Should costs be fixed?
17 Under the Federal Court Rules in operation prior to 1 August 2011, O 62 r 4(2)(c) provided that, where the Court orders that costs be paid, the Court may further order that that person pay a gross sum specified in the order. The equivalent under the current Federal Court Rules 2011 is r 40.02(b) which provides that a party or a person who is entitled to costs may apply to the Court for an order that costs be awarded in a lump sum, instead of, or in addition to, any taxed costs.
18 The Commissioner has submitted that his costs in this proceeding be fixed. While not specifically referring to the Federal Court Rules, I assume that the Commissioner is relying on either of the rules to which I have referred. No difference in substance between those rules is apparent for the purposes of this proceeding.
19 In support of that submission the Commissioner has filed an affidavit sworn by Ms Cameron on 8 February 2012. Annexed to that affidavit is a copy of the costs statement, invoices and covering correspondence sent to the solicitors for the applicant. The Commissioner submits, in summary, that his costs should be fixed to avoid incurring further costs of taxation which the applicant may be unable to pay. In her affidavit, Ms Cameron does not specifically state the fixed amount the Commissioner seeks in costs. In this respect the affidavit does not appear to comply with Practice Note CM4 issued by the Chief Justice of the Federal Court. However no issue has been taken by the applicant with the material of the Commissioner in this respect.
20 In the body of the affidavit it is clear that the total sum in costs and disbursements sought is $72,589.73, being $51,469.73 in fees for Counsel and Auscript, and $21,120.00 in respect of additional costs detailed in the affidavit.
21 Mr Hargreaves for the applicant submits that the costs payable by the applicant should be assessed rather than fixed because, in summary:
the administrators have not previously been involved in the matter;
the administrators were appointed on 3 January 2012 and have had limited opportunity to review material associated with this matter;
the draft bill of costs submitted by the Commissioner deals with a number of issues that the administrator is not able to assess;
in the circumstances it would not be unreasonable that the costs should be assessed as is the norm.
22 In my view costs ought be fixed in these proceedings in the amount of $72,589.73 less costs incurred by the Commissioner of and incidental to the interlocutory application filed 10 June 2011. While the issues of law raised in the proceedings were complex, in contrast the bill of costs in this matter is simple and uncomplicated, detailing costs referable to three days of hearing and preparation for those hearings. I am not persuaded that, in a short period of time, the administrators will be unable to effectively and efficiently comprehend the material and assess the issues associated with this matter. Further, in light of the fact that the applicant is now in voluntary administration there is a risk that the financial burden for any taxation process will fall entirely on the Commissioner. In making these comments I note a similar approach previously adopted in comparable circumstances in this Court (cf observations of Kenny J in Boyapati v Rockefeller Management Corporation (No 2) [2008] FCA 1375 at [42] and Logan J in Olivaylle Pty Ltd v Flottweg GMBH & Co KGAA (No 6) [2011] FCA 688).
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.