Canberra Residential Developments Pty Limited v Brendas

Federal Court of Australia|2010-03-04|Before: Graham J, Stone J

REASONS FOR JUDGMENT 1 On 30 January 2009 Graham J ordered Canberra Residential Developments Pty Limited (CRD) to pay the respondents' costs incurred in connection with an unsuccessful application made by CRD; Canberra Residential Developments Pty Limited v Brendas (No5) [2009] FCA 34; 69 ACSR 435. On 16 February 2010 following a hearing on the applicant's notice of motion, I set aside an interim certificate of taxation issued on 8 February 2010 in respect of a bill of costs submitted by the first, second and third respondents; Canberra Residential Developments Pty Limited v Brendas [2010] FCA 90. I also ordered that no further certificate pursuant to the taxing officer's decision be issued for 14 days from the date of the order. 2 The applicant was otherwise unsuccessful in its application, pending the outcome of an appeal from Graham J's decision, to stay his Honour's costs order, to restrain the respondents from drawing on the bank guarantees provided by the applicant as security for the respondents' costs and to have $40,000 also provided as security paid into this Court. Following the hearing of the notice of motion I allowed the parties five days within which to provide written submissions on the question of costs of the motion. 3 The Court has an unfettered discretion in relation to the award of costs of a proceeding; Federal Court of Australia Act 1976 (Cth) s 43(2). In general, costs follow the event but this is a practice not a rule; the practice may give way to individual circumstances. In particular, the Court may apportion the costs between the parties where each has been successful to some extent. Ultimately, the principle is that the discretion must be exercised judicially and, as Allsop J said in DSE (Holdings) Pty Limited v InterTAN Inc [2004] FCA 1251 at [14], it is "a broad and ample power not to be read down otherwise than by judicial principle conformable with the amplitude of the power". 4 In considering the basis on which costs should be awarded in respect of the applicant's notice of motion, it is necessary to distinguish between the position of the fourth respondent, Canberra Land Developments Pty Ltd and that of the first, second and third respondents. Therefore, in these reasons, I shall generally refer to the first, second and third respondents collectively as the respondents and to the fourth respondent as such.

The fourth respondent 5 The fourth respondent has not issued a bill of costs and, as indicated in [1] above, the interim certificate of taxation challenged by the applicant related only to the costs of the first, second and third respondents. Nevertheless, the notice of motion served on the fourth respondent, at the offices of its solicitors, on 11 February 2010 sought orders, including costs, against all the respondents without differentiation.

6 At the hearing, the notice of motion was amended to exclude any reference to the fourth respondent however there had been no prior communication of this intention to the fourth respondent. That being so the fourth respondent was represented at the hearing of the notice of motion by Mr John Harris of J S O'Connor Harris & Co, solicitors although, as it transpired, the notice of motion was abandoned against the fourth respondent. In the circumstances the fourth respondent incurred wholly unnecessary costs as a result of the applicant's actions. In the circumstances it is appropriate, and it was accepted by the applicant in its written submissions, that the fourth respondent should have its costs of the notice of motion.

7 The applicant seeks costs against the respondents. It submits that the hearing only became necessary because the interim costs certificate had been incorrectly issued against the applicant. The issue triggered an entitlement in the respondents to call on the bank guarantees issued in their favour prior to the hearing before Graham J. Therefore, the applicant submits, that in having the interim certificate set aside, it was successful on the main issue.

8 The respondents submit that the argument as to the operation of O62 r42 of the Federal Court Rules that was considered at the hearing and outlined at [2010] FCA 90 at [6]-[10], was not articulated by the applicant prior to the hearing. Moreover despite request by the respondents' solicitors in correspondence between the parties, the applicant did not identify any basis in the Rules for its position.

9 Both parties made submissions about the extent of argument on issues other than the issue of the interim certificate however I do not regard the submissions on either side as warranting detailed examination here. Ultimately, both the applicant and the respondents were partially successful. In succeeding in having the interim certificate set aside the applicant vindicated its right to object to the interim assessment. On the other hand the respondents were successful in defending their rights not to be precluded from enjoying the benefits of the costs order made by Graham J. It is difficult to give relative weight to the points on which they were successful and I do not regard it as necessary for me to do so. I have concluded that in the circumstances I have outlined it is appropriate that the applicant and the respondents each bear their own costs of the notice of motion

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone.

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