REASONS FOR JUDGMENT
1 The trial of this proceeding was heard by Selway J.
2 This proceeding was commenced on 11 March 1999 as a representative proceeding pursuant to s 33C of the Federal Court of Australia Act 1976 (Cth). The claimant represented 481 members in the group. A Settlement Scheme which provided a structured regime for settling the group members' claims was approved by the Court on 22 March 2001. The proceeding arose out of an outbreak of food poisoning amongst members of the public after drinking a product manufactured and sold by the first respondent and cross-claimant, Knispel Fruit Juices Pty Ltd ('Nippy's').
3 A cross-claim was brought by Nippy's against Peter Constas and Theo Constas (the second and third cross-respondents). The first cross-respondent, Nippy's Waikerie Producers Pty Ltd ('Packing'), subsequently also brought a cross-claim against the second and third cross-respondents.
4 The trial of these cross-claims was heard by Selway J over some 35 sitting days between 5 December 2002 and 27 June 2003. On 13 August 2003 Selway J delivered judgment in Dowdell v Knispel Fruit Juices Pty Ltd [2003] FCA 851 and on the same day made the following declarations and orders:
'1. The First Cross-Claimant is entitled to recover from the First Cross-Respondent damages, as assessed by the Court, in respect of the breaches by the First Cross-Respondent of contracts for the supply of oranges by the First Cross-Respondent to the First Cross-Claimant in the period December 1998 to March 1999 inclusive as follows:
1.1 All moneys paid by the First Cross-Claimant as at the date of judgment in order to resolve personal injury claims brought against the First Cross-Claimant arising out of the outbreak in 1999 of Salmonella Typhimurium Phage Type 135a in the total amount of $1,274,677.86.
1.2 All further moneys paid by the First Cross-Claimant on or after the date of judgment in order to resolve (whether by way of reasonable compromise or in accordance with the terms of the judgment of any Court) all personal injury claims brought against the First Cross-Claimant arising out of the outbreak in 1999 of Salmonella Typhimurium Phage Type 135a.
1.3 Costs incurred by the First Cross-Claimant in managing the salmonella outbreak the subject of these proceedings in the amount of $489,801.38.
1.4 Reasonable costs and disbursements incurred by the First Cross-Claimant in defending and settling all personal injury claims brought against the First Cross-Claimant arising out of the outbreak in 1999 of Salmonella Typhimurium Phage Type 135a.
1.5 Loss of profits suffered by the First Cross-Claimant as a result of the outbreak in 1999 of Salmonella Typhimurium Phage Type 135a in the amount of $990,906.
1.6 Interest on the foregoing at the rate of 6 per cent per annum to date of judgment in accordance with s 51A of the Federal Court of Australia Act 1976 (Cth).
2. The First Cross-Respondent is entitled to recover from the Second and Third Cross-Respondents damages, as assessed by the Court, so as to provide the First Cross-Respondent with a complete indemnity in respect of the liability of the First Cross-Respondent to the First Cross-Claimant referred to in par 1 of these Declarations.
AND THE COURT ORDERS THAT:
3. There be judgment for the First Cross-Claimant against the First Cross-Respondent for damages to be assessed so as to give effect to the declarations contained in pars 1 and 2 of this judgment.
4. The First Cross-Respondent pay to the First Cross-Claimant the amount of $3,182,009.24 (which sum includes interest of $426,624 to date of judgment) on account of damages to be assessed.
5. The final assessment of the damages to which the First Cross-Claimant is entitled from the First Cross-Respondent do stand adjourned.
6. There be judgment for the First Cross-Respondent against the Second and Third Cross-Respondents for damages to be assessed so as to give effect to the declarations contained in paras 1 and 2 of this judgment.
7. The Second and Third Cross-Respondents pay to the First Cross-Respondent the amount of $3,182,009.24 on account of damages to be assessed.
8. The final assessment of the amount which the First Cross-Respondent is entitled to recover from the Second and Third Cross-Respondents do stand adjourned.
9. In the event that the parties are unable to agree the quantum of the costs and disbursements referred to in par 1.4 hereof, the Registrar to inquire into and report, first on an interim basis, and in due course on a final basis, on the amount of reasonable costs and disbursements incurred by the First Cross-Claimant in defending and settling all personal injury claims brought against the First Cross-Claimant arising out of the outbreak in 1999 of Salmonella Typhimurium Phage Type 135a.
10. The First Cross-Claimant's claim against the Second and Third Cross-Respondents is dismissed.
11. The question of costs be adjourned to a date to be advised for further submissions.
12. Pursuant to O 52 R 15(1)(a)(iii) of the Federal Court Rules, the time within which a notice of appeal must be filed in relation to this judgment or any part of it be extended to 21 days from the date that judgment is delivered on the question of costs.
13. Each of the parties have liberty to apply on short but reasonable notice.'
5 It is to be noted that Nippy's obtained a judgment against Packing. Packing obtained a judgment by way of indemnity from the second and third cross-respondents in respect of Packing's liability by way of judgment to Nippy's.
6 On 11 November 2003 his Honour made further orders in relation to costs:
'1. Save only for the costs the subject of order 2, Peter Constas and Theo Constas shall pay the costs of the respondent Knispel Fruit Juices Pty Ltd in the proceedings for which judgment was given in Dowdell v Knispel Fruit Juices Pty Ltd [2003] FCA 851. Such costs are inclusive of such future costs in relation to the cross-respondents (or any of them) as may reasonably be incurred by Knispel Fruit Juices Pty Ltd in relation to the assessment of damages pursuant to par 6 of the order made on 13 August 2003.
2. In relation to the issue of the extent of any damages suffered by the respondent:
(a) Peter Constas and Theo Constas shall pay to the respondent Knispel Fruit Juices Pty Ltd 50 per cent of the costs of the respondent; and
(b) American Home Assurance Company, AMP General Insurance Ltd and CGU Insurance Ltd shall pay to the respondent Knispel Fruit Juices Pty Ltd 50 per cent of the costs of the respondent.
3. Peter Constas and Theo Constas shall pay the costs of the first cross-respondent Nippy's Waikerie Producers Pty Ltd in the proceedings for which judgment was given in Dowdell v Knispel Fruit Juices Pty Ltd [2003] FCA 851.
4. In each instance the costs ordered to be paid do not include any costs incurred by any party in relation to the claim by Knispel Fruit Juices Pty Ltd against the Citrus Marketing Board or the claims by Nippy's Waikerie Producers Pty Ltd against American Home Assurance Company, AMP General Insurance Ltd and CGU Insurance Ltd.
5. Costs to be taxed in the absence of agreement.
6. The parties be at liberty to apply upon reasonable notice.'
7 Although Nippy's judgment was against Packing, Selway J ordered the second and third cross-respondents to pay Nippy's costs. However, that order is subject to the qualification in paragraph 2 of Selway J's orders. In respect of the costs on the issue of damages the second and third cross-respondents are liable to pay only 50% of Nippy's costs.
8 On 12 July 2005 Nippy's issued a notice of motion seeking the following order:
'1. That the costs payable jointly and severally by the Second and Third Cross-Respondents (Peter Constas and Theo Constas) pursuant to the order of Justice Selway made on 11 November 2003 be assessed as a gross sum by the Court pursuant to O62, r3(1) and r4(2) of the Federal Court Rules.'
That application related to the order for costs given in Nippy's favour against the second and third cross-respondents.
9 The notice of motion was accompanied by an affidavit which exhibited written submissions of a costs expert, Mr Cogan. He was of the opinion that costs payable by the second and third cross-respondents amounted to $1,852,523.61.
10 On 28 November 2005 Nippy's amended the notice of motion to include a further application:
'2 That the costs incurred by the respondent/cross-claimant in defending and settling the personal injury claims during the period ending 30 September 2004 and payable jointly and severally by the second and third cross-respondents pursuant to the orders of Justice Selway made on 13 August 2003 be referred to the Registrar for assessment in accordance with these orders.'
That further application related to the costs incurred by Nippy's in settling the personal injury claims. Whilst the application speaks of costs, the costs referred to are, in fact, a measure of Nippy's damages.
11 On 23 March 2006 Nippy's filed a further amended notice of motion which sought, in addition to the previous paragraph 1, the following orders:
'2. That in lieu of Order 9 made by Justice Selway on 13 August 2003 the costs incurred by the Respondent/Cross-Claimant in defending and settling the personal injury claims during the period ending 30 September 2004 and payable jointly and severally by the Second and Third Cross-Respondents pursuant to the orders of Justice Selway made on 13 August 2003 be assessed by a Justice of this Court by way of damages.
3. That pursuant to Order 34B Rule 2 Registrar Christie or some other Registrar of this Honourable Court suitably knowledgeable and experienced as to the taxation of legal costs according to the Federal Court scales be appointed as an expert assistant to assist the Court in making the assessments identified in paragraphs 1 and 2 above.
4. In the alternative to paragraph 3, that, pursuant to Order 34 Rule 2, Registrar Christie or some other Registrar of this Honourable Court suitably knowledgeable and experienced as to the taxation of legal costs according to the Federal Court scales be appointed by the Court as an expert to enquire into and prepare an expert report estimating on a lump sum basis the legal costs and disbursements incurred by the Respondent/Cross-Claimant and falling within paragraphs 1 and 2 above.'
12 Since the issue of the first notice of motion dated 12 July 2005, the matter has been before the Court on a number of occasions. Nippy's has supplemented the evidence in support of the notice of motion several times.
13 In the end, the parties agreed a number of matters and submitted draft orders for my consideration. The draft orders were in the following form:
'1. The First Cross-Respondent pay to the Cross-Claimant the sum of $1,816,152.55 by way of final assessment of the damages to which the Cross-Claimant is entitled to receive from the First Cross-Respondent pursuant to Declaration 1.2 made by Selway J on 13 August 2003.
2. The First Cross-Respondent pay to the Cross-Claimant interest on the sum of $1,816,152.55 in the amount of $23,322.72 pursuant to Declaration 1.6 made by Selway J on 13 August 2003.
3. The First Cross-Respondent pay to the Cross-Claimant the sum of [to be completed] by way of final assessment of the damages to which the Cross-Claimant is entitled to receive from the First Cross-Respondent pursuant to Declaration 1.4 made by Selway J on 13 August 2003.
4. The First Cross-Respondent pay to the Cross-Claimant interest on the sum of [to be completed with the total of the amount in order 3] in the amount of [to be completed] pursuant to Declaration 1.6 made by Selway J on 13 August 2003.
5. The Second and Third Cross-Respondents pay to the First Cross-Respondent the sum of [to be completed with the total of the amounts in orders 1 to 4] by way of final assessment of the damages and interest to which the First Cross-Respondent is entitled to receive from the Second and Third Cross-Respondents pursuant to Declaration 2 made by Selway J on 13 August 2003.
6. The Second and Third Cross-Respondents pay the Cross-Claimants costs and disbursements of the proceedings for which judgment was given in Dowdell v Knispell Fruit Juices Pty Ltd [2003] FCA 851 in the amount of [to be completed].
7. The question of the costs of and incidental to the Cross-Claimant's further amended notice of motion filed herein on 23 March 2006 be adjourned to [a date to be fixed].'