Liang v Joblink Australia Pty Ltd

1. The amount payable by the respondent to the applicant pursuant to the indemnity costs order dated 24 October 2018 is fixed at $17,758.70.
2. The respondent must pay the applicant's costs of the lump sum costs application on an indemnity basis and fixed at $5,972.45. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

GREENWOOD J: 1 This is an application for an order that the respondent pay the costs of the proceeding on a lump sum basis, consequent upon an order of the Court on 24 October 2018 that the respondent pay the applicant's costs on an indemnity basis. The power to make an order awarding costs in a specified sum can be found in the Federal Court of Australia Act 1976 (Cth) (the "Act") at s 43(3)(d) and, of course, r 40.02 of the Federal Court Rules 2011 which provide that a party or person who is entitled to costs may apply to the Court for an order that costs be awarded in a lump sum instead of or in addition to any taxed costs. The General Practice Note of the Court in relation to costs also addresses the principles to be applied in determining whether a lump sum order ought to be made. 2 The underlying application which gave rise to the costs order was an application by a director of the company for an order that the director be given access to particular books and records of the company. That order was made on 24 October 2018 and was framed in terms of documents identified in particular categories in letters which had passed between the solicitors for the director and the solicitors for the company. 3 The order was made because the applicant had established the underlying merits of the principal application. 4 On 27 November 2018, the solicitor for the applicant, Ms Kennedy, swore an affidavit deposing to the facts and circumstances in relation to the work done and outlays incurred in relation to the application. That affidavit was filed on 27 November 2018, and it demonstrates that particular items of work at a particular cost were undertaken and particular expenses were incurred the end result of which is that an amount of $17,758.70 was incurred in preparing for and prosecuting the application. I have had the benefit of reading that affidavit and I am satisfied that the affidavit properly identifies the work done and its corresponding quantum for each step. I am willing to accept that affidavit as properly establishing the quantum of the body of work done. 5 It should also be noted, of course, that the question of the application for a lump sum costs order was brought before the Court for directions on 4 March 2019 and on that day, the respondent chose not to appear in response to the service of the application. 6 On 25 February 2019, Ms Kennedy swore an affidavit in which she deposes to some exchanges with the solicitors for the company. One of those exchanges involved the question of whether the affidavit seeking lump sum costs would be something that the solicitors for the respondent had instructions to accept. It turned out in exchanges that the solicitors were not able to obtain instructions about acceptance of the relevant documents. That response is consistent with the failure to appear at the directions hearing. 7 In the result, the listing of the matter for today on 4 March 2019 was a matter served upon the respondent and today the respondent has chosen not to appear. There could be little doubt that the respondent has no interest, in substance, in the consequences of the application. Certainly, no affidavit material has been put on to contest the reasonableness of the calculation of the costs and no submissions have been lodged in accordance with the procedural orders so as to take issue with any aspect of the applicant's affidavit material or the propositions of law upon which the application rests. 8 There is one matter that warrants some observation. 9 Sometimes in making orders of this kind, the question of whether a general discount should be applied arises and sometimes that is thought to be a consideration which needs to be addressed because when costs are assessed by taxing officers within the Court, it is not uncommon for a costs calculation to be discounted or reduced to some degree even where the costs are ordered on an indemnity basis. 10 I am satisfied that an observation by Brereton J in Hancock v Rinehart [2015] NSWSC 1640 at [58] is relevant in these circumstances. At [58], his Honour said this: "Where a gross sum is assessed on an indemnity basis and there is no evidence of unreasonableness, it may be inappropriate to apply any discount". 11 In this case, there is no evidence of unreasonableness. There was no effort by the respondent to appear at the directions hearing or appear today to put in issue any aspect of any of the material upon which the applicant relies. Having regard to those considerations, I am entirely satisfied that the lump sum costs order ought to be made in relation to the principal application, which, as I say, results in, as to that matter, an order in the amount of $17,758.70. 12 However, that is not the end of the matter because the applicant has been put to costs and expenses in bringing the lump sum application and it is entirely appropriate that the applicant be compensated on an indemnity basis for being put to the trouble of having to come to Court to deal with the lump sum question when an inter parties exchange might well have resolved the matter had the company given the solicitors acting for it relevant instructions to engage in and debate the question. 13 That did not occur. A further amount of $5,972.45 was incurred in prosecuting this application. Having regard to those considerations, I am satisfied that there ought to be a lump sum order in relation to the indemnity costs order already made of the amount nominated and there ought to be, in addition to that, a costs order for $5,972.45 in relation to the work and expenses incurred in dealing with the present application. 14 A further affidavit is put before the Court, sworn by Ms Kennedy on 25 March 2019. That affidavit is filed by leave of the Court. The affidavit deposes to a proposal which was put by the applicant to the respondent to try and resolve the question of the costs or the calculation of the costs on a lump sum basis. Accordingly, I take that affidavit into further account in relation to the making of the present order. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.