Full Federal Court: Clarifies Remittal Costs Variation Power

• The Full Federal Court amended its prior orders in `Thurston v Fox Sports Australia (No 2)` to clarify a primary judge's power regarding costs on remittal.
• The case involved defamation claims against Channel 9 and Fox Sports Australia, stemming from a 2020 rugby match broadcast.
• The primary judge initially dismissed claims against Channel 9 and ordered appellants to pay costs, but the Full Court later allowed appeals against Channel 9 and remitted the matter.
• The Full Court confirmed that under `r 39.05(h) of the Federal Court Rules 2011 (Cth)`, a primary judge can vary costs orders after resolving remitted issues.
• This ruling underscores that the power to re-evaluate costs rests with the primary judge upon remittal, even without explicit direction from the Full Court.

The Full Federal Court clarified that a primary judge retains the authority to modify their original costs order once a matter is remitted back to them for further consideration.

The Full Court of the Federal Court recently issued a clarification regarding its previous orders in an interlocutory application arising from a defamation proceeding, `Thurston v Fox Sports Australia Pty Limited (No 2), [2026] FCAFC 118`. This case originated from television broadcasts of a rugby match in 2020, featuring the Penrith Panthers and the New Zealand Warriors in Gosford, New South Wales. During these broadcasts, commentators discussed footage depicting stadium officials removing certain individuals, including the appellants, from the venue.

The appellants subsequently initiated defamation claims against both Fox Sports Australia Pty Limited and TCN Channel Nine Pty Ltd and Nine Network Australia Pty Ltd (collectively, Channel 9). Their contention was that the broadcasts defamed them by implying they had engaged in racial vilification, abuse, or made racist remarks directed at an Indigenous Australian player for the Penrith Panthers. The primary judge initially dismissed the appellants' defamation claims. Specifically concerning Channel 9, the judge concluded that the appellants had not substantiated the alleged defamatory imputations and consequently ordered them to cover Channel 9's costs on a party and party basis.

The appellants challenged the primary judge's decision. The Full Court addressed several aspects of the appeal: it determined that the appeal by the first appellant, who had passed away in 2025 after the primary judgment, was proscribed by section 10 of the Defamation Act 2005 (NSW). Regarding Fox Sports, whose defence of honest opinion was successful, the Full Court dismissed the appeal against the judgment in its favour. However, for Channel 9, the Full Court allowed the appeals brought by the second and third appellants.

Crucially, the Full Court remitted the matter back to the primary judge. This remittal was necessary because the primary judge had erroneously rejected the alleged imputations. The primary judge was tasked with addressing Channel 9's pleaded defences and determining the quantum of any damages. Following this, on 8 July 2026, the legal representatives for the second and third appellants filed an interlocutory application, arguing that the Full Court, as the sole body capable of setting aside the primary judge's liability and costs orders, should have explicitly set aside the costs order favouring Channel 9.

On 4 September 2026, the Full Court agreed to modify its prior orders from 25 June 2026. This amendment involved adding the phrase "including any question of costs" after the word "proceeding," a change made under rule 39.05(h) of the Federal Court Rules 2011 (Cth). Beyond this specific amendment, the Full Court otherwise denied the second and third appellants' interlocutory application without awarding costs. The Full Court explicitly stated that upon remittal, the primary judge possessed the authority to vary their original costs order once the issues remitted to them had been resolved. The Full Court also noted that it did not address submissions that extended beyond the scope of the leave granted.

This ruling clarifies the `Federal Court remittal costs variation power`, confirming that a primary judge retains the ability to adjust costs awards even when the Full Court's initial orders did not explicitly direct such a review. This principle is particularly relevant in cases involving `defamation costs Australia remittal`, such as the `Channel 9 defamation appeal costs` in this instance. The court's approach to costs is also evident in other recent decisions, such as on 20 July 2026, when it awarded indemnity costs to CharterLaw Legal Pty Limited after dismissing an applicant's proceeding to set aside a bankruptcy notice. Similarly, on 8 January 2026, the court granted leave to discontinue a proceeding and directed parties to bear their own costs, finding no unreasonableness in the applicant's actions.

The Full Federal Court's decision in `Thurston v Fox Sports Australia (No 2)` provides crucial guidance on the procedural aspects of `Full Federal Court of Australia costs` and the powers of a `primary judge vary costs remittal`. By amending its orders to explicitly include "any question of costs" under `Federal Court Rules 2011 r 39.05(h)`, the court underscored that the primary judge's power to re-evaluate costs upon remittal is inherent, even if not explicitly stated in the Full Court's initial remittal orders. This means that even without a specific directive from the appellate court, the primary judge has the discretion to revisit and potentially alter their original costs award once the remitted issues are resolved.

This clarification is significant for legal practitioners, as it impacts how `defamation costs Australia remittal` cases are handled post-appeal. It confirms that the primary judge maintains a comprehensive jurisdiction over the remitted matter, including the ability to adjust financial liabilities related to legal expenses. This ruling ensures that the ultimate costs outcome can align with the final resolution of the substantive issues after an appeal, providing a more flexible and equitable framework for managing litigation expenses in complex cases.

This ruling clarifies that primary judges retain the power to vary costs awards upon remittal from the Full Federal Court, even if the Full Court's initial orders did not explicitly address costs. Lawyers should factor this potential for costs re-evaluation into their appeal strategies and when advising clients on remitted matters.

Source: Reporting based on a Full Federal Court decision.