Lim v Flinders University of South Australia

1. The applicant made submissions about the appropriate procedure that should be used to commence a review of the registrar's decision. She asserted that she had been given contrary advice by different Registries about the appropriate form in which such a review may be commenced. At the hearing of her own interlocutory application, she asserted that the proper procedure was to apply in a separate proceeding for judicial review of the registrar's decision. She informed the Court that she had lodged an originating process for judicial review with the Registry a few days prior. In large part, the effect of the applicant's submission was that it was not appropriate for a presiding judge who delegates a power to a registrar to then sit upon a review of the decision made in the exercise of the delegated power, for to do so would be tantamount to reviewing one's own decision. The applicant submitted that the process lacked transparency. I rejected that submission and do not consider it necessary to repeat here what was said in oral reasons about it. Relatedly, I refused to disqualify myself from hearing the applicant's interlocutory application on grounds of apprehended bias. The applicant's submissions on that topic were substantially the same as those going to the question of jurisdiction, namely that a judge could not and should not review the exercise of power by a registrar in circumstances where the power was delegated by that same judge.
2. Dr Lim's interlocutory application may fairly be interpreted as an application for a de novo review of the registrar's decision, made in the exercise of her right to seek a review of that nature under s 35A(5) of the Federal Court of Australia Act 1976 (Cth). That right arises in the present case because the registrar was directed to exercise a power of the Court prescribed by the Federal Court Rules 2011 (Cth), being a power to make an order about the amount of costs: Act, s 35A(1)(f); Rules, r 3.01(1)(b), Sch 2, Pt 3.7, Item 220. Section 35A(5) of the Act provides that a party to a proceeding in which a registrar has exercised any of the powers of the Court under subs (1) may apply to the Court to review the exercise of that power. Section 35A(6) provides:

The Court may, on application under subsection (5) or of its own motion, review an exercise of power by a Registrar pursuant to this section and may make such order or orders as it thinks fit with respect to the matter with respect to which the power was exercised.

1. It is well established that the role of the Court in performing the task under s 35A(6) is to conduct a de novo review. As Allsop CJ, Markovic and Colvin JJ said in Bechara v Bates [2021] FCAFC 34; (2021) 286 FCR 166 (at [17]):

The nature of a review under ... s 35A(6) of the Federal Court Act of an order made by a registrar (often but not always in the context of the review of the making of a sequestration order in bankruptcy) has been the subject of a significant number of decisions of this Court. All are consistent. To underpin the validity of the delegation of judicial power of the Commonwealth to a non-judicial court officer there must be a rehearing de novo before a judge of the Court ... The review does not hinge, or focus, upon error in the decision of the registrar. It is a hearing de novo, in which the matter is considered afresh on the evidence and on the law at the time of the review, that is at the time of the hearing de novo. ...

1. Dr Lim asserted that the Court does not have jurisdiction to hear an application of the present kind because the action is finalised. The action is not finalised in the relevant sense. The Court's order that there be a lump sum fixed by a registrar left the action open for the purpose of quantifying costs. A necessary incident of the registrar's power in fixing that sum was that the exercise of the power to fix the amount of costs was reviewable on the merits. That is the task to which I now turn.

1. In accordance with the order of 2 March 2023, the respondents' costs were payable on a party-party basis and should therefore encompass only those costs that have been fairly and reasonably incurred by them in the conduct of their case: Rules, Sch 1. As Tracey, Bromberg and White JJ observed in Innes v AAL Aviation Limited (No 2) [2018] FCAFC 130 (at [37]):

The Dictionary in Sch 1 of the FCR defines 'costs as between party and party' to mean only the costs that have been 'fairly and reasonably' incurred by the party in the conduct of the litigation. The assessment of whether claimed costs should be so characterised should take account of a number of factors, including the nature and complexity of the litigation, the conduct of the parties in the litigation and the requirements of the Court. Proportionality is an important consideration.

1. The purpose of the Court's power to make a lump sum costs order is to avoid the additional expense, delay and aggravation that can attend the protracted process of a taxation: Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 7) [2018] FCA 1217, McKerracher J (at [49]). The Court may adopt its own processes in conducing the assessment, including by acquiring information at "the level of detail needed to make a determination that is fair, logical and reasonable": Paciocco v Australia and New Zealand Banking Group Ltd (No 2) (2017) 253 FCR 403, Allsop CJ, Besanko and Middleton JJ (at [18]). A judge making the assessment is entitled to take into account his or her own observation of the proceedings: Innes (at [18]). However, the Court "must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary 'fail safe' discount on the costs estimates submitted to the Court": Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, von Doussa J (at 123).

1. The costs claimed by the respondents before the registrar are those set out in Table A at [9] of the registrar's reasons, as follows:

Solicitors' fees (other than in respect of the costs assessment)

Solicitors' fees (in respect of the costs assessment)

Total Other Disbursements, Solicitor and Counsel fees

1. As can be seen, the costs are comprised of solicitors fees, counsel fees and solicitors fees in respect of the costs assessment itself and other disbursements.
2. The "other disbursements" are in the nature of transcript and courier fees. I am satisfied that those are reasonable expenses. They account for $71.00 of the total and I do not propose to reduce them.
3. The registrar allowed $3,600.00 for solicitors' fees associated with the costs assessment itself. That is apparent at [62] of the registrar's reasons. I will not disturb the registrar's order in relation to the portion of the costs that is referable to the costs assessment itself. It will be included in the total sum ordered by me, although strictly speaking it does not directly relate to the costs of the underlying proceeding.
4. My primary focus has been on the issue of solicitors' fees and counsel fees in respect of the application for an extension of time to appeal from an order made in a general protections proceeding.
5. The solicitors' fees are broadly itemised in Table B appearing at [12] of the registrar's reasons as follows:

1. The amounts in the third column are the amounts in fact charged to the respondents.
2. The respondents' approach before the registrar was to suggest a 25% reduction, so as to arrive at the figures in the final column as representing their proposed solicitors' costs to be included in the final lump sum. For the purposes of my own assessment I have relied on the figures in Table B, no party suggesting that the figures or the percentages recorded by the registrar were inaccurate.
3. The total charged time specified in Table B is 345 hours across all of the solicitors, and the total amount charged to the respondents was $89,165.79. There was then a reduction of 25% to the hours, reducing them to 258.75 hours. This resulted in the respondents' claimed amount of $66,874.34.
4. In addition to the solicitors' costs, there was a claim for disbursements in the nature of counsel fees totalling $59,624.00. That amount is the sum of fees charged by three barristers: Mr Prince of Senior Counsel and Ms Makris (both of whom were counsel in the proceedings at first instance) and Mr Swan. On my calculation, the total time charged by Mr Prince and Ms Makris amounted to about 30 hours. As the registrar correctly calculated, the total amount of hours charged by Mr Swan was 88 hours. That is a total of 118 counsel hours. In all, the respondents have been charged for 463 hours of legal work, being 345 solicitor hours and 118 counsel hours.
5. Much is said in the registrar's decision in relation to the nature of this proceeding and the manner in which it was conducted. As the presiding judge, I am familiar with those matters. There were four case management hearings in all. One of those proceeded for almost an hour. There was, in addition, an attendance before a registrar (for the purpose of preparing a book of documents) which continued for more than two hours. There was then a hearing of the application for an extension of time in which to appeal which proceeded from about 10.00 am until 4.00 pm on 27 October 2022. There was an argument relating to costs and a further attendance for the delivery of judgment. Argument before me proceeded on the basis that there were approximately nine and a half hours of in person attendances.
6. Ordinarily, an application for an extension of time in which to appeal is not a complex proceeding, although much depends on the facts and circumstances of the case. In the present matter I consider that there are facts and circumstances that would naturally have increased the respondents' costs significantly, at least when compared to a matter that does not have those features.
7. On the application for an extension of time it was necessary to have regard not only to the reasons for the delay in commencing the appeal but also to the underlying merits of the appeal that was sought to be commenced. The appeal was from an order dismissing an application in which the applicant alleged multiple contraventions of the FW Act. The primary judge gave detailed written reasons in respect of each of the alleged contraventions.
8. When the proceeding was first commenced, it was supported by an affidavit of the applicant in which she annexed a draft notice of appeal. It was 126 pages long. Much of the time spent in case management was devoted to providing Dr Lim the opportunity to revise that document so as to make it readable and to identify with precision the errors that were said to have been made by the primary judge. That took some time.
9. I accept that the respondents' costs could reasonably include the costs of its solicitors, or at least one or two of them, reading the original document. Having said that, it was also plain from the outset that the Court itself was not content to hear the application for an extension of time if that draft notice of appeal remained in the form in which it was originally presented. As such, it could not have been reasonable for the respondents to prepare for argument on the substantive application by reference to that draft. The draft notice of appeal was eventually distilled to a document of about seven or eight pages, and it was that document that formed the subject of argument on the application for an extension of time.
10. I have had regard to the nature of the materials filed by the applicant and her correspondence to the Court which I consider to be fairly indicative of the nature of her correspondence with the respondents through their solicitors. It is copious in its amount and discursive in its nature. The respondents were put to the task of reading and interpreting that correspondence. That is another feature that ordinarily might be expected to increase the number of hours devoted by the respondents' solicitors (both solicitors and counsel) to the proper defence of the application.
11. I have had regard to the hourly rates charged in relation to the classification of each of the staff members responsible for working on the matter. I consider those hourly rates to be reasonable and I do not propose to make any reductions to them.
12. I have also had regard to the team structure among the solicitors engaged by the respondents. It is an orthodox arrangement. However, when there is a team structure involving a partner in a law firm as well as a senior associate, associate and other solicitors, the Court should remain alert to the number of hours expended by each of the personnel to avoid duplication and inefficiencies arising from unnecessary familiarisation.
13. The 463 hours expended on the matter by the respondents' legal representatives is something that invites very careful scrutiny. I do not consider it to be appropriate to reduce the solicitor hours by only 25% when the original starting figure of 345 is not reasonable, even having regard to the features of the case referred to thus far.
14. Similarly, I consider the amount of 118 counsel hours to be something that requires some explanation notwithstanding the nature of the proceeding and the conduct of the applicant in the preparation and presentation of her case.
15. One matter identified by the registrar as justifying a discount (and with which I agree in principle) was the respondents' decision to change counsel. The barristers originally engaged were counsel who appeared in the proceeding at first instance. Given the detailed nature of the arguments and evidence in the proceeding (and especially having regard to the fact that the applicant's originating application took issue with nearly every conclusion of the primary judge on questions of fact and law) there was an obvious inefficiency in changing counsel. The registrar applied a discount by reference to that inefficiency. On this merits review, I prefer to take a more global approach.
16. The total number of 463 hours in fact expended and forming the basis of the charges made to the respondents is excessive and unreasonable. It is not an appropriate starting point for applying a 25% discount to reduce what would otherwise be a claim for indemnity costs.
17. Applying a broad-brush analysis, I have determined it appropriate to reduce the amount in fact charged by 40% both in respect of solicitors' fees and counsel fees. That reduction is made having regard to the fact that there were nine and a half in person attendance hours, together with the nature and amount of materials filed by Dr Lim and the circumstance that counsel appearing at first instance would in the ordinary course have been familiar with the large amount of material appearing in the Court Book which largely contained the same material that was before the primary judge.
18. The amount in fact charged appearing in the fifth column of Table B should be reduced by 40% to $53,499.00.
19. As to counsel fees I would reduce the figure in fact attributable to counsel ($59,624.00) by 40%. This would bring the total hours worked into something that would approximate what I consider to be reasonable having regard to the issues that I have identified as elevating the costs on an application of this kind. The amount attributable to counsel fees should be $35,744.00.
20. The lump sum should therefore comprise the following:

Costs Allowed (ex GST) after 40% discount (rounding down to closest dollar)

1. These figures are based on there being a total of 277 hours devoted to the matter across all of the solicitors retained by the respondents and the counsel briefed by those solicitors. At first glance that may appear to be a high number of hours devoted to an application for an extension of time in which to appeal, with attendances totalling only nine and a half hours in Court. However, the apparent disproportionality of those figures is explained by the manner in which the applicant conducted her case.
2. Both my oral reasons and my order of 17 March 2025 were affected by an arithmetic error, resulting in an order awarding $30.00 more than that which was intended. That error can be corrected by an order under r 39.05(c) of the Rules, the order being interlocutory in nature.
3. The order in paragraph 2 will be varied so as to substitute the figure of $92,944.00 with the figure $92,914.00.

I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Charlesworth.