COSTS
14 On 15 December 2000, when I made the order declaring the respondent to have been guilty of contempt, I also made an order for costs. I had not appreciated that a party, the applicant, desired to be further heard on the question of any special order for costs. The order I made would have resulted in the applicant recovering its party and party costs only.
15 On 10 January 2001 the solicitors for the applicant wrote to the respondent's solicitor informing him of their client's intention to seek an order vacating the earlier costs order and replacing it with one for indemnity costs in its favour. On 30 January 2001 they wrote to the District Registrar of this Court asking that, in light of their client's intention, the order for costs not be entered. A copy of this letter was also sent to the respondent's solicitors. Unfortunately no application was filed and the matter was not referred to me.
16 When the parties came before the Deputy District Registrar on 31 January to settle the index to the appeal book, town agents acted for the respondent's solicitors. A discussion took place between the applicant's solicitors and the Deputy District Registrar, as a result of which the time for completing the appeal books was extended to permit the applicant to raise the question of the order for costs on the date which had been fixed for the hearing of the issue of penalty. If, as the town agent said in evidence, she did not appreciate that this was the case, she could not have been attending to the conversation. This may have resulted, in large part, from her lack of knowledge of the matter because her principals had not properly instructed her. In particular they seem not to have told her anything about the possibility of an application for costs. The town agent did not then convey anything to her principals about what had been said and arranged.
17 On 1 February the respondent's solicitors wrote to the applicant's solicitors, asking whether they had had a response from the District Registrar to the letter of 30 January, and expressing the view that they were required to have the order entered. On 5 February the order was sent to the town agent to be entered. On 8 February it was entered, under the hand of the Deputy District Registrar. I do not infer from this that the Deputy District Registrar appreciated that the order was being entered despite the arrangements which had been put in place. In the meantime, on 7 February, the applicant's solicitors advised the respondent's solicitor's by letter of the arrangements made with the Deputy District Registrar and that the applicant intended to ask the Court to set the order aside. The respondent's solicitor was not present in his office and did not receive this communication.
18 The question whether the order entered could and should be set aside was adjourned following the taking of some further evidence at the hearing on penalty. When the adjourned hearing commenced on 29 March 2001 Senior Counsel for the respondent informed me that instructions had been sought from the respondent in light of the facts now known. The respondent quite properly accepted that the appropriate course was not to contest the setting aside of the order as entered, at least if the applicant was otherwise successful on its motion for indemnity costs of the proceedings leading to the declaration. The concession was made without acceptance of any responsibility for what had taken place, even unintentionally. It is not then necessary to make findings at this point on the issue of the respondent's solicitors conduct. Order 35 rule 7(2)(f) Federal Court Rules in my view permits the order to be set aside given the consent of both parties. The question of which of them had the benefit of the order does not need determination. Alternatively, it seems to me that the Court has an implied power to correct the misuse of its processes: see s 23 Federal Court of Australia Act 1976 (Cth) and Westsub Discounts Pty Ltd v Idaps Australia Ltd (No 2) (1990) 94 ALR 310. This would extend to unintentional actions having the effect that one party was mistakenly denied a right to put its case. A substantial injustice is involved. The Court's powers should not logically depend only upon the wrongful and intentional conduct of a party producing that result.
19 The question then is whether my order for costs made on 15 December 2000 ought to be vacated. The respondent submitted that the principle of finality forecloses the applicant an opportunity to be heard as to whether indemnity costs should be ordered. The position here is, I think, distinguishable from cases like State Rail Authority of New South Wales v Codelfa Construction Proprietary Limited (1982) 150 CLR 29, 38 where a matter was sought to be substantially reopened and something in the nature of a re-hearing was to be involved. Senior Counsel for the applicant is correct to observe that the basis upon which costs should be taxed, has never been raised and it has not been argued. The order made by me was not a considered judgment on the question now raised: Degmam Pty Ltd (In Liq) v Wright (No 2) [1983] 2 NSWLR 354.
20 That leaves the question whether the application for such an order should have been made before the order for costs was made. Such an order was not sought in the original notice of motion, but I do not think much turns upon that. The applicant could have foreshadowed an application, but it would have had to await findings on the conduct of the respondent before it could make meaningful submissions on that ground for an indemnity order. It is also correct to observe that I had not indicated to the parties that final orders, as distinct from findings, would be made at the conclusion of my reasons on the issue whether contempt had been committed.
21 The order should in my view be vacated. I should add that the applicant does not need such an order so that it might argue for indemnity costs on the penalty proceedings.
22 Parties who prosecute contempt cases are often recognised as performing a public duty and an order for indemnity costs is made so that they will not be out of pocket because they have undertaken that role. This is such a case And it is a case where the applicant was put to considerable expense in adducing evidence and piecing together what occurred because of the decision made by the respondent not to explain the events which took place and to call only one witness in answer to the charges. There are strong reasons why the applicant should have its order for indemnity costs in relation to the proceedings culminating in the declaration, as well as the penalty and costs proceedings.
23 In relation to the points raised by the respondent, I add only the following: the applicant was almost entirely successful in its prosecution. This is not a case for dealing separately with charges made out. It acted properly, in my view, in putting forward the evidence relating to the conduct of the respondent in Queensland and could not have been expected to think, if it is realistic in hindsight, that the facts would have been agreed to in whole or in part. In any event, this is a matter for the taxing officer to assess on account of reasonableness.
24 The applicant conceded, in light of one of the respondent's contentions, that the order for indemnity costs should carry the rider that it is not to include costs unreasonably incurred. Such an order was made in Degmam v Wright. I would not have thought a taxing officer needed this reminder.
25 The applicant is entitled to its costs of the proceedings on an indemnity basis. The respondent submits that the costs of the hearing of 29 March 2001 were brought about by the need for an adjournment to consider the future evidence relevant to the entry of the order. That adjournment in my view was brought about by the respondent's solicitors lack of understanding. This should not have occurred and can hardly be visited upon the applicant.
I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel .