Background
Jennifer Elizabeth Low, as liquidator of ACN 116 313 921 Pty Ltd (formerly Titan Interactive Pty Ltd), and the company brought proceedings that included claims against Pitcher Partners (WA) Pty Ltd and Pitcher Partners Accountants & Advisors WA Pty Ltd under the Corporations Act 2001 (Cth). In Low (Liquidator) v Hughes (No 2) [2026] FCA 71, the Court determined a separate question concerning those claims and concluded that the plaintiffs could not obtain the relief they sought.
Following that ruling, the parties consented to either judgment for the fifth and sixth defendants or dismissal of the relevant Corporations Act claims, leaving the Court to select the appropriate form of order. They also agreed that the plaintiffs would pay the defendants’ costs connected with the application for determination of the separate question and its hearing, with the remaining costs associated with those claims reserved.
The defendants separately sought indemnity costs, relying on the alleged lack of merit in the claims and the plaintiffs’ rejection of a Calderbank offer. They also asked that some or all of the awarded costs be taxed and paid before the rest of the proceeding concluded.
The Court’s Holding
Justice Vandongen held that the earlier decision had substantially disposed of the proceeding against the fifth and sixth defendants within r 30.02 of the Federal Court Rules 2011 (Cth). Because r 30.02 expressly permits dismissal of part of a proceeding, while its provision for judgment does not expressly refer to only part, the Court dismissed the Corporations Act claims pleaded in paragraphs 5 to 10 of the amended originating process.
The Court ordered the plaintiffs to pay the fifth and sixth defendants’ costs of and connected with the interlocutory application and the separate-question hearing, to be taxed if not agreed. It declined, however, to award indemnity costs. The plaintiffs’ pursuit of the s 1324(10) damages claim was not unreasonable or hopeless, given the close analysis required by the authorities and the controversy surrounding the provision’s proper construction. Nor had the defendants shown that rejection of their Calderbank offer was unreasonable or imprudent when assessed at the time.
The Court also refused to require immediate taxation and payment. The defendants did not establish a compelling reason to depart from the usual rule delaying taxation of interlocutory costs, and the Court declined to exercise its broader costs discretion to accelerate payment of the separate-hearing costs.
Key Takeaways
- A separate-question decision may “substantially dispose” of proceedings under r 30.02 when it eliminates almost all claims against particular defendants and considerably narrows what remains.
- Failure on a legally contested claim does not by itself justify indemnity costs; the Court assesses whether pursuing the claim was unreasonable, without relying on hindsight.
- Rejection of a Calderbank offer supports indemnity costs only if the rejection was unreasonable or imprudent in the circumstances existing when the offer was declined.
- A successful party seeking payment of costs before the proceeding ends must demonstrate a good reason to depart from the ordinary timing rules.
Why It Matters
The decision illustrates the procedural consequences of resolving a separate question that eliminates a substantial part of a case. It also distinguishes ordinary costs following an unsuccessful claim from the exceptional circumstances required for indemnity costs.
For litigators, the ruling underscores that neither a successful separate-question application nor an unaccepted Calderbank offer automatically produces indemnity costs or immediate payment. The applicant must establish unreasonable conduct and, for accelerated payment, a persuasive reason to depart from the usual approach.