McMillan v Warner as trustee in the bankruptcy of McMillan

1. The costs payable by the Respondent pursuant to order 2(b) made on 23 February 2022 be fixed in a lump sum.
2. The costs payable by the Respondent pursuant to order 3 made on 23 February 2022 be fixed in a lump sum.
3. Within 6 weeks of the date of these Orders, the Respondent is to file a Costs Response.
4. Within 14 days of receipt of the Costs Response and submissions the Appellant to file and serve submissions in reply not exceeding 5 pages.
5. The quantum of the lump sum for costs payable pursuant to Orders 1 and 2 above be determined by a registrar.
6. The issue of the determination of the quantum of the lump sum for costs payable pursuant to Orders 1 and 2 above be listed for hearing before a registrar on a date fixed by that registrar after consultation with the parties.
7. Liberty to apply.
8. The costs of the case management hearing be the Appellant's costs in the appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

LOGAN J: 1 A sequel to an appeal, McMillan v Warner [2022] FCAFC 20, is a disagreement in respect of the way in which orders for costs made by the Full Court, on the allowance of the appeal, should be carried into effect. 2 The relevant orders are those made in order 2(b) and order 3 of the orders of 23 February 2022. 3 The parties are agreed as to the costs being fixed, in each instance, in a lump sum and also as to related provision for submissions and supporting materials as to the amount thereof. The difference between the parties is whether the costs should be fixed in the first instance by a judge or a registrar. 4 The Court's Costs Practice Note (GPN-Costs) discloses a preference for the fixing of costs in a lump sum, rather than by way of the more traditional method of taxation. What informs that preference is a view that the fixing of costs in a lump sum is likely to visit less costs on the parties. 5 The practice note envisages that, where appropriate, the fixing of costs may be undertaken by a judge, but that in the ordinary course, that task would be consigned in the first instance to a registrar. 6 The ability to make interlocutory orders with respect to the manner of determination of costs after a judgment in the appellate jurisdiction is, in my view, found in s 25(1)(a)(b) of the Federal Court of Australia Act 1976 (Cth). 7 I have some recollection of the circumstances of the trial as a result of having been a member of the Full Court. The trial was closely contested and involved a large number of documents, but that hardly makes it unique. 8 Sometimes, exceptionally, in relation to the fixing of costs in a lump sum in the original jurisdiction, there can be an advantage in that task being undertaken in the first instance by the trial judge. That is because the trial judge has, necessarily, direct first-hand knowledge of the conduct by the parties of their respective cases that can, in some instances, mean that a trial judge is better placed than a registrar to determine what was reasonably necessary in terms of the incurring of costs. 9 I can recall agreeing in two instances to fix costs myself, informed by such considerations. In one instance, that was as a sequel to a lengthy commercial case; in the other, it was as a sequel to a lengthy public law case, which entailed a determination on the merits of whether particular statutory criteria were or were not satisfied. 10 In this instance, that advantage, if it were ever applicable, is no longer present, as the trial judge has retired from the Court, having reached the constitutionally ordained retirement age. 11 As for the appeal, whilst it entailed, as the reasons for judgment delivered disclosed, a very close examination indeed of the evidence and whether particular findings apparently made on credit grounds should be overturned, that feature hardly makes the appeal unique. 12 In the ordinary course of events, it is the Court's registrars who are much more current with costs amounts and trends in the practising profession than the judges. Of course, in some way, it may be possible for a judge undertaking the task of fixing costs to be assisted by a registrar, but any such process would, in my view, entail very particular procedural fairness requirements with respect to the parties, to ensure that whatever assistance was furnished by a registrar was nonetheless the subject of an opportunity to the parties to make particular submissions. I am not persuaded that the circumstances of the appeal or the trial are such that it is appropriate for costs to be determined in the first instance by a judge. For reasons which I have already given, I do not see either the trial or the appeal as having features which are so unique as to make it appropriate for a judge to undertake the fixing of costs in the first instance. 13 There has been some reference on behalf of the respondent to issues of principle which might arise, which are said to have resonance in the fixing of costs. Whatever those questions of principle may be, they would be identified with precision in the submissions of the parties. It may also be that the respondent chooses to make controversial whether it is lawfully possible for a registrar, even in the face of an order directing the same, to determine costs in a lump sum. Once again, the detail of any such submission, if indeed it comes to be made, must await the cost submission. 14 It may be, depending on what those submissions disclose, that the case becomes one where there is an application to vacate the order directing costs to be fixed by registrar and providing for a judge, or even a Full Court, to fix costs in the first instance, or at least resolve some controversy of principle. 15 However exceptional that may be, one must not anticipate. For the moment and, as a matter of impression, this strikes me as an unexceptional case which went to trial in the original jurisdiction and, as it happened, where the trial result was overturned on an appeal, but an appeal which, however closely contested, is not, in my view, an exceptional case. 16 For these reasons then the orders, as respectively promoted by the parties, will be varied such that Order 6 will be in terms that the costs are to be determined by a registrar. 17 A question has arisen as to what order for costs ought be made in respect of the resolution today of the only issue which divided the parties as to the determination of costs as a sequel to the appeal's allowance. The position of the appellant is straightforward. The issue which came to divide the parties is one in respect of which the appellant has succeeded today, hence the submission that costs should follow the event. For the respondent, it is put that the respondent has been cooperative and that it was really just a point of practice which divided the parties, such that there should be no order as to costs. 18 I must say, with all due respect, that the subject of division between the parties is, on present materials at least, one which is surprising. In my view, the appellant having succeeded in promoting the fixing of costs by a registrar and having sought costs in respect of today, the order for costs which should be made is that the costs in respect of the case management hearing today form part of the appellant's costs in the appeal. 19 I have deliberately confined the order for costs in favour of the appellant to the costs of the case management hearing, in recognition of the largely consensual outcome of negotiations between the parties in respect of the determination of costs. In my view, it would be to overcompensate the appellant were I to allow costs which might embrace the antecedent negotiations. Giving the appellant the costs of today's hearing will recognise, in my view, the short point which fell for resolution and which, as it happened, came to be resolved against the respondent. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Logan.