Taylor v Killer Queen, LLC

1. The Applicant pay the Respondents' costs of the Interlocutory Application filed 15 April 2021. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

CHEESEMAN J: 1 These reasons address the question of costs following on the success of the Respondents in resisting the Applicant's interlocutory challenge to their claims of privilege in Taylor v Killer Queen, LLC (No 2) [2021] FCA 680. 2 The Applicant submits that the costs order against her on the interlocutory application should be limited to 75% of the Respondents' costs for two reasons: (a) First, the Applicant contends that she had some success because during the interlocutory hearing the Respondents conceded that privilege had been waived in two documents, with the result that the Respondents were directed to discover those documents to the Applicant: Taylor (No 2) [35], [59]. (b) Secondly, that the Applicant made her interlocutory application on the basis of an available misunderstanding of paragraph 19 of the Respondents' Amended Defence filed on 10 March 2021. The interlocutory application served to clarify, in critical respects, the scope of the defence advanced by this paragraph and facilitated the Respondents correcting slips in the internal referencing in this paragraph. 3 The Applicant further submits that despite substantive correspondence between the parties, in which the Applicant exposed her understanding of paragraph 19 of the Amended Defence, the Respondents did not provide clarification as the scope of this part of their defence until filing their written submissions in opposition to the application. 4 The Respondents submit that pursuant to ordinary principles, the Respondents are entitled to recover their costs of the interlocutory application as they were successful on each of the substantive issues in the interlocutory application. In response to the Applicant's submissions, the Respondents submit that there should not be a departure from the usual order for the following reasons: (a) First, that the Respondents properly conceded that privilege had been waived in two documents during the course of the hearing does not disentitle them to their costs of the interlocutory application on which they were otherwise entirely successful. It is not the case that had those limited concessions been made earlier, the hearing of the interlocutory application would have been rendered unnecessary. The live issues between the parties in relation to the remaining documents the subject of the application were litigated to judgment notwithstanding the limited concessions made in respect of the two documents the subject of concession. The Respondents were put to the expense of preparing a detailed solicitor's affidavit, written submissions and preparing for and attending an oral hearing on those issues. In the circumstances, it cannot be said that properly made concessions in respect of two documents ought to have the effect of reducing the Respondents' costs recovery by 25%. (b) Secondly, the Respondents submit that the interlocutory application cannot be explained only by reference to the Applicant's misunderstanding of the scope of the allegations at paragraph 19. The interlocutory application was not limited to a challenge based on the Applicant's contention that there had been an issue waiver by reason of paragraph 19. The Applicant's challenge to the Respondents' privilege claims extended to arguments of express waiver and implied waiver that were not connected to the Applicant's misunderstanding of paragraph 19. Accordingly, the Applicant's misunderstanding ought not sound in a costs consequence to the detriment of the Respondents. 5 Having considered the parties' submissions, I am satisfied that in this matter the ordinary rule that costs follow the event should apply without any reduction in the amount of costs awarded by reason of the matters identified by the Applicant. In respect of both the matters put forward by the Applicant, I am not satisfied that the interlocutory application would have been progressed in a way that was materially different in terms of time and cost if the Respondents had made the limited concessions in terms of waiver or specifically clarified the scope of paragraph 19 of the Amended Defence at an earlier juncture. 6 In relative terms, the two waiver concessions made by the Respondents, involved a very small number of the documents that were in contest, comprising one document and part of another document. Had the Respondents made those concessions earlier, it is difficult to see that the evidence and argument would have materially reduced or narrowed. 7 As to the Applicant's misunderstanding of the Respondents' Amended Defence, I have some sympathy for the Applicant in terms of the way in which paragraph 19 is drafted, not only by reason of the slips in the internal cross-referencing. However, my view is that the Applicant's misunderstanding of the Amended Defence did not materially prolong the way in which the application was pursued. The Respondents correctly highlight that the Applicant persisted in the issue waiver argument based on her misunderstanding even after the Respondents in their written submissions expressly raised that she was proceeding on a misunderstanding of paragraph 19. Moreover, the scope of the argument on the interlocutory application was not only not limited to the Applicant's contention that there had been an issue waiver by reason of paragraph 19 but was not narrowed when the Respondents in their written submissions clarified the scope of paragraph 19. In the circumstances, I am not satisfied that in this matter the Applicant should have the benefit of a reduction of 25% in the costs ordered against her. 8 For these reasons, the Court orders that the Applicant pay the Respondents' costs of the Interlocutory Application filed 15 April 2021. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Cheeseman.