Reiche v Neometals Ltd (No 4)

Reiche v Neometals Ltd (No 4) [2026] FCA 144 is a Federal Court decision about a stay of costs-related orders while appeals were pending. It was not a rehearing of the underlying whistleblower dispute. The court was dealing with a narrower but commercially important question: should steps to quantify a costs order continue while the losing party pursues appeals?

Wheatley J held that the appeals were arguable and then focused on prejudice and convenience. The court accepted that the applicant had shown, with documentary support, that he was impecunious and unable to pay the claimed lump-sum costs amount. In those circumstances, and given the limited utility of other enforcement options, the court held there was a real risk that quantification and enforcement could lead to bankruptcy and undermine the appeals. But the court did not stop the process entirely. It stayed the referral to the Registrar to determine the lump-sum amount, while still requiring the applicant to file a costs response, with a short extension of time.

The broader dispute had already produced two earlier judgments. First, on 28 February 2025, the applicant was unsuccessful in claims for compensation and other relief under ss 1317AD(1) and 1317AE of the Corporations Act 2001 (Cth). Secondly, on 19 December 2025, Feutrill J made a costs judgment ordering the applicant to pay 60% of the respondent’s costs of the proceeding on and from 3 November 2024, on a party-party basis, to be fixed on a lump-sum basis.

Those costs orders did more than state liability. They also set a timetable under the Costs Practice Note. The respondent had to file and serve a costs summary, draft orders and any supporting submissions by 16 January 2026. The applicant then had to file and serve a costs response, draft orders and any supporting submissions by 30 January 2026. After that, the determination of the lump-sum amount was to be referred to a Registrar.

The applicant sought to stop that process while two appeals were on foot. The substantive appeal, WAD91 of 2025, had already been heard in the November 2025 Full Court sittings and judgment was reserved. The costs appeal, NSD2439 of 2025, had been filed but was yet to be heard. The stay application itself was lodged on 22 December 2025. There was then a mention before Longbottom J on 30 December 2025, directions for further material, and an unsuccessful oral interim stay application before Shariff J on 7 January 2026. Wheatley J heard the substantive stay application on 28 January 2026 because the applicant’s costs response deadline was approaching and the matter remained in the duty list.

By the hearing date, the respondent had already complied with its own filing obligation. That meant the applicant no longer pressed for a stay of the respondent’s filing step. The live issue was narrower: should the applicant still have to file his costs response, and should the Registrar still proceed to determine the lump-sum amount?

The applicant’s case was built around financial hardship and the practical consequences of moving ahead with costs quantification. He gave evidence that he had been unemployed since his employment with the respondent was terminated in September 2024. He said he was receiving Centrelink special benefit payments, did not own real property, did not have significant assets or savings, and had spent all of his savings on legal costs in connection with the proceedings and appeals. He also said he was incapable of paying the lump-sum costs amount sought by the respondent, which was said to be $173,507.12.

The respondent challenged the completeness of that picture. It relied on an ASX announcement referring to securities connected with Nova Elite Pty Ltd as trustee of the Reiche Family Trust and argued that the applicant had not explained his position in relation to that trust. It also pointed to the continued funding of the applicant’s legal representatives as something said to be inconsistent with his claimed impecuniosity. There were also submissions about differing addresses appearing in various records, including an ASIC search and the applicant’s more recent address for service.

The court worked through those points carefully. It noted that the applicant had not provided evidence about the family trust. It also noted that the position regarding the funding of legal representation had not been the subject of evidence or explanation. But the court gave significant weight to a Centrelink statement dated 18 January 2026. That document recorded the special benefit payments made to the applicant and also recorded his income and asset details, including three bank accounts said to be in his name, cash on hand, shares in Neometals Limited, and a modest amount of household and personal effects.

That documentary material mattered. The court referred to the distinction between demonstrated financial incapacity and a mere assertion of incapacity. It held that, in this case, the Centrelink document supported the applicant’s position and demonstrated that he did not have the financial capacity to pay the lump-sum costs amount sought, or a similar amount. The court also treated the Centrelink material as supporting the applicant’s evidence that he did not own real property, because he was in receipt of rent assistance.

The respondent had at one stage suggested the applicant might be required for cross-examination, but ultimately did not press for that course. The court therefore assessed the evidence as it stood. Its overall view was that the applicant’s evidence, read with the Centrelink statement, was consistent and supported by documentary material. The court accepted the submission that if the applicant had other assets of value, those would have been disclosed to Centrelink and recorded in the Centrelink document.

The legal issue was procedural. The court was not deciding whether the applicant had been a protected whistleblower or whether Neometals had breached the Corporations Act. It was deciding whether to stay parts of the costs and timetabling orders pending the determination of the substantive appeal and the costs appeal.

The court referred to s 29 of the Federal Court of Australia Act 1976 (Cth) and r 36.08 of the Federal Court Rules 2011 (Cth). Rule 36.08 was especially important because it states that an appeal does not operate as a stay of execution or of proceedings under the judgment subject to the appeal. That means the starting point is that the judgment, including costs-related steps, remains operative unless the court orders otherwise.

The parties accepted the applicable principles as summarised in earlier authorities. In practical terms, Wheatley J treated the stay question as involving two main inquiries. First, was there an arguable point on the appeal, or some rational prospect of success? Secondly, did the balance of convenience favour a stay? The second inquiry required the applicant to show a real risk of prejudice or damage if a stay were refused and that the prejudice would not be adequately repaired by a successful appeal. One recognised way of satisfying that requirement is to show that the appeal would be rendered nugatory unless a stay is granted.

The court also emphasised the countervailing principle that a successful party at first instance is entitled to the fruits of its judgment. A stay is not granted lightly. The court must be persuaded that there is a proper basis for intervention that is fair to all parties and consistent with the interests of justice.

On the first question, there was little controversy. The applicant submitted that the appeals were arguable, and the respondent accepted that position. The substantive appeal had already been heard and was reserved. There was no competency objection or similar challenge to the costs appeal. Wheatley J said it was generally not appropriate, at this stage, to embark on a close consideration of prospects. The court was satisfied that each appeal raised reasonably arguable grounds and had some rational prospect of success.

The real contest was the second question, the balance of convenience. The applicant argued that he would suffer serious adverse consequences that could not be addressed on appeal because he was in financial hardship and unable to pay the lump-sum costs sought. He also argued that there was no identified prejudice to the respondent if a stay were granted, that there was little utility in enforcing the costs order immediately given his financial circumstances, and that bankruptcy could affect his ability to prosecute the costs appeal.

The respondent’s main points were narrower. It said the applicant had not adequately disclosed his financial position and had not proved a real risk that the respondent would proceed by way of bankruptcy. It accepted that if the court were satisfied there was a real risk of bankruptcy, the appeal would likely be rendered nugatory. So the dispute turned on whether that risk had been shown.

Wheatley J accepted the applicant’s financial evidence. The court found that he would not be able to pay the lump-sum costs order in the claimed amount, or a similar amount. The court then considered whether there was a real risk of bankruptcy. It accepted there was no direct evidence of a bankruptcy notice or an express statement from the respondent that bankruptcy would be pursued. But the court said the question was whether there was an objective likelihood of bankruptcy proceedings, not mere speculation. In the particular circumstances, the applicant was in receipt of Centrelink special benefits, was impecunious, and lacked property, income and useful bank balances. The court reasoned that other enforcement measures would be unlikely to be of benefit to the respondent. On that basis, it held that the inference was open that there was a real risk the respondent would proceed by way of bankruptcy if the costs were quantified and enforcement followed.

The court also rejected the respondent’s submission that prejudice to the respondent was irrelevant. Referring to earlier authorities, Wheatley J held that prejudice to the other party was relevant, even if the applicant still bore the onus of showing a proper basis for a stay. On the material before the court, the respondent would not suffer prejudice from a delay in recovery if a stay were granted.

That did not mean the applicant obtained everything he wanted. The court drew a distinction between the Registrar’s determination of the lump-sum amount and the exchange of costs material between the parties. It held that it was in the interests of justice for the parties to complete the quantification process on their side now, while the issues were relatively fresh. If the applicant lost the appeals, the matter could then be reactivated promptly and referred to the Registrar without waiting for the parties to reconstruct the costs issues later. If the applicant succeeded, some work might prove wasted, but the court considered that an acceptable balance in the circumstances.

The result was a partial stay. Order 4 of the 19 December 2025 orders, which referred the determination of the fixed lump-sum amount to the Registrar, was stayed until the later of the determination of the appeal in either WAD91/2025 or NSD2439/2025. Order 3, requiring the applicant to file and serve a costs response, was not stayed. Instead, the time for compliance was extended to 4:30 pm AWST on 6 February 2026. The costs of the interlocutory stay application were reserved.

The court also rejected the applicant’s submission that his status as a whistleblower was relevant to the stay application. The judge said no authority had been cited for that proposition and that the relevant question remained whether this was an appropriate case to grant a stay under the ordinary principles.

For businesses, this case is a reminder that the period after judgment can be strategically important. If your business has won and obtained a costs order, the default position is that you remain entitled to the benefit of that order even if the other side appeals. You should not assume the appeal itself stops the costs process. Unless a stay is granted, quantification and enforcement steps may continue.

But the case also shows that the court can separate different parts of the costs process. A business resisting a stay should not assume the court will either allow everything to proceed or stop everything completely. The court may preserve some progress, such as requiring exchange of costs material, while pausing the step that would most directly expose the other side to immediate enforcement pressure. That kind of tailored order can matter commercially because it preserves momentum and reduces delay if the appeal fails.

The decision also highlights the importance of evidence. The applicant succeeded on the hardship issue because there was documentary support from Centrelink. The court expressly distinguished demonstrated financial incapacity from mere assertion. If your business is opposing a stay, test whether the other side has actually proved hardship and whether there are unexplained gaps in the evidence. If your business is seeking a stay, gather objective records early and be ready to explain your financial position clearly.

Another practical point is the court’s treatment of bankruptcy risk. Direct evidence that bankruptcy will be pursued is helpful, but not always necessary. The court may infer a real risk where the debtor appears unable to pay and other enforcement options are unlikely to be useful. Businesses considering enforcement should understand that their likely enforcement pathway may become relevant even if they have not yet taken formal bankruptcy steps.

Finally, the case shows that broader labels or themes may not carry much weight unless they connect directly to the legal test. The applicant’s status as a whistleblower did not assist him on the stay application. The court stayed focused on arguable appeal, prejudice, bankruptcy risk, and the balance of convenience. Businesses should do the same when preparing evidence and submissions.

The sequence of events is important to understanding the decision. The substantive judgment was delivered on 28 February 2025. The costs judgment followed on 19 December 2025. The stay application was filed on 22 December 2025. A mention occurred on 30 December 2025, and an oral interim stay application was dismissed on 7 January 2026. The substantive stay application was then heard by Wheatley J on 28 January 2026. The orders were made that day, and the reasons were published on 23 February 2026.

At the time of the stay decision, the substantive appeal had already been heard and judgment was reserved. The costs appeal had been filed but had not yet been heard. The stay of the Registrar referral was expressed to continue until the later of the determination of those two appeals.

This page summarises the Federal Court’s published reasons in Reiche v Neometals Ltd (No 4) [2026] FCA 144. The decision concerns an interlocutory application for a stay of costs and timetabling orders. It should be read as a procedural case note, not as a full summary of the underlying substantive dispute.

The available reasons clearly support the procedural history, the stay principles applied, the evidence about the applicant’s financial position, the court’s inference of a real risk of bankruptcy, the relevance of prejudice to the respondent, the partial stay outcome, and the rejection of whistleblower status as a relevant factor on this application. Because the published text available here is truncated near the end, this page does not go beyond what is clearly supported.