Pipe Networks Pty Ltd v Commonwealth Superannuation Corporation

PROPERTY COMMUNICATIONS MANAGEMENT INTERNATIONAL LTD

JUDGE: TRACEY J DATE: 20 june 2013 PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 I delivered judgment in this proceeding on 16 May 2013: see Pipe Networks Pty Ltd v Commonwealth Superannuation Corporation [2013] FCA 444. I directed that the parties confer and bring in minutes of orders to give effect to my reasons. The parties were not able to agree on orders and, as a result, I listed the proceeding for mention on 7 June 2013. At that hearing various matters in dispute were resolved. Two outstanding matters remained. The first related to disposition of the respondents' cross-claim. The second concerned costs. 2 The applicant ("PIPE") is the holder of a carrier license under s 56 of the Telecommunications Act 1997 (Cth) ("the Act") and owns and operates fibre networks in capital cities of each Australian state. Prior to May 2011 PIPE had installed fibre optic cables to provide communication services to various tenants of a building at 101 Collins Street Melbourne. The building was owned by the first respondent ("CSC"). The second respondent ("101") was engaged by CSC to manage the building. In September 2011 CSC appointed the third respondent ("PropertyComm") to exercise "operational control, over the communications facilities in the building". 3 In October 2011 PIPE gave 101 notice that it proposed to enter the building to install further cabling. 101 responded by advising PIPE that operational control over the building had been granted to PropertyComm and that PIPE would need to contact PropertyComm "to make the necessary arrangements for [PIPE] to obtain access to the Building for its purposes pursuant to Schedule 1 of the Telecommunications Act." At about the same time PropertyComm advised PIPE that any right it (PIPE) had to enter the building to install cabling was conditional on it first entering into an agreement with PropertyComm under Schedule 1 of the Act about the terms and conditions on which entry would be facilitated. PIPE asserted that it was under no such obligation. The respondents refused PIPE access to the building until the proposed agreement was concluded. 4 In order to resolve the dispute PIPE commenced the present proceeding. The immediate standoff was resolved on an interlocutory basis when the respondents agreed that PIPE would be granted entry to the building in order to perform the cable installation. 5 In its application PIPE sought declarations that it was entitled to carry out the installation of the cables and that, for that purpose, its employees and contractors were entitled to enter and occupy the building. It contended that these rights were conferred by clause 6(1) or, alternatively, clause 6(2) of Schedule 3 of the Act. 6 PropertyComm cross-claimed seeking declarations that: The building, including the riser and the MDF room within it, were facilities within the meaning of clause 17(5) of Schedule 1 of the Act. These facilities were operated by it as a "first carrier" within the meaning of clause 17(1) of Schedule 1. The installation by PIPE of its proposed facilities in the building was subject to Part 3 of Schedule 1. It was entitled, pursuant to clause 18(1) of Schedule 1, to require PIPE to enter into terms and conditions in order for PIPE to install its proposed facilities in the building or, failing agreement, upon terms and conditions determined by an arbitrator or the Australian Competition and Consumer Commission. 7 I determined that PIPE was entitled to the declarations which it sought because clause 6(1) of Schedule 3 of the Act provided the necessary authorisation for PIPE to enter the building and perform the proposed work. I held that the necessary authority was not conferred by clause 6(2). I further held that, in the circumstances of the present case, no basis existed for the contention that PIPE's rights under Schedule 3 of the Act were in any way qualified by anything appearing in Schedule 1. 8 I accepted PropertyComm's submissions that the building, the riser and the MDF room were facilities within the meaning of Clause 17(5) of Schedule 1 and that, in certain circumstances, not present in this case, PropertyComm could be a "first carrier" within the meaning of clause 17(1) of Schedule 1. 9 These submissions were in no way determinative of the cross-claim. The success of the cross-claim depended on a finding that parts of Schedule 1 operated to qualify PIPE's authority to enter the building for the purpose of installing cables and associated equipment pursuant to Schedule 3. The respondents failed to make good this essential element of its case. As a result its cross-claimed failed. The cross-claim should be dismissed. 10 The respondents and cross-claimants accepted that costs should, normally, follow the event but submitted that they should pay only 50% of PIPE's costs of the proceedings (including reserved costs). They did so on the basis that they had been successful, in substance, on a number of what were said to be "key issues" that occupied the greater part of the time devoted to preparation of submissions and the hearing. Those issues were identified as: The meaning of "land" in clause 6(2) of Schedule 3 does not include the building at 101 Collins Street, the riser or the MDF room. The building at 101 Collins Street, including the riser and the MDF room, are "facilities" under clause 17(5) of Schedule 1. The cross-claimant's characterisation as a "first carrier" for the purposes of cl 17(1) of Schedule 1. In the event of a conflict between Schedules 1 and 3, Schedule 1 prevails by reason of it being "another law of the Commonwealth" for the purposes of clause 52 of Schedule 3. 11 The power of the Court to award costs in proceedings is conferred by s 43 of the Federal Court of Australia Act 1976 (Cth). The discretion, conferred on the Court by this section, is broad and unfettered save that it must be exercised judicially: see Australian Conservation Foundation v Forestry Commission (1988) 81 ALR 166 at 169; Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at 234 (per Black CJ and French J). Costs are awarded to a successful party in order to effect "restorative justice". The normal rule that costs follow the event "assumes that where an applicant succeeds it will have incurred costs because the respondents' conduct made it necessary for the applicant to bring the proceedings": see Ruddock at 235. There is scope, in appropriate cases, for there to be a departure from the general rule whereby the curial discretion can be exercised to apportion costs between various parties. 12 The authorities relating to apportionment of costs were examined in detail by Cowdroy J in Roadshow Films v iiNet Limited (No 4) (2010) 269 ALR 606 at 610-613. The authorities contained conflicting dicta and differing emphases. All, however, stressed the breadth of the unfettered discretionary power conferred on the Court by s 43 of the Federal Court of Australia Act. His Honour also detected a trend in the decisions towards a greater willingness to apportion costs. 13 Among the cases considered by Cowdroy J was Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 271 where Gummow, French and Hill JJ referred to the dictum of Fisher J in Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3) (1979) 28 ALR 201 at 208 that the discretion to apportion costs should only be exercised in the most exceptional circumstances. The Full Court went on to note that Fisher J had accepted that such exceptional circumstances may be found where considerable time at trial had been devoted to dealing with issues on which an otherwise successful party had failed. Their Honours said that: "Nevertheless he accepted that where a considerable part of the trial is taken up in determining issues upon which a party fails, it is a proper exercise of the discretion to reduce the costs allowed to that party. Generally speaking, and notwithstanding the considerations referred to by Toohey J and the other authorities mentioned above, the demands of the community for greater economy and efficiency in the conduct of litigation may properly be reflected in a qualification of the presumption that the successful party is entitled to all its costs." 14 Other relevant observations were found in the reasons of Wilcox J in Commissioner of Australian Federal Police v Razzi (No 2) (1991) 30 FCR 64 at 69 where his Honour said: "But I do not think that the courts should be reluctant to recognise the existence of exceptional cases. In these days of extensive court delays and high legal costs the courts should use all proper means to encourage parties to consider carefully what matters they will put in issue in their litigation. If parties come to realise that they will not necessarily recover the whole of their costs, even though they have successfully raised a discrete issue, they are likely better to consider whether the raising of that issue is a justifiable course to take." 15 Having considered these and other authorities Cowdroy J concluded (at 613) that "[t]he current trend appears to favour apportionment in appropriate cases without such cases necessarily being classified as 'exceptional'". He had earlier cited, as an example of the circumstances in which apportionment might be appropriate, the statement of Jacobson J in Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd (No 2) [2010] FCA 277 at [15] that "a party who seeks to run every issue in a case that could be conducted more economically takes the risk that it will have to bear the wasted costs but the same applies to an unsuccessful respondent." 16 It is understandable that an applicant who has pleaded and prosecuted a series of discrete causes of action but only succeeded on some of them may, depending on the circumstances, only receive a portion of his or her costs from the respondent. If, for example, an applicant has a strong and obvious basis for success but chooses to lengthen the hearing time of the proceeding by advancing additional causes of action of dubious merit, the applicant may well be deprived of some of his or her costs even if successful on his or her strong point. 17 This was not such a case. PIPE was forced to commence the proceeding because the respondents refused it access to the building to service the needs of one of its clients. That refusal was founded on a mistaken construction of certain provisions of the Act. PIPE argued that it had unencumbered authority to enter the building to perform its work, that authority being conferred by clause 6 of Schedule 3 of the Act. It relied, principally, on clause 6(1) and, in the alternative, on clause 6(2). The argument relating to clause 6(1) was able to be put shortly and, in the event, successfully. The alternative argument, based on clause 6(2), involved more lengthy written and oral submissions. The alternative argument was unsuccessful. This alternative basis for asserting PIPE's authority to enter was, nevertheless, clearly arguable. The construction and application of clause 6 had not, previously, been considered by the Court. As is evident from my reasons, considerable difficulty attended the task of establishing the true meaning of the provision. 18 The principal plank of the respondents' argument, in relation to the cross-claim, failed. Schedule 1 was found, in the circumstances, not to impinge on the authority conferred on PIPE by Schedule 3. Their success on the two subsidiary points (the "facilities" and the "first carrier" points) was thereby rendered hypothetical. 19 In these circumstances, in my view, the justice of the case does not warrant a departure from the "usual rule". PIPE is entitled to its costs of the proceeding. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.