Abstract

Principles of Lump Sum Costs Assessment orders

Article

The principles of lump sum cost assessments under the Federal Court of Australia Act 1976 (Cth) ss 37M, 43 and the Federal Court Rules 2011 (Cth) rr 24.22, 40.02 were reviewed in Money Max Int Pty Limited (Trustee) v QBE Insurance Group Limited (No 3) [2018] FCA 2101.

By s 43 of the  Act  the Court may award costs and except as provided by any other Act, the award is in the unfettered discretion of the Court, provided that it be exercised judicially. By R 40.02, a party entitled to costs may apply for an order that costs be awarded a lump sum and be determined other than by taxation. By R 24.22, the Court may fix the amount of any reasonable loss or expense incurred in complying with a subpoena, doing so in accordance with the Court’s usual procedure in relation to costs. Parties who seek to resist or comply with a subpoena are entitled to have their costs and expenses reimbursed so that they are not out of pocket: ASADA v 34 Players and One Support Person (No 2) [2015] VSC 14; Prakash v Nationwide News Pty Ltd (Ruling No 6) [2017] VSC 331.

An assessment is particularly apt in lengthy and complex proceeddings where taxation is likely to be unduly protracted or expensive: Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120; Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 629, but it is not limited to such cases. The making of costs orders that might lead to taxation is preferably avoided, and more sophisticated procedures including lump-sum costs orders is encouraged: Costs Practice Note 25 October 2016 Part 3.3.

In an assessment the costs are not scrutinised in detail as in taxation, so that it provides speed and efficiency at the expense of accuracy. It is a broad brush approach rather than arithmetic calculation or precision. A discount to the amounts claimed is often applied, but the assessment must depend on the circumstances and the evidence: Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1; Ginos Engineers Pty Ltd v Autodesk Australia Pty Ltd (2008) 249 ALR 371; [2008] FCA 1051. But the evidence must be sufficiently detailed as to the components and how they are calculated: Motor Trades Association of Australia Superannuation Fund Pty Ltd v Rickus [2007] FCA 1878, and the approach mustbe logical, fair and reasonable: Beach; Seven Network Ltd v News Ltd [2007] FCA 2059; WM Wrigley JR Company v Cadbury Schweppes Pty Ltd [2006] FCA 1186.

Indemnity costs of compliance with a Notice for Non-Party Production, reasonably incurred, may include the costs of advice about its validity and the extent of compliance required if the matter is complex and more so than the ordinary case,
correspondence or attendances with the issuing party about its terms and whether they can be narrowed or production of the documents completed in a particular way;
advice about whether documents are confidential or subject to legal professional privilege; correspondence and attendance to negotiate the terms of access to the documents sought, including the formulation of undertakings as to confidentiality;
attendances when the documents are produced, though this will be ordinarily by post;
any necessary attendances at court to ensure that any arrangements are effected;
attendances to ensure undertakings have properly been given and compliance is secured; and preparing, negotiating and having taxed a bill of costs for such costs and attending on such taxation. In the ordinary case, it is unlikely that advice or legal assistance would be required and the cost of it would not be recoverable.

Costs of work which is not compliance with the Notice, such as challenges to its validity, the filing of an affidavit, correspondence on attendances in relation to other matters, and an enforcement of a costs order following taxation, should be assessed on a party/party basis, unless the court considers otherwise in the circumstances: Taylor v Dixon Advisory Limited [2010] ACTSC 161; (2010) 5 ACTLR 136.