reasoning
16 The first issue is whether an order for costs should be made now, or whether the question of costs should be deferred. I see no reason to defer making an order for costs. A contested hearing has been held. Judgment has been delivered and the appellate process exhausted. While the proceedings are interlocutory in character, on any view, they have resolved important issues in the proceedings and have done so in favour of the applicant and the represented group. The applicant is in my view entitled to have his application for costs heard and to have appropriate orders made.
17 The second issue is what costs order should be made. In my view, it is appropriate that Medtel be ordered to pay the applicant's costs to the date of the Judgment. I do not think that a distinction should be drawn between costs referable to the applicant's own claim for damages and costs referable to the representative proceedings.
18 It must be remembered that both parties agreed to holding a hearing that would resolve the applicant's claim and address questions that would assist in resolving the claims of the represented group. On any view, the proceedings were not confined to hearing and determining the applicant's own claim for compensation. As the applicant submits, even on Medtel's foreshadowed case in relation to the use of yellow spool solder, the answer given by me to Question (b) effectively establishes that Medtel is liable to compensate most of the 289 members of the represented group whose pacemakers have been explanted. It follows that the costs properly incurred by the applicant in relation to the hearing were not confined to preparing the applicant's own claim for compensation. On the contrary, they included the costs of preparing a case that potentially affected all members of the represented group.
19 It is true that the applicant may have incurred some relatively modest costs in relation to causes of action that were not addressed at the hearing, in particular in gathering evidence relevant to the pleaded cause of action based on breach of duty. However, one purpose of limiting the hearing to the causes of action under ss 74B and 74D of the TP Act was to avoid the time and expense in litigating issues that, in the event, have apparently proved unnecessary to resolve. In view of this, the applicant should not be deprived of the portion of his costs attributable to causes of action other than those arising under the TP Act.
20 The third issue is whether an order should be made under FCR, O 62 r 3(3) entitling the applicant to have his bill of costs taxed before conclusion of the principal proceedings. The starting point is to identifying the policy reasons underlying FCR, O 62 r 3(3). These include discouraging interlocutory applications (Stack v Brisbane City Council (1996) 71 FCR 523, at 534, per Drummond J); avoiding the inconvenience and possible oppression involved in a series of taxations where there are successive interlocutory applications (Vasyli v AOL International Pty Ltd [1996] FCA 804, per Lehane J); and the fact that it is usually inappropriate to require the unsuccessful party to interlocutory proceedings to pay costs immediately, since that party might ultimately succeed in the substantive proceeding (Brasington v Overton Investments Pty Ltd [2001] FCA 571, at [13], per Emmett J; Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136, at 145, per curiam).
21 FCR, O 62 r 3(3) has generally been interpreted as conferring a discretion which should be exercised in favour of a party who establishes that the demands of justice require a departure from the general practice envisaged by the sub-rule, namely that an order for costs of an interlocutory proceeding should not entitle a party to have a bill of costs taxed until the principal proceedings are concluded: Thunderdome Racetiming and Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297, at 312, per Olney J; Stack, at 535, per Drummond J. It appears to be broadly accepted that some reason must be shown to depart from what Lehane J in Vasyli described as the "clear practice of the Court". Lehane J thought that a departure would be countenanced only in "rare cases". Other judgments have suggested that the power might be somewhat under utilised: Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (No 14) [1995] FCA 660, per Lindgren J; Life Airbag Company of Australia Pty Ltd v Life Airbag Company (New Zealand) Ltd [1998] FCA 545, per Branson J; McKellar v Container Terminal Management Services Ltd [1999] FCA 1639, at [41], per Weinberg J.
22 A variety of circumstances have been regarded as justifying a departure from the general rule. The general rule has been departed from, for example, where an interlocutory proceeding involving a discrete issue has been resolved (Australian Flight Test Services v Minister for Industry, Science and Technology [1996] FCA 288, per O'Loughlin J) and where the principal proceedings are not likely to be resolved for some time, so that in the absence of an order the successful party will not enjoy the fruits of the interlocutory order for a long period (Life Airbag; Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 13) [1995] FCA 626, Full Court).
23 In my opinion, the circumstances of the present case clearly warrant a departure from the usual practice of the Court. The parties have chosen, perfectly sensibly, to litigate in a separate hearing the applicant's claim for compensation together with issues of considerable importance to the representative proceedings. Although the proceedings have not yet concluded, the Judgment can fairly be regarded as dealing with largely discrete issues. The applicant has incurred very substantial costs in conducting the proceedings. It appears that the proceedings as a whole will not be concluded for some considerable time, in part because Medtel wishes to adduce further evidence on the yellow spool solder issue. In my view, it would be unfair to deny the appellant the opportunity to tax his costs without delay.
24 I should add that if the respondents succeed in future stages of the litigation, in the ordinary course they can expect to obtain the benefit of a costs order. In my view, the possibility that the respondents may succeed on some aspects of the litigation in the future does not warrant either deferring the making of a costs order or declining to make an order under FCR, O 62 r 3(3). There has been no suggestion that if the applicant is entitled to tax his costs at this stage, the respondents will be at risk of obtaining unenforceable costs orders in the future.
25 The fourth issue is whether an order should be made that FCR, O 62 r 36A(1) not apply. In my opinion such an order should be made, largely for the reasons I have already given. This is not a case which should not have been brought in this Court or which can be said to involve only a modest claim. It is a representative proceeding and there has been no challenge to its constitution as such. The orders made, when read with the Judgment, are significant for all members of the represented group. Indeed this is what the parties intended when they identified separate questions for determination.
26 On the other hand, I do not think it appropriate to accede to the applicant's invitation to order Medtel to pay a lump sum on an interim basis. The orders I have foreshadowed to make provision for the applicant to tax his costs notwithstanding that the principal proceedings have not concluded. Moreover, the evidence is insufficient to enable me to make a sufficiently precise estimate of the quantum of party and party costs that are payable by Medtel at this stage of the litigation.
27 I am, however, conscious that the parties might wish to avoid the expense of a taxation of costs, at least at this stage of the proceedings. I indicated at the costs hearing that I would be minded to record in this judgment a figure which, on the incomplete material before me, would seem to be a reasonable figure for Medtel to pay on account of liability to pay costs on a party and party basis, after allowing for the amount already paid by it. However, this figure is merely a guide which the parties are free to accept or reject. The figure I have in mind is $350,000, inclusive of GST.
28 The orders I propose to make are as follows:
- Medtel pay the applicant's costs of the proceedings to the date of Judgment, including the costs of his individual and representative claims, except for those costs that are already subject to a costs order.
- The applicant be entitled, pursuant to FCR, O 62 r 3(3), to have his bill of costs taxed notwithstanding that the principal proceedings have not concluded.
- Pursuant to FCR, O 62 r 36A(1), the applicant's costs are not to be reduced notwithstanding that the applicant has been awarded judgment for a sum less than $100,000.
- The above orders be without prejudice to the applicant's entitlement to seek an order for payment of his costs on an indemnity basis.
I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice SACKVILLE.