Ingram as trustee for the Ingram Superannuation Fund v Ardent Leisure Limited

Federal Court of Australia|2020-10-01|Before: Mr J, Dixon J, Derrington J

The applicants are to pay 50% of the respondents' costs of the application. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 On 11 September 2020, this Court dismissed the applicants' proceedings seeking inspection of certain documents held by the respondent companies pursuant to s 247A of the Corporations Act 2001 (Cth) (Corporations Act). Reasons were given for that decision: Ingram as trustee for the Ingram Superannuation Fund v Ardent Leisure Limited [2020] FCA 1302 (the principal proceedings). These reasons are concerned with the question of costs. In broad terms the respondents assert that as the application was dismissed in its entirety they ought to be entitled to an order for costs in their favour on the basis that the usual rule is that costs follow the event. Conversely, the applicants submit that there ought to be no order for costs or that the question ought to be reserved until the hearing of the class action which the applicants, as lead plaintiffs, seek to pursue against the respondents and another party.

Should the ordinary rule that costs follow the event be displaced? 10 At the heart of the applicants' submissions was the proposition that, although they were unsuccessful on the application, they failed on a ground which had not been disclosed by the respondents prior to the making of oral submissions in Court, namely that the application was not made for a proper purpose because it was not made by the shareholders qua shareholders. In response, the respondents contended first that they had in fact "foreshadowed" this argument in their written submissions, second that in any event the applicants had ample opportunity to respond to the argument in oral submissions, and third that the argument was only further developed in oral submissions in response to the applicants' stated purposes for the application shifting over the course of its written submissions.

Did the respondents clearly articulate their central argument prior to the making of oral submissions in Court? 11 The circumstances preceding the hearing disclose that the factual basis of the applicants' submission in this respect is accurate. 12 The principal proceedings were commenced by an originating application supported by an affidavit, as was appropriate in the circumstances. The application under s 247A of the Corporations Act for inspection by a shareholder of a company's documents does not require pleadings and no party suggested otherwise. However, that did not mean that no mechanism was required in order to crystallise the issues for consideration at the final hearing. A case management hearing occurred on 30 July 2020 at which the following orders were made: (1) The applicants file and serve their written submissions in support of the 247A Application by 5 August 2020. (2) The respondents file and serve their affidavits and written submissions in opposition to the 247A Application by 12 August 2020. (3) The applicants file and serve any affidavits and written submissions in reply by 19 August 2020. (4) The matter be listed for hearing on 28 August 2020 at 10.00 am. 13 Submissions were filed accordingly and the matter proceeded to a hearing. 14 As is mentioned above, the respondents' submissions were devoid of any mention of the central argument which was orally advanced during the course of addresses. In the reasons for judgment in the principal proceedings I had cause to say at [80]: Before leaving this topic it is necessary to observe that the issue of whether the purpose of the intended inspection of documents was to advance the applicants' rights in their capacity as shareholders was central to the respondents' oral submissions. It was not, unfortunately, clearly articulated in the respondents' written submissions filed prior to the hearing. Indeed, if it appears at all in those submissions, it is well camouflaged. The cases relied upon by Mr Owens SC and Ms Lindeman in support of this central submission were discussed in the written submissions but, somewhat curiously, not for this point. It is more than likely that the import of the issue only became apparent to the respondents' legal advisers after the written submissions were filed. Nevertheless, the omission to properly ventilate it in the written submissions tends to undermine the benefit to the Court of receiving written submissions in advance of the hearing. On occasion, a failure to refer to a central argument in written submissions which are required by the Court to be filed prior to a hearing may have consequences in relation to costs. 15 A brief perusal of the transcript of the hearing of the application supports the conclusion that the argument that the applicants did not seek inspection of the respondents' documents for the purposes of enforcing or protecting their rights qua shareholders was a central element of the address by Counsel for the respondents. After identifying that the issue before the Court was whether s 247A of the Corporations Act would permit inspection, Mr Owens SC submitted: The beginning of the answer to that question, we say, lies in the third of the matters listed by the full court in Mesa Minerals, at paragraph 22, and they're the matters that Mr Edwards has helpfully set out in his written submissions that I think he was showing your Honour, just a little while ago in paragraph 8. The third of those matters that was identified by the full court in Mesa Minerals as a principle applicable to the exercise of this power, is that proper purpose means a purpose connected with the proper exercise of the rights of a shareholder as shareholder, and not, for example, as a litigant in proceedings against the company. In other words, what is being emphasised is that the statute contemplates the grant of access to documents to shareholders who are shareholders, not merely people who happen to be shareholders, who are in litigious disputes with the company. (Emphasis added). 16 The fact that applicants' purpose in seeking documents was not to advance their rights qua shareholders was not, as Mr Owens SC submitted, the beginning of the answer to the question, it was the complete answer, as the reasons in the principle proceedings demonstrate. Mr Owens SC went on to develop this central submission and, in doing so, he referred to many of the authorities to which reference had been made in the respondents' written outline, although not for the purposes of this argument. He then submitted: So what we get out of that is that although my learned friends have sought to deal with authorities at a very high level of generality, and said "they all involve litigation by a shareholder against a company, or proposed litigation against a company, and in many of them there has been disclosure of insurance documents". We say that it's necessary to look at them a little more closely, and to see when you do, that they involve a very different kind of litigation against the company, and they involve the assertion of rights of a shareholder qua shareholder. Here, of course, while it is true that the applicant happens to still be a shareholder of the company, that is not in any way an essential element of, or even a necessary element of the cause of action that that they seek to bring. In fact, the group of claimants that ... represent will, as Mr Edwards acknowledges, consist of many group members who are not shareholders in the company at the present time. 17 In their written submissions in reply on the question of costs, Mr Owens SC and Ms Lindeman submitted that the argument on which the respondents succeeded was adequately foreshadowed in the original written submissions. They asserted, and apparently seriously, that it flowed from the submission (made at paragraph 28 of their written submissions) that the authorities on which the applicants relied were distinguishable because they involved derivative actions by a shareholder against a company or scheme. 18 With respect, that must be rejected. Whilst it is true that they sought to distinguish a number of cases on that basis, this was not for the purpose of demonstrating that the discretion under s 247A of the Corporations Act could not be exercised where the rights sought to be protected by the applicants were not held qua shareholders. Rather the point that was sought to be made was that the applicants, as members of a class action, were in a different position to shareholders in a derivative action due to the difference in financial risk allocation. This was the point made at paragraph 28 of their written submissions: Further, and significantly, all of the cases relied upon by the Applicants involve proposed derivative actions by a member against a company or a scheme. None constitute funded shareholder class actions of the kind brought by the Applicants against the Respondents. Indeed, the Respondents have not identified any case in which an application has been made under s 247A for the disclosure of documents by an applicant in class action proceedings, such applications being ordinarily made under the FCA Act. This is a significant distinction, as the financial risks faced by the Applicants in bringing the Class Action proceedings against the Respondents are entirely different to those faced by applicants in the cases identified above… This point of distinction means that the Applicants cannot rely upon the identified authorities as supporting their contention that they seek the Documents for a "proper purpose" - in no identified case was an applicant granted access to insurance documents in circumstances where they faced no personal financial risk in bringing a proposed case against the respondent company or scheme. (Emphasis added). 19 There is no reading of this paragraph on which it is open to accept that the central argument of the respondent in oral submissions was raised, or even foreshadowed. This is particularly concerning given that it was pivotal to the respondents' case and was clearly capable of succinct and clear expression, as demonstrated by the respondents' oral submissions. I reject the respondents' submission in this respect. At best, this paragraph was an attempt to leave mere footprints to be relied upon at a later time.

Did the applicants have sufficient opportunity to respond in oral submissions? 20 It was also submitted that the applicants had sufficient time to respond to the argument made so clearly in oral address by Mr Owens SC. Whilst it is true that Mr Edwards attempted to respond to the argument raised, I have no doubt that he was hampered in advancing the best arguments possible by it being raised as it was in the course of the respondents' oral address. To suggest otherwise is to negate the relevance and importance of the filing of pre-hearing written submissions. 21 It is, with respect, now too well established to doubt that the "ambush theory of litigation" has long passed. It was once in vogue and in Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161, Kirby J described, at 195 - 196 [115], the various stratagems which were once accepted: In Donaldson v Harris, Wells J described litigation in accordance with the "old common law" as "based, with rigorous logic, upon the system of litigation by antagonists". The common law protected the "treasured right of each litigant to store up, in secret, as many unpleasant surprises for his opponent as he could muster, and only reveal them at the last minute at the trial … in the presence of the judicial umpire". Wells J quoted Wigmore as explaining that the common law regarded "the concealment of one's evidential resources and the preservation of the opponent's defenceless ignorance, as a fair and irreproachable accompaniment of the game of litigation." (Footnotes omitted). 22 There is no room for any of that in modern litigation and especially so in the Federal Court. It is entirely inconsistent with the obligations of parties and litigants as proscribed by ss 37M and 37N of the Federal Court Act. Well before the introduction of those sections it had been widely accepted that ambush in litigation had become a tactic to be deprecated. So much was said by Allsop J (as the Chief Justice then was) in White v Overland [2001] FCA 1333 at [4], albeit in a slightly different context: However, by way of general principle I would simply like to make perfectly plain my view that in the efficient and proper conduct of civil litigation, even civil litigation hard fought between parties, it should always be recognised that in the propounding of issues for trial the parties should take steps to ensure that all relevant parties to the dispute are cognisant of what the issues are. Any practice of quietly leaving footprints in correspondence or directions hearings to be uncovered some time later in an attempt to reveal that a matter was always in issue should be discouraged firmly. Even if something has been said, where it is evident, or indeed suspected, that the other side is proceeding on the basis of a misconception or has not appreciated something, as a general rule, efficiency, common sense and an appreciation of the costs and resources (both public and private) likely to be wasted by confusion in litigation will mandate that a party through his or her representative ensure that the other is not proceeding on a misconception or that the other does appreciate something that has been said. Litigation is not a game. It is a costly and stressful, though necessary, evil. To paraphrase Roscoe Pound from "The Causes of Popular Dissatisfaction with the Administration of Justice" (1906) 29 ABA Rep 395, 404-406, the "sporting theory of justice" and any behavioural manifestation of it should be seen as a survival, or better, a relic, of the days when a lawsuit was a fight between two clans: cf Jackamara v Krakouer (1998) 195 CLR 516 at 526-527 per Gummow and Hayne JJ. Representatives do not owe duties to the other side's client. They owe duties to their own client. But no one's interests are advanced by litigation proceeding on assumptions which are seen or suspected to be false. This is very much the case when an issue, if it is to be propounded, might endanger the instructions of those acting for the other side. In saying this I need make no reference to the well-known responsibility of the Crown and emanations of the Crown to act at all times as model litigants beyond referring to what was said by the Full Court of this Court in Scott v Handley [1999] FCA 404 at [43] ff. I would expect no less than that which I have indicated of bitterly competitive commercial parties in the hardest fought of cases. In the long run, the only consequence of keeping issues hidden or not clearly identifying them is to disrupt the business of the court leading to the waste of valuable public resources and to lead to the incurring of unnecessary costs by the parties, costs which ultimately have to be borne by someone. (Emphasis in original). 23 His Honour's words have been referred to and approved of on too many occasions to number. The essential thesis of those comments is that the just determination of disputes according to law and the efficient use of court time is best achieved by the parties ensuring that the real issues in dispute are crystallised before a matter is heard. Those comments extend to proceedings where the issue in question is one of law founded upon essentially uncontested facts, such as in applications of the present kind or in appeals. The Court is entitled to expect that when parties are directed to file written submissions in support of the case they wish to agitate at a hearing, those submissions will articulate the main arguments on which they truly intend to rely. Indeed, it cannot be doubted that the provision of written submissions to the Court by legal practitioners is intended to represent to the Court that the arguments so advanced are those which their clients assert support the resolution of the matter in dispute in their favour. The filing of written submissions prior to a hearing is no mere formality or some requirement to be fulfilled and then forgotten. They are vital documents utilised by the Court to assist in both the conduct of the hearing and the subsequent decisional processes. For the former purpose a judge will peruse and consider written submissions prior to the hearing such that the boundaries of the arguments and the matters in dispute will be understood when the hearing commences. So long as the written submissions accurately identify the issues in dispute, court time may be efficiently utilised and allow for the refining of submissions and the application of the Socratic Method through which the cogency of the arguments can be tested. Where substantially new submissions are advanced during the hearing, the identified benefits of the provision of written submissions dissipate. The judge will not have had the opportunity to formulate all appropriate questions which might arise around the issue and nor will the opposing party have had the opportunity to consider or to research the issues raised and provide any appropriate response. Necessarily this will lengthen court time and require the judge to undertake their own independent research in order to assess whether the new argument advanced is meritorious. The unfairness to the opposing party is patent. 24 These considerations apply equally to the argument made by the respondents in their written submissions that there was no additional cost or delay caused by its central argument being further developed in oral submissions. Indeed, had the point been squarely raised in their written submissions it is possible that there may have been no need for a hearing at all, however this is a matter of speculation and I place no weight on it. 25 It must, of course, be understood that the complexity and amorphousness of the law in its modernity has the result that little, if anything, is definite. Consequently, new arguments in relation to a proposition can often be formulated upon reflection or the introduction of a fresh set of eyes. This is often the case in relation to appeals where arguments advanced on appeal, particularly on questions of law, can differ markedly from those advanced to the trial judge. Indeed, new or slightly varied arguments are not infrequently teased out during the course of oral argument before the Court. That is to be expected from the court processes. However, the circumstances of the present matter cannot be characterised in that manner. Here, a hitherto unmentioned and separate argument was developed and made pivotal to the respondents' oral submissions. Moreover, the absence of the argument from the respondents' written submissions was not explained on the basis that the argument had only been discovered following the close of submissions. Rather, the implication from the respondents' written submissions on costs is that the existence of this argument was, in fact, known to them prior to the close of submissions. 26 Having rejected the submission that the argument was articulated in the respondents' written submissions, it is necessary to consider the other reason for the omission advanced by the respondents.

Did the applicants change their case? 27 By their written outline of argument in reply on the question of costs the respondents submitted that the applicants' position as to their purpose for seeking the documents had changed over time and that this was one of their reasons for articulating the new argument in oral submissions. Putting aside for one moment the degree to which this contradicts the respondents' principal submission that it had clearly articulated the argument prior to the hearing, it was said (at paragraph 5): Thirdly, it is significant that the applicants' stated purposes for the application shifted over the course of its written submissions. Ardent initially understood the applicants to seek access to the identified documents for two purposes, namely for the purpose of ensuring that the Class Action is conducted proportionately, and for the purpose of meaningfully engaging in an early mediation of the matter. Ardent prepared its written outline of submissions on this basis: see at [11]-[12]. It was only in the applicants' written reply that they pivoted (at [2(a)]) to rely on a third purpose to justify access, namely the economic viability of the Class Action. In circumstances where Ardent was then required in its oral submissions to address the third "purpose" raised by the applicants in their written reply, Ardent should not be penalized for further developing its argument in oral submissions in respect of whether any of the applicants' stated purposes were proper. Equally, the applicants should not be rewarded by a costs order in their favour in circumstances where their outline of submissions failed adequately to foreshadow in writing the third purpose ultimately relied upon. 28 With respect, this submission must be rejected. The applicants filed their written submissions in the principal proceedings on 5 August 2020. That was a week prior to the respondents filing their submissions. At paragraph 3 of the applicants' written submissions it was said: 3. In this proceeding the Applicants make orthodox application to gain access to various documents of the Respondents pursuant to s 247A of the Corporations Act 2001 (Cth) (Act). Access to those documents is sought in order to: (a) determine the capability of the Class Action respondents to meet any potential adverse liability arising out of that proceeding, and therefore to avoid unnecessary or protracted litigation; and (b) maximise the prospects of the Class Action reaching a compromise in a timely fashion. 29 By paragraph (a) the applicants could not have made it clearer that one of the purposes for seeking inspection of the documents was to determine the economic viability of pursuing the Ardent group of companies. Paragraph 3 included a footnote reference (not replicated above) to paragraphs 67 - 72 of the affidavit of Ms Blacker which had been filed in support of the application on 9 July 2020. In the first two of those paragraphs Ms Blacker deposed: 67. In my assessment there is a real risk that the Class Action Respondents will be unable to bear the full amount of any judgment in favour of the Applicants and group members in the Class Action. In the event the Class Action is successful, any amounts of compensation awarded would be recoverable principally from insurance policies, namely those policies to which I have referred in paragraph 62, in my view. 68. I believe that in the event that the Class Action Respondents do not have insurance, or have only limited insurance which is insufficient to cover their own costs of defending the Class Action (and the Applicants' costs in bringing the Class Action, if they are successful), then the Class Action may lack practical utility. I, with my partner Mr Whyte, had carriage of the proceeding Santa Trade Concerns Pty Ltd v Robinson (NSD168412016), and I refer to the judgment of the Honourable Justice Lee on the settlement approval application: [2018] FCA 1491. I am instructed that the Applicants do not wish to engage in lengthy and costly litigation which does not have a prospect of a meaningful recovery to them and group members. … 30 In addition, at paragraph 17 of the applicants' written submissions it was stated clearly that one of the reasons the applicants sought access to the insurance documents was because the respondents' financial position was unlikely to be able to absorb a claim of between $294m and $310m. It was then stated: [I]n light of the above, the Applicants apprehend that any policies of insurance taken out by the Respondents may be the ultimate source of recovery for some or a significant part of any damages claimed in the Class Action. Again, the footnote to this paragraph (which is not replicated above), referred to paragraph 67 of Ms Blacker's affidavit of 9 July 2020. 31 In response to Ms Blacker's affidavit, the respondents filed an affidavit of Mr Michael Mills on 12 August 2020, being the same day on which they filed their submissions in the principal proceedings. At paragraph 11, Mr Mills deposed: Ardent's financial position 11. Paragraphs 34 to 51 of the Blacker Affidavit raise concerns in respect of Ardent Leisure Group's financial position and accordingly, its perceived ability to meet any adverse judgment against it in the Class Action. 32 It follows that the allegations in the first and fourth sentences in paragraph 3 of the respondents' written submissions in reply (as set out above) are inaccurate. From the inception of the action, the economic viability of the class action was one of the applicants' claimed purposes, if not the main purpose, in seeking inspection of the respondents' insurance policies. 33 In the second sentence of paragraph 3 of the respondents' written submissions in reply on costs, Mr Owens SC and Ms Lindeman purport to give evidence of the respondents' understanding of the case which the applicants sought to advance. In effect, they claim that until the receipt of the written submissions in reply for the principal proceedings on around 20 August 2020, the Ardent companies were not aware that one of the applicants' purposes in seeking inspection of documents was to ascertain the economic viability of continuing the proceedings. As the assertion is not supported by evidence it is appropriate to ignore it as an allegation as to the knowledge or the limits of comprehension of the Ardent companies or their officers. If the statement is taken as a statement as to the understanding of the legal representatives of the Ardent companies the position is somewhat concerning. As has been demonstrated above, well before the delivery of the submissions in reply, the applicants had made it pellucid that one of their principal reasons for seeking inspection of the respondents' insurance policies was to ascertain the economic viability of pursuing the class action. Paragraph 11 of Mr Mills' affidavit shows that he was acutely aware that this was the case. It is a clear mischaracterisation of the circumstances of the case to suggest that in their submissions in reply in the principal proceedings the applicants "pivoted (at [2(a)]) to rely on a third purpose to justify access, namely the economic viability of the Class Action". In fact, in the paragraph to which reference was made, Counsel for the applicants identified that the respondents had not addressed the point which the applicants had originally made, being that they were seeking inspection of the documents in order to consider the economic viability of pursuing the respondent companies. 34 The assertion that the applicants pivoted or changed their case in their submissions in reply in their substantive submissions on the application must be rejected. There is no evidence that such was the case and, indeed, the material before the Court, including the affidavit of Mr Mills, clearly and demonstrably shows that there is no foundation whatsoever to support that proposition.

Is the omission sufficient to justify departing from the ordinary rule as to costs? 35 The reason for the absence from the written submissions of the central argument advanced by the respondents remains unexplained. Had their solicitors sought to file an affidavit to provide an explanation they would have been entitled to seek leave for that purpose. As it is, leave was not sought and the court is left in the position that those who know what occurred have chosen to remain silent on the issue. The submission that the point was included in the original written submissions has been rejected. It might be said that it is not directly asserted by Counsel for the applicants that the omission was deliberate, although the emphasis on the statement in Smith v Gould (No 2), that causing the real issues to be obscured is a reason for refusing costs to a successful party, might be taken as an implicit statement to that effect. 36 There is insufficient material on which any conclusion might be reached as to whether the omission to mention the central argument in the written submissions was deliberate. Nevertheless, the plain fact is that it was a substantial foundation of the respondents' defence of the application and it was not raised until after Mr Edwards for the applicants had completed his submissions. In the circumstances of the case and considering the obligations of parties and practitioners to the court as have been described above, this is a weighty factor justifying denying the respondents the application of the usual rule despite it claiming to have been wholly successful in defending the action. 37 Mr Edwards and Mr Green for the applicants further submitted that not only was the respondents' main argument not articulated in their written submissions, the arguments which were there articulated failed. That submissions is also well founded. In the respondents' written argument they submitted that the applicants' purpose in seeking inspection of documents was improper because it was not connected with the economic viability of the class action and that the class action had already commenced. It is fair to say that neither of those arguments succeeded. Indeed, it was patent that a purpose of the application was to ascertain the economic viability of pursuing the class action. Whilst that purpose had the complementary benefit of advancing the relations of the applicants and the litigation funder who stood behind them, it is clear that a purpose of the application was as the applicants claimed. It is not unfair to say that, in the light of the affidavit evidence advanced on behalf of the applicants which was unchallenged, the respondents' submission that the applicants were not seeking to ascertain the commercial viability of their action was somewhat facile. Similarly, the opposition to producing documents on the ground that the class action had already been commenced was unsuccessful. Again the arguments advanced by the respondents in this respect were weak. 38 The applicants also submitted that the respondents relied heavily, in their written submissions, upon the decision of Beach J in Evans v Davantage Group Pty Ltd (No 2) [2020] FCA 473 although, ultimately, it was not a decision which was directly relevant to the application of s 247A of the Corporations Act. That submission was correct to a degree, however, the erudite observations of Beach J in that case were supportive of the question of whether the discretion would have been exercised in favour of the applicants in any event. 39 The effect of the applicants' submissions in the above respects was that the respondents' written submissions tended to distract from, rather than elucidate, the real issues which were ultimately determined. Again, there is force in that submission and it supports the contention that, although the respondents ultimately succeeded, they failed on many of the grounds which they had articulated prior to the hearing. 40 The applicants also relied upon the fact that, until the day of the hearing, they were not privy to the annual financial report of Ardent Leisure Group Limited for the 2020 financial year. It was submitted on their behalf that until the receipt of that document they had reasonable grounds to apprehend that there may be significant recoverability risks should the class action proceed. That submission ought not be accepted. As the reasons in the principal proceedings disclose, the financial reports for the 2020 financial year identified that the Ardent Leisure Group was in a worse position than it had been in the previous year. Whatever might have been the recoverability risks based upon the financial reports for the 2019 financial year, if any, they would have been heightened by the information in the subsequent financial report. The late receipt of the 2020 financial year report for Ardent Leisure Group Limited it not a relevant consideration on the question of costs. 41 However, it is a relevant consideration that at the hearing of the application the respondents were prepared to disclose the deed of indemnity entered into between the first respondent and Mr Davidson. That was relief sought by the applicants and the respondents capitulated with respect to that at the hearing. The respondents contended in their written submissions in reply that this should not be viewed as a "success" in any relevant sense, but rather a voluntary action to the benefit of the applicants. While it is true that the Court held at [101] that the applicants were not entitled to that deed, the applicants' success in obtaining that document nevertheless cannot be ignored.

Conclusion 42 Despite the applicants' submission that the respondents ought be denied their costs entirely, that is not an appropriate outcome in the circumstances of this case. It certainly would have been had I concluded that the central arguments on which the applicants eventually succeeded had been deliberately concealed, however, as I have said, that determination is not available on the material and was not one explicitly contended for by the applicants. In reaching that conclusion I have ignored the possible inferences which might arise from the apparent lack of veracity discernible in the respondents' submissions made in relation to costs. 43 It may be that even an unintentional concealment of a litigant's central grounds of opposition to a claim may justify a complete denial of an order for costs even where that litigant has been successful. Such circumstances might include those cases where the failure to disclose the true grounds of opposition has denied the other party of an opportunity to concede or adopt a different course. However, in this case, although accepting the applicants might have adopted a different course, it must be kept in mind that the respondents succeeded on the discretionary ground as well. Their success on that basis was not tainted by the non-disclosure, and amply justifies the recovery of a good proportion of their costs. 44 Nevertheless, given the applicants' partial success in recovering one of the documents sought, the substantial failure of most of the respondents' arguments as articulated in their written submissions, and the unexplained omission to include in those written submissions the major argument which the applicants ventilated at the hearing, it is appropriate that they not recover all of their costs. The latter matter amounted to a failure to comply with the obligations in s 37N of the Federal Court Act in that the omission to clearly articulate the arguments which were relied upon was not consistent with the overarching purpose identified in s 37M and, in particular, to ensure the just resolution of the real issues in the proceedings. These considerations warrant the granting to the applicants a proportion of their costs only. 45 In the circumstances, weighing the respondents' success overall against those matters identified above, the respondents ought to recover 50% of their costs as taxed on a party and party basis. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Derrington.

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