Winning Form Pty Ltd v Giddy Up Ratings Pty Ltd

REASONS FOR JUDGMENT 1 The respondent has applied to the Court for orders requiring the applicant to put up additional security for the respondent's costs of and incidental to this proceeding. There is no dispute that the applicant is obliged to post appropriate security for the respondent's costs - the contest concerns the quantum of that security. The applicant contends that no additional security should be required for the pre-trial period and that the amount sought in respect of the trial is excessive. Pursuant to orders made by the docket judge on 5 February 2010, the applicant put up an amount of $70,000 by way of security for the respondent's costs. More recently, the applicant added to that amount the amount of $100,000. Thus, the total amount of security posted by it to date is $170,000. 2 The proceeding was commenced on 17 July 2009. The docket judge heard an application for security on 5 February 2010 and made orders for the $70,000 to which I have already referred to. In addition, on the same day, the docket judge ordered that the applicant put on its evidence by various dates specified in the orders which he made on that day. 3 After 5 February 2010, the parties filed affidavits. There is a significant body of evidence filed by each of the parties traversing dealings covering many years. 4 The respondent, having now filed its evidence, has made application for further security. That application was filed on 30 June 2011. 5 In broad terms the respondent's position is as follows: (1) The actual costs incurred to date (excluding GST) by the respondent total $394,990.70. (2) The respondent's estimate of future costs likely to be incurred by it (excluding GST) up to the conclusion of the anticipated trial (said by the respondent to be a 15 day trial) is $286,120.00. 6 The total of these two amounts is $681,110.70. 7 As far as future costs are concerned, the applicant estimates that the costs (excluding GST) that might be awarded to the respondent on the party/party basis should it be successful will be of the order of $145,395.00. That estimate is based upon a 10 day trial and is the subject of detailed submissions in writing. 8 As far as costs for the future are concerned, I think that the applicant's estimate is a little light on. On the other hand, I think that the respondent's estimate may be slightly over the mark. 9 It seems to me that the trial is likely to last more than 10 days and could go as long as 15 days. It also seems to me that preparation for the trial and other interlocutory matters likely to be undertaken between now and the commencement of the trial are likely to result in costs on the party/party basis being incurred in the order of $50,000. I think that allowing $10,000 a day on the basis of a 15 day trial is a reasonable estimate of the likely party/party costs for the trial. 10 Accordingly, it seems to me that allowing $200,000 for future costs (excluding GST) is a reasonable estimate of those costs on the party/party basis. It seems to me, given that the matter has now taken the shape that it has, that I should order as part of the amount of additional security an amount of $200,000 for likely future costs. 11 As far as past costs are concerned, the parties are in vigorous disagreement. Senior Counsel for the applicant has submitted that the docket judge intended to cover in the orders which he made on 5 February 2010 all of the costs likely to be incurred by the respondent in getting to the point in the litigation where all of the respondent's evidence was on. In a very general sense this submission is correct. However, when the docket judge was considering the matter, neither party had filed any evidence and, as is often the case, the estimate advanced by the respondent in February 2010 of the likely costs of the matter to the end of the litigation (I am told $152,000 on a party/party basis) has turned out to be woefully inadequate. 12 I have looked at the transcript of the argument before the docket judge on 5 February 2010 and it seems to me that his Honour did not finally determine the question of security even up to the point at which the evidence was to be filed. His Honour simply made a practical assessment pro tem pending further consideration. 13 The respondent called evidence from a costs consultant, Ms Deborah Vine-Hall, who is expert in the assessment of costs. Ms Vine-Hall has looked at the material filed on behalf of the respondent to date and considered the context in which that material was filed with a view to expressing an opinion as to what the likely party/party costs would be for that work should the respondent be successful. As paragraph 41 of her affidavit, Ms Vine-Hall said: Accordingly, on the basis of my experience of preparing bills of costs in the Federal Court it is my opinion that the respondent is likely to recover at least the following amounts in respect of costs incurred to 10 December 2010: Professional costs $71,400.00 Counsel's fees $202,188.00 Total $273,588.00