Ringrow Pty Ltd v BP Australia Pty Ltd

Federal Court of Australia|2003-12-15|Before: Hely J

The Cross-Claimant/Respondent's Notice of Termination dated 2 December 2002 in respect of the BP Privately Owned Sites Agreement dated 28 July 1999 in relation to a BP branded service station at 115-119 Hume Highway, Lansvale, is valid and effective. 2. The Cross-Claimant/Respondent's Notice of Termination dated 2 December 2002 in respect of the BP Privately Owned Sites Agreement dated 1 July 1999 in relation to a BP branded service station at 359-365 Elizabeth Drive, Mount Pritchard is valid and effective. 3. The BP Privately Owned Sites Agreement dated 28 July 1999 in relation to a BP branded service station at 115-119 Hume Highway, Lansvale was validly terminated by the Cross-Claimant/Respondent on 2 December 2002. 4. The BP Privately Owned Sites Agreement dated 1 July 1999 in relation to a BP branded service station at 359-365 Elizabeth Drive, Mount Pritchard was validly terminated by the Cross-Claimant/Respondent on 2 December 2002. 5. The option to purchase the land described as Folio Identifier 15/652782 and known as 115-119 Hume Highway, Lansvale was validly exercised by the Cross-Claimant/Respondent on 19 June 2003 pursuant to the Option Deed dated 28 July 1999. 6. The Cross-Claimant/Respondent is entitled to payment of liquidated damages in the amount of $84,256.00 pursuant to the BP Privately Owned Sites Agreement dated 1 July 1999 in relation to a BP branded service station at 359-365 Elizabeth Drive, Mount Pritchard; and 7. The Applicant/Cross-Respondent is liable to pay to the Cross-Claimant/Respondent the sum of $36,248.23 pursuant to clauses A14.2(f) and A16.9 of the BP Privately Owned Sites Agreement dated 28 July 1999 in relation to a BP branded service station at 115-119 Hume Highway, Lansvale and the BP Privately Owned Sites Agreement dated 1 July 1999 in relation to a BP branded service station at 359-365 Elizabeth Drive, Mount Pritchard. THE COURT ORDERS THAT:
1. The Third Further Amended Statement of Claim is dismissed.
2. The parties are released from the undertakings given to the Supreme Court of New South Wales on 10 January 2003 and the agreements made on that day by the parties and noted by the Supreme Court of New South Wales are discharged.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

N 279 OF 2003 BETWEEN: ULTIMATE FUEL PTY LTD

CROSS-CLAIMANT AND: ULTIMATE FUEL PTY LIMITED

The Cross-Claimant/Respondent's Notice of Termination dated 2 December 2002 in respect of the BP Privately Owned Sites Agreement dated 5 July 2000 in relation to a BP branded service station at 179 Parramatta Road, Auburn is valid and effective. 2. The BP Privately Owned Sites Agreement dated 5 July 2000 in relation to a BP branded service station at 179 Parramatta Road, Auburn was validly terminated by the Cross-Claimant/Respondent on 2 December 2002. 3. The option to purchase the land described as Auto Consol 7912-59 and Folio Identifier 1/965289 and known as 179 Parramatta Road, Auburn was validly exercised by the Cross-Claimant/Respondent on 19 June 2003 pursuant to the Option Deed dated 30 June 2000. 4. The Applicant/Cross-Respondent is liable to pay to the Cross-Claimant/Respondent the sum of $36,248.23 pursuant to clauses A14.2(f) and A16.9 of the BP Privately Owned Sites Agreement dated 5 July 2000 in relation to a BP branded service station at 179 Parramatta Road, Auburn. THE COURT ORDERS THAT:
1. The Third Further Amended Statement of Claim is dismissed.
2. The parties are released from the undertakings given to the Supreme Court of New South Wales on 10 January 2003 and the agreements made on that day by the parties and noted by the Supreme Court of New South Wales are discharged.
3. The Applicant/Cross-Respondent pay to the Cross-Claimant/Respondent: (a) the sum of $36,248.23 for costs and expenses incurred by the Cross-Claimant/Respondent prior to the commencement of proceedings; (b) interest on the amount in paragraph 3(a) in the sum of $3,493.23; and (c) the Cross-Claimant/Respondent's costs of the proceedings (including the costs of the proceedings whilst in the Supreme Court of New South Wales), including any reserved costs. 4, The parties have liberty to apply on three days notice.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

THE COURT DECLARES THAT: 1. The Cross-Claimant/Respondent's Notice of Termination dated 2 December 2002 in respect of the BP Privately Owned Sites Agreement dated 5 July 2000 in relation to a BP branded service station at the corner of Egerton Street and Silverwater Road, Silverwater is valid and effective. 2. The BP Privately Owned Sites Agreement dated 5 July 2000 in relation to a BP branded service station at the corner of Egerton Street and Silverwater Road, Silverwater was validly terminated by the Cross-Claimant/Respondent on 2 December 2002. 3. The option to purchase the land described as Folio Identifiers 1/135372 and 2/312252 and known as corner of Egerton Street and Silverwater Road, Silverwater was validly exercised by the Cross-Claimant/Respondent on 19 June 2003 pursuant to the Option Deed dated 30 June 2000. 5. The Applicant/Cross-Respondent is liable to pay to the Cross-Claimant/Respondent the sum of $36,248.23 pursuant to clauses A14.2(f) and A16.9 of the BP Privately Owned Sites Agreement dated 5 July 2000 in relation to a BP branded service station at the corner of Egerton Street and Silverwater Road, Silverwater. THE COURT ORDERS THAT: 1. The Third Further Amended Statement of Claim is dismissed. 2. The parties are released from the undertakings given to the Supreme Court of New South Wales on 10 January 2003 and the agreements made on that day by the parties and noted by the Supreme Court of New South Wales are discharged. 3. The Applicant/Cross-Respondent pay to the Cross-Claimant/Respondent: (a) the sum of $36,248.23 for costs and expenses incurred by the Cross-Claimant/Respondent prior to the commencement of proceedings; (b) interest on the amount in paragraph 3(a) in the sum of $3,493.23; and (c) the Cross-Claimant/Respondent's costs of the proceedings (including the costs of the proceedings whilst in the Supreme Court of New South Wales), including any reserved costs. 4. The parties have liberty to apply on three days notice. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

APPLICANT AND: BP AUSTRALIA PTY LTD

RESPONDENT BETWEEN: BP AUSTRALIA PTY LTD

CROSS-CLAIMANT AND: RINGROW PTY LTD

CROSS-RESPONDENT N 279 OF 2003 BETWEEN: ULTIMATE FUEL PTY LTD

APPLICANT AND: BP AUSTRALIA PTY LTD

RESPONDENT BETWEEN: BP AUSTRALIA PTY LTD

CROSS-CLAIMANT AND: ULTIMATE FUEL PTY LTD

N 280 OF 2003 BETWEEN: NADER-ONE PTY LTD

APPLICANT AND: BP AUSTRALIA PTY LTD

RESPONDENT BETWEEN: BP AUSTRALIA PTY LTD

CROSS-CLAIMANT AND: NADER-ONE PTY LTD

DATE: 15 DECEMBER 2003 PLACE: SYDNEY

REASONS FOR JUDGMENT 1 The parties have now brought in short minutes of order to give effect to the reasons for decision which I published on 13 November 2003. There are two matters which emerged in the process of preparation of those short minutes which I should record. First, there is an error in par [171] of the reasons. I intended to make declarations in terms of pars 1, 2 and 3B of the further amended cross claims, rather than pars 1, 2, 3A and 3B of the amended cross claims. The reasons for judgment should be corrected in that respect. Second, in par [174] of the reasons I referred to a sum of $119,619.14 (including GST). The parties have now agreed that the appropriate sum is one which is struck excluding GST, and the short minutes of order have been prepared on that basis. 2 The only issue remaining in dispute is costs, or more precisely, the manner in which the quantum of costs should be determined in default of agreement. 3 BP seeks orders that the applicant in each proceeding pay BP's costs (including the costs of the Supreme Court of NSW proceedings) in an amount to be agreed, or in default of an agreement, in an amount to be determined by a suitably qualified costs assessor. Alternatively, BP seeks a direction pursuant to Order 62 r 12 of the Federal Court Rules (if the costs of both the Federal Court proceedings and the Supreme Court proceedings are to be taxed in this Court) requiring the taxing officer to assess costs in accordance with the prescriptions contained in s 208F and s 208G of the Legal Profession Act 1987 (NSW) ('LPA'). In the alternative to each of the foregoing BP seeks an order pursuant to Order 62 r 5 that the costs of the Supreme Court proceedings be determined by the Supreme Court. The applicants' position is that the costs of the Supreme Court proceedings should be assessed in that Court, and that the costs of the Federal Court proceedings should be taxed in accordance with the Rules of this Court. 4 The power of the Federal Court in respect of costs arises by operation of s 43 of the Federal Court of Australia Act 1976 (Cth) which confers on the Court a general discretion to make an award of costs. Order 62 r 4(1) provides that where costs are to be paid to a person by or under an order of the Court, that person is entitled to his/her taxed costs. Unless otherwise ordered, bills of costs are to be taxed, allowed and certified by a Registrar or Deputy Registrar as taxing officer: Order 62 r 39, O 62 r 8. On a taxation, fees are to be allowed in accordance with the second schedule unless otherwise ordered: Order 62 r 12. Other fees are in the discretion of the taxing officer, which is to be exercised having regard to the factors specified in Order 62 r 22. Costs charges and expenses which appear to the taxing officer to be 'necessary or proper' are to be allowed: O 62 r 19. 'Necessary or proper' is the phrase often used where costs are taxed on a party/party basis. 5 Order 62 r 4 provides: '(2) Where the Court orders that costs be paid to any person, the Court may further order that as to the whole or any part of the costs specified in the order, instead of taxed costs, that person shall be entitled to - (a) a proportion specified in the order of the taxed costs; or (b) the taxed costs from or up to a stage of the proceedings specified in the order; or (c) a gross sum specified in the order; or (d) a sum in respect of costs to be ascertained in such manner as the Court may direct.' Order 62 r 5 provides: 'Costs in other Courts 5 Where in a proceeding transferred to or removed into the Court or in a proceeding on an appeal to the Court, the Court makes an order as to the costs of a proceedings before any other court, the Court may - (a) specify the amount of the costs to be allowed; (b) order that the costs be taxed in accordance with this Order; or (c) make orders for the ascertainment of the costs by taxation or otherwise in that other court.' 6 In the Supreme Court, s 76 of the Supreme Court Act 1970 (NSW) provides that costs shall be in the discretion of the Court. The Court may order costs to be assessed on the basis set out in Division 6 of Part II of the LPA. Part 52A r 6 of the Supreme Court Rules now provides (ie since 1 July 1994) that where costs are to be paid to a person, that person is entitled to assessed costs. Costs are ordinarily payable on a party/party basis (Order 51A r 32), which is now defined to mean the basis of assessment set out in Division 6 of Part II of the LPA: Order 52A r 2. 7 Division 6 of Part II of the LPA includes s 208F and 208G. In general terms, those sections provide for an assessment of costs which is 'fair and reasonable' in amount. The assessor must consider whether or not it was reasonable to carry out the work to which the costs relate, and what is a fair and reasonable amount of costs for the work concerned: LPA s 208F. The LPA s 208G lists matters to which the assessor is to have regard in assessing what is a fair and reasonable amount of costs. 8 As a matter of mechanics, an application for assessment of party/party costs under the LPA is made to the Manager, Costs Assessment (LPA s 202) who refers the matter to a costs assessor (s 206). The Manager, Costs Assessment is defined as a person holding office under Part 2 of the Public Sector Management Act 1988 (NSW) as 'Manager, Costs Assessment, in the (NSW) Attorney General's Department'. The costs assessor issues a certificate that sets out his determination (s 208J). 9 The mechanisms for the review of costs assessment are contained in subdivisions 4A and 4B of Part II, Division 6 of the LPA. In essence, the Act provides for three avenues for the review of a costs assessment: - review by a panel comprising two costs assessors pursuant to s 208KA; - appeal to the Supreme Court of NSW pursuant to s 208L on a question of law; and - appeal to the Supreme Court of NSW pursuant to s 208M by leave. 10 The provisions of Division 6 of Part II of the LPA operate under the umbrella of the NSW Supreme Court. Notwithstanding the generality of the expressions used in Order 62 r 4(d) of the Federal Court Rules, I am not entitled effectively to conscript those engaged in the NSW system of costs assessment to assess the quantum of costs payable pursuant to an order of this Court, nor is it appropriate that I should do so. This Court would have no supervisory jurisdiction in relation to an assessment of costs under the LPA. 11 Order 62 r 4(2)(d) permits the Court to make an order for costs to be ascertained in such manner as the Court may direct. Order 62 r 12 contemplates that an order may be made modifying or displacing the provisions of the second schedule. I am not sure that either of those provisions would enable me to substitute the 'fair and reasonable' standard employed in Part II Division 6 of the LPA for the 'necessary and proper' standard in Order 62 r 19. Nor is it clear to me what the practical difference (if any) results from the adoption of one test in preference to the other. I do have evidence that if BP's actual costs of the proceedings are $988,355.50, BP could expect to tax its costs pursuant to the Federal Court Rules at about $497,000, but would be likely to recover an amount of about $741,000 under an assessment pursuant to Part II of the LPA. Why a difference of this order would be likely to arise has not been explained. 12 BP seeks an order that its costs be taxed in accordance with the prescriptions contained in accordance with s 208F and s 208G of the LPA because such a taxation is likely to produce a greater costs recovery, and because the proceedings were commenced in the Supreme Court and only transferred into this Court because of exclusive dealings which the applicants later abandoned. 13 In my view, those matters provide an insufficient foundation for departing from the ordinary operation of the rules in relation to costs. The proceedings were transferred into this Court on BP's motion, and by far the greater part of the proceedings occurred in this Court. 14 Nor do I consider it to be appropriate that there should be an assessment of the costs in the Supreme Court and a taxation of costs in this Court. In the interests of efficiency, there should be only one quantification exercise. Order 62 r 5(b) allows for that to occur. In their written submissions, the applicants withdrew a submission made 'on the run' that this should occur. To the extent necessary, leave to withdraw that submission should be given, but I would not have acceded to it in any event. The proper order is that the applicants pay BP's costs of the proceedings, including costs incurred whilst the proceedings were in the Supreme Court. That will have the effect of entitling BP to receive its taxed costs of the proceedings: Order 62 r 4. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely.

Solicitor for the Applicants: Stojanovic Solicitors

Solicitor for the Respondent: Corrs Chambers Westgarth Lawyers

Public Sector Management Act 1988(NSW)

Legal Profession Act 1987(NSW)s 202, 208F, 208G

Supreme Court Act 1970(NSW)s 76, Part

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