Keira Holdings Pty Ltd -v- Broadcast Australia Pty Ltd

HIS HONOUR: Section 98(1)(b) of the Civil Procedure Act 2005 (NSW) (CPA) gives the Court full power to determine by whom, to whom, and to what extent costs are to be paid. Section 98(4)(c) empowers the Court to make an order that the party to whom costs are to be paid is to be entitled to a specified gross sum instead of assessed costs.

By motion filed on 12 May 2016, and originally made returnable on 20 May 2016, the defendant moves for

Mr Mullen appeared today both on his own behalf and, with leave, for Keira.

The application is supported by affidavits of Deborah Susan Vine-Hall of 25 May 2016 and James Patrick Fox of 12 May 2016, which establish that the defendant’s costs, which it could expect to receive on an assessment on the indemnity basis (the order which the Court previously made), are $901,315.94. The defendant seeks only the amount of $700,000.

The agreement upon which the defendant relies was recorded in consent orders made by Bergin CJ in Eq. It is in writing and provides, relevantly, as follows:

I am satisfied that this is an appropriate case for a lump sum costs order to be made and that the sum of $700,000 is more than a fair assessment of the amount which the defendant would be expected to receive were there to be some other assessment. I assess those costs in accordance with s 98 (4)(c) of the CPA at $700,000 and order that that amount be paid instead of assessed costs. Mr Mullen does not oppose the making of this order.

However, he points out that until the order was made, no obligation under the guarantee which he gave, to ensure that Keira met its obligations, arose. That point is well made – see: Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52. For that reason, I do not propose at present to make an order against Mr Mullen personally

The defendant and Mr Mullen saw fit to regulate their position by entering into an agreement. He guaranteed the defendant the performance by Keira of any obligation to pay costs in these proceedings. Accordingly, before the defendant is entitled to any order against Mr Mullen, Keira must be given an opportunity to pay the costs, and Mr Mullen must be given an opportunity, should the need arise, to perform his agreement. The defendant must make demand on him before it is entitled to any order, and he is entitled to an opportunity to react to such demand.

In those circumstances, I stand these proceedings over until 2 September 2016 for determination of any questions properly determinable between the defendant and Mr Mullen personally.