Davaria Pty Limited v 7-Eleven Stores Pty Limited

1. The costs of the application for leave to appeal dated 8 March 2021 be costs in the cause in the relevant underlying proceeding (namely, proceeding number VID 180 of 2018). [Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.]

MOSHINSKY J: 1 On 8 March 2021, the applicants filed applications for leave to appeal from interlocutory decisions made by the primary judge in proceedings VID 180 of 2018 and VID 182 of 2018. At the time the applicants filed the applications for leave to appeal, the reasons for judgment of the primary judge were not yet available. They were subsequently provided to the parties: Davaria Pty Limited v 7-Eleven Stores Pty Ltd (No 8) [2021] FCA 295. Having reviewed the primary judge's reasons for judgment, the applicants indicated to the respondents (7-Eleven) that they wished to discontinue their applications for leave to appeal. There was a disagreement between the parties regarding the costs of the applications for leave to appeal. Accordingly, on 12 April 2021, I made orders by consent (in respect of each application for leave to appeal) that the application for leave to appeal be dismissed, and that the parties file and serve written submissions and any evidence concerning the costs of the application. 2 The parties have now filed written submissions on the question of costs. The competing positions of the parties can be summarised as follows: (a) The applicants contend that the costs of the applications for leave to appeal should be costs in the cause in the underlying proceedings, namely VID 180 of 2018 and VID 182 of 2018. (b) 7-Eleven contends that the applicants should pay the costs of the applications for leave to appeal. 3 The background can be summarised as follows. There are two representative proceedings before the Court (namely, VID 180 of 2018 and VID 182 of 2018). The proceedings are related and are being case managed together. 4 In VID 180 of 2018, the applicants filed an interlocutory application seeking: (a) leave to file a Third Further Amended Originating Application and a Third Further Amended Statement of Claim; and (b) orders for oral discovery in respect of four individuals. 5 In VID 182 of 2018, the applicants filed an interlocutory application seeking leave to file a Third Further Amended Originating Application and a Second Further Amended Statement of Claim. 6 On 19 February 2021, the hearing of the interlocutory applications took place before the primary judge. His Honour reserved his decision. 7 On 22 February 2021, the Associate to the primary judge sent an email to the parties stating that his Honour had come to a decision regarding the interlocutory applications and set out the substance of the decision. In summary, his Honour decided to refuse the application for oral discovery. In respect of the application for leave to amend, his Honour decided: (a) to refuse the application to add an unconscionable system of conduct claim; (b) to allow the application to supplement the case with the further allegations and particulars revealed to the applicants in the course of reviewing 7-Eleven's discovery and preparing lay evidence; (c) to refuse the application to extend the group member definition; (d) to allow the application (if necessary) to formally cast matters pleaded in additional or amended paragraphs of the proposed pleading as common questions; and (e) to allow the application to remove claims against the ANZ Bank. 8 The email stated that brief reasons would be provided as soon as practicable. The parties were requested to provide orders reflecting the decisions, as well as orders dealing with certain ancillary matters. 9 On 5 March 2021, following a brief hearing on that day, the primary judge made orders in each proceeding reflecting the decisions outlined in the 22 February 2021 email and other case management matters. 10 On 8 March 2021, the applicants filed the two applications for leave to appeal. Each application was supported by an affidavit of Stewart Levitt, the Senior Partner at Levitt Robinson, the solicitors for the applicants, dated 8 March 2021. 11 On 29 March 2021, the reasons for judgment were provided to the parties. In the reasons for judgment at [2], the primary judge referred to the email of 22 February 2021 by which he had advised the parties of his decision in respect of the interlocutory applications, indicating that he would provide brief reasons for his decision as soon as practicable. His Honour explained that he did not want to delay providing the parties with his decision as the trial was looming and there were a number of significant interlocutory steps still required to be attended to by the parties. It is not necessary for present purposes to summarise the balance of the primary judge's reasons for judgment, which are detailed, comprising 122 paragraphs. These reasons assume a familiarity with the reasons for judgment of 29 March 2021. 12 In its written submissions on costs, 7-Eleven submits that the presumption created by r 26.12 of the Federal Court Rules 2011 is that a respondent to a discontinued application is entitled to their costs: Balanggarra Aboriginal Corporation v Western Australia [2018] FCA 1538 at [68]-[69]; see also Kaur v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (Costs) [2020] FCA 1247 at [23]; Read v Stevens Publishing Pty Ltd [2016] FCA 459 at [13]; and W Win Engineering Pty Ltd v Wiggins [2016] FCA 967 at [6]-[7]. 13 7-Eleven submits that the presumption can be displaced if the discontinuing party shows the Court good reason not to award costs, but (in 7-Eleven's submission) the applicants' written submissions do not do that. 14 In response to a submission by the applicants that the applications were filed to preserve their entitlement to seek leave to appeal, 7-Eleven submits that there are two reasons why the applicants did not need to file the applications for leave to appeal by 8 March 2021 in order to preserve their entitlement to seek leave to appeal. First, 7-Eleven submits, the time for filing an application for leave to appeal did not begin to run from the date on which the primary judge, by his Associate, emailed the parties foreshadowing the orders the Court intended to make - the email in question was neither a "judgment" nor an "order" for the purposes of r 35.13. Second, 7-Eleven submits, even if the email of 22 February 2021 could have set time running under r 35.13, there were other means by which the applicants could have preserved their entitlement to seek leave to appeal: the applicants could have written to 7-Eleven asking it to confirm that it would not oppose an extension of time under r 35.14; alternatively, the applicants could have sought 7-Eleven's consent to an order under r 35.13(b). 15 While I accept that, in accordance with the authorities cited by 7-Eleven, the default or usual position under r 26.12 is that the discontinuing party is liable to pay the costs of each other party, in the circumstances of the present case, I consider that good reason has been shown to depart from that position. The significant factors in the present case are that there was a risk that the time for filing an application for leave to appeal may have commenced to run on 22 February 2021 (although I consider the clearly better view to be that time did not start to run until the orders were made on 5 March 2021) and the reasons for judgment were not yet available on the date that was 14 days after 22 February 2021, namely 8 March 2021. In these circumstances, and having regard also to the nature of the interlocutory applications before the primary judge and the issues raised by those applications, the applicants acted reasonably in filing the applications for leave to appeal on 8 March 2021. Similarly, once they received and reviewed the primary judge's reasons for judgment, they acted reasonably in seeking to discontinue the applications for leave to appeal. 16 While it is true that there were alternative courses available to the applicants to preserve their ability to seek leave to appeal, such as seeking 7-Eleven's consent to an order being made under r 35.13(b), it may not have been practicable to adopt that course given the need to obtain advice and the short time frame in which to file an application for leave to appeal. 17 In the circumstances, I consider it appropriate to order that the costs of each application for leave to appeal be costs in the cause in the relevant underlying proceeding. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Moshinsky.