Costs of the Interlocutory Application
8 Asahi seeks an order that the costs of the interlocutory application be costs in the cause or, alternatively, if any costs are to be awarded to the relevant respondents, such costs be discounted.
9 Asahi contended that the usual order that costs follow the event ought not be made for two reasons. First, it relied on a number of concessions which were made in the course of the hearing by the relevant respondents. The concessions in question are referred to in my earlier reasons for judgment at [56]. In broad terms, it was conceded that legal professional privilege had attached to the document at issue. That left for determination the question of whether the privilege had been waived by Asahi.
10 Asahi characterised the concessions made as demonstrating that it was partly successful and that the mixed success of the parties on the interlocutory application should result in an apportionment of costs.
11 That contention is misconceived. This was not a case in which the parties enjoyed mixed success. Asahi failed to resist the interlocutory application and the relevant respondents were wholly successful. The fact that in obtaining the order sought, the relevant respondents made concessions in relation to some of the legal issues raised provides no basis for discounting the costs that would ordinarily be awarded to a successful party. Concessions or admissions negate the existence of a dispute on an issue. They are not, without more, demonstrative of a party's success on the issue. Further, if the making of a concession was to be regarded as some admission of failure, parties would be discouraged from making concessions for fear of detrimental costs consequences. Cost orders should encourage, rather than discourage, the narrowing of issues for determination by the making of appropriate concessions.
12 In the absence of any suggestion by Asahi that the concessions made or the timing of those concessions involved some unreasonableness or some conduct which resulted in unnecessary costs being incurred by it, I can see no reason why the making of concessions by the relevant respondents should result in any disadvantage to those respondents on the question of costs.
13 The second basis relied upon by Asahi was that the relevant respondents raised a number of unsuccessful contentions. Those unsuccessful contentions, so Asahi contended, involved a substantial amount of court time and documentary evidence. Relying on ss 37M and 37N of the Federal Court Act and the judgment of Redlich, Priest JJA and Macaulay AJA in Yara Australia Pty Ltd v Oswal [2013] VSCA 337 at [51]-[52] (which dealt with similar provisions in the Civil Procedure Act 2010 (Vic)), Asahi contended that the relevant respondents had an obligation to ensure that the expenditure incurred on the interlocutory application was reasonable and proportionate to the proceeding in question.
14 The passage in Yara relied upon by Asahi addressed a situation where a party had produced voluminous, extraneous, repetitious or excessive documents. The passage is not really on point although it does demonstrate the wide nature of the considerations that may be taken into account in assessing the potential failure by a party to comply with the duty imposed by s 37N(1). As earlier stated, s 37N(4) obliges me to take into account any such failure in exercising my discretion to award costs.
15 The failure of duty by the relevant respondents asserted by Asahi in this case was, in essence, the wasted time and expense dedicated to arguments which were unsuccessful. There is a difference however, in terms of the obligation imposed by s 37N(1), between raising an unsuccessful contention and raising a contention that should not have been raised because it was unreasonable or unnecessary to do so. Prior to the operation of s 37N(4), unreasonableness has been an acknowledged touchstone as to whether a successful party should suffer adverse costs consequences for raising unsuccessful contentions or claims: Cultivaust Pty Ltd v Grain Pool Pty Ltd [2004] FCA 1568 at [41], Mansfield J. Whilst I consider that s 37N(1) has broadened the scope for the making of adverse cost orders, I do not consider that an ultimately successful party's failure on a particular contention should necessarily or even ordinarily lead to adverse costs consequences.
16 I am not satisfied that the relevant respondents breached the duty imposed by s 37N(1). The unsuccessful contentions in question were all made in support of an issue upon which the relevant respondents succeeded. Whilst those unsuccessful contentions lacked merit, they were not unreasonably raised particularly as they related to a legal issue of significant complexity.