Natch v Stennson Pty Ltd

1. The orders for costs have been made against the applicants jointly and severally, reflecting the usual rule as discussed in G E Dal Pont, The Law of Costs (5th ed, LexisNexis, 2021) at [11.2] and the authorities there cited.
2. The costs were taxed by a Judicial Registrar of the Court as taxing officer and certificates of taxation in each proceeding were issued on 12 September 2024.
3. On 7 October 2024, the applicants filed an application in each proceeding seeking a review of the taxation pursuant to r 40.34 of the Federal Court Rules 2011 (Cth) (FC Rules).
4. The applications for review of the taxation in both proceedings were filed by Mr Natch on behalf of all of the applicants. At that time, the applicants were not legally represented.
5. In earlier judgments, I made reference to the applicant's history in these proceedings of appointing and dismissing legal representatives: Natch v Stennson Pty Ltd (No 2) [2024] FCA 1498 (Natch No 2) at [14]) and Natch v Stennson Pty Ltd (No 3) [2025] FCA 472 (Natch No 3) at [8]. On 23 October 2024, the applicants appointed Jeremy Broadbent of Broadbent Legal to represent them in both proceedings, and Mr Broadbent appeared at a case management hearing on 15 November 2024. On 4 December 2024, the applicants terminated Mr Broadbent's retainer and did not immediately appoint another lawyer. However, on 13 December 2024, the applicants appointed TLM Law to represent them in both proceedings. On 10 February 2025, Mr Natch filed a notice stating that he had terminated the retainer of TLM Law and had not appointed another lawyer to represent him. The notice of termination was only in respect of Mr Natch and the second and third applicants continue to be represented by TLM Law.
6. As each of the applicants is jointly and severally liable in respect of the award of costs in both proceedings, they have a common interest in the review. Mr Natch's decision to terminate the retainer of TLM Law and seek to represent himself was unexplained. It had the effect of duplicating many of the arguments advanced on the application and thereby increasing the costs of the review.
7. Mr Natch subsequently filed an amended application for review of the taxation dated 17 February 2025 and the second and third applicants filed their own amended application for review of the taxation dated 18 February 2025.
8. All of the grounds of objection raised by the applicants on the review, save for one, lacked merit. Certain of the grounds sought to re-agitate issues that had been determined by the Court in Natch No 2. There is a strong public interest in maintaining the finality of litigation and the applicants' attempt to re-agitate issues that had been determined by the Court warrants criticism. Other grounds sought to agitate issues that had not been raised in the applicants' notice of objection on the taxation contrary to r 40.34(3) of the FC Rules.
9. The applicants have succeeded, however, on one of their grounds of objection, albeit that the ground was not raised before the taxing officer. After the taxation, it was learned that the principal solicitor for Stennson, Darren Cain of KCL Law, did not have his name entered on the Register of Practitioners kept at the Registry of the High Court of Australia (High Court Register). As explained in Natch No 3 (at [57]-[59]), pursuant to s 55B(3) of the Judiciary Act 1903 (Cth), Mr Cain was therefore not entitled to practice as a solicitor in this Court. In such circumstances, it is appropriate to reduce the costs allowed in respect of Mr Cain's work on the proceeding to the rate of an unqualified legal clerk. Orders will be made for the parties to provide the Court with agreed or competing calculations of the arithmetic adjustments to be made to the certificates of taxation reflecting the reduction in the fees allowed for Mr Cain.
10. Although the applicants have been successful in respect of one ground of objection, the ground was not raised before the taxing officer. Further, the applicants' conduct of the taxation review has occasioned substantial wasted costs. In the circumstances, an award of costs on a lump sum basis fixed in the amount of $8,815 should be made in favour of Stennson in respect of the costs of the taxation review. Stennson will also be afforded an opportunity to apply for a different costs order under r 40.02 of the FC Rules.

1. On 2 December 2021, the applicants filed an application for an extension of time in which to seek leave to appeal the above costs order (which is referred to as the appeal proceeding). On 2 June 2022, O'Callaghan J dismissed that application and ordered the applicants to pay the costs of Stennson (as first respondent). His Honour's reasons are published in Natch v Stennson Pty Ltd [2022] FCA 641, which sets out the background to the litigation before Anastassiou J.
2. Accordingly, the applicants are liable for the costs of Stennson in both the principal proceeding and the appeal proceeding.
3. The parties did not reach agreement on the amount of costs payable, and Stennson initiated the taxation processes under Div 40.2 of the FC Rules. It is sufficient for present purposes to note that:

1. As can be seen, the rule prescribes that a taxation review is subject to two significant restrictions. First, a party must not raise any ground of objection that was not taken in the party's notice of objection filed in accordance with r 40.25. Second, apart from the Court calling for a written report from the taxing officer, no further evidence is to be received on the review.
2. The character of a taxation review under r 40.34 was considered by Edelman J (as a judge of this Court) in Cassimatis v Australian Securities and Investments Commission [2016] FCA 131; 334 ALR 350 (Cassimatis). His Honour canvassed the relevant authorities in detail and concluded that while a review under s 40.34 has elements of a hearing de novo - in that the matter must be heard afresh and that it is not necessary to identify error in the taxing officer's decision - it differs in that new evidence is not permitted on the review and the Court must take into account the conclusions reached by the taxing officer (at [12]-[14]).
3. Courts will review a decision of a taxing officer where it is contended that the decision is based on a wrong principle, and an error in principle may occur in both determining whether an item should be allowed or in determining how much should be allowed: Australian Coal and Shale Employees Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621 (Australian Coal and Shale) at 628, citing Schweppes Ltd v Archer [1934] NSWStRp 17; (1934) 34 SR (NSW) 178 (Schweppes v Archer) at 183-184; see also Cassimatis at [14]. However, as Jordan CJ observed in Schweppes v Archer (which observation was adopted in Australian Coal and Shale), where the question is one of amount only, the court will interfere only in an extreme case. A court may also review the decision of a taxing officer where no issue of principle is involved, and the matter relates only to the exercise of the taxing officer's discretion: at 628. However, other than in exceptional circumstances, courts are generally reluctant to interfere with the exercise of discretion having regard to taxing officers' particular expertise in assessing the costs in litigation: at [16], referring to ; at 145-6 and at 628. As such, a court will generally only interfere where: (i) the discretion appears not to have been exercised at all; or (ii) the discretion has been exercised in a manner that is manifestly incorrect: at 628, citing at 183-184; see also at [14].

1. Ground 1, concerning the High Court Register, was not raised in the applicants' notice of objection. Rule 40.34(3) would therefore ordinarily operate to prevent the ground being raised on the review of the taxation. Ultimately, Stennson did not object to this ground being raised by the applicants. In those circumstances, and for the reasons given earlier in the context of receiving new evidence on the review, I consider it appropriate to exercise the discretion under r 1.34 to dispense with the requirements of r 40.34(3) and permit the second and third applicants to raise ground 1.
2. The evidence established that Mr Cain's name did not appear on the High Court Register at the points in time for which costs are sought for his work as a solicitor. The second and third applicants submitted that, in those circumstances, Stennson should only be permitted to recover costs in respect of work performed by Mr Cain at the rate of a non-solicitor (that is, a law clerk), relying on the principles stated in Jadwan Pty Ltd v Rae & Partners (A Firm) (No 7) [2022] FCA 1174 (at [27]-[37] and [40]).
3. Stennson acknowledged that the usual course is for the Court to reduce the amount of costs to the amount allowed for a non-solicitor (that is, a law clerk). In respect of Mr Cain, that would require his usual charge rate, being $690 per hour (ex GST), to be reduced to $240 per hour (ex GST). Stennson submitted, however, that in some cases, the Court has allowed recovery at a higher rate having regard to the nature of the work performed (citing University of Western Australia v Gray (No 25) [2009] FCA 1227; (2009) 180 FCR 483 at [108]), and urged that such an approach be taken in the case of Mr Cain. Specifically, Stennson submitted that the Court should exercise its discretion to fix a rate for Mr Cain at $395, being the midpoint between the rate of a clerk at $240 and the $550 rate settled upon by the taxing officer.
4. For the reasons already stated in Natch No 3 (at [57]-[59] and [63]), I uphold ground 1 and consider that Stennson's costs should be assessed on the basis that costs incurred in respect of work performed by Mr Cain are recoverable at the rate of a law clerk. Mr Cain's costs should therefore be assessed at the rate of $240 per hour. This applies to both the principal proceeding and the appeal proceeding.

(1953) 94 CLR 621

(1931) 47 CLR 142

(2019) 265 CLR 164

(2009) 180 FCR 483