18. ACCC has sought costs on an indemnity basis on the ground that the application was misconceived, without merit and an abuse of process. Collings have sought their costs as parties to the application although they did not appear on it. The applicants have opposed both applications.

Background facts 19. The application for the writs was refused on two distinct grounds. The first was that Wilcox J had jurisdiction to make the order transferring the proceeding to the Supreme Court of New South Wales which had jurisdiction to hear it. The second was that even if Wilcox J did not have jurisdiction to make the order, the writs sought should be refused on discretionary grounds.

20. It is desirable that we restate some of the reasons why the Full Court refused the application for the issue of prerogative writs under s.75(v) in any event on discretionary grounds: . the applicants had raised the issue of the jurisdiction of Wilcox J to order that the original proceeding against them be transferred to the Supreme Court of New South Wales in a motion, before Hunter J in the Supreme Court in October 1994, which they did not pursue, in their defence filed in November 1994 and finally in submissions in the course of the final trial of the proceeding late in 1995 before Hunter J; . Hunter J had indicated that he would rule against the applicants on their objection to jurisdiction; . if Hunter J, as he had already indicated, ruled against that objection, then his judgment could be the subject of an appeal to the Court of Appeal of the Supreme Court on all grounds including absence of jurisdiction; . the applicants had elected to have the jurisdictional issues determined in, and as part of, the proceeding transferred to the Supreme Court of New South Wales; . there were alternative and more appropriate remedies available to the applicants than the prerogative writs they sought; . the proceedings in the Supreme Court had led to an extensive hearing over 13 days before a referee and a final hearing over 27 days before Hunter J who had reserved his decision; . the applicants, who first filed their application for writs under s.75(v) in the High Court on 5 February 1996, had been guilty of inexcusable and inordinate delay in making their application for the writs; . no satisfactory explanation was proffered as to why the application for prerogative writs could not have been made shortly after the order of Wilcox J in September 1994. . the delay had resulted in the proceedings continuing in the Supreme Court to a concluded final hearing at great cost, both in time and money, for all concerned; the ACCC's costs alone exceeded $1.3 million.

21. After referring to the following passage in the judgment of Deane J in R v. Ross-Jones; Ex parte Green [1984] HCA 82; (1984) 156 CLR 185 at 225: The constitutional writ of prohibition is an important safeguard against abuse of jurisdiction. Its grant lies within discretion at least in a case where alternative remedies by way of appeal are available. It is important that care be taken to ensure that it is not itself abused by being made an instrument of unnecessary and undesirable disruption and avoidance of the ordinary and orderly procedures, including appellate procedures, within the courts to which it may be directed.

22. the Court concluded at 69: Earlier we referred to the observation by Deane J in R v. Ross-Jones (at CLR 225) that it is important that a writ of prohibition, which is to safeguard against abuse of jurisdiction, is not itself abused by disrupting the ordinary and orderly procedures, including appellate procedures, of the courts sought to be prohibited.

23. In our view, the present case is a prime example of the kind of abuse of process Deane J was referring to.

Indemnity costs - the applicable principles 24. The issue whether costs should be ordered on a party and party basis or on an indemnity basis has acquired increasingly greater significance as the gap between the two bases appears to have grown.

25. The gap has highlighted the conflict between two seemingly irreconcilable objectives. The first is protecting access to justice by only exposing an unsuccessful litigant in the usual course to an order for scale costs on a party and party basis. The second is relieving a successful litigant from the burden of costs which that litigant should not have been required to incur. These and other policy factors have been considered by the courts over a very long period in order to arrive at the principles which govern the undoubted discretion of courts to depart from ordering costs on a party and party basis and ordering costs on an indemnity basis. The principles were stated by Sheppard J in Colgate-Palmolive Company v. Cussons Pty. Ltd. [1993] FCA 536; (1993) 46 FCR 225.

26. The recent decision of Einfeld J in Marks v. GIO Australia Holdings Ltd. (1996) 137 ALR 579 has cast doubt on these principles. In Marks, after discussing s.43 of the Federal Court of Australia Act 1976 (Cth) ("FCA") and a number of policy considerations in relation to costs, Einfeld J concluded at 583: The matter of the interaction of "the usual rule", particularly as affects indemnity costs, with the statutory regime of the Federal Court Act is one which in my most respectful opinion requires fresh attention. An interpretation which I believe to be more in keeping with such a statutory provision is that the court is to start with no "usual rule" or preconceptions as to the costs issue. Rather, the question of costs, like other aspects of the case, will fall to be determined on its merits. This means that the applicant for indemnity costs must put forward all of the circumstances which suggest that the most (r)igorous order should be made.

27. In the light of that conclusion it is desirable that we set out our views on the manner in which the court's jurisdiction to award indemnity costs ought to be exercised.

28. Until Marks the principles enunciated in Colgate-Palmolive and generally applied in the Court were: 1. Section 43 of the FCA confers an absolute and unfettered discretion on the Court to make orders as to costs but the discretion must be exercised judicially. 2. In order to exercise the discretion judicially the following principles have been accepted by the Court as applicable: (a) the Court ought not to depart from the rule that costs be ordered on a party and party basis unless the circumstances of the case warrant the Court in departing from the usual course; (b) the circumstances which may warrant departure from the usual course arise as and when the justice of the case so requires or where there may be some special or unusual feature in the case to justify the Court in departing from the usual course; (c) whilst the circumstances in cases in which indemnity costs have been ordered offer a guide, the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for costs other than on a party and party basis.

29. Section 43 of the FCA provides: 43(1) Subject to subsection (1A), the Court or a Judge has jurisdiction to award costs in all proceedings before the Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs shall not be awarded. 43(1A) In a representative proceeding commenced under Part IVA or a proceeding of a representative character commenced under any other Act that authorises the commencement of a proceeding of that character, the Court or Judge may not award costs against a person on whose behalf the proceeding has been commenced (other than a party to the proceeding who is representing such a person) except as authorised by: (a) in the case of a representative proceeding commenced under Part IVA - section 33Q or 33R; or (b) in the case of a proceeding of a representative character commenced under another Act - any provision in that Act. 43(2) Except as provided by any other Act, the award of costs is in the discretion of the Court or Judge.

30. The discretion to award costs is to be exercised not only in the context of the jurisdiction conferred by s.43 but also in the context of the Rules of Court.

31. The relevant rules in Order 62 of the Federal Court Rules are: RULE 12 SCALE OF COSTS

Except as otherwise ordered in all proceedings commenced on and after the date these Rules came into operation, solicitors are, subject to these Rules, entitled to charge and be allowed the fees set forth in the Second Schedule in respect of the matters referred to in that Schedule and higher fees shall not be allowed in any case except such as are by this Order otherwise provided for. RULE 19 COSTS TO BE ALLOWED ON TAXATION On every taxation the taxing officer shall allow all such costs charges and expenses as appear to him to have been necessary or proper for attainment of justice or for maintaining or defending the rights of a party, but except as against the party who incurred them, costs shall not be allowed which appear to the taxing officer to have been incurred or increased: (a) through over-caution, negligence or misconduct; (b) by payment of special fees to counsel or special charges or expenses to witnesses or other persons; or (c) by other unusual expenses.

RULE 31 PARTY AND PARTY BASIS

On a taxation on a party and party basis - (a) the costs of briefing more than one counsel may be allowed notwithstanding that none is one of Her Majesty's counsel; (b) a retaining fee to more than one counsel shall not be allowed; and (c) costs in respect of counsel attending before a Registrar or taxing officer shall not be allowed unless the Registrar or taxing officer certifies the attendance to be proper, or the Court otherwise orders.

32. The Second Schedule sets out the scale of costs. Although it provides some discretion and flexibility it is clear that in many instances reasonably incurred costs will exceed the scale rate.

33. As was pointed out by Sheppard J in Colgate-Palmolive, the costs for which these rules provide are costs on a party and party basis. The rules do not deal with the award of costs on any other basis. Although the gap between actual costs and the scale rate used in determining party and party costs may be increasing, it is relevant to note that the criterion in Rule 19 in respect of the items for which costs may be recovered allows recovery of all such costs, charges and expenses as appear to the taxing officer - "to have been necessary or proper for the attainment of justice or for maintaining or defending the rights of a party...".

34. The exclusion of costs incurred or increased by the factors in (a), (b) and (c) of Rule 19 is also relevant.

35. The rules apply unless otherwise ordered. The very fact and terms of the relevant Rules suggest to us that, unless the justice of the particular case requires or some special or unusual feature arises, the Rules should not be departed from by the making of some other order for costs in exercise of the jurisdiction conferred under s.43. The generality of the criteria for departing from the usual rule ensures that the discretion to depart from the rule can be exercised whenever the Court is of the view that after applying the criteria to the facts of the particular case, it is just to do so. Such an approach is consistent with the requirement that the discretion to award costs is to be exercised judicially.

36. However, there are other reasons for continuing to apply the principles that have been generally applied in the Court.

37. As was also pointed out by Sheppard J in Colgate-Palmolive, for the reasons discussed by him, the ordinary rule in favour of party and party costs, has been settled practice in the courts in England and Australia over a very long period of time. It is not readily apparent why that practice should be changed. It may well be that the scale rates, rather than the principles, require review.

38. Further, a general discretion of the kind suggested by Einfeld J is likely to give rise to greater disputation over costs than already exists, with possible inconsistency within the Court and between courts. Such outcomes do not advance and are not in the interests of the administration of justice.

39. The combination of these factors leads us to the view that the principles enunciated in Colgate-Palmolive as stated above ought to continue to be applied in the Court.

Should indemnity costs be ordered? 40. In the instant case the first ground put forward by ACCC for an order for indemnity costs is that the application to the Court was misconceived and without merit. In its reasons for judgment the Court discussed the issues of law which required resolution. The Court concluded that the grounds relied upon by the applicants had not been made out. However, the issues of law involved in the matter were complex and, subject to the timing of the application and the circumstances in which it was made to which we will return, were matters which were proper to raise under s.75(v) of the Constitution. In these circumstances we do not accept that the first ground is one which warrants an order for indemnity costs.

41. The second ground relates to the timing of and the circumstances in which the application was made. It was submitted by ACCC that these matters constituted an abuse of process which has been accepted as a circumstance warranting an order for indemnity costs: see Baillieu Knight Frank (NSW) Pty. Ltd. v. Ted Manny Real Estate Pty. Ltd. (1992) 10 ACSR 551 at 540 per Powell J.

42. We have set out the facts relevant to this submission earlier in these reasons for judgment. It is sufficient to say that, cumulatively those matters led us to the conclusion which we arrived at previously, namely that the application was a "prime example" of the abuse of process to which Deane J was referring in Ross Jones at 225.

43. In accordance with the principles we have enunciated above, the abuse of process in the present case warrants the Court in departing from the usual course in relation to costs. Having considered the circumstances of the instant case in the context of the principles stated above, we are of the view that indemnity costs should be awarded to the ACCC.

Form of order 44. It seems to us that the appropriate form of order is that the applicants pay ACCC's costs on the basis that such costs are to include all costs except in so far as they are of an unreasonable amount or were unreasonably incurred so that, subject to such exceptions, the ACCC will be completely indemnified by the applicant for its costs: see Fountain Selected Meats (Sales) Pty. Ltd. v. International Merchants Produce Pty. Ltd. [1988] FCA 202; (1988) 81 ALR 397 at 401-2 per Woodward J.

Collings' costs 45. We have considered the application for costs by Collings. They were respondents to the proceedings but played no part in them save to enter a "submitting" appearance. Collings, who were co-defendants with the applicants in the proceedings transferred to the Supreme Court, were content to receive the benefit of the orders sought by the applicants if they succeeded. In all of the circumstances we are of the view that no order for costs should be made in favour of or against Collings. - 1 -