Background
David and Cathy Britten commenced proceedings against eBroker.com.au Pty Ltd, First Cash Flow Solutions Pty Ltd, Dynamic Business Enterprises Pty Ltd and Matthew Blackburn. Their claims arose from a business loan to CJDJ Pty Ltd, the operator of “Soakhouse Adelaide,” and a mortgage securing that loan over a residential property owned by Mr Britten. The applicants alleged, among other things, unconscionable conduct, misleading or deceptive conduct and noncompliance with federal consumer-credit legislation.
The applicants did not file an amended pleading or responsive evidence within the Court’s timetable. After the respondents had filed summary-dismissal applications, evidence and submissions, each applicant advised shortly before the scheduled hearing that the proceeding would not be prosecuted. Mr Britten’s claims were dismissed on 14 May 2026, and the remainder of the proceeding was dismissed later that month. The respondents then sought indemnity costs fixed in lump sums.
The Court’s Holding
McDonald J ordered both applicants to pay indemnity costs. The Court found that Ms Britten’s conduct of the proceeding was unreasonable and vexatious and that at least some claims had been unreasonably commenced and pursued. Although Mr Britten had taken little active part, he knew of and authorised the proceeding, permitted Ms Britten to conduct it on his behalf, and failed to distance himself from her conduct. The Court therefore held that he should bear indemnity costs for the period during which he remained an applicant, as well as the costs of the costs applications.
The applicants were made jointly and severally liable for $46,000 in costs payable to eBroker.com.au and $82,000 payable to the other respondents. Because Mr Britten’s substantive claims were dismissed on 14 May 2026, Ms Britten alone was ordered to pay the later substantive costs, fixed at an additional $7,000 for eBroker.com.au and $10,000 for the other respondents. The lump sums incorporated an approximately 20% reduction from the respondents’ relevant actual costs and included the costs of the abandoned interlocutory-injunction application.
Key Takeaways
- A litigant who authorises proceedings and knowingly allows another self-represented litigant to conduct them may incur indemnity costs despite taking little active part personally.
- Abandoning claims only after opponents have prepared summary-dismissal applications can expose applicants to the resulting costs even though the merits are never adjudicated.
- The Court may fix costs as lump sums to avoid further delay and expense, particularly where taxation is likely to become protracted or recovery may be difficult.
Why It Matters
The decision underscores that passive participation does not insulate a named applicant from costs. A person who lends their name to litigation, knows how it is being conducted and permits another person to act on their behalf remains exposed to joint and several liability if the case fails.
It also illustrates the Federal Court’s willingness to use indemnity and lump-sum costs orders to bring procedurally burdensome litigation to an efficient conclusion. The judgment concerned costs following abandonment; it did not decide the applicants’ underlying allegations on their merits.