These proceedings involve two applications for judicial review by Ms Emma Narelle Cathryn Thompson (the applicant) from decisions and Orders made in QUD 86 of 2022, dated 25 August 2023 (Full Court Costs Assessment), and in QUD 113 of 2021 dated 7 September 2023 (amended on 14 September 2023) (First Instance Costs Assessments), by a Registrar of this Court. Those decisions and Orders concern the lump sum assessments of the costs ordered to be paid out of the Bankrupt Estate of Ms Thompson to the first and second respondents, Mr Morgan Lane as trustee of the Bankrupt Estate, and the Body Corporate for Arila Lodge CTS 14237 (BCAL), respectively, in two prior proceedings before this Court involving the same parties - Thompson v Lane (Trustee) (Costs) [2023] FCA 568 (Goodman J) and Thompson v Lane (Trustee) (No 4) [2022] FCA 616 (Logan J).
By her originating application filed on 29 September 2023 (QUD 419 of 2023), Ms Thompson complains that the Registrar "erred at law by failing to consider that the second respondent has not exhibited evidence of compliance with the Rules pertaining to making a Costs Order, or to substantiate making a Costs Order". Ms Thompson applies for the Orders of the Registrar made on 7 September 2023 (as amended on 14 September 2023) to be set aside. She also seeks an order for the first respondent in the original proceeding (QUD 113 of 2021), Mr Lane, to reimburse the account of the insolvency firm of the trustee in bankruptcy to the measure of the funds deducted from the Bankrupt Estate, and for Mr Lane to be restrained from making further payment to Mr Lane or the BCAL (the second respondent in QUD 113 of 2021) "in proceedings QUD 113 of 2021 and QUD 86 of 2023". The latter proceeding was presumably intended to be a reference to QUD 86 of 2022, the related proceeding as to which Ms Thompson is also aggrieved. In support of her application, Ms Thompson filed an affidavit, dated 21 September 2023 (First Thompson Affidavit).
By her originating application concerning QUD 420 of 2023, also filed on 29 September 2023, Ms Thompson applies for the Orders made by the Registrar on 25 August 2023 to be set aside, and for Mr Lane to be restrained from making any payment to the BCAL. She relies on the same ground as in QUD 419 of 2023, but with respect to QUD 86 of 2022. Ms Thompson filed an application for an extension of time on the same day. In support of the applications, she filed two affidavits, dated 15 September 2023 and 21 September 2023, respectively, also on 29 September 2023 (Second and Third Thompson Affidavits).
The latter affidavit deposes to Ms Thompson having purported to file the originating application within time on 15 September 2023. In the circumstances, it is appropriate that the extension of time be granted.
The Registrar has filed a submitting notice in both proceedings. As a result, there is no contradictor opposing Ms Thompson's applications. For reasons that will become apparent, the Court has, on its own motion, taken Ms Thompson's applications as those which seek a de novo hearing under s 35A(5) of the Federal Court of Australia Act 1976 (Cth), rather than applications for judicial review. That is not, however, to ignore Ms Thompson's complaints in support of her applications for judicial review.
For the reasons that follow, it is appropriate that, pursuant to the Order 3 of the Orders of Logan J made on 24 May 2022, the costs payable to Mr Lane be fixed in the sum of $50,262.91, and that the costs payable to the BCAL pursuant to that Order and Order 2 of the Orders of Goodman J made on 2 June 2023 be fixed in the sums of $52,451.00 and $44,202.00, respectively.
[2]
BACKGROUND AND PROCEDURAL HISTORY
It is appropriate to shortly set out the facts and procedural history that pertain to and contextualise the Registrar's decisions. On 1 July 2020, Ms Thompson was made bankrupt pursuant to s 55(4A) of the Bankruptcy Act 1966 (Cth), upon the Official Receiver accepting the Debtor's Petition presented by her on 26 June 2020. On 14 April 2021, Ms Thompson filed an annulment application, which was dismissed by Logan J on 18 February 2022: Thompson v Lane (Trustee) (No 3) [2022] FCA 128. Subsequently, in Thompson (No 4), in which His Honour addressed the costs of Thompson (No 3), Logan J made the following Orders:
The first respondent's costs be paid out of the bankrupt's estate.
The second respondent's costs be paid out of the bankrupt's estate with the same priority accorded by s 109(1)(a) of the Bankruptcy Act 1966 (Cth) to the trustee's costs.
In each instance, the costs for which this order provides be fixed by a Registrar on a lump-sum basis.
On 7 July 2023, a Registrar, to whom the determination was initially referred, made Orders for, inter alia, the filing of a Costs Summary and Costs Response, in accordance with the Court's Costs Practice Note (GPN-COSTS). For reasons of efficiency, and as notified to the parties on 16 August 2023, that determination was referred to the respondent Registrar. The review of the determination of costs by the Registrar that followed is the subject of QUD 419 of 2023.
Separately, Ms Thompson filed an application to appeal from Thompson (No 3) on 23 March 2022, seeking, relevantly, that it be set aside. That application was dismissed by the Full Court, with costs, on 10 March 2023: Thompson v Lane (Trustee) [2023] FCAFC 32; 410 ALR 439 (Charlesworth, Downes and Goodman JJ). On 13 March 2023, the Full Court subsequently made an Order allowing the respondents, being Mr Lane and BCAL, to file any proposed minute of further or ancillary orders relating to the costs of the appeal and an outline of submissions in support thereof.
On 28 March 2023, Goodman J ordered, relevantly, that Ms Thompson file and serve an outline of submissions by 26 April 2023 in response to the submissions filed by the respondents on 23 March 2023, that the respondents file any submissions in reply by 10 May 2023, and that:
The submissions to be filed in accordance with orders 1 and 2 are to indicate whether the party making the submission opposes the question of costs being determined on the papers and without an oral hearing and, if so, the reason(s) for such opposition.
Ms Thompson filed her submissions on 26 April 2023, but did not indicate any opposition to the determination of costs on the papers. Neither respondent filed any submissions in reply. On 12 May 2023, the Court ordered that the respondents' applications be determined on the papers.
On 2 June 2023, the Court published Orders and reasons as to the respondents' applications for further or ancillary orders concerning the costs of the appeal: Thompson (Costs). Although the first respondent sought an Order for payment for its costs of and incidental to Thompson FC from the Bankrupt Estate, the Full Court in Thompson FC had already ordered Ms Thompson to pay the first respondent's costs of that appeal: see Thompson (Costs) at [3]. The second respondent, however, sought, inter alia, for its costs to be fixed by a Registrar on a lump sum basis. Accordingly, Goodman J relevantly ordered that:
The second respondent's costs pursuant to Order 2 of the Orders made on 10 March 2023 be paid out of the appellant's bankrupt estate with the same priority accorded by s 109(1) of the Bankruptcy Act 1966 (Cth) to the first respondent's costs.
The quantum of the costs payable to the second respondent pursuant to Order 2 of the Orders made on 10 March 2023 be awarded in a lump-sum pursuant to rule 40.02(b) of the Federal Court Rules 2011 (Cth), to be determined by a Registrar of the Court, who shall upon such determination, make an order fixing the amount of those costs.
In accordance with Order 2, the determination of the lump sum costs was referred to the Registrar. At a case management hearing conducted on 23 June 2023, the Registrar made Orders for, inter alia, the filing of a Costs Summary, Costs Response, and submissions, in accordance with GPN-COSTS. The determination of costs that followed is the subject of QUD 420 of 2023.
[3]
Powers of a Registrar
The powers of a Registrar to be exercised where the Court or a Judge so directs are set out under s 35A(1) of the Federal Court Act. Those powers constitute delegated judicial power, and include, relevantly, at s 35A(1)(f), "the power to make an order as to costs".
A party may apply to the Court under s 35A(5) for review of any exercise of power by a Registrar under s 35A(1): Federal Court Rules 2011 (Cth) r 3.11. Such a review is de novo in nature: Guildford International Group Pty Ltd, Aviation 3030 Pty Ltd, in the matter of Aviation 3030 Pty Ltd [2018] FCA 600 at [1]. Relevantly, s 35A(5) states:
A party to a proceeding in which a Registrar has exercised any of the powers of the Court under subsection (1) may, within the time prescribed by the Rules of the Court, or within any further time allowed in accordance with the Rules of the Court, apply to the Court to review that exercise of power.
In Deputy Commission of Taxation v Australian Securities and Investments Commission and Anor [2013] FCA 623, Kenny J, at [37], set out Lander J's summary of the character of review under s 35A(5), citing His Honour's judgment in Callegher v Australian Securities and Investments Commission [2007] FCA 482 at [46]:
The [review] hearing … is a hearing de novo: Mazukov v University of Tasmania [2004] FCAFC 159; Pattison v Hadjimouratis (2006) 155 FCR 225; 236 ALR 1; [2006] FCAFC 153 … The right to review arises because the registrar has exercised the judicial power of the Commonwealth and, as such, is subject to the supervision of the court. The Registrar's orders are reviewable by hearing de novo: Harris v Caladine (1991) 172 CLR 84 at 124; 99 ALR 193 at 220; 14 Fam LR 593 at 617 … per Dawson J. A hearing de novo contemplates a complete rehearing. The moving party before the registrar has the responsibility of satisfying the court that the orders should have been made. The parties may adduce further evidence before the court and the rehearing is determined on the evidence put before the court which may include the evidence put before the registrar. The judge determines the rehearing without being fettered by the decision of the registrar: Southern Motors Pty Ltd v Australian Guarantee Corporation Ltd [1980] VR 187 …
This is a broader form of relief than would be available to Ms Thompson were she limited to judicial review of the Registrar's decisions.
[4]
Assessment of the costs ordered in QUD86/2022 and qud113/2021
[5]
Rules pertaining to costs orders
Section 43 of the Federal Court Act provides that the Court or a Judge has jurisdiction to award costs in all proceedings before the Court, other than proceedings in respect of which an Act provides that costs must not be awarded. Section 43(3)(d) provides that the Court or a Judge may, among other things, award a party costs in a specified sum. The award of costs is in the discretion of the Court or Judge, pursuant to s 43(2): see Jenkins Sh v Australia Council for Arts [2024] FCA 309 (Horan J) at [27].
Rule 40.02(b) of the Rules allows a Court to order an award of costs in a lump sum, instead of, or in addition to, any taxed costs: see Vald Pty Ltd v Kangatech Pty Ltd (Costs) [2024] FCA 693 (Downes J) at [23]; MCD Asia Pacific LLC v Hungry Jack's Pty Ltd (No 2) [2023] FCA 299 (Burley J) at [8]. I note, however, that unless the Court otherwise directs, no formal application for a lump sum costs order is required: GPN-COSTS [4.10]. Where an order is made that a person pay or be paid costs, without any further description of the costs, those costs are to be costs as between party and party: Rules r 40.01.
[6]
Legal principles
The principles applying to the Court's power to order lump sum costs, and the quantification of costs where such an order is made, were summarised by Markovic J in LFDB v MS S M (No 2) [2018] FCA 2062 at [6]-[8], which summary I gratefully adopt:
6 The Court's power to order lump sum costs is discretionary and may be exercised whenever the circumstances warrant it: Su v Australian Fisheries Management Authority (No 3) [2008] FCA 2018 at [1] (Reeves J).
7 A Full Court of this Court (Allsop CJ, Besanko and Middleton JJ) in Paciocco v ANZ (No 2) (2017) 253 FCR 403 at [16]-[17] explained the following in relation to the Court making orders for lump sum costs:
16 On 25 October 2016 the Chief Justice issued the Central Practice Note: National Court Framework and Case Management (CPN-1) ('Central Practice Note') and the Costs Practice Note (GPN COSTS) ('Costs Practice Note'). The Central Practice Note states that the determination of the quantum of costs of a successful party (in a proceeding) should not be delayed and, to this end, the Court will, where appropriate, facilitate the making of lump sum costs orders. The Costs Practice Note provides that the Court's preference, wherever it is practicable and appropriate to do so, is to make a lump sum costs order so as to finalise costs and avoid potentially expensive and lengthy taxation hearings. It makes clear that the Court should now proceed on the basis that taxation "should be the exception" and confined to matters which are unable to be determined otherwise: Costs Practice Note at [3.3]. The guiding principles are to reduce delay and cost when quantifying costs: Costs Practice Note at [3.1].
17 The Costs Practice Note provides for the Court to make use of sophisticated costs orders and procedures, and to take such steps as it considers necessary to ensure that it has the requisite level of detail to make a costs determination that is fair, logical and reasonable and to avoid orders that lead to potentially expensive and lengthy taxation hearings: Costs Practice Note at [3.3].
8 In Bitek Pty Ltd v IConnect Pty Ltd (2012) 290 ALR 288; [2012] FCA 506 at [18] Kenny J said the following in relation to the determination of the appropriate quantum of a lump sum costs order:
18 The starting point for the fixing of costs is the charges rendered by the applicant's solicitors: Beach Petroleum at FCR 124; ALR 165 and Hamod v New South Wales [2011] NSWCA 375 at [820] per Beazley JA (with whom Giles and Whealy JJA agreed). The sum of costs fixed should also be proportionate to the nature, including the complexity, of the case: see Canvas Graphics Pty Ltd v Kodak (A'asia) Ptd Ltd [1998] FCA 23. As Beazley JA said in Hamod, at [820], citing, among others, Beach Petroleum at FCR 123; ALR 164:
[820] The approach taken to estimate the costs to be ordered must be logical, fair and reasonable … This may involve an impressionistic discount of the costs actually incurred or estimated, in order to take into account the contingencies that would be relevant in any formal costs assessment … [Citations omitted.]
Further, it is well accepted that Courts need not, in determining the quantum of a lump sum costs order, engage in a "line by line analysis" - rather, the task is "one of estimation or assessment", but "not of arithmetic": Fewin Pty Ltd v Burke (No 3) [2017] FCA 693 (Markovic J) at [60]. A "broad brush approach" is to be adopted: Fewin at [60].
Fixed costs should be proportionate to the nature (including the complexity) of the present case: Innes v AAL Aviation Ltd (No 2) [2018] FCAFC 130 (Tracey, Bromberg and White JJ) at [17]. The Court is "entitled to take into account the evidence that is before it; its own observations of the proceedings and the judge's own assessment experience": Innes at [18], citing, with approval, Fewin at [61].
Additionally, the Full Court in Paciocco v Australia and New Zealand Banking Group Ltd (No 2) [2017] FCAFC 146 (Allsop CJ, Besanko and Middleton JJ) at [18], underlined the nature of the Court's task in the assessment of costs for a lump sum award:
… in making a lump sum award of cost, the Court in undertaking the task of assessing costs is not precluded from undertaking a close inquiry of costs relating to a particular issue or category of costs, should the Court consider it appropriate to do so. ... The Court is able to adopt its own procedures in inquiring into costs, is able to be flexible in how it conducts that inquiry, including by the obtaining of suitable assistance whether by referee's report or other reporting, and is able to acquire the level of detail needed to make a determination that is fair, logical and reasonable.
(Emphasis added. Citations omitted.)
[7]
Costs Practice Note (GPN-COSTS)
As anticipated in Paciocco, the Court has adopted its own procedures. Details of the procedure for determining a lump sum award of costs are set out in GPN-COSTS. Relevantly, it outlines that the following material should be sought from the parties, being the evidence on which that determination will rely:
Material in Support
[4.10] Unless the Court otherwise directs, no formal application for a lump-sum costs order is required. However, in cases where a lump-sum costs procedure is to take place, the Costs Applicant should file an affidavit in support of the lump-sum claim ("Costs Summary") in accordance with the timetable set by the judge. The Costs Summary should succinctly address the relevant matters set out in Part B of "Annexure A - Guide for Preparing a Costs Summary" and must also verify the matters set out in Part A of Annexure A.
[4.11] The Costs Summary must be clear, concise and direct and not resemble a bill of costs in taxable form, nor should it contain submissions on the law. The intention of the lump-sum costs procedure is to streamline and expedite the determination or resolution of the quantum of costs question and not to replicate the taxation process.
[4.12] Unless leave is given by the Court in advance of filing, the Costs Summary must not exceed 5 pages in length (omitting formal parts) or, in large or complex cases, no more than 10 pages. The Costs Applicant is not required to exhibit to the Costs Summary the source material verifying the costs and disbursements claimed. However, such material must be available at the costs hearing.
Materials in Response
[4.13] The Costs Respondent may file an affidavit responding to the matters raised in the Costs Summary ("Costs Response") in accordance with the timetable set by the judge.
[4.14] Any Costs Response must be clear, concise and direct and briefly summarise the categories of any disputes arising in respect of the Costs Summary. The summary should not resemble formal costs objections (as prepared for a taxation of costs) nor contain submissions on the law. The Costs Response should make clear which of the costs issues arising from the Costs Summary are in dispute and which are not, and should not exceed 4 pages in length (omitting formal parts) or, in large or complex cases, no more than 8 pages.
Submissions
[4.15] If the parties are given leave by the Court to do so, they may file short written submissions addressing the law as to costs on relevant issues in accordance with any timetable set by the Court. Unless leave is given by the Court in advance of filing, any submissions must not exceed 3 pages in length.
(Emphasis added.)
[8]
The nature of a de novo hearing
Colvin J in Robson (As Former Trustee of the Estate of Samsakopoulos) v Body Corporate for Sanderling at Kings Beach CTS 2942 [2021] FCAFC 143 at [63] (with Allsop CJ, and Markovic, Derrington and Anastassiou JJ agreeing with the relevant point) set out a succinct consideration of the nature of a de novo review:
… the de novo review is not to be seen as directed to a consideration of the correctness of the delegate's decision or redressing error by the delegate. On review, the Court hears the case again unaffected by what has gone before. However, the Court does not act as if there is a new appellate proceeding. The review task it undertakes is a determination again of an application that has already been listed for hearing and proceeds in the same manner that would be the case if the power had not been delegated. In consequence, on review, the Court can entertain new arguments, receive new evidence or adjourn the proceeding but only to the extent, and in the circumstances where, it would do so in a matter that had already been set down for determination. Further, the applicant on review is the applicant on the application irrespective of whether the applicant was successful before the delegate. The same onus arises as if the application was behind heard for the first time. …
(Emphasis added.)
[9]
Ms Thompson's submissions
In her written submissions filed in respect of both applications, Ms Thompson sought to raise matters relating to her assertion that the decisions in QUD 113 of 2021 and QUD 86 of 2022 were "obtained by fraud". These matters, however, are not raised as grounds of her applications for review of the Registrar's Orders in respect of the First Instance Costs Assessments or Full Court Costs Assessment. Rather, she has merely observed in each originating application that "[her] Application QUD 286 of 2023, which pertains to the related decisions QUD113 of 2021 and QUD86 of 2022 being 'obtained by fraud', and in reliance upon false allegations, has not yet been heard by this Court". They are not matters that were appropriate to be raised before the Registrar on the assessment of lump sum costs, and nor are they appropriate to be raised in respect of either of the present applications.
[10]
No valid basis for costs orders
In considering the applications de novo, I have had regard to Ms Thompson's submissions before the Registrar filed on 26 April 2023 with respect to QUD 86 of 2022 and those filed on 31 July 2023 both in QUD 113 of 2021 and QUD 86 of 2022. The submissions filed in support of the current applications raise essentially the same matters as were raised before the Registrar, except for the alleged arithmetical errors that were raised before the Registrar.
First, Ms Thompson's complaints largely echo complaints made before Logan J in Thompson (No 3) (see [65]-[66], [78]-[79]) and the Full Court in Thompson FC ([60] and [149]-[150]). As Downes J found in Thompson v Hird [2023] FCA 1530, her arguments appear to constitute an effort by Ms Thompson to restate her complaints before the Full Court, the essence of which is that Logan J should have interrogated the evidence on which the ultimate costs orders were based. I observe that the Full Court rejected that argument at [149]-[150] (see Thompson FC).
[11]
Costs orders 'obtained by fraud'
Secondly, the gravamen of her complaint that "the Orders made in matters QUD113 of 2021 and QUD86 of 2022 are 'obtained by fraud'" was dealt with by Downes J in Hird (at [15]-[17]). In circumstances where Ms Thompson has not clarified the nature of the fraud alleged, I interpolate the contention as to QUD 113 of 2021 and QUD 86 of 2022 arises from the same facts before Downes J in Hird and adopt Her Honour's reasoning in dismissing that argument.
Moreover, Ms Thompson's reliance on Commissioner of Taxation v Rawson Finance Pty Ltd [2023] FCA 617 (Perry J) is misplaced. It is true that, as Perry J set out in that judgment, the Federal Court has implied jurisdiction to set aside orders procured by fraud: Rules r 39.05(b); see Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd [1986] FCA 248; 12 FCR 14 (Morling J) at 15. However, where in that case there was "new evidence [that] overwhelmingly established" the primary decisions were obtained by fraud (at [14]), Ms Thompson has not referred to any new evidence or basis otherwise upon which the Orders impugned can be said to have been obtained by fraud.
[12]
No right to cross-examine
Thirdly, to the extent Ms Thompson's complaints relate to an alleged failure to allow Mr Lane and the BCAL to be cross-examined by her, she waived her right for such an opportunity to be afforded to her by failing to require an oral hearing, as was her right.
[13]
Exercise of power under rr 40.01 and 40.02
Fourthly, to the extent Ms Thompson's contentions relate to the making of Orders by Logan and Goodman JJ pursuant to rr 40.01 and 40.02 of the Rules, these proceedings do not allow the Court to review the separate decisions of Logan and Goodman JJ that referred the relevant proceedings to the Registrar. The proper exercise of those powers of the Court was not part of either of the Registrar's decisions, and in neither those proceedings nor these could those Orders be called into question.
Nonetheless, it is appropriate to set out the gravamen of Ms Thompson's complaint in respect of the exercise of power under rr 40.01 and 40.02, which is threefold. First, it is her submission that there is no evidence of a costs agreement between Grace Lawyers and the BCAL, nor of a costs agreement between Shand Taylor Lawyers and Mr Lane as trustee. Ms Thompson submits that the making of a costs order under rr 40.01 or 40.02 "does not obviate compliance with the requirements of valid legal engagement of legal representation" as required by ss 308 and 315 of the Legal Profession Act 2007 (Qld), the Legal Profession Regulation 2017 (Qld), the Australian Solicitors Conduct Rules 2012 (Qld), Ch 8 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR), and the decision in Bingham v Boensch [2023] FCA 117. Secondly, Ms Thompson submits that costs have been unreasonably and unnecessarily incurred. Thirdly, Ms Thompson contends that the BCAL commenced and continued the original proceeding in contravention of ss 94(2) and 1000(5) of the Body Corporate and Community Management Act 1997 (Qld).
As has already been observed of those three arguments by Goodman J in Thompson (Costs) at [9], "the Full Court has already made an order that Ms Thompson pay the respondents' costs … whilst the first and second matters may be relevant to the assessment of the quantum of the costs to be paid, they were not relevant to the making of an order that costs be paid" (emphasis added). More importantly, as to the third matter, the Full Court dealt squarely with Ms Thompson's submissions relating to the BCAL's compliance with the relevant legislation, upholding the primary judge's finding that the requisite ratifying special resolution had been passed: Thompson FC at [151]-[153]. I adopt and adapt the observations of Downes J in Thompson FC at [148] - this application is not yet another occasion for Ms Thompson to re-agitate arguments that have now been rejected in at least two other proceedings (see also Shaw v Yarranova Pty Ltd [2017] FCAFC 88; 252 FCR 26 at [13]).
The gravamen of the second matter - being whether costs have been unreasonably and unnecessarily incurred - will necessarily be addressed in the course of the de novo review.
As to the first matter, however, Ms Thompson's submissions are misconceived. Ms Thompson submitted that she had "identified non-compliance by the parties seeking costs with the relevant provisions in legislation", and that "there is no valid basis for these costs [orders] to have been made". There is, however, no requirement that a costs agreement must exist before a costs order is made. Section 315(1) of the Legal Profession Act provides a costs agreement "may be made" between a law practice and certain specified parties. If one is made, then it must be written or evidenced in writing (s 315(2)). Section 308, to which Ms Thompson referred in her submissions, requires relevantly that a law practice must disclose a client's right to negotiate a costs agreement with the practice (s 308(2)). Ms Thompson's reliance on rr 3, 5 and 19 of the Australian Solicitors Conduct Rules appears to be directed at a suggestion that the solicitors who have sworn affidavits in these proceedings have breached their professional obligations. That is a serious allegation and one that should not be made lightly, particularly where there is no evidence to support such an allegation. Neither the Legal Profession Regulation nor Ch 8 of the UCPR provide any assistance to Ms Thompson.
Similarly, the decision in Bingham does not assist Ms Thompson. That case was concerned squarely with a question as to the construction of an alleged costs agreement between a solicitor and his own client and whether the true costs agreement was contained in a mortgage, which capped the client's liability at $100,000.00. The construction of any costs agreement is not a matter of relevance in these proceedings.
There being no basis on which the Orders of Logan and Goodman JJ can be impugned by this Court, I proceed, pursuant to s 35A(5), to review de novo the exercise of power by the Registrar of the lump sum assessments which led to the Orders of 7 September 2023 (as amended on 14 September 2023) in QUD 113 of 2021 and the Orders of 25 August 2023 in QUD 86 of 2022.
[14]
First Instance Costs Assessments
It is necessary to first assess the amount claimed and, secondly, consider whether it is appropriate that any discount should be applied: Hamod v New South Wales [2011] NSWCA 375 (Beazley JA) at [814]. Relevantly, discounting is to be applied where costs are assessed on a party and party basis: see, for example, Gleeson J in Yeo v Australian Securities and Investments Commission, Re JL Woo International Education Centre Pty Ltd (No 3) [2018] FCA 1749 at [26]-[30]; Crescent Capital Partners Management Pty Ltd v Crescent Funds Management (Aust) Ltd [2019] FCA 1082 (Markovic J) at [53].
[15]
Materials filed by the parties
On 24 July 2023, the first respondent (Mr Lane) filed an affidavit of Roderick Ernest O'Sullivan (First Respondent's Costs Summary Affidavit, or the O'Sullivan Affidavit). The same day, the second respondent (BCAL) filed the affidavit of Brenton Schoch (Second Respondent's Costs Summary Affidavit, or the First Schoch Affidavit). On 31 July 2023, Ms Thompson filed a document titled "Applicant's Reply to Costs Submissions" (Costs Response). I have already observed that the Costs Response was also filed in the proceeding before the Registrar the subject of the Full Court Costs Assessment.
By the Costs Response at [35], Ms Thompson submitted that, as Mr Lane has already paid $52,406.76 in legal costs from the Bankrupt Estate, the total amount of legal costs claimed by the first respondent is $207,253.06. She appears to impugn the unreasonableness of the costs claimed with reference, in part, to that total. That figure, however, not only represents the aggregate costs claimed by both respondents in the proceedings, but the further $52,406.76 which is not claimed by either respondent. Rather, that amount appears in a "Receipts and Payments Summary" dated 3 July 2023, with the line description "Legal Fees", sent to Ms Thompson by the insolvency firm of the trustee in bankruptcy, after she commenced QUD 419 of 2023 and QUD 420 of 2023. The costs actually claimed are set out in the respective Costs Summaries of the respondents. These assessments will, therefore, address those amounts only.
[16]
Costs of the First Respondent
Mr Lane is the trustee of the bankrupt estate of Ms Thompson. In Thompson (No 4) at [24], Logan J said:
Although the trustee, Mr Lane, took a neutral stance in relation to the question of whether an order annulling the bankruptcy should be made, the trustee was a necessary party and furnished a report in relation to the estate and the sufficiency of assets to meet liabilities. Mr Lane also furnished evidence in relation, in particular, to dealings with the Australian Taxation Office.
Mr Lane relies on the O'Sullivan Affidavit. Despite Ms Thompson's submissions to the contrary, the O'Sullivan Affidavit accords with Annexure A to the GPN-COSTS. It includes:
The verification required by Pt A of Annexure A. Relevantly, in that regard,
Mr Lane, as trustee, is not entitled to claim input tax credits in respect of any GST relevant to the claims in the Costs Summary and has complied with Pt 6 of GPN-COSTS (O'Sullivan Affidavit at [3]); and
in the Costs Summary,
Mr Lane is not claiming more than he is liable to pay for costs and disbursements;
the calculations are correct; and
the matters noted are a fair and accurate summary of the costs and disbursements that the Costs Applicant is entitled to claim (O'Sullivan Affidavit at [4]).
The information required by Pt B of Annexure A, insofar as it is relevant, is as follows:
the Costs Summary has not been prepared with the assistance of an expert as to costs (O'Sullivan Affidavit at [6]);
Mr Lane's costs are to be paid out of Ms Thompson's bankrupt estate as set out in the Orders made by Logan J on 24 May 2022 (O'Sullivan Affidavit at [7]);
the amount of the lump sum sought, being $58,193.30, inclusive of GST (O'Sullivan Affidavit at REO-1);
how the lump sum has been calculated, including any discounts that have been applied (O'Sullivan Affidavit at [10], [11] and REO-1 and REO-2);
a summary of the categories of work, including an estimate in percentage terms of the proportion that each category of work constitutes of the total costs claimed (O'Sullivan Affidavit at REO-2);
in relation to each person who performed the work, a summary of their hourly rate, total hours worked and an estimate, in percentage terms, of the proportion of the total sum claimed attributable to that person (O'Sullivan Affidavit at REO-1); and
a summary of the disbursements incurred, including fees charged by Counsel (O'Sullivan Affidavit at [11]).
Ms Thompson submitted that there was no evidence exhibited to the O'Sullivan Affidavit to support the amounts claimed. Mr O'Sullivan deposed, at [5], that the relevant source material could be produced if required, as required by Pt A of Annexure A of GPN-COSTS. Ms Thompson did not ask for the source material to be produced and, as has already been observed, waived her right to an oral hearing where she may have had the opportunity to cross-examine Mr O'Sullivan.
[17]
What quantum should be awarded?
Ms Thompson's position, in substance, is that the costs claimed were not proportionate to the nature and complexity of the case, and not fair and reasonable, in circumstances where she continues to maintain that she was not insolvent when the Debtor's Petition was signed and that she was able to pay all debts, and maintains her claims of fraud and misleading and unprofessional conduct by the solicitors acting for Mr Lane and the BCAL. As I have already said, and to the extent her arguments attempt to raise arguments that have been already addressed in these reasons, those allegations cannot be reagitated in these proceedings. Nevertheless, it remains incumbent on this Court to be satisfied that the costs claimed are indeed fair and reasonable, or whether a discount should be applied.
I am satisfied that the disbursements incurred, being Counsel's fees, are reasonable. The rate charged was within the range set out in the "National Guide to Counsel's Fees - Federal Court of Australia" effective from 1 July 2013. The proportion of time spent on the matter by Counsel was appropriate, given the nature of the matter.
As to the solicitors' charges, while there was some, albeit fairly minor, evidence of duplication of work as between partners and junior staff, I do not consider the charges to be excessive. I note also that no allowance was made for "care, skill and responsibility", nor were any additional disbursements charged. The rates are also consistent with the Scale of Costs set out in Schedule 3 of the Rules.
On balance, I am not persuaded that it would be fair and just to apply anything more than a 15% discount to the solicitors' charges. I will therefore calculate the lump sum amount payable to Mr Lane to be $50,262.91.
[18]
Costs of the Second Respondent
For the purpose of the costs claimed in respect of the second respondent, BCAL relies on the First Schoch Affidavit.
Again, despite Ms Thompson's submissions to the contrary, the First Schoch Affidavit contains the required verification consistent with Pt A of Annexure A to the GPN-COSTS. That verification states, relevantly:
BCAL is entitled to claim input tax credits in respect of any GST relevant to the claims in the Costs Summary and has complied with Pt 6 of GPN-COSTS (First Schoch Affidavit at [3]);
in the Costs Summary:
BCAL is not claiming more than it is liable to pay for costs and disbursements;
the calculations made are correct; and
the matters noted are a fair and accurate summary of the costs and disbursements that BCAL is entitled to claim (First Schoch Affidavit at [4]).
As to the information requirements of Pt B of Annexure A of GPN-COSTS, Mr Schoch deposes, insofar as it is relevant, that:
the Costs Summary has not been prepared with the assistance of an expert as to costs (First Schoch Affidavit at [6]);
BCAL's costs are to be paid out of Ms Thompson's bankrupt estate as set out in the Orders made by Logan J on 24 May 2022 (First Schoch Affidavit at [7]);
BCAL seeks $52,451.00 in costs and disbursements, exclusive of GST (First Schoch Affidavit at [8]);
how the lump sum has been calculated, including any discounts that have been applied (First Schoch Affidavit at [9]-[10]);
summaries of the categories of work, including an estimate in percentage terms of the proportion that each category of work constitutes of the total costs claimed (First Schoch Affidavit at [10]);
in relation to those people who worked, a summary of their hourly rate, total hours worked and an estimate, in percentage terms, of the proportion of the total sum claimed attributable to that person (First Schoch Affidavit at [11]); and
a summary of disbursements incurred, including fees charged by Counsel (First Schoch Affidavit at [13]).
Mr Schoch also deposed, at [5] of the First Schoch Affidavit, that the amounts claimed can be further verified through source material, should the Court require such verification, as required by Pt A of Annexure A. Again, Ms Thompson did not require the source material to be produced.
[19]
What quantum should be awarded?
Ms Thompson's complaints as to the costs claimed by Mr O'Sullivan also apply to the costs claimed by Mr Schoch in QUD 113 of 2021, and QUD 86 of 2022. They need not be repeated.
I am satisfied that the disbursements claimed were reasonably incurred. The fees charged by both Counsel engaged are consistent with the National Guide. The manner in which both Counsel were engaged consecutively indicates that there would be no more than a negligible degree of duplication of work (if any). There is no evidence to support that any duplication of work occurred (First Schoch Affidavit at [14]-[16]). The proportion of time spent by Counsel on the matter is not disproportionate for the type of matter. As to the additional disbursements incurred, totalling $1,211.93, the actual amount claimed reflects a sum that has been substantially reduced to comply with the rates within the Scale (First Schoch Affidavit at [13(c)]).
I am also of the view that the solicitors' fees are appropriate. All of the rates charged by the fee earners on the matter were reasonable, and consistent with the Scale. There is no evident duplication of work, and I observe no allowance was made for "care, skill and responsibility".
On balance, I am not persuaded that it would be fair and just to apply any discount to the costs claimed. I will therefore calculate that the lump sum costs payable to BCAL to be $52,451.00.
[20]
Full Court Costs Assessment
For the purpose of the costs claimed in respect of QUD 86 of 2022, the Court applies the same principles to first assess the amount claimed and, secondly, consider whether it is appropriate that any discount should be applied. It is not necessary to restate the additional principles cited.
[21]
Costs of the Second Respondent
On 6 July 2023, BCAL filed an affidavit of Mr Schoch (Second Respondent's Costs Summary Affidavit, or the Second Schoch Affidavit). On 31 July 2023, Ms Thompson filed the Costs Response.
BCAL relies on the Second Schoch Affidavit. I observe that, by that affidavit, Mr Schoch has deposed to matters in accordance with Pts A and B of Annexure A of GPN-COSTS in essentially verbatim terms and paragraph references as in the First Schoch Affidavit ([50]-[51] above). For that reason, I will not restate them, but I observe that Ms Thompson did not request that any source material to verify the amounts claimed in the Cost Summary be produced (Second Schoch Affidavit at [5]).
[22]
What quantum should be awarded?
I have found that the disbursements claimed by BCAL are appropriate. Counsel's fees are under the maximum rate allowed by the National Guide. While Mr Schoch deposes that they represent a significant proportion of the total costs claimed (38%), when considered against Counsel's reasonably low hourly rate, that proportion of total costs is not unreasonable. The total amount of the only additional disbursement claimed has also been reduced to comply with the Scale.
As to the solicitors' fees, all rates charged by the fee earners on the matter were reasonable, and consistent with the Scale. There is no evident duplication of work, and no allowance for "care, skill and responsibility". I am likewise satisfied that those costs claimed are appropriate.
On balance, I am not persuaded that it would be fair and just to apply any discount to the costs claimed. Accordingly, I will calculate the lump sum costs payable to BCAL to be $44,202.00.
[23]
DISPOSITION
Having completed a de novo review of the lump sum costs assessments, I find that the lump sum amounts payable pursuant to Order 3 of the Orders of Logan J made on 24 May 2022 are as follows:
to Mr Lane fixed in the sum of $50,262.91; and
to BCAL fixed in the sum of $52,451.00.
Further, I find that the lump sum amount payable pursuant to Order 2 of the Orders of Goodman J made on 2 June 2023 to BCAL fixed in the sum of $44,202.00.
At the hearing, Ms Thompson expressed some frustration that she "[felt] like [she was] saying the same thing over and over again, and the correct steps aren't being taken by the court". In circumstances where Ms Thompson has commenced multiple proceedings on grounds that have been repeatedly unsuccessful before the Court, evidently at great financial cost, it is fair to observe that she would have been assisted by considered legal advice. That is particularly so where, as Kenny J observed in Ogawa v University of Melbourne (No 2) [2004] FCA 1275 at [42], the circumstance that a party is a litigant in person is not "a ground for displacing the ordinary result that costs follow the event".
Indeed, there are no circumstances in the present case that would displace the usual order as to costs. However, by her submitting notices, the Registrar has not sought to be heard on costs in respect of either proceeding. On that basis, there will be no order as to costs of the proceedings.
I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Sarah C Derrington .
Parties
Applicant/Plaintiff:
Thompson
Respondent/Defendant:
Ellis
Legislation Cited (10)
Australian Solicitors Conduct Rules 2012(Qld)rr 3, 5, 19
Body Corporate and Community Management Act 1997(Qld)ss 94(2), 1000(5)
(Qld), the Legal Profession Regulation 2017(Qld)
(Qld), the Australian Solicitors Conduct Rules 2012(Qld)
Thompson v Lane (Trustee) (No 3) [2022] FCA 128
Thompson v Lane (Trustee) (No 4) [2022] FCA 616
Thompson v Lane (Trustee) [2023] FCAFC 32; 410 ALR 439
Vald Pty Ltd v Kangatech Pty Ltd (Costs) [2024] FCA 693
Yeo v Australian Securities and Investments Commission, Re JL Woo International Education Centre Pty Ltd (No 3) [2018] FCA 1749