Norden Holdings Pty Ltd (Trustee) v Martens Investments Pty Ltd

"One such category is where the applicant has been only partially successful in that it has not obtained all of the relief sought. The second category is where a party has succeeded in obtaining the relief sought, but has not succeeded on all bases (factual or legal) upon which it sought such relief. Of course, it is possible that a particular outcome will fall into both categories. A third category involves consideration of the successful party's conduct of the case."

1. After referring to the decision of Finkelstein and Gordon JJ in Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107, Dowsett, Middleton and Gilmour JJ in Queensland North Australia then said at [18]:

[Section 43 of the Federal Court of Australia Act] does not mention costs following the event. In Ruddock, Bowen Investments and Sportsbet, the Court proceeded on the basis that ordinarily, the successful party may reasonably expect to receive its costs, whether that outcome be described as costs following the "event" or otherwise. The question of costs is within the Court's discretion. As we have said, relevant factors include the extent of a party's success, the extent of its success or failure on individual issues and its conduct of the proceedings.

1. Usually, but not by way of a rigid rule, costs follow the event, such that the discretion to award costs is exercised in favour of a successful party: Malone v B&M Aboriginal Corporation (In Administration) (No 2) (2025) 309 FCR 35; [2025] FCAFC 51 at [6], O'Bryan, Halley and Horan JJ. A successful litigant will usually receive their costs, in proportion to their degree of success, which can result in a successful party being deprived of costs on issues failed upon or ordered to pay some of the costs of an unsuccessful party, on that issues approach: Hughes v Western Australia Cricket Association (Inc) [1986] ATPR 40-748; [1986] FCA 465 at 48,136, Toohey J; Hockey v Fairfax Media Publications Pty Ltd (No. 2) (2015) 237 FCR 127; [2015] FCA 750 at [37], White J; Tenser at [27]. However, the mere fact that a court does not accept all of a successful party's arguments on costs does not necessarily make it appropriate to apportion costs on an issues basis: Impiombato v BHP Group Limited (No 2) [2025] FCAFC 28 at [13], Beach and O'Bryan JJ.
2. Costs are compensatory in nature, not punitive: Latoudis at 543, 563 and 567; Seven Network at [1099]; Hockey at [37]; Tenser at [27]. Costs are usually awarded by way of partial indemnity for professional costs actually incurred, they are not intended to be a full and comprehensive amount of compensation for any loss suffered by the litigation: Cachia v Hanes (1994) 179 CLR 403; [1994] HCA 14 at 410-411, Mason CJ, Brennan, Deane, Dawson and McHugh JJ; Bell Lawyers Pty Ltd v Pentelow (2019) 269 CLR 333; [2019] HCA 29 at [22], Kiefel CJ, Bell, Keane and Gordon JJ; Birketu Pty Ltd v Atanaskovic (2025) 99 ALJR 321; [2025] HCA 2 at [14] and [17], Gageler CJ, Gordon, Edelman, Gleeson and Beech-Jones JJ.
3. The ordinary position, as is also reflected in r 40.01 of the FCR, is costs on a party and party basis. The discretion to depart from that ordinary position requires some special or unusual feature or that the justice of the case requires such a departure: Seven Network at [1102]; Colgate at [8]; Cussons at 230-231. The categories where the Court will depart from the ordinary position are not closed: Seven Network at [1102]; Jianshe Southern Pty Ltd v Turnbull Cooktown Pty Ltd (No 2) [2007] FCA 903 at [32]. Various categories were identified in Cussons at 233-234, the principles of which were distilled in Barrett Property Group Ltd v Metricon Homes Pty Ltd (No 2) [2007] FCA 1823 at [4], as follows:

• the making of allegations of fraud knowing them to be false, and the making of irrelevant allegations of fraud;
• evidence of particular misconduct that causes loss of time to the Court and to other parties;
• the commencement or continuation of proceedings for an ulterior motive;
• wilful disregard of known facts or clearly established law;
• the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions; and
• an imprudent refusal of an offer to compromise.
  1. Dowestt and Lander JJ (with whom Manfield J relevantly agreed at [1] and [67]) in Seven Network at [1102] described the exercise of the discretion to depart from the usual position as follows:
     1. Usually costs are ordered on a party and party basis but if there is "some special or unusual feature in the case to justify the Court exercising its discretion" costs may be ordered on some other basis: Preston v Preston [1982] 1 All ER 41 at 58. There must, however, be some justification to depart from the ordinary rule. The discretion to depart from an order for party and party costs will not be exercised unless there is some special or unusual feature or the justice of the case so requires: Re Wilcox; Ex parte Venture Industries Pty Ltd [1996] FCA 1942; (1996) 141 ALR 727. The categories of case in which it might be appropriate to do so are not closed: Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225. An applicant who should have known that his or her proceeding was foredoomed to failure could be obliged to pay costs on an indemnity basis: Smolle v Australia and New Zealand Banking Group Ltd (No 2) [2007] FCA 1967. A clearly hopeless proceeding may mean that the unsuccessful applicant should be subjected to an order for indemnity costs. An applicant who persists in prosecuting a proceeding without regard to the evidentiary difficulties in the case may be called upon to pay costs on some basis other than the usual basis: Yates Property Corporation Pty Ltd v Boland (No 2) [1997] FCA 760; (1997) 147 ALR 685. Specific examples of cases which might attract the exercise of the discretion to award indemnity costs were given by Sheppard J in Colgate-Palmolive Company v Cussons Pty Limited 46 FCR at 233.
  2. In Morningstar at [177], after hearing four interlocutory applications, Austin J determined that the costs of those application be costs in the cause. There was partial success by both sides in relation to those applications. However, it is apparent that Austin J ordered that the costs of the motion in the Federal Court be assessed and paid forthwith (at [176] and [178] and order (4)(a)).

1. The Respondents sought to develop their opposition to the Applicant's costs application by relying on the following matters:

(a) first, the time taken addressing the deficiencies in the Applicant's evidence relied on in the Document Application;

(b) secondly, that any costs to be borne by the Respondents should be borne by the First, Second, Fourth and Fifth Respondents, jointly and severally; and

(c) thirdly, that any costs ordered should not be taxed until the proceeding is finalised.

1. First, the Respondents submit that the first half of the first day of hearing was "largely" occupied by objections taken by the Respondents to the Applicant's affidavit relied on in support of the Document Application. The Respondents' objections were taken to the Affidavit of the solicitor for the Applicant affirmed 27 August 2025 (Affidavit in support). This first day of the hearing, on 5 September 2025, comprised 87 pages of transcript and approximately 42 pages of that transcript was occupied by hearing and ruling on the objections taken by the Respondents to the Affidavit in support.
2. I accept that approximately half of the first day was occupied with hearing the Respondents' objections to the Affidavit in support.
3. The Respondents submitted that on a consideration of those objections "the Court found that a substantial portion of that affidavit comprised inadmissible material..." and further that a "large number of paragraphs and sentences were either struck out or not relied upon after objections were taken by the Respondents' counsel and accepted by the Applicant's own counsel upon review." It was on this basis that the Respondents submitted that the additional time and costs expended addressing the deficiencies from the Affidavit in support does not then support an award of costs. The Respondents provided no analysis of the objections taken or the results of those objections to support this submission. This was a submission at a high level of generality.
4. The factual foundation for that submission, that the Court found that a substantial portion of the Affidavit in support comprised inadmissible material and that a large number of paragraphs and sentences were struck out or not relied on, is not supported by what occurred at the hearing and what was the result of the objections taken by the Respondents.
5. The Affidavit in support was 99 paragraphs in length and comprised 21 pages, without including the pages of the annexures. The Respondents provided a document, in table form, which advanced 36 objections to the Affidavit in support. Of the 36 objections, 21 of those objections were either not pressed by the Respondents or withdrawn after some or little argument. Of those remaining objections, one paragraph, six sentences and 13 individual words were struck out as being inadmissible from the Affidavit in support. That is, the objections taken were, for the most part, unsuccessful. None of the annexures to the Affidavit in support, which comprised 140 pages, were struck out as being non-admissible.
6. This was raised with the Respondents at the additional hearing on 24 October 2025. The solicitor for the Respondents accepted he had not undertaken any kind of analysis for the outcome of the objections taken. The Respondents sought to withdraw the submission.
7. On a proper consideration of the outcome of those objections, the factual foundation initially suggested but not maintained by the Respondents did not reflect what actually occurred as a result of the Respondents taking those objections. There is no basis to accept this submission and there was no merit in it being advanced, at any stage.
8. Second, the Respondents submit that any costs to be borne by the Respondents should be borne by the First, Second, Fourth and Fifth Respondents, jointly and severally. This was on the basis that the documents sought and the access to the Companies' Systems were matters of and relevant to the Fourth and Fifth Respondents. Further, the Respondents submitted that the Fourth and Fifth Respondents were relatively small enterprises and that the collation of the required documents took substantial time and effort, such that the resulting non-compliance was not due to any deliberate delay. It was submitted that the Fourth and Fifth Respondents and their staff acted cooperatively and expended significant effort to try and comply.
9. Most of these submissions are matters directed towards seeking to provide some sort of explanation for the non-compliance with the Court's orders, rather than submissions directed towards why the costs should be borne joint and severally by the First, Second, Fourth and Fifth Respondents.
10. The Respondents also submitted that the First and Second Respondents should not be singled out to bear the costs of the Document Application. There is no development or reasoning to support this submission. It is expressed at this level of generality.
11. In Norden No 5, the costs of the strike-out application were ordered only against the First and Second Respondents. The reasons for that are set out at Norden No 5 at [36]-[37]. The Respondents have not engaged with those reasons in any way to seek to argue why the circumstances of the Document Application is different. The Second Respondent is an individual, Mr Dwayne Martens. He is the current director and controlling mind of the Fourth and Fifth Respondents. The essence of these proceedings is a shareholder dispute. The shares in the Fourth and Fifth Respondents were held by the Applicant and by the First Respondent. The Second Respondent is also the director and controlling mind of the First Respondent being a corporate trustee. The First Respondent remains a shareholder of the Fourth and Fifth Respondents and remains under the control of the Second Respondent.
12. Orders 8 and 10 of the Court's Orders of 7 May 2025 were directed to the Fourth and Fifth Respondents to provide certain documents. Order 1 was broader and directed to the "Respondents". Other Orders made on 7 May 2025 were directed to the selection, engagement and instructing of a joint Expert. The Expert is engaged to provide a Valuation in relation to the Fourth and Fifth Respondents. The cost of the Expert Valuer is not borne by the Fourth and Fifth Respondents, but by the Applicant as to one-third, the First and Second Respondents as to one-third, and the Sixth Respondent as to one-third.
13. The provision of documents pursuant to the Court's Orders of 28 June 2024 and 7 May 2025 was a matter which fell upon the Fourth and Fifth Respondents. Being corporate entities, however, such matters could only be undertaken by the physical actions of others. The Second Respondent is the controlling mind and director of the Fourth and Fifth Respondents. It is the Second Respondent as director of the Fourth and Fifth Respondents who should have ensured that there was compliance with the Court's Orders. Furthermore, if it was anticipated that there might be non-compliance, it would have been the Second Respondent, as director of the Fourth and Fifth Respondents, to have caused those parties to make an application to the Court, and who would have provided an affidavit to explain the position. As such, it is because of these matters and in the circumstances of this case, being oppression proceedings involving a shareholders dispute (which is akin to a partnership dispute), that the appropriate parties who should bear the costs of the Document Application are the First and Second Respondents. It seems contrary to the spirit of that quasi partnership to pay the expense of the litigation out of that general fund, being the company: Re D G Brims & Sons Pty Ltd (1995) 16 ACSR 559 at 591-592; Trojan Equity Ltd v CMI Ltd (2011) 87 ACSR 144; [2011] QSC 346 at [25]- [28] (McMurdo J) (cited in Morara Pty Ltd v Kingslane Property Investments Pty Ltd (No 2) [2022] WASC 372 at [75] (Hill J)).
14. Thirdly, the Respondents submitted that any costs ordered should not be taxed until the proceeding is finalised. This submission accords with the usual position under r 40.13 of the Federal Court Rules 2011 (Cth). The Applicant has not submitted to the contrary that anything other than the usual position should apply.
15. As such, the usual position in accordance with r 40.13 will apply.
16. The Applicant was almost completely successful on the Document Application. Therefore, it should usually be entitled to its costs. The Respondents seek to rely on the potentially disentitling conduct relating to the what is submitted to have been the inadmissible evidence, from the Affidavit in support. There is no merit in this argument by the Respondents. It does not comprise any disentitling conduct because the factual foundation for the Respondents' submission is wrong.
17. The Applicant seeks its costs on an indemnity basis. This is appropriate for the following four reasons, which provide the necessary special or unusual features to depart from the ordinary position that costs should only be on a party and party basis.
18. First, the Respondents had not complied with earlier Orders of the Court, including an Order from 28 June 2024. However, rather than seeking a variation of the Court's Orders with an appropriate explanation and proposal forward, the Respondents, in written submissions, denied non-compliance. At the second (and final) day of the hearing, the Respondents then accepted at least some non-compliance. The raising of such groundless contentions, or to describe them another way, a clearly hopeless position, ought not to have been advanced. There was no proper evidentiary basis for the Respondents to seek to maintain the position they did. This was particularly in circumstances where in between the first day of hearing and the second day of hearing, the Respondents contended that further documents had been provided and the Affidavit of the Second Respondent (dated 12 September 2025, again in between the hearings) refers to some documents which were required pursuant to the Court's Order as being "to be sent". That is, that those documents had not yet been provided in accordance with the Orders of the Court, but which were to be provided, that is were to be sent. That position was manifestly inconsistent with the Respondents written submissions contending compliance.
19. Secondly, the Respondents' submissions advanced that a particular test was applicable and said to be based on particular authorities. However, the Respondents were unable to take the Court to those suggested authorities, yet maintained the submission. That also advanced a groundless contention which ought not to have been made. This also resulted in wasted and lost Court time (as well as to the other parties) while an adjournment was granted and then while this issue was considered over the luncheon adjournment.
20. Thirdly, the Respondents brought unnecessary and, in many respects, groundless objections to the Affidavit in support. Most of these were abandoned prior to the hearing. The ones which were pressed were predominantly unsuccessful. Only a very small amount of the Affidavit in support was struck out on the basis of those objections, yet that process occupied a significant amount of Court hearing time.
21. Fourthly, the observations from LFDB v SM (No 2) [2017] FCAFC 207 at [7] (Besanko, Jagot and Lee JJ) are particularly relevant. Although a party can and may need to take appropriate objections to evidence and can and may make certain arguments, it must be with a view to "facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible". First agitating 36 objections to the Affidavit in support, then only pressing 15 of those objections with limited success, is not acting in accordance with the overarching purpose of the civil procedure provisions. Second, continuing to advance in written submissions that there had not been any non-compliance with the Court's Orders, but then accepting non-compliance on the second day of the hearing, also does not accord with facilitating the just resolution according to law as quickly, inexpensively and efficiently as possible. Had such acceptance been properly made in writing and the categories of documents been properly engaged with, the hearing would have taken significantly less time to hear. Furthermore, not seeking to narrow the dispute on the first day of the hearing by accepting non-compliance and seeking to withdraw the unmaintainable written submissions would have also facilitated the real issues in dispute. Not proceeding in this way prolonged the hearing of the Document Application, in circumstances where many of the matters advanced were without merit. This conduct could also be described as acting in wilful disregard of known facts. The facts, as to the provision of documents, were within the knowledge of the Respondents.
22. The raising of unmeritorious submissions not supported by the facts has continued by the Respondents. As observed above, the factual foundation for the Respondents' submission regarding inadmissible evidence was unfounded and only withdrawn when raised with the Respondents on 24 October 2025.

1. For all of the above reasons, I am satisfied that it is appropriate that the First and Second Respondents pay the Applicant's costs of and incidental to the Document Application, Norden Holdings Pty Ltd (Trustee) v Martens Investments Pty Ltd (Trustee), in the matter of Amazonia IP Holdings Pty Ltd (No 6) [2025] FCA 1212, on an indemnity basis, to be taxed if not agreed.

I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wheatley.