Medical Defence Association of Western Australia Inc v Australian Securities & Investments Commission

Federal Court of Australia|2005-02-14|Before: Stone J

Background 1 On 17 December 2004 I gave reasons for judgment in this proceeding which concerned the interpretation of s 601BC; [2004] FCA 1684. The parties have not been able to settle on a form of declaration that would be consistent with those reasons and therefore, in accordance with my orders, they have provided their respective drafts with short submissions in support. The parties have also made submissions as to the appropriate order for costs in this matter. 2 The dispute between the parties resulted from the respondent's view that it had no power to register the transfer of the applicant's incorporated status to that of a company registered under the Corporations Act 2001 (Cth) ('Corporations Act'). As I noted in my earlier reasons the respondent's view that it did not have the requisite power was premised on the absence of any express provision for such a transfer in the legislation of Western Australia. The respondent took the view that, in the absence of such provision, the evidentiary requirement of s 601BC(8)(d) of the Corporations Act could not be met. At the hearing the parties pressed their competing views and had the opportunity to ventilate thoroughly their views as to the correct interpretation of the section. Ultimately, my interpretation of the section is such that I agreed with the applicant that the absence of express provision for the transfer did not preclude the evidentiary requirements of s 601BC(8)(d) being met.

7 The applicant's draft is narrower in that it confines itself to the requirement that the application be accompanied by evidence of the matters referred to ss 601BC(8)(d), (e) and (f) and does not attempt to encompass the requirement in s 601BC(9). Under that subsection once the evidence is lodged in accordance with subsections (7) and (8), it is a matter for ASIC whether it is satisfactory proof of the matters referred to in those subsections. For that reason I prefer the applicant's approach which recognises that evidence of the members' consent is evidence of authorisation within the meaning of the statute but does not preclude ASIC's right to determine if that evidence is satisfactory. I therefore propose to make a declaration in the form submitted by the applicant.

Costs 8 In general the award of costs is a matter for the discretion of the judge; Federal Court of Australia Act 1976 (Cth), s 43(2). However the principles governing the exercise of that discretion are well settled. Ordinarily costs follow the event although a party who is only partially successful may not receive all its costs and may even be required to pay part of the other party's costs; see generally Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1997) 72 FCR 151. 9 In this case the applicant challenged ASIC's view that because there is no express legislative provision for transfer of incorporation in Western Australia, it was not empowered to register the applicant as a company under the Corporations Act. As is clear from the terms of the declaration in [4] above, the applicant's challenge succeeded albeit for reasons somewhat different from those it put forward. The applicant submits that it should therefore be awarded costs in the normal way 10 The respondent strongly submits that the course of the proceeding prior to the hearing was such that the applicant should pay the respondent's costs incurred prior to the hearing of the matter. In support of this submission the respondent makes a number of points including that: · the original application did not properly invoke the jurisdiction of the Court and, initially, the applicant declined to amend the application although the defect was identified by the respondent and communicated to the applicant; · it was not until the respondent had filed a notice of objection to competency and that notice was listed for hearing at a directions hearing that the applicant accepted the point and amended its application; · the applicant changed the orders sought and its arguments as to why ASIC's position was incorrect including on the day of the hearing; and · the Court's reasons for judgment are inconsistent with the applicant's arguments. 11 The circumstances in which a successful party will be deprived of its costs and the relevant authorities were comprehensively canvassed by Goldberg J in Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 at [52]-[55]. I do not propose to discuss those authorities in any detail however I am conscious of Cooper J's observation in Cummings v Lewis (1993) 41 FCR 559 at 603 that: 'It is within the discretion of a trial judge to award only a proportion of a successful party's costs if the conduct of that party in the trial was such as to unreasonably prolong the proceedings'. 12 In Cretazzo v Lombardi (1975) 13 SASR 4 at 16 Jacobs J injected a note of caution saying: '[T]rials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues.' 13 The only aspect of the conduct of this proceeding that suggests to me that the applicant should have its entitlement to costs reduced is that the proceeding was commenced on 10 August 2004 by filing an application that did not invoke the jurisdiction of the Court. The issue was raised at a directions hearing on 3 September and the respondent filed a notice of objection to competency on 28 September 2004. Despite this issue being brought to the applicant's notice it did not file an amended application until 2 November 2004 on which date the notice of objection was dismissed with the consent of the parties. 14 In my view the respondent should not have been put to the cost of dealing with the application filed on 10 August 2004. It was not until 2 November that the respondent had a competent application to which it could respond. For this reason I will order that the applicant should pay the respondent's costs incurred up to and including 2 November 2004 and thereafter the applicant should be entitled to its costs. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone.

Associate: Dated: 14 February 2005 Counsel for the Applicant: Mr J Sackar QC and Mr M Dawson

Solicitor for the Respondent: Australian Securities and Investments Commission

Associations Incorporation Act 1987(WA)

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Judgment (6 paragraphs)

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