Jadwan Pty Ltd v Rae & Partners (A Firm) (No 2)

• Jurisdiction: Australia Federal only
• Court: Federal Court
• Judgment Date: 29 May 2020
• Neutral Citation: [2020] FCAFC 95
• Date: 29 May 2020

FEDERAL COURT OF AUSTRALIA

Jadwan Pty Ltd v Rae & Partners (A Firm) (No 2) [2020] FCAFC 95

File number:	TAD 28 of 2018
Judges:	BROMWICH, O'CALLAGHAN AND WHEELAHAN JJ
Date of judgment:	29 May 2020
Catchwords:	COSTS – whether to reduce the costs payable by the appellant to the respondents on account of the appellant’s partial success in the appeal – no reduction applied – whether to make a lump sum costs order – direction for Registrar of the Court to assess the lump sum of costs to be awarded and make orders.
Legislation:	Federal Court of Australia Act 1976 (Cth) ss 35A(1)(h), 43 ; Federal Court Rules 2011 (Cth) rr 3.01(b), 40.02, item 221 of Schedule 2
Cases cited:	Ah Toy v Registrar of Companies [1985] FCA 291; 10 FCR 280 Driclad Pty Ltd v Federal Commissioner of Taxation [1968] HCA 91; 121 CLR 45 Idenix Pharmaceuticals LLC v Gilead Sciences Pty Ltd (No 2) [2018] FCAFC 7 Jadwan Pty Ltd v Rae & Partners (A Firm) [2020] FCAFC 62 Martin v Norton Rose Fulbright Australia (No 2) [2020] FCAFC 42 Neptune Hospitality Pty Ltd v Ozmen Entertainment Pty Ltd (costs) [2020] FCAFC 74 Northern Territory v Sangare [2019] HCA 25; 265 CLR 164 Paciocco v Australia & New Zealand Banking Group (No 2) [2017] FCAFC 146; 253 FCR 403
Date of hearing:	Determined on the papers.
Date of last submissions:	11 May 2020
Registry:	Tasmania
Division:	General Division
National Practice Area:	Other Federal Jurisdiction
Category:	Catchwords
Number of paragraphs:	12
Counsel for the Appellant:	Mr M Pearce SC with Mr D Deller
Solicitor for the Appellant:	Keypoint Law
Counsel for the First, Second and Third Respondents:	Mr P Jackson SC with Ms K Cuthbertson
Solicitor for the First, Second and Third Respondents:	Tremayne Fay Rheinberger Lawyers
Counsel for the Fourth Respondent:	Mr C Gunson SC with Ms B Myers
Solicitor for the Fourth Respondent:	Lander & Rogers
Counsel for the Fifth Respondent:	Mr S McElwaine SC
Solicitor for the Fifth Respondent:	Shaun McElwaine & Associates

ORDERS

		TAD 28 of 2018
BETWEEN:	JADWAN PTY LTD Appellant
AND:	RAE & PARTNERS (A FIRM) First Respondent ; WILSON DOWD (A FIRM) Second Respondent ; TOOMEY MANING & CO (A FIRM) (and others named in the Schedule) Third Respondent

JUDGES:	BROMWICH, O'CALLAGHAN AND WHEELAHAN JJ
DATE OF ORDER:	29 may 2020

THE COURT ORDERS THAT:

1. The appellant pay the respondents’ costs of the appeal to be assessed in a lump sum pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth).

2. It is directed that a Registrar of the Court is to determine the amount of the respondents’ costs in such manner as the Registrar deems fit, and shall then make an order fixing the amount of those costs, which are to be payable within 28 days of such orders.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

Introduction

1. On 9 April 2020, we dismissed the appellant’s appeal in this proceeding: Jadwan Pty Ltd v Rae & Partners (A Firm) [2020] FCAFC 62. These reasons in relation to costs assume familiarity with those substantive reasons.

2. At that time, we also made orders for the parties to file written submissions as to costs, and for the question of costs to be considered on the papers. All of the parties have now filed submissions as to costs. We note that the first to third respondents, fourth respondent and fifth respondent each filed separate submissions, however as those submissions advanced essentially the same arguments and were supportive of each other, we have addressed them collectively in these reasons.

3. For the following reasons, we have determined to direct a Registrar of this Court to assess the lump sum of costs to be awarded in favour of the respondents. That assessment should not be reduced on account of what was said to be the appellant’s partial success in the appeal. The Registrar is directed to determine the quantum of the respondents’ costs in such a manner as the Registrar deems fit, and at the conclusion of that process, the Registrar is to make orders about the payment of the respondents’ costs in the sums determined.

No reduction

4. The parties’ submissions on costs focussed on whether the Court should reduce the costs to be awarded in favour of the respondents on account of what was said to be the appellant’s partial success in the appeal. The appellant submitted that such a reduction should be applied, which the respondents opposed.

5. The appellant did not resist an order that it pay the respondents’ costs of the appeal, however it submitted that it should be ordered to pay only two-thirds of the respondents’ costs on account of its partial success in the appeal. The appellant relied on Idenix Pharmaceuticals LLC v Gilead Sciences Pty Ltd (No 2) [2018] FCAFC 7 at [3] as authority for the proposition that “the ordinary rule is that costs follow the event, although a successful party may be awarded less than its costs, or costs may be apportioned, based upon success on the issues.” The appellant submitted that it succeeded in relation to three of the nine findings of the primary judge that it challenged, and in particular pointed to the Court’s findings that each of the professionals who had advised it – Mr Wicks, Mr Porter and Mr Hogan – had breached their duties of care. The appellant submitted that the costs ordered in favour of the respondents should be reduced on account of that partial success, despite the Court having found that the appellant did not establish causation, and dismissing the appeal.

6. The respondents submitted that costs should be awarded against the appellant without any reduction. The respondents accepted that the Court may reduce an award of costs on account of an ultimately unsuccessful party’s partial success, so as to achieve justice in the case, but submitted that there was no sufficient reason to displace the general rule that costs should follow the event. The respondents submitted that the central issue in the appeal, on which the appellant failed, was whether the respondents, in breach of duty, caused the appellant to suffer loss. The respondents further submitted that any partial success by the appellant in respect of some grounds of appeal was illusory because, ultimately, none of the primary judge’s orders was disturbed. The respondents also noted that unlike in Idenix Pharmaceuticals, which the appellant relied upon, there was no cross-appeal or notice of contention on which the appellant was successful, and which might have in some circumstances justified a reduced costs order.

7. The Court’s power in relation to costs is well established. Section 43 of the Federal Court of Australia Act 1976 (Cth) gives the Court a wide discretion in awarding costs. That discretion must be exercised judicially, with appropriate regard to guiding principles: Northern Territory v Sangare [2019] HCA 25; 265 CLR 164 at [25] (the Court). One of the most, if not the most, important guiding principles is...