Markous v IPIC Pty Ltd [2025] FedCFamC2G 1769

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 24.04(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth)), or to record a variation to the order pursuant to r 24.04 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth).

1. The applicant commenced general protection claim proceedings in this Court on 20 December 2024 by the filing of an Originating Application and a Form 2 Claim. The respondents filed a Response on 7 February 2025 which denied all the applicant's claims.
2. On 3 June 2025, the Court made orders as follows:
   1. The Applicant shall file and serve a Statement of Claim on or before 4.00pm on 2 July 2025.
   2. The Respondent shall file and serve a Defence on or before 4:00pm on 30 July 2025.
   3. The Applicant shall file and serve a Reply on or before 4:00pm on 13 August 2025.
   4. The parties are to each make, file and serve an affidavit of disclosed documents on or before 4:00pm on 3 September 2025.
   5. The parties shall undertake mutual inspection of the opposing party's disclosed documents on or before 4.00pm on 17 September 2025.
   6. The matter be referred to a Registrar of this Court for mediation pursuant to s.169 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) and r.30.14 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021, on a date to be fixed by the Registrar after first liaising with the parties as to their availability to be held on or before 15 October 2025.
   7. The matter be listed for directions on a date to be fixed following the mediation.
   8. Each party have liberty to apply on the giving of two (2) days' notice, each to the other.
3. On 3 July 2025, the applicant filed a Statement of Claim.
4. By a letter sent by email dated 15 July 2025, the lawyers for the respondents took issue with the way in which the Statement of Claim was pleaded. [1] The letter was 14 pages long and was comprised of 151 separate numbered paragraphs.
5. On 23 July 2025, the Court made orders in Chambers as follows:

1. The Order dated 3 June 2025 be vacated.

1. The Applicant shall file and serve an Amended Statement of Claim on or before 4.00pm on 28 August 2025.
2. The Respondents shall file and serve a Defence on or before 4.00pm on 25 September 2025.
3. The Applicant shall file and serve a Reply on or before 4.00pm on 9 October 2025.
4. The parties are to each make, file and serve an affidavit of disclosed documents on or before 4:00pm on 30 October 2025.
5. The parties shall undertake mutual inspection of the opposing party's disclosed documents on or before 4:00pm on 13 November 2025.
6. Pursuant to section 169(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth), this matter be referred to mediation before a Registrar of the Court, such mediation to be held on or before 11 December 2025.
7. The matter be listed for directions on a date to be fixed following the mediation.
8. Each party have liberty to apply on the giving of two (2) days' notice, each to the other.

1. On 29 August 2025, the applicant filed an Amended Statement of Claim.
2. By letter sent by email dated 4 September 2025, the lawyers for the applicant asserted in detail that the applicant's claim had been appropriately pleaded. [2] The letter concluded with the following:

We place the respondents on notice that should the respondents make their threatened strike-out application that we will pursuant to section 570(2)(b) of the FW Act and rule 22.02 of the Federal Circuit & Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (the FCC Rules) rely on this letter as part of our client's application that the respondents are to pay our client's costs of and associated with the respondents' threatened strike-out application and for those costs to be assessed on an indemnity basis. Further, if the respondents have failed to expressly admit or deny our clients pleaded allegations as they are required to do by 25 September 2025 we will seek declarations pursuant to rule 16.07(2) of the Rules that the respondents are deemed to have admitted those allegations and will rely on those admissions as part of our client's application for summary determination of her claims. We look forward to receipt of the respondents' defences on or before 25 September 2025 and the respondents' list of documents 30 October 2025.

1. By letter sent by email dated 18 September 2025, the lawyers for the respondents again took issue with the way in which the Amended Statement of Claim had been pleaded, specifying the bases for so asserting. [3] The concluding paragraphs of that letter were as follows:
   1. We enclose, for this purpose, a minute of proposed consent orders reflecting the above. We ask that you sign and return this minute to us by 4pm on 22 September 2025 so we can provide it to the Court.
   2. If your client is not amenable to this course, or we do not hear back from you by the above time, we have instructions to apply to the Court, without further notice to you, to strike out the deficient paragraphs of the Amended SOC.
   3. Should a strike out application be necessary, our clients will rely upon this correspondence and our letter dated 14 July 2025 in support of an application for its costs under section 570(2)(b) of the FW Act. It will be our clients' position that the ongoing failure or refusal by your client to properly amend the statement of claim is an unreasonable act or omission that has caused our clients to unnecessarily incur costs. Those costs may be significant.3

17. In the meantime, our clients reserve all their rights.

1. As will be later referred to, when addressing what costs would be sought to be paid by the applicant to the respondents on the assumption that the strike-out application would be successful, Footnote 3 to the respondents' 18 September 2025 letter ironically provided as follows:

Those costs will include the preparation and filing of a strike out application and an affidavit in support, the preparation of submissions in support of the strike out application, preparation for and appearance (and instructing) at the strike out application and related hearings, and associated correspondence, attendances and disbursements.

1. Without having recourse to the liberty to apply provisions contained in earlier orders of the Court, the lawyers for the respondents did not give notice to Chambers that Order 3 of the orders of the Court made on 23 July 2025 was not going to be complied with. The lawyers for the respondents thereafter filed, with the Courts leave, an interlocutory strike-out application on 30 September 2025, together with the affidavit of Ms Douglas also filed on 30 September 2025.
2. After Chambers had determined that further time-tabling orders would be required for the taking of future interlocutory steps, the matter was listed for directions on 16 October 2025. Due to unforeseen personal circumstances of Counsel, the date for the directions hearing was changed to 20 October 2025. On that day, the application to strike-out was set down for hearing on 24 October 2025 with the agreement of all parties.
3. On 22 October 2025, the lawyers for the respondents advised the lawyers for the applicant that they had instructions to not proceed with the strike-out application. It was proposed that the application to strike-out be dismissed by consent, and that there be no order as costs. [4]
4. By letter sent by email dated 22 October 2025, the lawyers for the applicant did not consent to the application being dismissed with no order as to costs. It was maintained that by the commencement, continuation, and then the withdrawal of the application, the respondents had acted unreasonably, and that the costs incurred by the applicant in respect of the application ought to be paid by the respondents on the indemnity basis. [5]

1. The Court has power to make an order for costs on the application of a party consequent upon an opposing party filing a Notice of Discontinuance. Rule 23.05(1) and (2) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 relevantly provided as follows:

(1) If a party discontinues an application, or part of an application, another party to the proceeding may apply for costs.

(2) A party applying for costs must make the application within 28 days after being served with the notice of discontinuance.

1. Due to the filing of the Notice of Discontinuance, the issues the subject of the application to strike-out could never be finally tested. Hypothetical testing of the merits of the respective cases of the parties is inappropriate for the purpose of a Court making a considered judgment on the question of costs. [6]
2. It was submitted on behalf of the applicant that the respondents had acted unreasonably by commencing, continuing with, and then abandoning the strike-out application. Application was made for the payment of the applicant's costs on the indemnity basis in the exercise of the Court's discretion pursuant to the provisions of s. 570(2)(b) of the Fair Work Act 2009 (the FWA).
3. The conduct of parties to litigation is always relevant when considering whether costs ought to be awarded under s. 570(2)(b) of the FWA or not. Of relevance to that consideration are sections 139, 190 and 191 of the Federal Circuit and Family Court of Australia Act 2021 (the Act).
4. Section 139 provided as follows:

SECT 139 - Determination of matter completely and finally

In every matter before the Federal Circuit and Family Court of Australia (Division 2), the Court must grant, either:

(a) absolutely; or

(b) on such terms and conditions as the Court thinks just;

all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by a party in the matter, so that, as far as possible:

(c) all matters in controversy between the parties may be completely and finally determined; and

(d) all multiplicity of proceedings concerning any of those matters may be avoided.

1. It is of particular note that s. 139(c) contemplated that all matters in controversy between the parties were required to be finally determined by the Court. By the filing of the strike-out application, the respondents made the question of the propriety of the pleadings in the Amended Statement of Claim a matter of controversy which had to be finally determined by the Court.
2. Sections 190 and 191 of the Act relevantly provided as follows:

SECT 190 - Overarching purpose of civil practice and procedure provisions

(1) The overarching purpose of the civil practice and procedure provisions, in relation to the Federal Circuit and Family Court of Australia (Division 2), is to facilitate the just resolution of disputes:

(a) according to law; and

(b) as quickly, inexpensively and efficiently as possible.

Note 1: For civil practice and procedure provisions, in relation to the Federal Circuit and Family Court of Australia (Division 2), see subsection (4).

Note 2: The Federal Circuit and Family Court of Australia (Division 2) must give effect to principles in the Family Law Act 1975 when exercising jurisdiction in relation to proceedings under that Act.

(2) Without limiting subsection (1), the overarching purpose includes the following objectives:

(a) the just determination of all proceedings before the Federal Circuit and Family Court of Australia (Division 2);

(b) the efficient use of the judicial and administrative resources available for the purposes of the Court;

(c) the efficient disposal of the Court's overall caseload;

(d) the disposal of all proceedings in a timely manner;

(e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.

(3) The civil practice and procedure provisions, in relation to the Federal Circuit and Family Court of Australia (Division 2), must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose.

(4) The civil practice and procedure provisions , in relation to the Federal Circuit and Family Court of Australia (Division 2), are the following, so far as they apply in relation to civil proceedings:

(a) the Rules of Court;

(b) any other provision made by or under this Act or any other Act with respect to the practice and procedure of the Federal Circuit and Family Court of Australia (Division 2).

SECT 191 - Parties to act consistently with the overarching purpose

(1) The parties to a civil proceeding before the Federal Circuit and Family Court of Australia (Division 2) must conduct the proceeding (including negotiations for settlement of the dispute to which the proceeding relates) in a way that is consistent with the overarching purpose.

(2) A party's lawyer must, in the conduct of such a proceeding before the Federal Circuit and Family Court of Australia (Division 2) (including negotiations for settlement) on the party's behalf:

(a) take account of the duty imposed on the party by subsection (1); and

(b) assist the party to comply with the duty.

(3) The Federal Circuit and Family Court of Australia (Division 2) or a Judge may, for the purpose of enabling a party to comply with the duty imposed by subsection (1), require the party's lawyer to give the party an estimate of:

(a) the likely duration of the proceeding or part of the proceeding; and

(b) the likely amount of costs that the party will have to pay in connection with the proceeding or part of the proceeding, including:

(i) the costs that the lawyer will charge to the party; and

(ii) any other costs that the party will have to pay in the event that the party is unsuccessful in the proceeding or part of the proceeding.

(4) In exercising the discretion to award costs in a civil proceeding, the Federal Circuit and Family Court of Australia (Division 2) or a Judge must take account of any failure to comply with the duty imposed by subsection (1) or (2).

(5) Without limiting the exercise of that discretion, the Federal Circuit and Family Court of Australia (Division 2) or a Judge may order a party's lawyer to bear costs personally.

(6) If the Federal Circuit and Family Court of Australia (Division 2) or a Judge orders a lawyer to bear costs personally because of a failure to comply with the duty imposed by subsection (2), the lawyer must not recover the costs from the lawyer's client.

1. As set out in s. 190(1)(b), the overarching purpose of the civil practice and procedure provisions of the Act is to ensure that there is a just resolution of disputes as quickly and as inexpensively and efficiently as possible. The provisions of ss. 190(2) (b), (c) and (d) require the parties to conduct themselves so as to promote the efficient use of judicial and administrative resources, as well as best facilitating the overarching purpose of those provisions.
2. Importantly, s. 191(1) of the Act required the parties to conduct proceedings in a way consistent with the overarching purpose.
3. A Court must ensure that a respondent to a costs application is prevented from illegitimately evading the overarching purpose of the Act so as to achieve an unjust result in a costs context. The legislature could not have intended that that would be allowed to occur at the time that the provisions of s. 570(2)(b) of the FWA came into force.
4. By filing the strike-out application, the Court inferred that the respondents did so with a resolution to bringing their interlocutory claim to a conclusion. In Burt v University of Sydney (No.2) [2025] FCA 596 at [6], Owens J recognised that s. 570 of the FWA encourages litigants to advance legitimate claims in a complete and robust way. His Honour said:

" 6. By limiting the circumstances in which a costs order may be made, s. 570 of the Fair Work Act operates to promote access to justice by ensuring that the spectre of an adverse costs order does not discourage litigants with genuine grievances, and an arguable evidentiary and legal basis for them, from advancing their claims in a complete and robust way. ..."

(Underlining added)

1. The filing of a Notice of Discontinuance on the day before the date set for the hearing of such application could not be said to constitute conduct undertaken with a view to advancing the respondents' claims in a complete and robust way.
2. The legislative scheme under the Act required the respondents to act in accordance with the overarching purpose and principles of the Act. The respondents must have appreciated that not only would costs be incurred by the applicant in resisting the application (after the applicant had indicated that it was not intended to further amend the Amended Statement of Claim), but also that valuable Court time would be taken up with the supervision and listing for hearing of such application.
3. The Court finds that the filing by the respondents of a Notice of Discontinuance of the interlocutory application to strike-out was an act devoid of a resolution on their part to have the pleading issue dispute finally determined by the Court. It was an act contrary to the overarching purpose of the Act.

1. In his affidavit filed on 23 October 2025, Mr Trotman set out in detail all of the steps reasonably taken by him on behalf of the applicant after the filing by the applicant of the strike-out application. Up until the time of the hearing on 24 October 2025, substantial costs in excess of $20,000.00 were claimed to have been incurred in resisting the application. The respondents and their lawyers must have appreciated that such costs would be incurred. Indeed, the lawyers for the respondents foreshadowed that they intended to seek to recover costs against the applicant pursuant to the provisions of s. 570(2)(b) of the FWA in the event of a finding by the Court that the applicant had unreasonably refused to amend the Amended Statement of Claim. [7] Such position is entirely at odds with the submissions made by Counsel for the respondents at the hearing of the strike-out application that it was reasonable for the respondents to have filed such application.
2. Further, there was no evidence before the Court as to why the respondents, at the 11th hour, had filed a Notice of Discontinuance of the strike-out application. The Court was left in the position of not knowing whether the respondents ever considered that there were good prospects of success in the strike-out application, or whether the application was brought for some other, perhaps forensic, unknown reason, without the prospects of the application ever having been considered.

1. Despite being well aware that the lawyers for the applicant had indicated that they would seek all costs thrown away as a result of the filing of the Notice of Discontinuance, the respondents refused to agree to pay such costs. In those circumstances, the applicant had no option but to seek orders that the respondents pay all of its costs, including the costs of the appearance on 24 October 2025. How else was the question of the payment of their costs to be resolved finally, cost efficiently, and in the least expensive way? The submission that the determination of costs ought to be reserved until trial was an inefficient and costly way of finally determining the question of costs.
2. Further, the Court does not accept the submission made on behalf of the respondents that the costs of the hearing on 24 October 2025 are not payable in any event. It was submitted that the applicant ought to have agreed on 23 October 2025 that such costs be reserved. Such submission flies in the face of Footnote 3 to the respondents' lawyer's 18 September 2025 letter which clearly indicated that the respondents would be seeking all costs, including the costs of all related hearings/applications. As it turned out, the costs hearing on 24 October 2025 was such a related hearing to the hearing of the substantive application to strike-out. The respondents ought not both approbate and reprobate. It was unreasonable for the respondents not to have agreed on 23 October 2025 to pay the applicant's costs up until that date. That they did not do so required the applicant to proceed with its costs application on 24 October 2025.
3. The Court finds that the respondents conduct in commencing, continuing with, and then withdrawing the strike-out application was conduct contrary to the overarching purpose of the Act. In such circumstances, the costs of the applicant are payable by the respondents both pursuant to the provisions of s. 570(2)(b) of the FWA, and s. 191(4) of the Act - the latter by reason of the failure of the respondents to comply with the duty imposed by s. 191(1) of the Act.

1. It was submitted on behalf of the applicant that the respondents ought to be ordered to pay the applicant's costs of and incidental to the strike-out application, on the indemnity basis, which had been thrown away as a result of the filing of the Notice of Discontinuance. The itemised costs as set out in Mr Trotman's affidavit were submitted to be reasonable. The Court does not accept such submission.
2. First, the Court has no expertise in the assessment of the reasonableness of the costs claimed on behalf of the applicant.
3. Second, though the respondents withdrew the strike-out application on the eve of the hearing, the Court does not consider that there was any demonstrated mala fides in its having done so. Rather, the Court finds that the respondents proceeded upon an erroneous view as to the extent of the discretion vested in the Court having regard not only to the provisions of s. 570(2)(b) of the FWA, but also to the provisions of ss. 190 and 191 of the Act. The respondents were misconceived if they believed that they would not be responsible for the payment of costs by reason of their late filing of the Notice of Discontinuance, but such conduct in the Court's view does not warrant the making of an order for costs on the indemnity basis.
4. It is appropriate that the respondents pay the applicant's costs on a party/party basis to be assessed if otherwise not agreed.
5. And it is so ordered.

I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Egan.

[1] Annexure TD - 2 to the affidavit of Ms Douglas filed on 23 October 2025

[2] Annexure TD - 4 to the Douglas affidavit.

[3] Annexure TD - 5 to the Douglas affidavit.

[4] Annexure HT - 8 to the affidavit of Hunter Trotman filed on 23 October 2025.

[5] Annexure HT - 8 to the Trotman affidavit.

[6] Fairfield Services Pty Ltd (in Liq) v Leggett [2020] QSC 183 at [74] per Bond J.

[7] See the respondents' lawyer's letter of 18 September 2025 and Footnote 3 thereto.