Betfair Pty Limited v Racing New South Wales

Federal Court of Australia|2010-01-27|Before: Mr P, Mr J, Jagot J

REASONS FOR JUDGMENT 1 On 8 October 2009 I published reasons for judgment in respect of a notice of motion filed by Betfair Pty Limited (Betfair) on 22 September 2009 (Betfair Pty Limited v Racing New South Wales (No 7) [2009] FCA 1140). By the motion Betfair sought orders that the respondents produce certain documents for inspection over which claims for privilege had been made. The respondents resisted any order for production. The State of New South Wales (the State) also was granted leave to appear for the purpose of resisting the production of documents in which it had an interest. I made orders requiring the respondents to produce a number of the documents in dispute. The State sought and was granted leave to appeal against my orders. On 23 October 2009 the Full Court varied my orders, publishing reasons on 12 November 2009 (State of New South Wales v Betfair Pty Ltd [2009] FCAFC 160). In substance, the Full Court overturned that part of my decision rejecting the State's claim for legal professional privilege over drafting instructions to and responses from parliamentary counsel, including draft legislative instruments. 2 The outstanding issue is costs.

RACING NSW'S POSITION 6 Racing NSW submitted that it should not be liable for any part of Betfair's costs in respect of those claims for privilege raised by the State. Nor did Racing NSW seek any order for costs in respect of those claims. As to its own claim for "without prejudice" privilege, Racing NSW submitted that Betfair's costs should be costs in the cause. Alternatively, no order as to costs should be made. Although unsuccessful, Racing NSW's claims were arguable. It was obliged to make those claims given that the entities with whom Racing NSW had been in dispute (namely, TAB Limited, Tabcorp Holdings Limited and Luxbet Pty Limited, to which I refer below as the TAB interests), being joint holders of the privilege asserted, are not parties to the proceeding. The Court recognised the joint interest of these entities in the asserted privilege by foreshadowing a confidentiality order in [75] of the reasons for judgment. Moreover, Betfair succeeded because of the use to which it wished to put the documents and not because the documents were incapable of attracting "without prejudice" privilege. This proposed use only became apparent on receipt of Betfair's written submissions.

THE STATE'S POSITION 7 The State submitted that it and Betfair should each pay their own costs of the motion. 8 Whilst Betfair succeeded in respect of the State's claim for public interest immunity: - (i) Betfair's submissions that the class of documents were incapable of attracting the immunity failed, (ii) the State could not waive the immunity, it being a matter for the Court to determine the immunity's application and undertake the necessary balancing exercise, and (iii) the State, as a stranger to the litigation, accepted that the balancing exercise was a matter for the Court. 9 As to the State's claims for legal professional privilege, Betfair initially submitted that it had enjoyed greater success than the State having regard to the number of claims made and the documents ordered to be produced. This, however, was altered after the orders of the Full Court pursuant to which the State enjoyed greater success when so assessed. Contrary to Betfair's subsequent position, this form of assessment is appropriate. The final result is that 38 of the State's claims for privilege succeeded and 19 failed. The event thus favoured the State. Alternatively, this case involved multiple events with multiple outcomes. Relative measures of success and failure are not feasible or appropriate. Both Betfair and the State, overall, enjoyed significant success. Hence, each should meet its own costs of the motion.

CONCLUSIONS 10 In my reasons for judgment published today in proceeding NSD 1821 of 2008 (Sportsbet Pty Limited v State of New South Wales (No 8) [2010] FCA 15) I summarised the applicable principles at [8] as follows (relying on the reasons in Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 at 48,136-48,137): The discretion is wide. Costs are awarded to compensate the successful party and not to punish the unsuccessful party. This compensatory objective means that costs usually follow the event. A successful party may be ordered to pay costs or be deprived of an order for costs in respect of issues on which that party failed. Where, however, issues are not discrete and severable it may be inappropriate to attempt to apportion costs by reference to relative success and failure. 11 In the Sportsbet proceeding I decided that Racing NSW's submissions against the making of a costs order should not be accepted (see my reasons therein at [9]). I have reached the same conclusion in the present case. Racing NSW refused to produce relevant documents for inspection on the basis of its claim for "without prejudice" privilege. I rejected the claim and ordered that all of the documents be produced. The fact that Racing NSW's claim might have been arguable and its conduct reasonable is not to the point. As noted, costs are compensatory. Betfair had to come to the Court to vindicate its right to inspect relevant documents and incurred costs in so doing. The use which Betfair could make of the documents and their relevance to the substantive proceeding was apparent from the pleadings. The fact that the TAB interests jointly hold the privilege also does not alter the position. Racing NSW chose to resist production. The fact that Racing NSW ran its defence to the motion with admirable efficiency (which I accept) does not undermine Betfair's entitlement to an order for costs in its favour. The costs liability will be less due to the efficiency with which the point was run. It is also appropriate to frame the order to exclude any liability on Racing NSW's part for the costs of the motion which Betfair incurred by reason of the claims for privilege made by the State. 12 Consistent with my conclusions in the Sportsbet proceeding (see my reasons therein at [10]-[12]), I am satisfied that Betfair is entitled to an order for costs against the State. The State intervened for the purpose of ensuring that documents discovered by Racing NSW as potentially relevant to the issues in the substantive proceeding were not produced for inspection. Betfair succeeded in obtaining orders for production albeit not in respect of all documents. The grounds on which privilege was asserted (public interest immunity and legal professional privilege) are separate. Betfair wholly succeeded with respect to the former and partly succeeded with respect to the latter. More specifically, as to the former, the State actively resisted production by reference to all aspects of the claim (including the balancing exercise) by tendering evidence and making submissions. The State did not adopt a neutral stance. It is also immaterial that some of Betfair's arguments failed. Betfair ultimately obtained an order for access to all of the documents in issue. As to the latter, Betfair had no choice other than to file and serve a motion to obtain an order for production. It obtained an order albeit not in respect of every disputed document. The claims on which it failed absorbed a material part of the hearing. For these reasons Betfair should not obtain an order that the State pay all of its costs. A proportional costs order is appropriate. I am of the same view as I reached in the Sportsbet proceeding at [12] as follows: A proportional costs order is appropriate to reflect [Betfair's] overall success whilst giving due recognition to the claims of the State for legal professional privilege which were sustained. Mathematical precision in the apportionment is neither necessary nor desirable. 13 As in the Sportsbet proceeding I consider that Betfair should obtain an order that the State pay 60% of Betfair's costs of the motion insofar as those costs were incurred with respect to the State's claims for privilege. 14 I make orders accordingly. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.

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