Case: Re Gibson's Settlement Trusts [1981] 1 All ER 233
Outcome: cited
I am prepared however to order security in the amount of $75 000, being in respect of seven further days of trial and further preparation for the May 2007 hearing. My reasons are as follows: 1. Although the applicants' costs assessor, Mr Graham, has deposed to a view that the trial will take a further three days, as distinct from the seven days which have now been allocated, I do not accept this view. During the 10 days of trial in November (of which seven days was hearing) Counsel made opening submissions and the evidence of only six witnesses was given. Nine witnesses of the respondent remain to be heard. This includes the second respondent, Mr Strahley, who I anticipate will be in the witness box for some time. Further, the seven days allocated in May 2007 includes closing submissions from Counsel, and dealing with the respondent's objections to the applicants evidence. On two occasions during the second week of the hearing I advised Counsel that I intended to list this matter for a further seven days in May 2007 (see TS 23 November 2006 p 585 ll 12-17 and TS 24 November 2006 p 775 ll 45-47. I note that on the second occasion the transcript reads that I indicated eight days, however, I believe it was understood by all parties in the room that I meant seven days being the 8-16 of May 2007). A listing for this matter for a period of seven days commencing 8 May 2006 has been made by the Federal Court Registry. At no time did either Counsel demur from this estimation. In my view this is a fair estimate of the time required and the respondents should be entitled to security for costs for seven further hearing days. I have compared the estimates of Mr McLellan in his affidavit filed 27 March 2006 ($8166 per day being fees for senior and junior counsel and the professional fees for the lawyers per day of trial) and Mr Graham in his affidavit filed 13 April 2006 ($7124.25 per day being fees for senior and junior counsel, the professional fees for the lawyers and the transcript fees per day of trial). In my view it is reasonable to order $50 000 in respect of the seven days of trial remaining. 2. Although the applicants dispute that any security for costs should include further preparation time, in my view it is appropriate to order security to encompass costs for further preparation. Notwithstanding the submission of Mr Perry that the applicants' case has now closed and that the majority of the work to be done henceforth is by Counsel for the applicants (TS 24 November 2006 p 755 ll 4-19), an adjournment part way through the trial will inevitably result in additional preparation costs being incurred by the parties prior to the resumption of the hearing: Brown v Rodgers [2006] FCA 713. It is to be expected that Counsel for the respondents will need to prepare once again for the May 2007 hearing. This is particularly so in light of the unfortunately lengthy adjournment of this matter from November 2006 to May 2007. In any event, as a general rule, costs of and incidental to an application include costs reasonably incurred both in the litigation and in preparation for the litigation ( Re Gibson's Settlement Trusts [1981] 1 All ER 233, Higgins v Nichol (No 2) (1972) 21 FLR 34, Liverpool City Council v Commonwealth of Australia (1993) 46 FCR 67, and I also note O 62 r 19 which contemplates preparation costs included in a taxation). It is reasonable that an award of security for costs should include preparation as well as trial time: The Council of the City of Sydney v Goldspar Australia Pty Ltd [2004] FCA 1023. In this matter the respondents claim five days preparation. Mr McLellan estimates preparation by senior and junior counsel at $5500 per day in total. Although the applicants dispute that further preparation for the trial is recoverable by the respondents, I note that in the affidavit of Mr Graham filed 13 April 2006 Mr Graham accepts the daily rate for preparation by Counsel except to the extent that the figure should be discounted by 10 per cent on the basis that no allowance should be made for GST. In my view it is reasonable to order the first and third applicants to pay security for costs in the sum of $25 000 in respect of preparation. 3. In making an order for security for costs the Court does not set out to give a complete and certain indemnity to a respondent, nor is it to be assumed that the applicant will fail in the proceeding: Brundza v Robbie &amp; Co [No 2] [1952] HCA 49 ; (1952) 88 CLR 171 at 175; Menhaden Pty Ltd v Citibank NA (1984) 1 FCR 542 at 547; Caruso Australia Pty Ltd v Portec (Australia) Pty Ltd (1984) 1 FCR 311 at 314; Re Quad Consulting Pty Ltd (unreported, Federal Court of Australia, Burchett J, 28 June 1991 par 7); Bryan E Fencott at 515; Billinudgel Pastoral Co Pty Ltd &amp; Ors v Westpac Banking Corp &amp; Ors [1997] FCA 863. In my view the quantum of costs I have ordered is reasonable in the circumstances, taking into consideration the estimates of the expert witnesses for both parties, the likely length of the resumed hearing and the need for preparation after a lengthy adjournment. I do not consider it necessary to make any award in respect of general attendance.