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[2021] FCA 1224
Federal Court of Australia
2021-10-08
Cheeseman J
Original judgment source is linked above.
Introduction 1 These reasons address the question of costs in respect of the applicant's interlocutory application for non-standard discovery pursuant to r 20.15 of the Federal Court Rules 2011 (Cth) which I determined on 24 September 2021: Orientile Pty Ltd v Salitrosa Holdings Pty Ltd [2021] FCA 1154 (Orientile (No 1)). In Orientile (No 1), I dismissed the applicant's application and instead ordered limited mutual discovery in respect of one modified category. Familiarity with Orientile (No 1) is assumed. 2 The applicant seeks the following costs orders on its interlocutory application: (1) in relation to discovery categories 1 to 4 and 6, costs should be reserved; and (2) in relation to discovery category 5, costs should be costs in the cause. 3 The respondents contend that, having enjoyed substantial success in resisting the interlocutory application, they should have their costs of and incidental to the application.
Submissions 4 The applicant submits that its discovery application in relation to categories 1 to 4 and 6 was unsuccessful primarily on the ground that it was premature. Further that as there is no default position that discovery should only take place after evidence has been filed, it was not inevitable that the applicant's discovery application would be refused. The applicant relies on my comments in Orientile (No 1) (at [23], [25], [28] and [38]) which acknowledge that the applicant may, if so advised and if necessary, bring a further application for discovery following the filing of lay evidence to submit that because there is a prospect that discovery may be ordered later in the proceedings it is appropriate for costs in relation to categories 1 to 4 and 6 be reserved. That submission is premised on an assumption that any future application by the applicant would be for substantially the same categories as were the subject of its first application. 5 In relation to category 5, the applicant submits that costs should be in the cause. The applicant relies, in particular, on the correspondence exchanged on the eve of the hearing of the application. That correspondence related to a proposal initially raised by the respondent that category 5 was capable of resolution by the parties exchanging 'design files' relating to the applicant's commercial tile products. The applicant asserts that as the term 'design files' is not defined in the pleadings, the applicant's rejection of the respondents' proposal was justified. The applicant states that as the respondent did not obtain an order in the form or same effect as the proposal made during the eve of the hearing, that an order to the effect that costs be in the cause is appropriate. 6 The respondents seek an order that costs follow the event and submit that the applicant has not identified any rational basis for departing from the general rule. The respondents submit that the basis upon which the applicant seeks costs in respect of categories 1 to 4 and 6 be reserved is misconceived. The respondents state that the applicant will not be permitted to 'revive' its application but rather may file a further application for discovery, if required, after the filing of lay evidence. 7 As to category 5, the respondents submit that the Court should not apportion costs separately between issues but act on the outcome as a whole. The respondents rely on the High Court's remarks in Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53; (2015) 90 ALJR 270 at 271 [6] (French CJ, Kiefel, Nettle and Gordon JJ) in this respect. The respondents further submit that the applicant only accepted that the exchange of the material the subject of category 5 should be mutual during the hearing, and had rejected that proposal prior to the hearing. Having done so, the issues on the interlocutory application were narrowed, but not eliminated.
Consideration 8 The Court has a broad discretionary power to award costs pursuant to s 43(2) of the Federal Court of Australia Act 1976 (Cth). The ordinary rule is that costs follow the event. This is reflected in r 40.04(a) of the Rules. In my view, the applicant has not justified a departure from the ordinary rule for the following reasons. 9 The applicant's submission to the effect that the application was not doomed to failure because there is no default position in this Court as to whether discovery should precede or follow the filing of evidence ignores the specific circumstances of this case. The features of this case which weighed heavily in favour of any order for discovery following the filing of lay evidence are as follows: (1) the manner in which the applicant has pleaded its case has not been conducive to narrowing the issues in dispute: Orientile (No 1) at [12]; (2) it is likely that the exchange of lay evidence will result in the issues in dispute being refined and will avoid ambit discovery of documents irrelevant to the determination of the real issues in dispute: Orientile (No 1) at [23], [25], [28]; and (3) there appear to be a series of admissions in open correspondence that should enable the parties to significantly narrow the issues in dispute and refine the way in which any future documentary request is framed: Orientile (No 1) at [12], [25]. 10 It will be plain from the above that I reject the applicant's submissions to the effect that any future application by the applicant would be for substantially the same categories as were the subject of its first application. 11 The respondents have consistently, since the application was flagged during the first and subsequent case management hearings, maintained that it was premature and should, if required, follow evidence. The respondents were correct in their assessment, because of the particular circumstances outlined above. 12 As to category 5, I am not satisfied that the discrete issue in relation to this category warrants a separate costs order. The present application exemplifies that there are "good reasons not to encourage applications regarding costs on an issue-by-issue basis, involving apportionments based on degrees of difficulty of issues, time taken to argue them and the like": Firebird Global at [6]. 13 Accordingly, I order that the applicant pay the respondents' costs on the interlocutory application filed on 3 August 2021. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Cheeseman.
Orientile Pty Ltd
Salitrosa Holdings Pty Ltd