my reasoning
41 I accept the applicant's submission that before the institution of the proceedings there were negotiations, that it gave the respondent extensions of time within which to consider the proposed undertaking, but that the negotiations became protracted and remained unresolved when the application was lodged. I do not think that it "misconducted" itself in the sense referred to by McHugh J in Oshlack v Richmond River Council (1998) 193 CLR 72 at 97-98.
42 Counsel for the respondent complained on its behalf that the applicant had invited it to negotiate, the respondent had engaged in negotiation, but in reality the applicant was not prepared to negotiate at all. The applicant, so it was put, was at all times insisting upon an undertaking substantially in the terms which it had proposed to the respondent on 26 June 2000. I do not think that the evidence establishes that. The changes which (until virtually on the eve of the proceedings being commenced) the respondent sought to the terms of the undertaking were so fundamental that it is not possible for me to assess what the applicant's response would have been if the respondent had demanded somewhat lesser amendments.
43 In my view, the applicant acted reasonably when it commenced these proceedings. In its letter of 30 June 2000 to the respondent the applicant put it on notice that the applicant reserved its rights to issue proceedings notwithstanding the ongoing negotiations. On 4 July 2000 it confirmed that the contents of its letter of 30 June 2000 still applied. On 14 July 2000, by its letter of that date, the applicant told the respondent that it intended to institute proceedings in this Court. The applicant had a statutory duty to enforce the law and it had allowed time for negotiations. In a letter sent as late as 19 July 2000, the respondent's solicitor contended that there had been no breach of the Act in relation to the GST Representation. In relation to the Finance Representation, the respondent (in the same letter) offered simply an undertaking that it would not, in future, use the abbreviation "T.A.P." in its advertisements. It made no admission of any contravention of the Act by having made the Finance Representation. It was only after the applicant's further letter of 19 July 2000, advising the respondent that these proceedings were about to be instituted, that the respondent's solicitor, on 21 July 2000, sent to the applicant an amended draft of the proposed undertaking in a form which he was going to "recommend to [his client]."
44 That date was a Friday. The application was lodged on the following Wednesday. The respondent complains that the applicant did not follow up with the respondent's solicitor whether it was prepared to accept his recommendations, before proceeding to file the application. In my view, it might equally be said that, given the history of the matter, it was for the respondent to confirm to the applicant that it was prepared to give the undertaking with only the somewhat lesser amendments. In any event, even those lesser amendments were substantial. For example, the respondent was not prepared to give a clear acknowledgment that it had contravened ss 52 and 53(e). The respondent was still insisting on changes of substance to the public apologies. In my view, the respondent did not misconduct (in the relevant sense) itself when it proceeded to file this application. It had made its position clear on 30 June 2000 and again on 4 July 2000.
45 Another relevant factor on the question of costs is that although the final version of the respondent's amended draft undertaking acknowledged (on the assumption that the respondent would have accepted its solicitor's advice) that the making of the Finance Representation was a contravention of s 53(g), the respondent later denied that in its defence.
46 The respondent relied on the fact that its solicitor had, on 1 August 2000, telephoned the applicant's solicitor offering to resolve the matter by giving appropriate undertakings on a consent basis and requesting a meeting between the parties and their respective legal advisers. The applicant's solicitor had at first agreed to contact her client and arrange a convenient time, but shortly thereafter had telephoned the respondent's solicitor to advise that the applicant was not prepared to attend such a meeting because there had already been "too many meetings". In the circumstances of this matter, I do not consider that the applicant's refusal to negotiate at that stage is to be given very much weight at all in relation to the question who should bear the costs of the application. It is clear that within a few weeks thereafter the applicant participated in negotiations which resulted in a partial settlement.
47 The respondent pointed to the fact that in its last set of amendments proposed before the proceedings commenced, it had deleted reference to refunds so that it would only be obliged to provide compensation to relevant purchasers. In paragraph 8 of its application the applicant had only sought arrangements for compensation, not refunds. I would not regard that difference as being relevantly significant. I note from the affidavit sworn by the respondent's solicitor that on 24 August 2000 (some four weeks after this application was filed) a director of the respondent sent letters to persons who had purchased new motor vehicles from it between 14 June 2000 and 30 June 2000 offering appropriate compensation. It did the same to those persons whose application for finance had been rejected during that period.
48 Counsel for the respondent submitted that the terms of the undertaking which its solicitor was prepared to recommend were stronger than the proposed consent orders.
49 I do not think that the differences between the undertakings sought by the applicant before instituting proceedings and the omission from the terms of settlement of the provisions which I have summarised at paragraph 37 above sufficiently detract from the overall success achieved by the applicant in bringing these proceedings. It is quite clear that the applicant has been substantially successful in the proceedings.
50 I would distinguish Messiter v Hutchinson from the present case because in that case the plaintiff was quite clearly offered more money ($120,000) than she eventually recovered ($100,000).
51 Another relevant factor which I have taken into account, as counsel for the applicant invited me to do, was to compare the limited admission made by the respondent in paragraph 6 of the final version of the draft undertaking in relation to the GST Representation (page 46 of Exhibit A1), with the extent of the admissions in the defence i.e. that that representation constituted conduct in contravention of ss 52 and 53(e). On the uncontradicted evidence, I am not satisfied that the applicant would have achieved the results which it has achieved, had it not instituted these proceedings.
52 I certainly reject any suggestion that the applicant's conduct has been so unreasonable as to warrant an indemnity costs order against it.
53 On the contrary, I think that costs should follow the event. That is, the applicant, in the circumstances to which I have referred above, has not misconducted itself, has been substantially successful and should have its costs. There will be orders accordingly.