Gagarimabu v BHP Billiton Limited [2002] VSC 525

5. On 4 February 2002 OTML offered certain undertakings to the plaintiff in an effort to resolve outstanding issues relevant to the 11 February hearing. These undertakings were rejected by the plaintiff's solicitors the following day.

8. On 8 February 2002 the defendant's solicitors were advised by the plaintiff's solicitors that the plaintiff did not intend to read seven of the affidavits which had been filed and served in support of his case. OTML submits that the withdrawal of these affidavits amounted to a substantial amendment to the plaintiff's case, thus giving it an entitlement to costs thereby rendered wasted in accordance with ordinary principles. It argues that it should be entitled to its costs including its costs of answering those affidavits on an indemnity basis. In particular, it points to the fact that it had to have lawyers travel to New Guinea for the purpose of obtaining the necessary instructions to answer the affidavits filed by the plaintiff but no longer relied upon.

11. The matter listed for 11 February was in fact heard on 12 February 2002. On that date the parties announced a resolution of the issues then before the Court upon the basis of certain undertakings being given by OTML, which undertakings were accepted by the plaintiff. The effect of those undertakings was to prevent OTML from taking certain steps which the plaintiff said would permanently affect his rights and the rights of those group members he represents in this action, without giving the plaintiff a period of notice to enable him, if possible, to protect his position. There was no determination of the questions which the plaintiff says arise for determination under s 33V of the Supreme Court Act 1986.

14. In Australian Securities Commission v Aust-Home Investments Limited and Others[1] Hill J considered the question of liability for costs where the Court was not called upon to adjudicate upon the merits of a dispute. His Honour set out five principles which might, in appropriate cases, provide some guidance as to the exercise of the judicial discretion in respect of costs. Those five principles were endorsed by Warren J of this Court in Acacia Resources Ltd v Delta Gold NL[2] and have been accepted as appropriate by a number of other courts[3].

17. Hill J's second principle is to the effect that it will rarely, if ever, be appropriate for a court to determine how the costs of a proceeding should be borne by attempting to determine the case for itself on the merits. To do so would involve the conduct of a hypothetical trial. The resolution of issues between parties by way of compromise inevitably involves a yielding of some ground on each side. In the present case the undertakings given by the second defendant (which were given with an express denial of liability) had the effect of extending earlier interim and interlocutory injunctions granted by the Court on 7 and 21 December 2001. In granting those injunctions, of course, the Court had had to be satisfied that there were serious issues to be tried between the parties and that the balance of convenience favoured the maintenance of the status quo. OTML's yielding to an effective continuation of those injunctions by the giving of appropriate undertakings does not, in any way, entitle the Court now to go beyond the interlocutory determinations which it made on 7 and 21 December. Accordingly it does not do so. It makes no finding as to whether, had the matter been argued the plaintiff would have been successful in its application to have the second defendant found guilty of contempt or would have been successful in obtaining injunctive, declaratory or other relief.

20. Another of Hill J's principles is to the effect that it is appropriate for the Court to determine whether the applicant acted reasonably in commencing the proceeding in respect of which the costs issue has arisen and whether the respondent to that proceeding has acted reasonably in defending it. In the present instance I am satisfied that the plaintiff acted reasonably in bringing the proceeding which was ultimately compromised and that the respondent acted reasonably in defending it. However, it is also clear that the plaintiff has, in effect, achieved at least part of the outcome which he sought to achieve by the institution of the proceeding and in that sense, at least, he has been successful.

23. Considering all of Hill, J's propositions, including those to which I have not specifically referred and all the circumstances of the case I consider it appropriate that the plaintiff, generally, should receive his costs of the application subject to the matters I now turn to.

26. The issue of the withdrawn affidavits cannot be ignored. The second defendant was undoubtedly put to significant expense in preparing answering material in respect of them even if some of the material contained in them could have been successfully objected to as being inadmissible. The second defendant had to seek evidence in Papua New Guinea to attempt to refute the factual assertions made in those affidavits and accordingly it should have at least some of its costs of its doing so taxed on a party/party basis, not on an indemnity basis. As, having taken instructions from a number of indigenous citizens of Papua New Guinea on many issues which will eventually become relevant upon a trial of this action, OTML has gained more from such instructions than just material to answer the plaintiff's withdrawn affidavits it is reasonable that its recoverable costs in respect of those instructions should be reduced by 15 per cent, so that it should be awarded 85 per cent of its reasonable costs of answering those affidavits in this interlocutory proceeding. Further, the second defendant should not be required to pay the plaintiff's costs with respect to the preparation of the withdrawn affidavits.

29. In its further submissions on costs dated 8 March 2002 the second defendant sought costs in respect of two further matters.

32. Firstly, it sought costs on the return of a subpoena/notice to produce on 25 January 2002. In paras 19-27 it sets out a basis for that application. Nothing in those submissions persuades me that I ought to depart from the ordinary order which I have made generally in interlocutory proceedings in this case, that is to say that the questions of costs should be reserved in respect of the subpoena/notice to produce issue, the other costs of that hearing already having been awarded by an order made on that day.

35. The second defendant also claims to be entitled to an order for costs thrown away by virtue of the plaintiff's late application to file evidence. In paras 28-32 of its further submissions the defendant argues its case as to why it should be entitled to these costs as well. Again, I consider that the question of costs in this respect should also continue to be reserved.

1. That the second defendant pay the plaintiff's costs of his further amended summons filed 24 December 2001 including the costs of this application for costs to be taxed on a party/party basis; such costs not to include the plaintiff's costs of preparing, filing and serving the affidavits of Boston Kasiman sworn 19 January 2002, Kesawe Duge sworn 21 January 2002, Ken Kese sworn 21 January 2002, Sauna Daguba sworn 20 January 2002, Tenny Tameo sworn 20 January 2002, Phidelis Phillie sworn 21 January 2002 and Pia Dometa sworn 21 January 2002.

2. That the plaintiff pay 85 per cent of the second defendant's costs to be taxed on a party/party basis of its preparation, filing and serving the affidavits of Reverend Touta Gauga sworn 30 January 2002, Pius Kami sworn 30 January 2002, James Wanjik sworn 1 February 2002, Paul Scarr sworn 2 February 2002, Louis ToRobert sworn 2 February 2002, Ketu Nuri sworn 2 February 2002, Martin Zeiye sworn 2 February 2002, Ivan Buago sworn 3 February 2002, Conrad Akope sworn 3 February 2002, Roger Magautu sworn 3 February 2002, Rex Salle sworn 3 February 2002 and Charles Tenakenai sworn 3 February 2002.

3. That otherwise all questions of costs between the plaintiff and the second defendant continue to be reserved.

4. That this order be drawn up by the solicitors for the plaintiff and signed by a Judge pursuant to Rule 60.04 of the Rules of the Supreme Court.

[1] [1993] FCA 585; (1993) 44 FCR 194.

[3] Re The Minister for Immigration and Ethnic Affairs of the Commonwealth; ex parte Lai King Quin [1997] HCA 6; (1997) 186 CLR 622; Gribbles Pathology Pty Ltd v Health Insurance Commission & Ors (1997) 80 FCR 283 and WST Securities Pty Ltd v Go-Tell Nominees Pty Ltd & Ors (1997) SCV (unreported, Mandie J; 30 May 1997)