procedural history, and exhibited correspondence exchanged between the parties in relation to the quantum of costs pursuant to the Costs Orders. The Council objected to this affidavit on the basis that all or most of this correspondence was exchanged on a "without prejudice" basis. Ultimately, the applicant did not read the Seidel affidavit on the present application. In the light of the Council's objection, I consider that it is appropriate to direct that the Seidel affidavit be removed from the Court file pursuant to r 2.28 of the Rules. 19 The Council objected to the first Taylor affidavit as premature and prejudicial (in so far as it addressed the preparation of a Costs Summary for the purpose of a lump sum process) and objected to the second Taylor affidavit as prejudicial (in so far as it addressed the estimated time and cost that would be involved in a taxation process). Further, the Council submitted that both of the Taylor affidavits had been filed without leave having been granted by the Court. 20 In circumstances where it would have at least been necessary to allow the Council an opportunity to respond to the second Taylor affidavit, the applicant elected not to read either the first Taylor affidavit or the second Taylor affidavit. Nevertheless, I do not consider that the contents of those affidavits raise the same difficulties as led to my order under r 2.28 in relation to the Seidel affidavit - the first Taylor affidavit relates to the preparation of a Costs Summary which would ultimately be provided in some form to an officer who is to conduct a lump sum assessment, and the second Taylor affidavit relates to the estimated time and cost of a taxation of the interlocutory costs orders which would be neither relevant nor prejudicial to any subsequent assessment process. Accordingly, the first Taylor affidavit and the second Taylor affidavit may remain on the Court file (noting that they have not been read on the present application). 21 The Council did not file or rely on any evidence on the application.

Submissions 22 The applicant submits that the purpose of the power to award costs in a lump sum is to "avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation": Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120 (von Doussa J). The applicant submits that, consistently with the Court's preference as set out in paragraph [4.1] of the Costs Practice Note (GPN-COSTS), a lump sum costs order should be made wherever it is practicable and appropriate to do so. In addition to large complex commercial litigation, a lump sum costs order may be appropriate where taxation of costs would require the parties to consume additional time and incur additional expenditure so as to prolong already protracted litigation (Paciocco v Australia and New Zealand Banking Group Ltd (No 2) (2017) 253 FCR 403 at [19] (Allsop CJ, Besanko and Middleton JJ), or where a lump sum costs order can avoid an ongoing, counter-productive dispute as to costs in the interests of achieving finality, including where there has been prior protracted "trench warfare" between the parties: (LFDB v SM (No 2) [2017] FCAFC 207 at [16] (Besanko, Jagot and Lee JJ); Coshott v Prentice (No 2) [2018] FCAFC 1 at [19] (Logan, Kerr and Farrell JJ). 23 In the circumstances of the present case, the applicant submits that it is practicable and appropriate to make a lump sum costs order for the following reasons. (a) First, there are no special circumstances that require the parties to be put to further expense and delay in the "slow, expensive and gruelling" process of taxation: Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd [2017] FCA 436 at [16] (Perram J). (b) Second, in circumstances where the applicant is impecunious (her legal representatives having been retained on a conditional fee basis), the costs of any taxation, including the cost of any costs consultant, are likely to be drawn from either the costs payable by the Council pursuant to the Costs Orders or from the settlement sum payable under the settlement agreement between the parties. The applicant submits that it is not in the interest of justice that such monies be spent on an unnecessary and protracted taxation. (c) Third, the settlement sum is not payable under the settlement agreement until after the proceeding is dismissed, and the Council has adopted the position that it will not consent to the making of orders to dismiss the proceeding until the costs dispute has been resolved. Accordingly, until the resolution of the costs dispute, the applicant will be prevented from receiving the benefit of the settlement sum. (d) Fourth, the applicant submits that the litigation was "protracted and hard-fought" and that, until the settlement was reached in November 2023, the Council had defended the proceedings "in a vigorous manner". The applicant submits that it may be inferred that the Council will approach any taxation in a similar manner. (e) Fifth, the applicant submits that the costs dispute between the parties has been "protracted, ongoing and counter-productive". As discussed above, this submission was ultimately made in the absence of any supporting evidence. Further, the applicant submits that there was considerable overlap between the three interlocutory applications, which were all heard together, and that this is a factor in favour of a lump sum costs procedure (see Zreika v Royal (No 2) [2019] FCAFC 237; 141 ACSR 261 at [25] (Besanko, Farrell and O'Callaghan JJ)). (f) Sixth, the applicant submits that there is "no risk" to the Council in a lump sum procedure, on the basis that the Court may take such steps as it considers necessary to ensure that it has the requisite level of detail to make a costs determination that is fair, logical and reasonable: Paciocco at [17]-[18]. (g) Seventh, an order that costs be assessed by a taxation in accordance with Pt 40 of the Rules would result in unnecessary expense, delay and aggravation, thereby frustrating the very purpose for which the lump sum costs procedure exists. 24 Further, while the Council was first notified of the applicant's desire to use a lump sum costs procedure in February 2024, the applicant submitted that it was not practicable to raise the appropriateness of that procedure at the hearing of the interlocutory applications or until after the settlement of the proceedings, having regard to r 40.13 of the Rules. 25 The Council submits that an order for costs on a lump sum basis is neither practicable nor appropriate for the following reasons. (a) First, whether or not costs should be awarded in a lump sum is at the discretion of the Court, and the presiding judicial officers who determined the interlocutory applications were in the best position to determine whether a lump sum order was practicable and appropriate. (b) Second, the discretion to order lump sum costs is often most appropriately exercised in large and complex matters, where a taxation process is likely to be long and costly. In the present case, the Council submits that a taxation of the costs of three discrete interlocutory applications is likely to be "a relatively straightforward process" which does not carry the same risks of prejudice to the Council or injustice to the applicant that would arise in a lump sum procedure: see Beach Petroleum NL at 123; Idoport v NAB [2005] NSWSC 1273 at [9] (Einstein J). (c) Third, the Council submits that any application for a lump sum costs order ought to have been made promptly following the determination of the costs entitlement on the interlocutory applications, referring to paragraphs [4.4] and [4.7] of the Costs Practice Note. The Council accepts that the Costs Orders were unable to be taxed before the proceeding was finished (see r 40.13 of the Rules), which both parties agree has now occurred by reason of the settlement agreement. Nevertheless, the Council submitted that this should not be confused with the timing of any application for the costs to be ordered on a lump sum basis. The Council argued that the applicant was now effectively seeking to "vary" costs orders that were made between nine and fifteen months ago, in circumstances where the Council had "properly approached the quantification of costs on the basis that there is no lump sum order nor any application for such an order". (d) Fourth, the Council submits that the purpose of a lump sum costs order is to reach a logical, fair and reasonable approximation of the costs that would be allowed upon taxation, but without going to the time, trouble and expense of the taxation process (referring to Paciocco at [17]; Beach Petroleum NL at 123; WM Wrigley JR Company v Cadbury Schweppes Pty Ltd [2006] FCA 1186 at [9] (Sundberg J)). The Council submits that the lump sum process gives "efficiency at the expense of accuracy", and that the risk of inaccuracy is particularly strong in the present case. As discussed above, no particular evidentiary basis was advanced in support of the latter submission. (e) Fifth, the Council submits that the determination of the costs issues is unlikely to be streamlined or expedited by a lump sum process, foreshadowing that it is "almost inevitable that the Council will seek leave to file submissions followed by a contested hearing on those issues". Again, there was no particular evidentiary basis for this submission. In so far as the Council expressed some pessimism that the parties will reach any consensual outcome through a lump sum process, there is no factual basis on which the Court can presume that a taxation process will lead more quickly or efficiently to any such resolution. (f) Sixth, the Council submits that Pt 40 of the Rules sets out a clear process for quantification of costs where a lump sum costs order has not been made, and that "[g]iven the nature and quantum of costs claimed by the [a]pplicant, this is the process most likely to result in a timely and fair outcome which implements the orders that were made". No material has been placed before the Court as to the nature or quantum of the costs sought by the applicant, although the nature of the interlocutory applications in which the costs orders were made is apparent from the Registrar's reasons for decision and referee report dated 14 December 2022. (g) Seventh, the Council submits that the taxation process "need not be unnecessarily complex, prolonged or expensive" and that, once the applicant has filed a bill of costs, an estimate is likely to be made by a Registrar faster than the time taken to complete any lump sum process. The Council suggests that such an estimate of costs on a taxation "may represent the end of the matter", that objections and taxation hearings are required only infrequently, and that mediation would be available if necessary. (h) Eighth, the Council submits that it is not relevant that the applicant has already prepared a Costs Summary for the purposes of a lump sum assessment. As discussed above, the applicant did not ultimately rely on the evidence in relation to that Costs Summary for the purposes of this application. 26 In summary, the Council opposes a lump sum costs process because it "has been sought late", and it "is unlikely to bring about a timely and fair assessment of costs in the unique circumstances" of the present case.

Consideration 27 Section 43 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) provides that the Court or a Judge has jurisdiction to award costs in all proceedings before the Court other than proceedings in respect of which an Act provides that costs must not be awarded. The award of costs is in the discretion of the Court or Judge: FCA Act, s 43(2). 28 Rule 40.02 of the Rules relevantly provides: 40.02 Other order for costs A party or a person who is entitled to costs may apply to the Court for an order that costs: … (b) be awarded in a lump sum, instead of, or in addition to, any taxed costs; or (c) be determined otherwise than by taxation. 29 Division 40.2 of the Rules deals with taxation of costs, however that Division will not apply if an order has been made under r 40.02(b) that costs be awarded in a lump sum instead of any taxed costs. 30 The Costs Practice Note was issued by the Chief Justice on 25 October 2016, and took effect from that date. It applies to all proceedings in this Court, subject to any specific statutory or other legal considerations that may apply in proceedings within certain areas of the law (such as class actions, fair work matters, and native title matters). As the Costs Practice Note expressly acknowledges, it must be read together with the FCA Act, including in particular the overarching purpose provisions in s 37M and s 37N of that Act. Further, the Costs Practice Note should be understood as a guide rather than an inflexible set of rules: see Coshott at [21]. 31 The principles set out in the Costs Practice Note emphasise that the procedure for determining the quantum of costs for a party successful at a final hearing should not be delayed and should be as inexpensive and efficient as possible: see paragraph [3.1]. While this principle is expressed to apply to the determination of costs following success at a final hearing, the approach should be no different in relation to the determination of the quantum of the costs of interlocutory applications once that quantum falls to be determined after the proceeding is finished (see r 40.13). 32 Paragraph [3.3] of the Costs Practice Note relevantly provides that "[f]or those costs issues that are unable to be resolved by negotiation and require the involvement of the Court, the Court's preference is to avoid, where possible, the making of costs orders that lead to potentially expensive and lengthy taxation of costs hearings". To this end, the Court "will seek to adopt, and will encourage parties to utilise, the appropriate use of sophisticated costs orders and procedures", including in particular lump sum costs orders. Accordingly, "[t]axation of costs hearings should be the exception and be confined to those matters that have genuinely been unable to be otherwise resolved or determined." 33 Paragraph [4.1] of the Costs Practice Note states: The Court's preference, wherever it is practicable and appropriate to do so, is for the making of a lump sum costs order. 34 Of potential importance in the present case, this paragraph contains the following footnote: Although it may be applied in certain appropriate circumstances, the lump sum costs procedure is not intended to apply generally to interlocutory costs orders unless otherwise ordered. Parties are reminded of timing considerations in respect of interlocutory costs orders (see r 40.13 of the Federal Court Rules). 35 Paragraph [4.2] makes it clear that the utilisation of a lump sum costs procedure remains at the discretion of the judge, and that parties have a right to be heard on the appropriateness of utilising such a procedure. Parties are encouraged to notify the Court and all other parties of their views on the appropriateness of utilising the lump sum costs procedure at the earliest practicable stage in the proceeding: paragraph [4.8]. 36 The timing of any lump sum costs procedure is dealt with in paragraphs [4.3] to [4.7] of the Costs Practice Note, which distinguishes between "regular" costs scenarios and "simple" costs scenarios. In the former, the Costs Practice Note contemplates that the costs hearing dealing with lump sum costs will take place within 6 weeks following the determination of the costs entitlement question, or as soon as possible at any other time considered appropriate by the judge. In the latter, being "particularly short and simple cases" where straightforward costs orders are sought, the costs hearing dealing with lump sum costs may take place during closing submissions at trial, before or immediately following the determination of the costs entitlement question. 37 A Registrar may be involved various capacities in a lump sum costs procedure, including as a consultant or referee: paragraph [4.9]. 38 Paragraphs [4.10] to [4.20] of the Costs Practice Note set out the procedure for determining costs on a lump sum basis. In broad terms, this involves the costs applicant filing a "Costs Summary" addressing and verifying the matters specified in Annexure A of the Costs Practice Note, following which the costs respondent may file a "Costs Response" summarising the categories of any disputes arising in respect of the Costs Summary. Both the Costs Summary and the Costs Response are in the form of an affidavit. The parties may then be given leave to file short written submissions addressing the law as to costs on relevant issues. 39 The deponent must verify in the Costs Summary, among other things, that: (a) the applicant is not claiming more than the applicant is liable to pay for costs and disbursements (that is, reflecting the indemnity principle); (c) the calculations made are correct; (d) the matters noted are a fair and accurate summary of the costs and disbursements that the applicant is entitled to claim; and (e) the amounts claimed are capable of further verification through source material. 40 The information that must be set out in the Costs Summary relevantly includes: (a) the amount of the lump sum sought, and how it has been calculated including if any discounts have been applied; (b) a summary of the categories of the work fairly and reasonably incurred in the conduct of the litigation, together with an estimate of the proportion that each category of work constitutes of the total costs claimed; (c) in respect of each person who has performed costs work the subject of the claim, a summary of the person's hourly rate and total hours worked, together with an estimate of the proportion of the total sum claimed attributable to that person; (d) a summary (with any applicable hourly and/or daily rates) of disbursements fairly and reasonably incurred in the conduct of the litigation, including fees charged by counsel and any expert witness, together with an estimate of the proportion of the total sum claimed attributable to counsel fees; (e) a clarification of the amount of any "skill, care and responsibility" claimed and how it has been calculated, and the bases for it being claimed; (f) where applicable, a description of any special or unusual costs arrangements underpinning the costs claimed (e.g. conditional fee agreements, pro-bono arrangements or fixed fee arrangements); (g) whether the amounts claimed fall within or outside the amounts permissible for any item under the Scale, the National Guide to Counsel's Fees, or the National Guide to Discretionary Items in Bills of Costs, as relevant; and (h) any special features of the case which may impact the assessment of costs or any other relevant and important matters not mentioned above 41 The taxation process, on the other hand, is governed by Div 40.2 (rr 40.12 to 40.35) of the Rules, and is addressed in paragraphs [5.1] to [5.21] and Annexure B of the Costs Practice Note. I put to one side the short form bill procedure under Div 40.3 that applies to winding up proceedings under the Corporations Act 2001 (Cth) and migration appeals. The steps in a taxation process under Div 40.2 include: (a) the preparation, filing and service of a bill of costs for taxation; (b) the provision by a taxing officer of an estimate of the approximate total for which the certificate of taxation would be likely to issue (without making any determination on the individual items in the bill); (c) if a party interested in the bill objects to the estimate, the filing of a notice of objection together with the payment of security for the costs of taxation; (d) if a Registrar so directs, the conduct of a confidential conference of the parties before a designated Registrar; (e) in some cases, a provisional taxation by a taxing officer, in the absence of the parties; (f) the giving of notice by a Registrar that the bill is to be taxed; (g) the filing of notices of objection identifying each item or part of an item to which objection is taken (and stating briefly but specifically why the item or part of the item should be disallowed and the amount by which it is contended that the item should be reduced); (h) the filing and service of a notice of response stating whether each objection is admitted or opposed (and stating briefly but specifically why the item or part of the item should be allowed and why the objection should be dismissed); (i) the conduct of the taxation by the taxing officer, who has a range of powers including to summon and examine witnesses, direct or require the production of books, papers and documents, or issue subpoenas; (j) the issue of a sealed certificate of taxation; and (k) potentially, the hearing of any application for review of the taxation and any consequential orders. 42 It is apparent that the taxation process under Div 40.2 will often be longer and more intensive than the lump sum costs process. As is recognised in paragraph [5.7] of the Costs Practice Notice, "[e]mbarking on a long form bill of costs process may result in a lengthier and more costly process than the lump sum process set out in this practice note". In Clipsal Australia at [15], Perram J noted that "the modern process of taxation is very onerous and few have the fortitude to see a taxation through to its conclusion". 43 Paragraph [5.12] of the Costs Practice Note contemplates that the estimate of the taxable costs will be made by a registrar "wherever possible, within 30-60 days of the filing of the bill of costs, depending on the complexity of the bill". The Costs Practice Notice also expresses an expectation that, in the light of the guidance provided by the estimates process and the use of alternative dispute resolution processes such as mediation, notices of objection and taxation hearings will be required "infrequently". 44 Both parties accepted that r 40.02(b) confers a broad discretion to order that costs be awarded in a lump sum. That discretion must of course be exercised judicially by reference to considerations relevant to its exercise and upon facts connected with the litigation. Further, the power should be exercised in the way that best promotes the overarching purpose to facilitate the just resolution of disputes according to law and "as quickly, inexpensively and efficiently as possible": s 37M(1)(b), (3). 45 The purpose of a power such as that conferred by r 40.02(b) has been described as being "to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation": Beach Petroleum NL at 120; Seven Network Limited v News Limited [2007] FCA 2059 at [25] (Sackville J); Paciocco at [15]. 46 In my view, two important considerations bearing on the exercise of the discretion to make a lump sum costs order in the present case are efficiency and fairness. In relation to efficiency, the issue is whether the lump sum costs process will minimize the time and costs incurred by the parties as compared to embarking on a taxation process. In relation to fairness, the issue is whether the lump sum costs process will provide an outcome that is logical and reasonable and sufficiently accurate to do justice between the parties. Each of those considerations must be balanced and considered in the context of the particular circumstances of the case, including the complexity of the litigation and the scope and magnitude of the costs involved. 47 Paciocco involved costs orders made in favour of a party on the final hearing of an appeal, and the question of whether a lump sum costs order should be made or whether the costs disputes should proceed to taxation in the ordinary course. Chief Justice Allsop, Besanko and Middleton JJ observed at [17] that the Costs Practice Note provides for the Court to "take such steps as it considers necessary to ensure that it has the requisite level of detail to make a costs determination that is fair, logical and reasonable and to avoid orders that lead to potentially expensive and lengthy taxation hearings". Their Honours continued (at [18]-[20]): We emphasise that in making a lump sum award of costs, the Court in undertaking the task of assessing costs is not precluded from undertaking a close inquiry of costs relating to a particular issue or category of costs, should the Court consider it appropriate to do so: see e.g. Hudson v Sigalla (No 2) [2017] FCA 339 at [30] ('Sigalla'). The Court is able to adopt its own procedures in inquiring into costs, is able to be flexible in how it conducts that inquiry, including by the obtaining of suitable assistance whether by referee's report or other reporting, and is able to acquire the level of detail needed to make a determination that is fair, logical and reasonable. Whilst the Costs Practice Note now suggests that most cases should have a lump sum costs order approach applied unless there is some characteristic that would make it unsuitable, a lump sum costs order is not mandated in all instances. In all cases it is a matter for the Court to exercise the discretion given to the Court by the Federal Court Act and the Rules as appropriate: see Sigalla at [18]-[19]. There is no particular characteristic that a case must possess for it to be suitable for the making of a lump sum costs order. Particular circumstances that may make a lump sum order especially appropriate include where in a large and complex commercial matter it would save the time, trouble, expense and aggravation of a taxation; where a taxation would require the parties to consume additional time and incur additional expenditure prolonging already protracted litigation; and generally to avoid an ongoing, counter-productive dispute as to costs, in the interests of achieving finality. 48 In deciding that it was appropriate to make a lump sum costs order, the Full Court in Paciocco rejected as unwarranted a concern that had been expressed by the parties liable for costs "that a lump sum determination of costs will deny the Court the ability to closely scrutinise the costs in a way that would ordinarily occur through the process of taxation": at [29]. The Full Court accepted that, if a lump sum procedure were adopted in that case, "the Court would be able to apply the appropriate and necessary level of scrutiny" to the relevant costs, and "would not be constrained in any way from ensuring that it had sufficient information to make a logical, fair and reasonable determination": at [30]. In particular, the Court was "not precluded from adopting appropriate steps and procedures which may include undertaking a close inquiry of costs relating to a particular issue or category of costs … should the Court consider it appropriate to do so": at [31]. 49 In Paciocco, the Full Court relied on evidence from a costs consultant that a taxation of costs "would be inefficient and costly, and there would be significant time and costs savings achieved by adoption of a lump sum award of costs": at [28]. In the present case, the applicant did not ultimately rely on any evidence of that nature for the purposes of its application. Nevertheless, for the following reasons, I consider that it is practicable and appropriate for the costs of the interlocutory applications to be awarded on a lump sum basis, and there is nothing in the particular circumstances that would make such a process unsuitable. 50 First, in relation to the timing of the application for a lump sum costs order, I do not consider that it is significant that such an application was not made at the time that the costs entitlement was determined. In circumstances where r 40.13 of the Rules provides that the costs of an interlocutory application cannot be taxed until the proceeding is finished, it cannot be expected that the party in whose favour such costs are awarded would initiate a lump sum costs process at that time. This is consistent with the footnote to paragraph [4.1] of the Costs Practice Note, which recognises that the lump sum costs procedure is not intended to apply generally to interlocutory costs orders unless otherwise ordered, and reminds parties of the timing considerations in respect of interlocutory costs orders. Ordinarily, the quantification of interlocutory costs would be addressed together with any final costs awarded once the proceeding is finished. The applicant in the present case accepted that, if an application were to be made for a lump sum costs order in relation to any final costs awarded at the end of the proceeding, it would be possible to deal with the interlocutory costs orders on the same basis notwithstanding that an application for a lump sum cost process had not been made at the time of those orders: compare, in this regard, LFDB at [18]; Clipsal Australia at [31]. 51 In light of the settlement reached by the parties, it does not appear that there will be any order made in respect of the costs of the proceeding generally. Nevertheless, the Costs Orders made in the applicant's favour on the interlocutory applications remain to be dealt with. There is no evidence before the Court to suggest that the applicant has unduly delayed raising the issue of lump sum costs after the settlement was reached and the proceeding "finished" for the purposes of r 40.13 of the Rules. While it might be less common for the costs of an interlocutory application to be addressed discretely by means of a lump sum costs process (see, for example, Saizeriya Co Ltd v Peregrine Management Group Pty Ltd [2005] FCA 1174 at [31] (Kenny J)), such a process can be applied "in certain appropriate circumstances", to use the language contained in the footnote to paragraph [4.1] of the Costs Practice Note. It is not in dispute that the Court has power to make a lump sum costs order notwithstanding that an earlier costs order envisaged taxation in the ordinary way: Beach Petroleum NL at 120. 52 While the Council submitted that it had proceeded on the basis that there was neither a lump sum costs order nor an application for such an order, no particular prejudice was identified as flowing from any assumption that might have been made by the Council as to the process by which the costs entitlement would be quantified, other than that it might have informed the parties' negotiations in relation to costs in circumstances where the Council asserts that a lump sum costs process will result in a "markedly different" outcome from a taxation (a matter which I will address below). 53 Secondly, the interrelated nature of the interlocutory applications in respect of which the Costs Orders were made involved the preparation of multiple affidavits, the filing of written submissions, and the conduct of a hearing over two days before a Judicial Registrar. The making of a lump sum costs order is not limited to large complex commercial matters: see e.g. Playcorp Group of Companies Pty Ltd v Peter Bodum A/S (No. 2) [2010] FCA 455 at [3] (Middleton J); Coshott at [19]. In the circumstances of this case, I do not consider that a taxation of the costs of the interlocutory applications would necessarily be a "relatively straightforward process", as the Council submitted. Conversely, it is speculative to suggest that the lump sum costs process will be highly contested and will end up being more protracted than a full taxation. Ultimately, no evidence was led in support of or against either proposition. 54 While the interlocutory applications were contested, it is not possible to make any finding that the parties have engaged in, or are likely to continue to engage in, "trench warfare" of the kind referred to in Coshott at [19] and LFDB at [16]. On the contrary, the parties have since been able to reach a full settlement of the substantive dispute. Nevertheless, some assessment can still be made of the likely time and cost of a taxation process and a lump sum costs process respectively. The Council cannot, on the one hand, suggest that it would vigorously contest any lump sum costs process and, on the other hand, that it would readily agree to a costs estimate without requiring a full taxation (even accepting that the latter would have involved the production by the applicant of an itemised bill of costs). 55 The Council placed some reliance on the approach adopted by Middleton J in Playcorp at [19]-[23], who proceeded on the basis that the parties in that case would conduct the taxation process in a manner consistent with the overarching purpose and that unnecessary conflict would not necessarily occur between the parties on a taxation. Similar considerations have been referred to in cases such as ACN 074 971 109 (as trustee for the Argo Unit Trust) v National Mutual Life Association of Australasia Limited [2013] VSC 137 at [14]-[16], [42]-[43] (Wood AsJ) and Wilson v Bauer Media Pty Ltd [2018] VSC 161 at [15] (John Dixon J). However, apart from the fact that these decisions either preceded or were not guided by this Court's current Costs Practice Note, each case will ultimately turn on its own particular facts and circumstances. Further, in the present case, no expert evidence was ultimately placed before the Court in relation to the predicted time and cost that might be involved in a taxation process or a lump sum costs process respectively. 56 Having regard to the Costs Practice Note and the provisions governing the taxation process and the lump sum costs process, together with the general circumstances of the proceeding, I consider that the lump sum costs process is likely to save time and costs and be more efficient than the taxation process in determining the costs entitlement of the applicant in relation to the Costs Orders. 57 Thirdly, I do not consider that the lump sum costs process is less likely to reach a fair and reasonable outcome in relation to the quantification of the applicant's entitlement to costs. As the Full Court noted in Paciocco, the Court can take appropriate steps in a lump sum costs process to acquire the level of detail necessary to make a costs determination that is fair, logical and reasonable. The Costs Summary and Costs Response are capable of exposing any significant contested issues in relation to the costs to which the applicant claims to be entitled. 58 The particular concerns foreshadowed by the Council relating to the inter partes costs allowable in respect of documents such as the affidavits filed by the applicant on the interlocutory applications (which the Council contends should be assessed on a "task" or per folio basis by reference to item 2 of Sch 3 of the Rules, as opposed to a time costing basis) are capable of being raised and considered in the lump sum costs process. As Middleton J noted in Playcorp at [5] and [7], while a lump sum costs order "applies a much broader brush than would be used on a taxation of costs", it nevertheless involves consideration of "the basic principles applicable to a taxation of costs" and the scale of costs "provide[s] assistance in fixing an appropriate gross [or lump] sum" (in this regard, see also Seven Network Limited at [25]-[30]). 59 Further, I have decided to refer the determination of the lump sum costs amount to Registrar Edwards, who, as is evident from these reasons, has considerable familiarity with each of the interlocutory applications giving rise to the Costs Orders. 60 I am therefore not satisfied that there would be any risk of prejudice or injustice to either the Council or the applicant in determining the costs as a lump sum rather than by a taxation of costs (cf. Beach Petroleum NL at 123). 61 Fourthly, I also take into account the position of the applicant, who it is accepted is impecunious and will not receive the benefit of the settlement sum until such time as the costs dispute is finalised and final orders are made to dismiss the proceeding. This is an additional factor that militates against requiring the parties to engage in a potentially time-consuming and costly process of taxation of costs. 62 Accordingly, I consider that it is appropriate to order that the applicant's costs of the interlocutory applications should be awarded as a lump sum pursuant to r 40.02(b) of the Rules, and that directions should be made for the filing of material in accordance with paragraphs [4.10] to [4.20] of the Costs Practice Note. 63 The determination of a lump sum costs award can be performed by a Judge, including with the assistance of a Registrar, or can be delegated to a Registrar. As the Full Court explained in Paciocco at [39] (see also Clipsal Australia at [17]; LFDB at [17]): Whilst a judge of the Court can hear and determine a lump sum costs award, the determination of the lump sum quantum can be referred to a registrar pursuant to s 35A(1)(h) of the Federal Court Act, and r 3.01(1)(b) of the Rules, read with item 221 of Schedule 2. Alternatively, a registrar may provide assistance with the lump sum hearing: Costs Practice Note at [4.9]. If necessary a separate issue could be referred to a referee by a judge pursuant to s 54A of the Federal Court Act and r 8.6 of the Rules. 64 In the present case, I consider that it is appropriate to direct that the assessment and determination of the lump sum costs be carried out by a Registrar. As the Full Court noted in LFDB at [17], "[t]his will not become a 'mini taxation' as there are important differences between the protracted process involved in the conduct of a taxation of costs under Division 40.2, and the more general assessment under FCR 40.02(b)". 65 Finally, I have considered whether it is appropriate to order that the Council pay the applicant's costs of this hearing on the question whether a lump sum costs award should be made. I note that an order to that effect was made in Paciocco, with those costs also being awarded in a lump sum to be quantified together with the other lump sum costs. However, there was no formal interlocutory application made by the applicant, and the orders proposed by the applicant did not seek any order in relation to the costs of this hearing. Further, the making of a further costs order might run the risk of further complicating the resolution of the existing costs dispute between the parties. On balance, I do not propose to make any order as to the costs of the hearing on the lump sum costs issue.

Conclusion 66 For the reasons set out above, I will make orders in the following terms: (1) The costs payable to the applicant pursuant to the orders made on 14 December 2022, 17 February 2023 and 13 June 2023 be awarded as a lump sum pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth). (2) The amount of the costs referred to in Order 1 of these Orders be determined by Judicial Registrar Edwards pursuant to s 35A(1) of the Federal Court of Australia Act 1976 (Cth). (3) On or before 2 April 2024, the applicant file and serve a Costs Summary in accordance with paragraphs 4.10 to 4.12 of the Costs Practice Note (GPNCOSTS). (4) On or before 30 April 2024, the respondent file and serve a Cost Response in accordance with paragraphs 4.13 to 4.14 of the Costs Practice Note (GPN-COSTS). (5) By 4.00 pm on 7 May 2024, the applicant and the respondent file and serve written submissions addressing the law as to costs on relevant issues in accordance with paragraph 4.15 of the Costs Practice Note (GPN-COSTS). (6) Pursuant to rule 2.28 of the Federal Court Rules 2011 (Cth), the following documents be removed from the Court file: (a) the affidavit of Peter Seidel sworn 21 March 2024; and (b) the applicant's written submission dated 21 March 2024. (7) The applicant is granted leave to file an amended version of the applicant's written submission dated 21 March 2024, removing any references to the documents referred to in Orders 6(a) and (b) of these Orders I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Horan.