TJ & P Pty Ltd as trustee for the Post Family Trust v Agrinova Pty Ltd

1. The following matters provide relevant context for the questions requiring determination.
2. The proceeding was commenced by Mr and Mrs Van Vlymen on 10 September 2020, by way of an originating application and concise statement which included Agrinova and Mr Richard Stott and Mr Mathew Stott (Stott respondents) as respondents.
3. The claims against Agrinova and the Stott respondents in the originating application and concise statement included claims in contract, equity and a claim under the Competition and Consumer Act 2010 (Cth) (CC Act). The latter claim was to the effect that Agrinova and the Stott respondents had engaged in misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law (ACL) (being Schedule 2 to the CC Act).
4. In September 2020, Mr and Mrs Van Vlymen filed an amended originating application and an amended concise statement.
5. On 27 October 2020, Mr and Mrs Van Vlymen filed a statement of claim and on 1 December 2020, Agrinova and the Stott respondents filed separate defences to the statement of claim.
6. On 19 January 2021, Mr and Mrs Van Vlymen filed an amended statement of claim and on 17 March 2021, Agrinova and the Stott respondents filed separate defences to the amended statement of claim.
7. Following the entry of Mr and Mrs Van Vlymen into bankruptcy in June 2021 (J[253]) their trustee in bankruptcy, Mr David Sampson, made an election under s 60(2) of the Bankruptcy Act 1966 (Cth) to continue to prosecute the proceeding on behalf of their estates; and Mr Sampson, in his capacity as trustee of those estates became the applicant in the proceeding pursuant to an order made by Justice Rares on 8 October 2021 (J[5]).
8. On 18 March 2022, Mr Sampson entered into a deed of assignment and that deed, together with a deed of variation dated 8 April 2022 - as described by Justice Rares in Sampson in his capacity as trustee of the bankrupt estates of Van Vlymen v Agrinova Pty Ltd [2022] FCA 529 at [2] - effected an assignment of "the chose in action comprising the bankrupts' interest in the subject matter of the proceeding" to TJ & P Pty Ltd, as trustee for the Post Family Trust.
9. TJ & P is a company of which Mr Tjeerd Post is the sole director and one of two shareholders.
10. On 6 May 2022, Justice Rares ordered that TJ & P, qua trustee for the Trust, be substituted as an applicant in place of Mr Sampson: see Sampson. References in these reasons to the applicant are to TJ & P, qua trustee for the Trust.
11. On 16 May 2022, the applicant filed a further amended originating application and a further amended statement of claim. The further amended statement of claim removed the allegation that the Stott respondents were primary contraveners of s 18 of the ACL; and instead alleged that they were accessorily liable for contraventions of s 18 of the ACL by Agrinova.
12. On 3 June 2022, Agrinova and the Stott respondents filed a single defence to the further amended statement of claim.
13. On 8 July 2022, Agrinova and the Stott respondents filed an interlocutory application, seeking, inter alia, an order that the applicant provide security for the respondents' costs.
14. On 25 October 2022, Justice Rares ordered the applicant to provide security for the costs of Agrinova and the Stott respondents in an amount of $255,000 in the following tranches:

(1) $100,000 on or before 25 November 2022; and

(2) $155,000 within 30 days of the Court setting the proceeding down for final hearing.

1. On 4 November 2022, Justice Rares set the proceeding down for final hearing, to commence on 18 July 2023.
2. On 25 November 2022, the applicant paid the first of those tranches into Court. The applicant failed to pay the second tranche of security.
3. However, on 3 March 2023, Justice Rares made an order, by consent, that the form of security for the second tranche be varied such that the "the undertaking to the Court of Tjeerd Post signed on 27 January 2023 and the freezing order made today be substituted as suitable security ...".
4. The freezing order, which was an annexure to the 3 March 2023 orders, relevantly provided:

Freezing of assets

1. You must not or in any way dispose of, deal with, encumber or diminish the value of your asset being the real property known as ..., Albany Creek in the State of Queensland ....

Exceptions to this order

7. This order will cease to have effect if you:

1. pay the sum of $155,000 into Court; or
2. provide security in that sum by a method agreed in writing with the [Agrinova and the Stott respondents] to be held subject to the order of the Court.

1. On 24 April 2023, the hearing scheduled to commence on 18 July 2023 was vacated and the proceeding was referred for re-allocation. It was subsequently allocated to my docket and on 30 May 2023, I listed the proceeding for final hearing, to commence on 4 March 2024.
2. On 28 July 2023, the applicant filed a second further amended statement of claim.
3. On 14 February 2024, the applicant filed its written outline of opening submissions, ahead of the hearing. Those submissions addressed the pleaded claims in contract and estoppel but did not refer to the pleaded claims of contraventions of the CC Act (misleading or deceptive conduct claims).
4. On 5 March 2024, the trial commenced. The applicant pursued its claims in contract and estoppel but not the misleading or deceptive conduct claims.
5. On 27 March 2024 and near the end of the hearing, orders were made by consent dismissing the proceeding as against the Stott respondents and reserving the question of costs relating to that dismissal.
6. On 16 May 2024, and subsequent to the hearing, the applicant regularised its pleading by filing a further statement of claim which deleted the misleading or deceptive conduct claims.
7. As earlier noted, on 5 June 2025, I delivered reasons for judgment and, in broad terms, found in favour of the applicant with respect to its case based on estoppel but against it on its case based on contract; and on 26 June 2025, I made an order for judgment in favour of the applicant and against Agrinova in the sum of $585,000 exclusive of interest.

1. Against that background, I start with the costs position as between the applicant and Agrinova. Each contends that the other should pay its costs. Agrinova also contends that the applicant should pay its costs of the misleading or deceptive conduct claim against it in any event, and that Mr Post - the director of the applicant and a non‑party to the proceeding - should be jointly and severally liable, with the applicant, for the costs payable to Agrinova. The latter contention is considered at E. below.

1. It is well-established that the Court's discretion to award costs under s 43 of the Federal Court of Australia Act (FCA Act) is broad.
2. The recent summary of applicable principles concerning costs provided by Burley, Jackson and Downes JJ in Fanatics, LLC v FanFirm Pty Limited (Costs) [2025] FCAFC 111 at [5] to [7] is apposite:

Applicable principles relating to costs

1. The principles relating to the award of costs are clear and well-settled. The award of costs is at the discretion of the Court, which discretion is broad but is to be exercised judicially: Idenix Pharmaceuticals LLC v Gilead Sciences Pty Ltd (No 2) [2018] FCAFC 7 at [3] (Nicholas, Beach and Burley JJ). The fundamental purpose is to compensate the successful party, not to punish the unsuccessful party.
2. As set out by the Full Court in Les Laboratoires Servier v Apotex Pty Ltd (2016) 247 FCR 61; [2016] FCAFC 27 at [303] (Bennett, Besanko and Beach JJ), the usual principle is that costs follow the event:

Without amounting to an absolute rule, the principle remains that, subject to certain limited exceptions generally linked to the disentitling conduct of the successful party, a successful party in litigation is entitled to an award of costs (Oshlack per McHugh J at [67]-[68], in dissent but not in this aspect of the principle and with whom Brennan CJ agreed). That is not to punish the unsuccessful party but to compensate the successful party. There is no absolute rule that, in the absence of disentitling conduct, a successful party is to be compensated by the unsuccessful party, nor is there a rule that there is no jurisdiction to order a successful party to bear the costs of the unsuccessful party (Oshlack at [40] per Gaudron and Gummow JJ). However, the Courts have been slow to order a successful party to pay the costs where it has been unsuccessful on some issues. In Mok v Minister for Immigration, Local Government and Ethnic Affairs (No 2) [1993] FCA 650; (1993) 47 FCR 81, Keely J was of the view (at 84) that, without attempting to fetter the discretion, this power ought to be exercised only where the Court, on a consideration of all of the circumstances, has concluded that the raising of an issue by the applicant on which it has failed was so unreasonable that it is fair and just to make the order.

1. Where there is a mixed outcome in proceedings, an unsuccessful party is not automatically entitled to costs in respect of those issues of fact or law on which the successful party failed: Inspector-General in Bankruptcy v Bradshaw (No 2) [2006] FCA 383 at [12] (Kenny J). Justice Mortimer (as her Honour then was) stated in Plaintiff S111A/2018 v Minister for Home Affairs (No 5) [2022] FCA 603 at [42] that "the authorities caution against apportioning the costs of a successful party by some kind of division into the issues on which the party succeeded and those the party did not".

1. The starting point is the order made on 26 June 2025 that Agrinova pay the applicant the sum of $585,000. An application of the usual position that costs follow the event would have the consequence that Agrinova should pay the applicant's costs of the proceeding.
2. Agrinova's position is that the usual position should not apply, such that it should not be ordered to pay the applicant's costs of the proceeding; and the applicant should pay its costs of the proceeding.
3. The essence of Agrinova's argument on the former contention is that it, rather than the applicant, was the successful party. This argument has several strands.
4. The first strand of Agrinova's argument is that it was the successful party because the applicant achieved only a very small part of its overall claim, in circumstances where the applicant's claim, as expressed in final submissions, was for an amount in excess of $20,000,000, in respect of which it received $585,000, or approximately three per cent of the amount claimed. In this regard, Agrinova relies upon observations in Baker v Towle [2008] NSWCA 73; (2008) 39 Fam LR 323 at 331 [29] (Beazley JA) and 343 [86] (Basten JA); Australian Receivables Ltd v Tekitu Pty Ltd (Subject to Deed of Company Arrangement) (Deed Administrators Appointed) [2011] NSWSC 1425 at [24] to [26] (Ward J); and Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15] (Ward, Emmett and Gleeson JJA). Agrinova also relied upon various offers exchanged by the parties, and in particular the applicant's lowest offer of $4,500,000 as further evidence that the applicant fell well short of what it was seeking, as it recovered an amount equal to 13 per cent of that offer ($585,000/$4,500,000).
5. I do not accept Agrinova's submission. On any measure, an amount of $585,000 is a substantial amount of money and it is not an amount that the applicant could have achieved other than by pursuing the proceeding to its conclusion. It cannot be said that the applicant did not obtain from the proceeding anything of value. Care must be taken in the application of mathematical comparisons, particularly in circumstances where it is commonplace for applicants not to recover all that they seek in a proceeding.
6. The second strand is the contention that the part of the case on which Agrinova succeeded (i.e. the contract case) was the dominant issue in the proceeding; and that the estoppel case on which the applicant succeeded was a subsidiary issue.
7. In some cases, it is an appropriate exercise of the costs discretion to award costs by reference to the success of the parties on particular issues rather than by reference to the "event". However, it is well-established that this usually requires that a particular issue be clearly dominant or separable from other issues: see, e.g., Chou (aka Chou) v Metstech Pty Ltd (ACN 602 390 214) [2023] FCAFC 205; (2023) 178 IPR 406 (Yates, Downes and Jackman JJ) at 428 [110]; Doppstadt at [17]. As their Honours noted, by reference to the judgment of O'Bryan and Cheeseman JJ in Mawhinney v Australian Securities and Investments Commission (No 2) [2022] FCAFC 205 at [66], "[t]he mere fact that a court does not accept all of a successful party's arguments does not make it appropriate to apportion costs on an issue by issue basis". See also FanFirm at [7].
8. I do not accept that the contract case was the dominant issue of the proceeding. Certainly, the applicant's opening submissions were capable of conveying such an impression, with the estoppel case playing a lesser role in those submissions. However, this shifted during the course of the hearing and in closing submissions the focus of the applicant's submissions was upon the estoppel case rather than the contract case (J[259]). That focus is also clear in the analysis in Agrinova (No 3).
9. I also do not accept that the contract and estoppel cases were separable. There was considerable overlap between those cases as is evident from Agrinova (No 3) and the closing submissions of the parties.
10. Thus, putting to one side for the moment the question of the costs of the applicant's misleading or deceptive conduct claim as against Agrinova, I am not persuaded that there is any reason to depart from the usual position that costs should follow the event with the result that Agrinova should pay the applicant's costs.

C.2 Costs between the applicant and Agrinova with respect to the applicant's misleading or deceptive conduct claim

1. I turn now to the costs of the applicant's misleading or deceptive conduct claim as against Agrinova.
2. As noted above, the misleading or deceptive conduct claim was part of the applicant's claim against Agrinova from the inception of the proceeding, but was not pursued in the applicant's pre-trial written submissions, or at the hearing.
3. The applicant contends that the misleading and deceptive conduct claim could not be pursued because Mr and Ms Van Vlymen entered bankruptcy as a result of Agrinova's conduct. Assuming for present purposes that this is so (and noting that there is no such finding), this does not assist the applicant, which assumed the burden of the proceeding when it took the assignment and then continued to pursue the misleading and deceptive conduct claim as against Agrinova.
4. Although there has been no determination of the merits of that claim, the applicant should pay Agrinova's costs of that claim in circumstances where the applicant surrendered with respect to it: Chapman v Luminis Pty Ltd [2003] FCAFC 162 at [7] (Beaumont, Sundberg and Hely JJ).

C.3 Conclusion as to costs between the applicant and Agrinova

1. For the reasons set out above, Agrinova should pay the applicant's costs save with respect to the misleading or deceptive conduct claim against Agrinova; and the applicant should pay Agrinova's costs of its misleading or deceptive conduct claim as against Agrinova.

D. COSTS AS BETWEEN THE APPLICANT AND THE STOTT RESPONDENTS

1. I turn next to the costs position as between the applicant and the Stott respondents.
2. As noted above: (1) the Stott respondents were, from the inception of the proceeding, respondents to the applicant's misleading or deceptive conduct claims (whether primarily or accessorily liable); (2) the applicant did not pursue this claim in its pre-hearing written submissions, or at the hearing; and (3) on 27 March 2024 and near the end of the hearing, orders were made by consent dismissing the proceeding as against the Stott respondents and reserving the question of costs relating to that dismissal.
3. The dismissal of the proceeding as against the Stott respondents may be regarded as an event which costs should follow. The applicant contends, in essence, that costs should not follow this event and that there should be no order as to costs as between the applicant and the Stott respondents for the following reasons.
4. First, the applicant contends that the claim against the Stott respondents was properly brought by Mr and Mrs Van Vlymen but became untenable following the assignment because the applicant (as opposed to Mr and Mrs Van Vlymen) had not suffered any loss or damage. I do not regard this as a reason why costs should not be ordered against the applicant, rather it provides a reason as to why the applicant should pay such costs. The applicant, in taking the assignment, assumed the risk of a claim which it now concedes was unviable. Further, the applicant affirmed that claim, by amending it, including by the introduction of the accessorial liability allegations, and then maintained that claim until at least 14 February 2024 when it served its pre-trial submissions without addressing it.
5. Contrary to the applicant's submissions, the fact that the Stott respondents consented to the orders by which the applicant became a party to the proceedings is of little moment.
6. Secondly, the applicant contends that particular conduct of the Stott respondents disentitled the Stott respondents to any costs. In this regard, the conduct relied upon by the applicant is primarily identified by reference to evidence adduced at the hearing, rather than to findings made in Agrinova (No 3). By such evidence, the applicant seeks to characterise the Stott respondents as the "masterminds" behind the engendering of a false assumption on the part of Mr and Mrs Van Vlymen and the "architects of the downfall" of Mr and Mrs Van Vlymen. In my view, disentitling conduct with respect to costs is conduct with respect to the manner in which the proceeding was conducted, rather than conduct the subject of the underlying dispute. As Justice Kennett explained in North Shore Property Developments Pty Ltd (in liq) v Haddad (Costs) [2025] FCA 827 at [13]: "... the Court's discretion in relation to costs under s 43 of the Federal Court of Australia Act 1976 (Cth) is not a general power to punish past misconduct. Departures from the general rule that costs follow the event are justified by "misconduct", not in a general sense, but rather where such misconduct has itself caused or induced the other party to incur costs in litigating". It is also inappropriate for the Court to revisit the evidence concerning the underlying dispute with a view to making further findings of fact for the purpose of determining the question of costs. For completeness, I note that the findings made in Agrinova (No 3) are insufficient to support the applicant's contention.
7. Thirdly, the applicant contends that at no stage in their conduct of the proceedings did the Stott respondents seek to act in any individual capacity, or take any step which set them apart from Agrinova. In this regard, the applicant relies upon the fact that the defence to the further amended statement of claim was a joint pleading on behalf of Agrinova and the Stott respondents ([14] above). I do not accept the premise of this submission in circumstances where, as noted above, the Stott respondents did file some separate defences during the proceeding (see [7] and [8] above). In any event, the differentiation between costs properly attributable to Agrinova and costs properly attributable to the Stott respondents is a matter for taxation and not a reason not to award costs in favour of the Stott respondents.
8. For the reasons set out above, the applicant should pay the Stott respondents' costs of the proceeding.
9. The Stott respondents also contend that Mr Post should be jointly and severally liable, with the applicant, for the costs payable to the Stott respondents. I turn now to that question and the related question whether Mr Post should be jointly and severally liable, with the applicant, for the costs payable to Agrinova.

1. As noted above, the Court's discretion under s 43 of the FCA Act to award costs is broad. It enables the Court, in an appropriate case, to make an order for costs against a non-party to a proceeding. Whether the discretion should be so exercised in a particular case is dependent upon the circumstances of that case. In Morbidelli v Resourceco Pty Ltd [2010] SASC 107, White J (Bleby and Kelly JJ agreeing) provided the following conspectus of principles at [13]:

A review of the authorities indicates that the following principles should govern the exercise of the power to award costs against a non-party:

(i) the discretion must be exercised judicially and in accordance with the general legal principles pertaining to costs;

(ii) the general principle is that an order for costs is made only against a party to the litigation but there are circumstances in which considerations of justice may warrant an order for costs against a non‑party;

(iii) it has been said that the power should not be exercised lightly and that the circumstances in which it is appropriate to do so are "rare and exceptional";

(iv) such circumstances exist when there is some feature of the association or connection between the party to the litigation and the non-party, or between the non-party and the incurring of costs, which makes it just for the order to be made;

(v) the mere fact that a non-party may have benefitted from the litigation if it was successful is not, by itself, sufficient for an adverse exercise of the discretion against that non-party;

(vi) the mere fact that the non-party may have funded the legal costs of the unsuccessful party will not normally be sufficient. However, as Knight v F P Special Assets illustrates, if a non-party funding the litigation had a financial interest in its outcome and involved itself actively in its commencement and conduct, the making of an order that it pay the costs of the successful party may well be appropriate. That is because it would usually be unjust for such a person to be able to pursue its own interests without risk of a liability for costs should the proceedings fail or be discontinued;

(vii) the existence and timing of any warning to the non-party that a costs order against him or her may be sought will usually be a very relevant consideration. That is in part because the non-party should not be taken by surprise after the conclusion of the litigation, and in part because the absence of any warning may have deprived the non‑party of the opportunity to exercise any influence over the continuance or compromise of the proceedings, or as to the manner in which it was conducted;

(viii) the Court does not have to be satisfied of improper conduct of some kind by the non-party, but proof of such conduct may be very relevant to the exercise of the discretion;

(ix) the availability of an order for security of costs at an early stage of the proceedings may be a strong argument for refusing to exercise the discretion to order costs against a non-party. By the obtaining of security, a defendant sued by an impecunious plaintiff can protect itself in relation to costs. For this reason the fact that a successful defendant did not seek an order for security may be a very relevant consideration.

1. In Trustee for The MTGI Trust v Johnston (No 2) [2016] FCAFC 190 Siopis, Collier and Katzmann JJ stated at [28] to [30]:
   1. Section 43(1) of the Federal Court Act empowers the Court to award costs in all proceedings before the Court other than proceedings in respect of which that or any other Act provides that costs shall not be awarded. Section 43(2) provides that, except as provided by any other Act, the award of costs is in the discretion of the Court or Judge.
   2. Section 43 empowers the Court to not only award costs against a non-party to proceedings (Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (No 4) (2012) 200 FCR 154 at [84]), but to award indemnity costs against a non-party (re Hughes, in the matter of Firepower Operations Pty Ltd (In Liquidation) (No 3) [2010] FCA 141; (2010) 183 FCR 150).
   3. Principles guiding the exercise of the discretion of the Court to award costs against a non-party were set out by Mason CJ and Deane J in Knight v FP Special Assets Ltd (1992) 174 CLR 178. As more recently explained by French CJ, Kiefel, Bell and Keane JJ in Selig v Wealthsure Pty Ltd [2015] HCA 18 at [43]:

In Knight v FP Special Assets Ltd, this Court held that its discretionary power to make orders against non-parties extends to the circumstance "where the party to the litigation is an insolvent person or man of straw, where the non-party has played an active part in the conduct of the litigation and where the non-party ... has an interest in the subject of the litigation." There is, however, no rule that where a non-party falls into this category an order for costs will necessarily follow. Rather, as Mason CJ and Deane J said, "an order for costs should be made against the non-party if the interests of justice require that it be made."

(Footnotes omitted.)

1. See also Court House Capital Pty Ltd v RP Data Pty Limited [2023] FCAFC 192 at [10] to [13] (Charlesworth, Sarah C Derrington and Raper JJ).
2. In the exercise of the discretion in this case, I have had regard to the following matters.
3. First, Mr Post is the sole director of the applicant, and the applicant is an impecunious company which had no involvement in the events which gave rise to this proceeding, and instead pursued this proceeding as an assignee following the assignment.
4. Secondly, as the sole director of the applicant, it is likely that Mr Post provided instructions for the conduct of the proceeding on behalf of the applicant.
5. Thirdly, as the sole director of a trustee company, Mr Post is the person with authority to determine how the proceeds of the applicant's success are distributed among beneficiaries of the Trust. The terms of the Trust, however, are not in evidence on this application and the identity of the beneficiary or beneficiaries is not clear.
6. Fourthly, the provision of security for the costs of the applicant in the manner described at [16] to [20] above, including Mr Post's provision of an undertaking and consent to a freezing order for the purposes of the second tranche of security. The availability of an order for security for costs at an earlier stage of the proceeding is, in many cases, a strong argument for refusing to exercise the discretion to order costs against a non-party: see Knight v F.P. Special Assets Limited [1992] HCA 28; (1992) 174 CLR 178 at 191 (Mason CJ and Deane J). Agrinova has not contended that the security provided is insufficient, nor is there any suggestion that it applied at any time to "top up" the amount of the security.
7. Finally, Agrinova did not give Mr Post prior notice of the making of the present application. It appears to have been raised for the first time following the delivery of judgment. In this regard, I do not accept Agrinova's submission that Mr Post was on notice - by dint of Agrinova's request for security - that Agrinova would seek to recover its costs from Mr Post. An order (or agreement) for the provision of security for costs and a non-party costs order are quite different events with different consequences. The bringing of an application for (or agreement as to) the former is not of itself notice of the latter: see Morbidelli at [48] to [52]. The giving of notice of the bringing of an application for a non-party costs order, inter alia, allows the non-party an opportunity to assess its position with respect to the proceeding and to decide whether to continue with the additional risk of exposure to such an order: see, e.g., Morbidelli at [13(vii)] and the authorities there cited. Indeed, the making of an order (or agreement) for the provision of security for costs, and the absence of any application to "top up" the quantum of such order (or agreement), may create the impression in the non-party that the other party is content with the protection provided by such an order (or agreement) and will not seek a non-party costs order.
8. Taking all of the above matters into account, and in particular the provision of security for costs and the absence of any notice to Mr Post that a non-party costs order would be sought against him, the proper exercise of the costs discretion is not to make the non-party costs order sought by Agrinova.

1. I turn now to the question of interest.
2. The applicant seeks an order for the payment of pre-judgment interest on the sum of $585,000. Agrinova contends that the Court is unable to make an order for interest, by dint of the operation of s 51A(3)(a) of the FCA Act.
3. Section 51A of the FCA Act provides in so far as is presently relevant:

(1) In any proceedings for the recovery of any money (including any debt or damages or the value of any goods) in respect of a cause of action that arises after the commencement of this section, the Court or a Judge shall, upon application, unless good cause is shown to the contrary, either:

(a) order that there be included in the sum for which judgment is given interest at such rate as the Court or the Judge, as the case may be, thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered; or

(b) without proceeding to calculate interest in accordance with paragraph (a), order that there be included in the sum for which judgment is given a lump sum in lieu of any such interest.

...

(3) Where the sum for which judgment is given (in this subsection referred to as the relevant sum) includes, or where the Court in its absolute discretion, or a Judge in that Judge's absolute discretion, determines that the relevant sum includes, any amount for:

(a) compensation in respect of liabilities incurred which do not carry interest as against the person claiming interest or claiming a sum in lieu of interest;

...

interest, or a sum in lieu of interest, shall not be given under subsection (1) in respect of any such amount or in respect of so much of the relevant sum as in the opinion of the Court or the Judge represents any such amount.

(4) Subsection (3) shall not be taken to preclude interest or a sum in lieu of interest being given, pursuant to this section, upon compensation in respect of a liability of the kind referred to in paragraph (3)(a) where that liability has been met by the applicant, as from the date upon which that liability was so met.

(emphasis in original)

1. Section 51A(1) applies in any proceeding for the recovery of any money in respect of a cause of action that arose after the commencement of the section. The present proceeding is such a proceeding and no party contended otherwise.
2. Section 51A(1) provides that the Court shall, upon application, make an order for interest (or for the provision of a lump sum in lieu of interest) unless contrary good cause is shown. However, s 51A(3) operates to prohibit the making of an order for interest to the extent that the sum for which judgment is given includes, relevantly, any amount for "... compensation in respect of liabilities incurred which do not carry interest as against the person claiming interest...".
3. This phrase gives rise to several questions.
4. The first question is whether the sum of $585,000 - which is the "relevant sum" for the purposes of s 51A(3) - is "compensation in respect of liabilities incurred".
5. That amount was awarded as compensation in equity. So much is common ground.
6. The applicant contends that the sum of $585,000 was equitable compensation commensurate of the detriment suffered by Mr and Mrs Van Vlymen but was not "in respect of liabilities" incurred by them. I do not accept this submission. As the reasoning at J[329] to [354] illustrates, the detriment suffered by Mr and Mrs Van Vlymen was: (1) a liability for legal fees incurred in connection with the re-agitation of Supreme Court proceeding 2015/60753 for the purpose of determining the amount owing to Mr Wong; and (2) the potential liability for legal fees incurred by Mr Wong, which crystallised upon the making of the 2 September 2020 orders. Thus, contrary to the applicant's submission, the compensation was directly referable to the liabilities incurred by Mr and Mrs Van Vlymen. It follows that the compensation was "in respect of" those liabilities.
7. The applicant also contends that s 51A(3) must be construed by reference to the word "debt" in s 51A(1) and that the word "liabilities" in s 51A(3)(a) contemplates an action for the recovery of a debt, giving rise to a liability for that debt. I do not accept this submission. "Debt" is included as one example in the broader expression "any proceedings for the recovery of any money (including any debt or damages or the value of any goods)" and there is no justification for the narrow construction suggested by the applicant. Further, were the applicant's argument correct, then the applicant would have no entitlement to interest under s 51A(1) (regardless of the operation of s 51A(3)) because the proceeding did not involve an action for the recovery of a debt.
8. Thus, the $585,000 is "compensation in respect of liabilities incurred" within the meaning of s 51A(3) of the FCA Act.
9. The second question is whether those liabilities are liabilities "which do not carry interest as against the person claiming interest".
10. The person "claiming interest" is the applicant. Thus, the question becomes whether the liabilities in respect of which the compensation of $585,000 was calculated did not carry interest as against the applicant.
11. In my view, those liabilities did not carry interest as against the applicant, as:

(1) I am not persuaded by the applicant's argument that the assignment substituted the applicant for Mr and Mrs Van Vlymen with respect to the liability to pay Keleher Lawyers and Mr Wong. In this regard, the deed of assignment is not in evidence. As noted at [10] above, Justice Rares recorded that the assignment was an assignment of the "chose in action comprising the bankrupts' interest in the subject matter of the proceeding". Were the applicant's argument correct then, subject perhaps to any contrary terms in the deed of assignment, the applicant would be liable to Keleher Lawyers and Mr Wong regardless of the outcome of the proceeding;

(2) the applicant was not otherwise liable to pay the legal fees owed to Keleher Lawyers or Mr Wong; and

(3) absent any liability on the part of the applicant for the legal fees owed to Keleher Lawyers or Mr Wong, there is no interest carried as against the applicant.

1. The above conclusion is consistent with the evident purpose of s 51A(3), as described by Mossop AsJ (as his Honour then was) in Cressy v Miloriad (No 2) [2016] ACTSC 339; (2016) 317 FLR 267 (a decision concerning a similar provision in s 69(3) of the Supreme Court Act 1933 (ACT) and r 1619(2) of the Court Procedures Rules 2006 (ACT)) at 273 to 274 [34(f)] as being to avoid a situation in which an applicant who is not required to pay interest to the third party being over compensated by an award of interest in their favour.
2. In any event, if s 51A(3) did not prevent the awarding of interest to the applicant, the windfall nature of an award of interest in the circumstances of this case provides a sufficient "good cause" for the purposes of s 51A(1) not to award interest to the applicant on the sum of $585,000.
3. As I have concluded that the sum of $585,000 is "compensation in respect of liabilities incurred which do not carry interest as against [the applicant]", s 51A(3) of the FCA Act operates so as to prohibit the award of interest on that sum.
4. In light of the above conclusions, it is unnecessary to address the question of whether the fees owed to Keleher Lawyers carried interest against anyone, and in particular whether no interest was payable on such fees by dint of the lateness of the rendering of a tax invoice by Keleher Lawyers (J[343]) and the operation of s 195(5) of the Legal Profession Uniform Law (NSW).

1. For the above reasons, there should be orders that: (1) Agrinova pay the applicant's costs of the proceeding, save for the costs of the applicant's misleading or deceptive conduct claim; and (2) the applicant pay the Stott respondents' costs of the proceeding. I will make orders accordingly.

I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Goodman.