Thunderdome Racetime and Scoring Pty Ltd v Dorian Industries Pty Ltd

Australian Flight Test Services Pty Ltd ("AFTS") sought injunctive relief against the respondents, the Minister for Industry, Science and Technology, the Commonwealth of Australia, the Flinders University ("the University"), Jörg Michael Hackar and Peter Schwerdtfeger. The last two named respondents, Hacker and Schwerdtfeger, are employees of the University. As the Minister and the Commonwealth gave certain undertakings that were accepted by AFTS, they played no part in these present proceedings. It will be sufficient therefore to refer to them compendiously as the "Commonwealth". AFTS claimed that it and the University had, in January 1995, jointly prepared and lodged a proposal for a grant of funds from the Major National Research Facilities Program. In June 1995, for reasons at this stage unknown, the University presented another proposal which excluded any reference to the AFTS. This latter proposal was successful, entitling the University to receive a grant from the Commonwealth of $8.5 million. The Commonwealth made a first payment of $3.7 million to the University in early February 1996. AFTS filed an application in this Court on 20 February 1996 by which it sought, inter alia, to prevent the Commonwealth from providing or causing to be provided further funds to the University pursuant to the grant. In response the Commonwealth gave an undertaking to the Court, the effect of which meant that the Commonwealth would not provide further money to the University pursuant to the research program for a period of 2 months. The AFTS also sought an injunction restraining the University from expending or agreeing to expend any funds received pursuant to the grant. The University resisted the claim for injunctive relief and the matter was argued before me on 28 February 1996. AFTS failed in its application. The basis of my refusal for the order sought was that it was a case where, if the applicant succeeded, damages would, in my opinion, be an appropriate remedy. Counsel for the University, Mr Blue, sought an order for costs against the applicant as a consequence of the dismissal of its application for injunctive relief. He also sought an order under O62 r3 of the Federal Court Rules (the "rules") that the costs be taxed and paid forthwith thereafter. Mr Blue based his submissions on the following propositions: that the application for injunctive relief was separate and apart from the principal claims which included claims against the Commonwealth and that the University would not recover its costs for a significant period of time if it must await the conclusion of the principal proceedings. Mr Greenwell, counsel for the AFTS, in opposing an order under O62 r3 referred to and relied upon the judgment of Olney J in Thunderdome Racetime and Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297. In that case orders for costs had been made against the respondents at various interlocutory hearings. The applicants sought an order that those costs be taxed and paid forthwith. His Honour dismissed the application saying:- "The rule does not suggest any particular criteria by which the court should be guided in approaching such an application, and accordingly I take the view that the discretion should be exercised in favour of a party who establishes that the demands of justice require that there be a departure from what appears to be the general practice envisaged by the rule, namely, ... than an order for costs of an interlocutory proceeding shall not entitle a party to have a bill of costs taxed until the principal proceeding in which the interlocutory order was made is concluded." (p312)

I cannot accept Mr Blue's submission that the Full Court was thereby disapproving of the remarks of Olney J in Thunderdome (supra). In Allstate Life Insurance (No 13) there was the special feature of an unsuccessful appeal against an interlocutory order to be taken into consideration by the Full Court when it gave its decision. As to the relevance of the possible length of the trial, both the Full Court and Lindgren J were influenced by the fact that the litigation was complex, was not to be heard for another eight months and, unless settled, would subsist for a substantial time. I received conflicting submissions as to the possible length, complexity and the commencement date of the trial. Counsel for AFTS was of the view that this matter was a "perfectly straightforward type of proceeding" and anticipated that the trial could commence at the end of May. On the other hand, counsel for the University argued that as a result of the complexity of these proceedings the trial will be "substantial" and it would not be ready to start for many months. At this stage, I am not in a position to determine which party has given the more accurate prediction of the length and difficulty of the trial. Therefore, I do not take these issues into account in making my decision. In a recent judgment of the Full Court of the Federal Court of Australia, Metcalf v NZI Securities Australia Limited (5 March 1996, unreported) the extent of the relief awarded was a persuasive element. In that case there had been a finding against two respondents of misleading conduct that justified grants of quite extensive relief. In separate proceedings that were still on foot in a State Supreme Court, one of the respondents was suing some of the applicants and, if successful, questions of set-off might arise. The existence and prosecution of those proceedings was not considered a sufficient cause to prevent an order that the respondents pay the costs in the Federal Court proceeding without delay. In Harris v Cigna Insurance Australia Limited (1995) ATPR 41-45 Kiefel J was persuaded to make an order that costs be taxed and paid forthwith because there had been "a long delay in close of pleadings by the pursuit of an ill considered and perhaps unnecessary (interlocutory) claim". (p41,011) The question that arises is whether the facts in this case are such that it is in the interests of justice to exercise the court's discretion and order that costs be taxed and paid forthwith. The element in this case that has influenced my decision to make the order sought is the importance attaching to the claim for injunctive relief. Often the essence of an application for an injunction is its urgency. Many such proceedings are won or lost within a few days. The decision to apply for an interlocutory injunction is one that should not be taken lightly. It is an application which, if successful, has serious consequences. Factors that an applicant for an injunction should take into account are the costs that are incurred by a respondent in preparing a defence to the claim for injunctive relief and the payment of the costs involved in the application should they fail to obtain an injunction. In this particular case, the issue of the injunction, namely the payment of the grant and the expenditure of the grant will not be primary issues in the trial. The primary issue appears to be an investigation of why, how and when the University made the second unilateral application for a share. Because that issue is separate and apart from the relief sought at the interlocutory level, I have concluded that the University should succeed. I order that the University have leave to tax the costs of and incidental to the application filed by AFTS wherein injunctive relief was sought (including the costs of this order) and that the applicant pay those costs forthwith upon service of the allocatur.

At a glance

Court

Decision date

Before

Source

Judgment (6 paragraphs)

Parties

Cases Cited (1)