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[2010] FCA 514
Federal Court of Australia
2010-05-26
Mr P, McKerracher J, Kenny J
Original judgment source is linked above.
BACKGROUND 1 The applicants filed an application in this proceeding on 16 September 2009, seeking a declaration that s 47A of the Limitation Act 1935 (WA) did not apply to a proceeding that the applicants proposed to bring against the respondents and, in the alternative, a grant of leave under s 47A(3) of that Act for the applicants to bring the proposed proceeding. On 20 October 2009, the respondents filed a notice of motion in which, amongst other things, they challenged the jurisdiction of the Court to entertain the applicants' application. (The motion also contemplated a stay, but the basis for this fell away with the delivery of McKerracher J's judgment in Repacholi Aviation Pty Ltd v Civil Aviation Safety Authority (2009) 263 ALR 93.) 2 In consequence of the respondents' motion, the applicants' application and the course of argument, the Court has decided two main issues in this proceeding. The first was that the Court had jurisdiction with respect to the applicants' leave application. As a result, the respondents' motion challenging jurisdiction was dismissed. No order as to costs was made at the time that this interlocutory judgment was delivered, the question of costs being held over to the hearing of the further question as to whether the applicants should have leave under s 47A(3) of the Limitation Act to bring their proposed proceeding. 3 The second main issue decided in this proceeding was that, in so far as leave under s 47A(3) was necessary to bring the proposed action, such leave was refused. On 29 April 2010, the applicants' application was dismissed. For reasons already stated (see Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 2) [2010] FCA 404 at [100]) I declined to rule on whether the applicants in fact needed leave under s 47A(3) to bring their action. Amongst other reasons, I considered that this question would more appropriately be dealt with in proceeding VID 255/2010. 4 At the hearing of the second issue on 23 April 2010, the parties agreed that all questions of costs in the proceeding should be dealt with after the delivery of judgment on the applicants' application. Consequently, when judgment was delivered on 29 April 2010, orders were made for the filing and serving of submissions on costs, including the costs of the respondents' motion of 20 October 2009. 5 In written submissions, the applicants submitted that this was "a case involving clearly discrete issues and the issues being evenly balanced no order as to costs should be made". 6 The respondents sought an order that the applicants pay the respondents' costs of the proceeding (apparently including the costs attributable to their own motion). In the alternative, the respondents submitted that: … if the Court is of the view that an allowance should be made in recognition of the applicants' success in opposing the respondent[s'] preliminary motion as to the Court's jurisdiction, that should be done by ordering the applicants to pay a reduced percentage of the respondents' costs. That should be not less than 85% of the respondents' costs. In the latter regard, the respondents argued that any apportionment order "should reflect the respondents' overall success on the matters that took up most of the hearing time and to which most of the evidentiary material was directed". 7 The respondents sought all their costs on the basis, first, that they had been the successful parties overall and that, although their jurisdictional challenge was unsuccessful, "a significant part of that challenge involved consideration of the applicants' application and the substantive actions proposed to be brought against the respondents". Further, though noting that the Court might order an apportionment of costs, the respondents submitted that this was not "a case for splitting costs on an issues basis" because, amongst other reasons, the first hearing in the proceeding (which involved argument on the respondents' motion) "involved multiple issues" and "it would not be possible to separate the costs of the jurisdiction issue from other issues raised by the parties on any taxation of costs". The respondents supported this submission with the further submission that "the issues in dispute in this proceeding, the manner in which the matter has been conducted and the comparatively small costs attributable to the respondent[s'] notice of motion, [did] not warrant any apportionment of costs between the parties". With respect to the last proposition, the respondents argued that: (a) The issue raised on the respondents' motion occupied only part of the hearing time before the Court on 30 November 2009 and only involved a question of law. Little (if any) factual evidence was required to determine the jurisdiction issue. As a result, the parties incurred minimal additional expense in addressing the jurisdiction issue. (b) In contrast, the manner in which the applicants conducted their substantive case resulted in substantial costs being thrown away. In particular: (i) the applicants materially amended their proposed statement of claim twice; and (ii) the applicants filed lengthy affidavits of both Edward John Maitland and Clark Andrew Butson. The affidavit of Mr Butson, sworn 29 September 2009, contained largely inadmissible conclusory assertions and opinions and spanned two lever-arch files. The respondents incurred significant costs in reviewing the affidavit material and preparing objections and otherwise responding to Mr Butson's evidence, but the affidavit was ultimately not read. (c) The applicants were not successful in securing any of the relief sought in their substantive application. (d) Prior to the Court's decision on the substantive application, the applicants commenced separate proceedings (VID 255 of 2010) by filing an almost identical statement of claim to the one proposed to be filed in the present proceeding. …. In effect, the applicants' conduct in commencing VID 255 of 2010 after commencing the present proceeding but before the Court had ruled on the issues raised in the proceeding, rendered this proceeding (including the respondents' motion) wholly nugatory.
CONSIDERATION 8 Section 43 of the Federal Court of Australia Act 1976 (Cth) ('the Federal Court Act') relevantly provides: (1) …the Court or a Judge has jurisdiction to award costs in all proceedings before the Court…. …. (2) … the award of costs is in the discretion of the Court or Judge. 9 Within the general discretion conferred by s 43, it is accepted that costs ordinarily follow the event, with the result that a successful litigant receives costs in the absence of special circumstances justifying some other order: see Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at 234 per Black CJ and French J and Seven Network Ltd v News Ltd [2009] FCAFC 166 at [1101] per Dowsett and Lander JJ (with whom Mansfield J agreed). The discretion as to costs is, however, a wide one and there is no absolute rule that a successful party is entitled to an award of costs: see Oshlack v Richmond River Council (1998) 193 CLR 72, especially at 88 [40] per Gaudron and Gummow JJ. 10 I accept the respondents' primary submission that this is not an appropriate case for a percentage apportionment of costs. In their alternative argument, the respondents did not propound any very persuasive reason for preferring an 85% apportionment in their favour rather than any other apportionment. In fact, no basis for an apportionment of this kind readily recommends itself as fair in all the circumstances disclosed to the Court. In so far as the respondent sought to support a percentage apportionment by reference to the circumstances of the case, I make the following points. 11 First, the costs of the respondents' motion should not be dismissed as insignificant in the way the respondents urge. As explained below, the respondents' motion was the occasion for the first hearing in this proceeding. 12 Further, I would not accede to the respondents' submission that the applicants' conduct of the proceeding necessarily militated against them in the exercise of the discretion as to costs. It is true that, as the respondents noted, the applicants have, in the course of the proceeding, provided the respondents and the Court with three versions of their proposed statement of claim. The changes from one version to another, however, have been relatively minor and insignificant. I doubt that the consideration of these changes would have necessitated much effort from the respondents' side and they have had little bearing on the resolution of the decided issues. Secondly, the respondents' submission that the institution of proceeding VID 255 of 2010 rendered the present proceeding nugatory is misconceived. The applicants sought leave under s 47A(3) of the Limitation Act because they apprehended that such leave might well be necessary to bring their action. As explained in reasons delivered earlier in this proceeding, the applicants brought the present proceeding because the relevant authorities have stated that leave under s 47A(3) of the Limitation Act may not be granted retrospectively, i.e., to validate a proceeding after it has been filed. The circumstances in which proceeding VID 255 of 2010 was instituted were also discussed in an earlier judgment: see Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 2) [2010] FCA 404 at [97]-[99]. This later proceeding will require the applicants to establish that they have no need of leave under s 47A(3) validly to bring it. As explained, the determination of this issue awaits another day. 13 The respondents also sought to make something of the fact that the applicants had filed lengthy affidavits of Mr Maitland and Mr Butson. The course of argument and my earlier reasons indicate that Mr Maitland's affidavits were, in general, helpful, in the sense that they assisted in the resolution of the issues before the Court, in the main by providing the necessary background to the case. Though his first affidavit included numerous exhibits, the exhibited documents were generally non-contentious documents with which the respondents were familiar. The respondents' objections to the affidavit of Mr Butson were very lengthy, and the affidavit was ultimately not read. Instead, the parties agreed on a chronology of events and so it transpired that there was little dispute at the second hearing about evidentiary issues. The applicants stated (and the respondents did not dispute) that Mr Butson's affidavit was in fact the same as an affidavit filed in earlier proceedings in the Supreme Court of Western Australia seeking pre-trial discovery. This has some bearing on the respondents' complaint about the time and effort expended by them in reviewing Mr Butson's affidavit and preparing objections. In all the circumstances, with regard to the question of costs, little ultimately turns on the matter of these affidavits. 14 Ultimately, the focus must be on the two hearings in this proceeding. The first was occasioned by the respondents' motion challenging the Court's jurisdiction. This was the primary matter for determination at that time, although the respondents agreed to the applicants having the issue as to the applicability of s 47A of the Limitation Act argued at the hearing as well. Argument on the primary issue raised a question of law, which required consideration of the applicable authorities and the proposed pleading. The respondents failed on their challenge to the jurisdiction. 15 The second hearing was as to whether (assuming that s 47A applied to the applicants' proposed action) the applicants had made out a case for leave under s 47A(3) of the Limitation Act. This issue was resolved against the applicants. In my reasons for judgment, I not only explained why leave should be refused (assuming s 47A applied) but also why I would not rule on the applicability of s 47A. The result was that the applicants' application withstood the respondents' jurisdictional challenge, but failed to win the relief sought in the application. 16 The respondents' primary argument seemed to be that I should disregard their loss on their own motion on the basis that the hearing of their motion had not been confined to the jurisdictional issue. As I have said, at this hearing, the parties also addressed the Court on the applicability of s 47A to the proposed proceeding. This happened at the applicants' request and with the respondents' agreement. Argument on this latter issue did not travel beyond references to certain statutory provisions and authorities. Argument on the applicability issue and the motion occupied no more than an afternoon. Although the inclusion of the applicability issue was problematic from other perspectives, the issue did not receive particularly lengthy argument or occupy a great deal of the Court's time. In any event, neither side succeeded in persuading me that I should rule as they invited me to do. 17 Ultimately, the disposition of costs depends on two matters - the respondents' failure on their motion and the applicants' failure on their application. Broadly speaking, the failure on the one was equal to the failure on the other. To put it another way, as the applicants said, "[o]ne party has succeeded on a preliminary issue (jurisdiction), the other has succeeded on a secondary issue, leave". Although the hearing on the leave issue was lengthier than the first hearing, I do not consider that this should affect the apportionment of costs. The second hearing could have been considerably shorter had the respondents adopted a more efficient approach to argument. In the end, neither applicants nor respondents have succeeded in having the issue of the applicability of s 47A of the Limitation Act decided in their favour. In these circumstances, I would order that there be no order as to costs. The parties will be left to bear their own costs. 18 The present is a case in which, in Professor GE Dal Pont's words, "the issues are evenly balanced", with the result that the justice of the case is that there be no order as to costs: see GE Dal Pont, Law of Costs (second edition, LexisNexis Butterworths 2009) p 211 [8.5]. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny.
Polar Aviation Pty Ltd
Civil Aviation Safety Authority