Queanbeyan City Council v ACTEW Corporation Limited

REASONS FOR JUDGMENT BUCHANAN J: 1 The principle judgment in this matter was Queanbeyan City Council v ACTEW Corporation Limited [2009] FCA 943. Following the delivery of that judgment orders were made by consent on 22 September 2009. They included an order that the applicant ("QCC") should pay to the first respondent ("ACTEW") an amount of $3,979,419.02. That amount was paid on 23 September 2009. 2 The issues which remain for disposition, and with which the present judgment deals, concern: (1) whether, if costs are awarded against it, QCC should pay the costs of each respondent separately, or whether there should be, if costs are awarded against it, some discount or allowance made for the fact that the respondents had similar interests in the proceedings; (2) whether any costs should be awarded against QCC and, if so, what proportion of the respondents' costs it should be required to pay; and (3) the rate at which interest should be applied to amounts making up the sum awarded against QCC representing payments of a Water Abstraction Charge ("WAC") which were due, but not paid, from 1 July 2007. 3 I do not accept the contention by QCC that the respondents are not each entitled to their own costs. QCC argued that although they were each required to be, and were properly, made respondents their interests were substantially identical. In my view, however, they were not obliged to make common cause. Their interests were not identical, even if they had a common interest in pursuing similar arguments. Counsel for each respondent made substantial contributions to the debate, but I detected no unnecessary duplication or inefficient use of the Court's time. In my view, they are each entitled to such costs as would otherwise properly be awarded. 4 On the question of the overall costs to be awarded, the parties were not at issue about the principles to be applied. Costs are to be assessed in the exercise of a judicial discretion, and, if necessary, taking a broad and pragmatic approach to the outcome of the proceedings. QCC has suggested that all parties should bear their own costs. ACTEW and the ACT each suggested in their written submissions that QCC should pay 60 to 80 per cent of the costs of the proceedings. Those submissions were based on their assessment of the overall amount of time which was required by them to be spent in the preparation and presentation of the respective cases. It is not possible for me to know exactly how much time was spent on the preparation and presentation of cases. It is preferable, in my view, that I attempt to make some assessment of the position by reference to the overall result and the time occupied on the main issues in the proceedings themselves. 5 ACTEW and the ACT accept, however, that it would not be appropriate that QCC pay 60 to 80 per cent of their costs and bear the whole of its own costs. They have each submitted that an appropriate translation into an overall result would be that QCC pay 20 to 40 per cent of their costs as well as bearing its own costs. QCC, in oral submissions in reply, offered as an alternative to its initial suggestion, that each party pay their own costs, the proposition that if it is to pay any of the costs of the respondents, such costs should be ordered at no more than 20 per cent of the respondents' costs. 6 In my view, QCC should pay some, at least, of the costs of the respondents. Although it had a substantial measure of success in the proceedings, the final result, both in terms of practical financial outcome and by reference to the time taken in the proceedings themselves, represented more failure than success. My own assessment of the position is that, broadly speaking, the respondents are entitled to an award of costs on the basis that the principal issues on which they succeeded occupied about 60 per cent of court time, while those on which QCC succeeded accounted for about 40 per cent. In that connection, there was some debate about the significance of the fact that I ruled that the expert evidence (initially advanced by the ACT but ultimately advanced by all parties) was irrelevant. That does not mean that I should discount the entirety of the time taken by the expert evidence. I do not think the final ruling (which all parties agreed could be deferred until judgment) is a circumstance which should be given that amount of weight, although it, so to speak, takes the edge off the fact that QCC lost the debate concerning the WAC, which debate consumed more attention than the debate about the Utilities Network Facilities Tax which I ruled invalid. Another matter raised by the written submissions by QCC concerned the necessity to prove matters not admitted, despite a notice to admit facts. In my view, that circumstance has not altered the general picture. I have no information about how, if at all, the formal proof of the facts in question contributed to QCC's costs. 7 As I understand the position which was stated in the oral submissions, an assessment that costs should be awarded against QCC in the proportion 60/40 would mean that QCC would pay 20 per cent of the costs of the respondents, as well as bear its own costs. Accordingly, the order which I will make is that QCC pay 20 per cent of the costs of each of the respondents, such costs to be taxed if not agreed. 8 The remaining issue concerns the rate of interest to be awarded on the sum which QCC was required to pay to ACTEW. ACTEW and QCC were agreed in the end that for the period 1 July 2007 to 30 June 2008, interest should be ordered under O 35 r 7A(a) of the Federal Court Rules; namely, at the Reserve Bank of Australia cash rate from time to time plus four per cent. However, QCC and ACTEW were not agreed about how interest should be calculated from 1 July 2008 to the date of payment shortly after the orders made on 22 September 2009. 9 ACTEW relied upon the provisions of a pricing agreement made between it and QCC in July 2008. Clause 7.5 of the pricing agreement provides that: If [QCC] is late in making any payment due, interest will accrue on that portion of the payment which is outstanding, from the date the payment is due until the date the payment is received by ACTEW at the rate that applies from time to time under Schedule 2, Part 2.2 of the ACT Court Procedure Rules 2006. 10 That rate is 11 per cent. QCC resisted the adoption or application of that provision as a fair guide to the assessment of interest from 1 July 2008 by pointing to the fact that in its further amended cross-claim, filed in Court on 6 April 2009, ACTEW had not specifically pleaded a debt arising in that way, but rather had sought: Interest in accordance with s51A of the Federal Court of Australia Act 1976 (Cth). 11 Section 51A provides for an award of interest at such rate as the Court thinks fit. Normally, interest would be calculated and awarded in accordance with the provisions of the Federal Court Rules or, in some circumstances, in accordance with the practice of the Supreme Court sitting in the location with which the proceedings were concerned. The rate of interest applied by the ACT Supreme Court on amounts up to judgment is nine per cent, rather than 11 per cent. The rate adopted by the parties in the pricing agreement reflects the amount normally awarded by that court on amounts after judgment. 12 At the hearing this morning, ACTEW sought to amend the further amended cross-claim to rectify any deficiency in its pleadings. I declined leave for it to do so. Although there is no doubt that the Court may allow such an amendment, even at this late stage of the proceedings, in my view, it would not be appropriate to do so, simply to answer a point legitimately taken. The point taken by QCC is sound. ACTEW chose to plead its claim for interest by reference to the general discretion to award interest rather than by reference to the provisions of the pricing agreement. In those circumstances, I think the same approach should be taken as for the 12 months between 1 July 2007 and 30 June 2008. Accordingly, interest for that period will also be paid in accordance with the provisions of O 35 r 7A(a). 13 The parties were agreed that costs of today's proceedings should fall within the overall award of costs of the proceedings as a whole. In my view, that is the appropriate approach to take. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.