Background
This matter concerns the quantum of costs following an interlocutory application. Justice Jackman had previously dismissed LFDB’s application to join Marque Lawyers Pty Ltd as a party (LFDB v SM (No 7) [2026] FCA 718, 4 June 2026) and ordered that Marque’s costs be paid by LFDB as a lump sum.
Marque Lawyers subsequently claimed $41,340.80, representing a 10% discount on counsel’s fees and 30% discount on solicitors’ costs. LFDB filed an affidavit challenging seven aspects of the costs claim, and Marque provided a reply addressing these criticisms.
The Court’s Holding
Justice Jackman accepted most of Marque’s rebuttal to LFDB’s criticisms. However, the Court identified two legitimate issues: GST had been incorrectly included on counsel’s fees, and two barrister invoices that had been sent in error were subsequently replaced with correct invoices. Following these adjustments, Marque’s revised costs claim of $34,281.50 was upheld as amply justified and proportionate to the nature of the interlocutory application.
LFDB sought to defer payment of the lump sum until final determination of the proceedings, relying on Federal Court Rules r.40.13. Justice Jackman rejected this argument because the proceedings against Marque had been finalized. The Court ordered the lump sum costs payable immediately, noting no purpose would be served by deferring payment until the final hearing scheduled for 10 August 2026.
Key Takeaways
- Lump sum costs awards can be enforced immediately where the proceedings against that party have been finalized, notwithstanding a pending final hearing in broader proceedings.
- Costs claims must be accurate and properly substantiated; courts will scrutinize invoices for calculation errors and GST treatment.
- The proportionality principle applies to interlocutory costs—courts will assess whether claimed amounts reflect the scale and complexity of the application itself.
Why It Matters
This decision clarifies the interplay between Federal Court Rules r.40.13 (which ordinarily defers taxation of interlocutory costs) and practical finality of proceedings against individual parties. It signals that courts will not delay enforcement of costs awards beyond the time necessary, particularly where the substantive dispute with that party has concluded.
For practitioners, the case reinforces the importance of accuracy in costs claims and the willingness of the Court to scrutinize invoices for errors—even minor issues such as GST treatment or date discrepancies can affect the quantum of recoverable costs.