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Federal Court of Australia · [2026] FCA 219

PSC AMGI WSC Pty Ltd v J&P Capital Insurance Pty Ltd (No 2)

In this later ruling, Justice Colvin fixed the successful applicants' costs at $50,000 on a lump-sum basis.

Federal Court of Australia

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Quick read

  • The strongest lesson from this case is settlement discipline.
  • PSC AMGI WSC Pty Ltd v J&P Capital Insurance Pty Ltd (No 2) [2026] FCA 219 is a Federal Court costs decision following an earlier dispute about performance of a...

Use this to check

  • Underlying merits issue: what the deed required and whether it was performed in time
  • Alternative merits issues raised by the respondents: estoppel and alleged penalty consequences
  • Procedural issue in this judgment: whether the respondents had proper notice of the costs hearing despite not appearing

Decision snapshot

  1. 1

    What happened

    • PSC AMGI WSC Pty Ltd v J&P Capital Insurance Pty Ltd (No 2) [2026] FCA 219 is a Federal Court decision about costs following an earlier dispute over the performance of a settlement deed.
    • In March 2025, two subsidiaries of PSC Insurance Group Limited entered into a deed of settlement and release with J&P Capital Insurance Pty Ltd, Jason Damien Prasad and Zaheera Samiya Khan.
    • The deed was intended to resolve an existing dispute, but issues then arose about whether it had been performed in time.
    • The Court recorded that, broadly speaking, the PSC parties claimed the respondents had failed to perform the deed in time, with the consequence that the PSC parties were not entitled to pay a settlement sum of $80,000.
  2. 2

    What the court had to decide

    • The underlying legal dispute concerned the proper construction and performance of a deed of settlement and release, including whether the respondents had performed the deed in time, whether the $80,000 settlement sum had to be paid, and whether alternative arguments based on estoppel or penalty affected that result.
    • In this No 2 judgment, the issue before the Court was narrower: whether the respondents should pay the successful applicants' costs on a lump-sum basis and whether $50,000 was a reasonable and proportionate amount in light of the amount in issue, the conduct of the parties and the complexity of the proceeding.
  3. 3

    What the court decided

    • The Federal Court ordered that the respondents pay the applicants' costs on a lump-sum basis in the amount of $50,000.
    • Justice Colvin first accepted that the respondents had proper notice of the costs hearing, even though they did not appear, because hearing information and orders had been sent to the relevant email addresses and, earlier, to the solicitors then still on the record.
    • The Court then accepted the applicants' cost material, which had been prepared in accordance with the Court's Costs Practice Note and properly verified.

Practical impact

Practical read

  • The strongest lesson from this case is settlement discipline.
  • If your business signs a deed to end a dispute, make sure the deed clearly states each step, the deadline for each step, who must do it, and what happens if a step is late or incomplete.
  • This judgment also shows that legal costs can escalate quickly when parties shift position in correspondence, raise alternative arguments, or introduce new points late.
  • The Court was prepared to fix costs at $50,000 on a lump-sum basis because it considered the successful parties had run the matter efficiently and the amount claimed was a reasonable discounted figure.

Useful next steps

  • Underlying merits issue: what the deed required and whether it was performed in time
  • Alternative merits issues raised by the respondents: estoppel and alleged penalty consequences
  • Procedural issue in this judgment: whether the respondents had proper notice of the costs hearing despite not appearing
  • Costs issue in this judgment: whether a lump-sum costs order was appropriate and whether $50,000 was reasonable
  • Map every obligation in the settlement deed, not just the payment obligation

The story

This case sits at the end of a settlement dispute that did not stay settled. In March 2025, two subsidiaries of PSC Insurance Group Limited entered into a deed of settlement and release with J&P Capital Insurance Pty Ltd and two individual respondents. The deed was supposed to resolve an existing dispute, but a further disagreement arose about whether the deed had been performed in time and what the consequences of that timing were.

The Court's reasons describe the dispute in broad terms. The PSC parties said the respondents had failed to perform the deed in time, with the consequence that the PSC parties were not entitled to pay a settlement sum of $80,000. The respondents disputed that reading of the deed and said they had performed it.

They also advanced alternative arguments, including estoppel and a contention that, if the PSC parties' construction was correct, the deed would operate so that forfeiture of the settlement sum amounted to a penalty.

The judgment also notes that the dispute was not only about money. There were issues about whether the respondents had delivered up rights to certain email addresses, telephone numbers and a domain name, in the context of an underlying dispute about the sale of a business. That detail matters commercially because it shows how settlement obligations often involve customer-facing assets and digital infrastructure, not just payment.

After correspondence between the parties, during which the respondents' position moved somewhat, the PSC parties went to court seeking a declaration about the proper construction of the deed and an order enforcing further performance. The respondents defended that application and filed a cross-application seeking orders that would, in effect, require payment of the settlement sum.

What the court had to decide

There were really two layers to the litigation. The first, in the earlier substantive proceeding, concerned the deed itself. The Court had to deal with the proper construction of the deed, whether the respondents had performed it in time, whether the settlement sum of $80,000 had to be paid, and how the respondents' alternative arguments about estoppel and penalty should be treated.

This 2026 judgment was narrower. By the time of this decision, the PSC parties had already succeeded in the earlier proceeding and had obtained an order that the respondents pay their costs of the competing interlocutory applications, assessed as one set of costs if not agreed. The question now was whether those costs should be fixed by the Court on a lump-sum basis and, if so, whether $50,000 was the right amount.

Practical sense check

  • Underlying merits issue: what the deed required and whether it was performed in time
  • Alternative merits issues raised by the respondents: estoppel and alleged penalty consequences
  • Procedural issue in this judgment: whether the respondents had proper notice of the costs hearing despite not appearing
  • Costs issue in this judgment: whether a lump-sum costs order was appropriate and whether $50,000 was reasonable

The Court approached the costs question by reference to familiar considerations for lump-sum costs, including proportionality, reasonableness, the conduct of the party claiming costs, and whether the amount sought represented an appropriate discount from actual costs incurred. The Court also referred to the Federal Court's preference for lump-sum assessment where the judge is familiar with the conduct of the proceedings and has sufficient information about the costs incurred.

Procedure and notice

The procedural history of the costs application is important because the respondents did not appear at the hearing. The application for a lump-sum costs order was initially listed for a directions hearing on 28 January 2026. Before that hearing, the PSC parties' solicitors had been told that the respondents' solicitors were no longer acting. On that basis, the respondents were notified of the hearing by email to the email addresses known to the PSC parties for each respondent.

At the time of the directions hearing, however, the solicitors were still formally on the record and had not been notified of the hearing. Because of that administrative oversight, orders were made listing the lump-sum costs application for hearing, setting a timetable for any affidavit and short submissions in opposition, and reserving liberty to apply to vary the timetable.

The next day, notices of intention to cease acting were filed by the respondents' solicitors. On 6 February 2026, notices of ceasing to act were filed. The last known email addresses specified in those notices were the same email addresses that had already been used by the Court and the PSC parties. A further reminder email about the hearing was sent by the judge's associate on 4 March 2026.

When the matter came on for hearing on 5 March 2026, there was no appearance for the respondents. Counsel for the PSC parties asked the Court to proceed on the basis that the respondents had been duly notified. Justice Colvin accepted that there had been proper notice of the hearing, heard short submissions from the PSC parties, and reserved the decision.

What the court decided

The Court ordered that the costs payable by the respondents to the applicants, pursuant to the earlier costs order made on 3 September 2025, be assessed on a lump-sum basis in the amount of $50,000. Justice Colvin was satisfied that the amount sought should be allowed in full.

The application was supported by an affidavit from a practitioner employed by the PSC parties' solicitors. That affidavit set out a cost summary in accordance with the Court's Costs Practice Note, and the required verification had been provided. The Court recorded that the amounts incurred included disbursements totalling $8,078.82 plus GST, including external counsel fees for preparing written submissions on the penalties issue.

The actual fees incurred by the PSC parties, excluding external counsel fees, were about $73,000 plus GST, and the claim represented about 62% of actual costs including disbursements.

Justice Colvin then identified six matters of particular significance. First, the amount in issue was $80,000, while also noting the additional issues concerning rights to email addresses, telephone numbers and a domain name in the context of the underlying business sale dispute. Second, the Court considered that the application to resolve the impasse over performance of the settlement deed had been pursued efficiently by those acting for the PSC parties and only after attempts at resolution.

Third, the complexity of the issues, and therefore the resulting costs, had been expanded by the alternatives advanced by the respondents and was not attributable to any unreasonableness by the PSC parties.

Fourth, the Court accepted that there had been an appropriate reduction in the actual costs incurred to reflect the extent to which there were solicitor and own-client costs. Fifth, there were additional costs in having to bring the lump-sum costs application itself. Sixth, after allowing for the overall discount to actual costs, the hourly rates charged were within a reasonable range for the experience of the practitioners involved.

Applying those principles, the Court fixed costs at the amount sought, namely $50,000.

How businesses should read it

The most practical point is that a settlement deed needs to work in the real world. It is not enough to agree on a headline payment figure and assume the rest will sort itself out. If the deed requires later steps such as document delivery, releases, transfer of customer contact channels, handover of digital assets or changes to account access, each step should be described precisely. The deed should say who must do what, by when, what evidence will prove completion, and what happens if a deadline is missed.

This case also shows that a settlement-performance dispute can become expensive very quickly. The amount in issue was $80,000, but the Court still fixed costs at $50,000 after considering the work required and the way the matter had been run. For many businesses, that is a serious financial consequence. A dispute about implementation can therefore wipe out much of the commercial value of the original settlement.

The reference to email addresses, telephone numbers and a domain name is especially useful for business owners. Those assets often sit at the centre of customer relationships, lead generation and brand continuity. If a sale, separation or settlement requires those assets to be transferred, surrendered or disabled, the document should identify them specifically and deal with practical control issues such as passwords, registrar access, forwarding arrangements, administrator rights and timing of cutover.

The judgment also suggests that courts pay close attention to conduct. The PSC parties were credited with pursuing the matter efficiently and after attempts at resolution. By contrast, the Court considered that the complexity had been expanded by the respondents' alternative arguments, including a new point raised on the day of the hearing. Businesses should therefore keep a careful written record of requests for performance, reminders, proposed solutions and any late changes in the other side's position.

That record can matter on both the merits and costs.

Practical sense check

  • Map every obligation in the settlement deed, not just the payment obligation
  • Set exact deadlines and state whether timing is intended to be critical
  • Identify all digital and customer-facing assets that must be transferred or surrendered
  • Keep written proof of each completion step, including emails, screenshots and transfer confirmations
  • Escalate implementation problems early and try to resolve them in writing before filing proceedings
  • If the other side raises new arguments late, record the extra work and cost that causes

Documents and conduct

One of the clearest themes in the judgment is the importance of documents. The parties filed affidavits setting out the history of their dealings in relation to the deed and the communications between them concerning performance. There was no cross-examination on those affidavits, so the documentary record was central to how the dispute was presented. That is a reminder that implementation disputes are often won or lost on emails, notices, confirmations and the exact sequence of events.

The Court also referred to a period of correspondence during which the respondents' position moved somewhat. For a business reader, that is a warning sign. If the other side's position is changing, you should document each version carefully, identify what remains in dispute, and avoid making assumptions about what has been agreed. A clear chronology can become critical if the matter later reaches court.

On costs, conduct mattered. The Court accepted that the PSC parties had acted efficiently and had first attempted to resolve the impasse. It also accepted that the complexity of the case had been expanded by the respondents' alternative positions. That does not mean every unsuccessful argument will lead to a heavier costs outcome, but it does show that the way a case is run can influence the Court's view of what costs are reasonable and proportionate.

Businesses should read this as a practical prompt to manage disputes with discipline. Keep a central file, preserve all communications, make sure notices are sent to the correct addresses, and ensure that any settlement implementation plan is actively supervised rather than left to drift.

Source notes

This page is based on the Federal Court of Australia's judgment in PSC AMGI WSC Pty Ltd v J&P Capital Insurance Pty Ltd (No 2) [2026] FCA 219, delivered by Colvin J on 9 March 2026. The judgment is a costs decision. It clearly supports the costs order, the procedural history of the costs application, and the broad description of the underlying settlement-performance dispute.

Because this is not the full merits judgment, some details are necessarily limited. In particular, the exact wording of the deed and the full reasoning on construction, estoppel and penalty are not set out in this ruling. The judgment itself refers to the earlier substantive decision, PSC AMGI WSC Pty Ltd v J&P Capital Insurance Pty Ltd [2025] FCA 1057, for the outcome on the underlying claims.

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