C & C Fisher Pty Ltd v Livadaras

EX TEMPORE REASONS FOR JUDGMENT (Corrected from transcript) 1 This is an application for indemnity costs against the applicants who were unsuccessful in these proceedings. It is put on three bases: firstly, that the respondents' solicitors made what, is said to be, a Calderbank offer to the applicants' solicitors which was unreasonably or imprudently rejected; secondly, that the applicants' case was so manifestly hopeless, or had so little prospects of success, that it should never have been pursued; and, thirdly, that the applicants made allegations of bad faith against Mr Livadaras which amounted to equitable fraud and that that should attract an award of indemnity costs, in circumstances where I have found that there was no basis for those allegations. 2 In relation to the first of these bases, the Calderbank offer, I consider that the offer in the form it was made, that is, that the applicants should discontinue their proceedings against the respondents, and the respondents would waive their entitlement to costs, is not a Calderbank offer and does not constitute an offer of compromise: see Australian Consumer and Competition Commission v Universal Music Australia Pty Ltd (2002) 201 ALR 618 at [60] per Hill J; Vasram v AMP Life Ltd [2002] FCA 1286 at [12] per Stone J; Fyna Foods Australia Pty Ltd v Cobannah Holdings Pty Ltd (No 2) [2004] FCA 1212 at [10] per Kenny J; and Jacomb v AMACSU [2004] FCA 1600 at [7] per Crennan J. 3 However, that does not dispose of the matter because the reasonableness of the applicants' conduct in rejecting a Calderbank offer, even if it were a Calderbank offer, is still a matter that is raised in the second basis, namely, the overall unreasonableness of the respondents in pursuing the proceedings. In relation to that aspect, I do not consider the applicants' case fits under any of the various labels that have been used to describe the pursuit of a case in circumstances which, having failed, attracts indemnity costs. They include that the case was manifestly hopeless, or had no prospects of success, or was being pursued in wilful disregard of known facts or clearly established law, or the prolongation of the case was based on groundless contentions. 4 I consider that the applicants' case involved a number of contentious issues of fact and law that were clearly arguable. Even though it lost on these issues, I do not consider that means that those contentions were manifestly hopeless, or had no prospects of success, or amounted to the pursuit of groundless contentions. If I had though that, it would not have taken me 29 pages of reasons to deal with them. 5 As to the third basis, the allegation of bad faith against Mr Livadaras. The applicants alleged that he acted improperly in the conduct of the meeting of 12 December, in a way that amounted to bad faith. This allegation would undoubtedly have caused Mr Livadaras great stress. 6 However, I consider that stress is a concomitant of litigation of this kind and Mr Livadaras has been vindicated by my findings that there was nothing in his conduct of the meeting that amounted to bad faith. These findings should be sufficient to ameliorate any adverse effect on his reputation. Moreover, I consider that the respondents need to establish more to have me exercise the discretion to award indemnity costs in their favour. They need to establish the sorts of things that Woodward J referred to in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 400 to 401 per Woodward J, namely, pursuing allegations of fraud that are known to be false, or pursuing allegations of fraud that were irrelevant to the issues between the parties. 7 As to the former, counsel for the respondents, Mr Pirrie, did not submit that the applicants were pursuing these allegations of bad faith knowing them to be false. Rather, he founded the respondents' application on the fact that I had ultimately concluded that there was no basis for making these allegations. I did not consider the success of the respondents in these proceedings can be said to amount to the pursuit of allegations of fraud by the applicants, when they knew them to be false. As to the latter example given by Woodward J, clearly the allegation of bad faith was a relevant and central issue between the parties. 8 For these reasons, I reject the respondents' application for indemnity costs. 9 As to the costs of this application, Mr Pirrie has relied upon the orders made by Greenwood J in Australian Olives Ltd v Livadaras (2008) 172 FCR 34. 10 I do not consider what another judge did in other proceedings, albeit that they might have dealt with similar issues, should have a bearing on the exercise of my discretion as to the costs of this application for costs. The applicants have been successful on this application and that success would usually result in an award of costs in their favour. I do not consider that anything has been put before me by Mr Pirrie which would affect that conclusion. 11 The orders I propose to make, in addition to the orders I made on the last occasion, are: (1) That the applicants pay the respondents' costs of and incidental to these proceedings on a party and party basis. (2) That the respondents pay the applicants' costs of this application for costs. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves.