Koonara Management Pty Ltd v Rockliff (No 3)

• Jurisdiction: Australia Federal only
• Judge: GLEESON J
• Judgment Date: 23 April 2020
• Neutral Citation: [2020] FCA 523
• Date: 23 April 2020
• Court: Federal Court

FEDERAL COURT OF AUSTRALIA

Koonara Management Pty Ltd v Rockliff (No 3) [2020] FCA 523

File number:	NSD 1357 of 2016
Judge:	GLEESON J
Date of judgment:	23 April 2020
Catchwords:	COSTS – application for indemnity costs by respondents and cross-claimant – where applicants and cross-claimant both unsuccessful in their respective claims and liable to pay the relevant costs of the other party – principle that costs should follow the event – how to define ‘event’– numerous offers of settlement made by respondents and cross-claimant – offers not accepted by applicants and cross-respondents – Calderbank offers and Notices of offer to compromise – what constitutes a genuine offer of compromise – refusal of offers by applicants and cross-respondents not unreasonable in the circumstances – application for indemnity costs refused ; COSTS – competing applications for lump sum and consolidated costs orders – where applicants and cross-claimant both unsuccessful in their respective claims and liable to pay the relevant costs of the other party – where prior costs orders made in the proceeding – where necessary to undertake apportionment of costs of proceeding as between primary claim and cross-claim – lump sum orders consolidated
Legislation:	Federal Court of Australia Act 1976 (Cth) ss 37N(1), 43 Federal Court Rules 2011 r 40.02(b)
Cases cited:	Anchorage Capital Partners Pty Limited v ACPA Pty Ltd (No 2) [2018] FCAFC 112 Brookfield Multiplex Limited v International Litigation Funding Partners Pte Ltd (No 4) [2009] FCA 803 CGU Insurance Limited v Corrections Corporation of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd [2016] FCA 37 Dukemaster Pty Ltd v Bluehive Pty Ltd [2003] FCAFC 1 Elite Protective Personnel Pty Ltd & Anor v Salmon [2007] NSWCA 322 Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd [2009] FCAFC 40 Hislop v Paltar Petroleum Limited [2017] FCA 1632 Howell v Dering [1915] 1 KB 54 Keen v Telstra Corporation Limited (No 2) [2006] FCA 930 Koonara Management Pty Ltd v Rockliff (No 2) [2019] FCA 808 Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 7) [2018] FCA 1217 Morony & Ors v Reschke & Ors [2017] NSWSC 544 NMFM Property Pty Ltd and Ors v Citibank Ltd (No 2) [2001] FCA 480; 109 FCR 77 Paciocco and Another v Australia and New Zealand Banking Group Limited (No 2) [2017] FCAFC 146; 253 FCR 403 Rocky Castle Finance Pty Ltd v Taylor; Rocky Castle Finance Pty Ltd v Gillen [2014] SASCFC 1; 118 SASR 349
Date of hearing:	2 October 2019
Registry:	New South Wales
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Category:	Catchwords
Number of paragraphs:	121
Counsel for the Applicants/ Cross-Respondents:	J Hynes
Solicitor for the Applicants/ Cross-Respondents:	Minter Ellison
Counsel for the Respondents/ Cross-Claimants:	A Avery-Williams
Solicitor for the Respondents/ Cross-Claimants:	Rockliff Snelgrove Lawyers

ORDERS

		NSD 1357 of 2016
BETWEEN:	KOONARA MANAGEMENT PTY LTD (ACN 082 883 323) First Applicant ; ROCKY CASTLE FINANCE PTY LTD (ACN 082 858 160) Second Applicant
AND:	STEPHEN JOHN ROCKLIFF First Respondent ; MICHELLE RENEE ROCKLIFF Second Respondent
AND BETWEEN:	STEPHEN JOHN ROCKLIFF Cross-Claimant
AND:	BURKE ROBERT STANLEY RESCHKE (and others named in the Schedule) First Cross-Respondent

JUDGE:	GLEESON J
DATE OF ORDER:	23 April 2020

THE COURT ORDERS THAT:

1. The costs payable by the first and second applicants to the second respondent pursuant to orders 1 and 2 of the orders made on 31 May 2019 be fixed in the lump sum of $115,000.00, with each of the first and second applicants to be jointly and severally liable to pay that amount.

2. The costs payable by the cross-claimant to the third cross-respondent pursuant to order 3 of the orders made on 31 May 2019 be fixed in the lump sum of $190,000.00.

3. The costs payable by the cross-claimant to the first cross-respondent pursuant to order 3 of the orders made on 31 May 2019 be fixed in the lump sum of $132,500.00.

4. The costs payable by the cross-claimant to the second cross-respondent pursuant to order 3 of the orders made on 31 May 2019 be fixed in the lump sum of $132,500.00.

5. The costs payable by the first applicant to the first respondent pursuant to order 1 of the orders made on 31 May 2019 be fixed at $nil.

6. The costs payable by the second applicant to the first respondent pursuant to order 2 of the orders made on 31 May 2019 be fixed at $nil.

7. The parties endeavour to agree on or before 7 May 2020 on appropriate costs orders, preferably a consolidated lump sum costs order or orders, reflecting the extent of their success or failure on the costs questions determined by these orders.

8. The parties file any agreed proposed orders pursuant to order 7 on or before 14 May 2020.

9. In the event that the parties cannot file agreed proposed orders, the parties are to file their proposed orders and any supporting evidence on or before 21 May 2020.

10. The issue of the costs of the parties’ respective claims for indemnity, consolidated and lump sum costs will be determined on the papers.

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

REASONS FOR JUDGMENT

GLEESON J:

1 In May 2019, the claims of the applicants (Koonara and RCF) against the first respondent (Mr Rockliff) and the second respondent (Ms Rockliff) were dismissed with costs and Mr Rockliff’s cross-claim against Koonara, RCF and Burke Reschke (Reschke parties) was also dismissed with costs: Koonara Management Pty Ltd v Rockliff (No 2) [2019] FCA 808 (liability judgment).

2 In these reasons for judgment, I refer to the applicants’ claims as the primary claims.

3 In relation to costs, these dismissals gave rise to the following various liabilities and entitlements:

(1) Koonara is:

(a) liable for the costs of Mr and Ms Rockliff on its claim;

(b) entitled to be paid costs of the cross-claim by Mr Rockliff.

(2) RCF is:

(a) liable for the costs of Mr and Ms Rockliff on its claim;

(b) entitled to be paid costs of the cross-claim by Mr Rockliff.

(3) Mr Rockliff is:

(a) liable for the costs of the Reschke parties on the cross-claim;

(b) entitled to be paid his costs of the primary claims by Koonara and RCF;

(4) Ms Rockliff is entitled to be paid her costs of the primary claims by Koonara and RCF.

(5) Mr Reschke is entitled to be paid his costs of the cross-claim by Mr Rockliff.

Section 43(1) of the Federal Court of Australia Act 1976 (Cth) (FCA...