Baramon Sales Pty Ltd v Goodman Fielder Mills Limited

REASONS FOR JUDGMENT 1 Under the old common law pleading the applicant could put in his declaration one or more counts and the respondent could plead to those counts. That practice was confirmed by the Common Law Procedure Act 1852 (UK). Section 41 of that Act provided that causes of action by and against the same parties in the same rights might be joined in the same suit. The modern rules of all superior courts make like provision. In the Federal Court the provision is to be found in O 6, r 1 of the Rules. 2 In the present case the pleadings raised two groups of causes of action - one related to the validity of certain covenants in a contract for the sale of land, and the other related to alleged contraventions of a number of provisions of the Trade Practices Act 1974 (Cth). It was ordered that the first series of claims be determined separately, and before the other claims. In the result, the applicant failed to establish the invalidity of the covenants and the respondent, Goodman Fielder, now asks for its costs. 3 What the respondent seeks has long been recognised as an appropriate order to make. Section 81 of the Common Law Procedure Act provided that the costs of any issue, either in fact or law, should follow the finding or judgment upon such issue and be awarded to the successful party, whatever might be the result of the other issue or issues. A glance at some of the earlier authorities on the application of the rules which incorporated s 81 shows a difference of opinion between the Common Law Division and the Chancery Division on the rule. In the Common Law Division the party who succeeded in the action got the general costs of the action and of any issues on which he had succeeded, while the other party recovered the costs of any issue on which he had succeeded; in the Chancery Division it was the practice to make special orders with regard to the costs of the issues arising in the suit, and if the order discriminated between different portions of the proceedings, the principle followed on taxation was that, after the costs referrable to the various issues had been ascertained, an apportionment was made between them of the general costs of the proceedings: see Jenkins v Jackson [1891] 1 Ch 89. 4 In due course the English rules were amended to get rid of the chancery practice. The resultant position was that where distinct issues were raised in an action, a successful party only got the costs of those issues on which he succeeded, unless, for some reason, the court ordered otherwise. 5 Now, however, things have changed. The rules of most superior courts merely give to the court general discretion as to costs, though they sometimes make express provision for the court to make an order for costs in relation to a particular question in or a particular part of a proceeding. In the Federal Court there is only a general power to award costs, as to which see s 43 of the Federal Court of Australia Act 1976 (Cth). In the Victorian Supreme Court there is express power to order costs of an issue in O 63.04. 6 The brief history of the rules relating to costs of issues to which I have referred suggests that when there is a separate determination of an issue, or of a cause of action, the court should incline towards making an order that costs follow the event, unless there is good reason to make a different order. Aussie Airlines Pty Ltd v Australian Airlines Ltd (unreported, Sundberg J, 5 June 1997) is an example of a case where a contrary order was made. Sundberg J said that "[t]he ultimate outcome of the case may impact on the appropriateness or otherwise of the separate questions being raised, and whether in fact they led anywhere". In that circumstance he thought it appropriate that the costs of the determination of a separate question should be reserved to the trial judge. 7 Here I need not adopt that course. There is no overlap between the issues already disposed of and those that will be considered at trial. That was one reason why the issues are being tried separately. The other reason is that if the applicant had succeeded on the first issue, this may have disposed of the case and thus avoided a lengthy trial. Nothing that can occur at the trial of the trade practices causes of action could cast doubt on the correctness of any order for costs that is made now. 8 Accordingly Goodman Fielder will have its costs of the questions already tried. It asks that those costs be paid immediately. I will not make that order for two reasons. First, Goodman Fielder will not suffer any prejudice if it is kept out of its costs for a short time. Second, if it ultimately turns out that Goodman Fielder is unsuccessful at trial, then the award of costs in its favour can be set off against those which it will be required to pay. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.