25Leaving aside the separate proceedings concerning the Constitutional issue for the moment, in my opinion, none of these issues warrants a separate costs order.
26As I have said, the case raised a large number of issues. It ran for approximately 100 hearing days. In my opinion, it was unnecessarily complicated and much of the blame for that lies at the feet of the plaintiffs. The Bank was put in a position where it had to contend with a large number of issues. It was successful in relation to many of them; and it was, of course, successful in each of the proceedings. Having regard to the way in which the case was run by the plaintiffs, there would be a degree of unfairness in depriving the Bank of part of its costs because, on a careful analysis, it is possible to identify some issues on which it was not successful.
27As the Bank points out, it was not wholly unsuccessful in relation to the reasonable grounds issue. I found that the Bank did have reasonable grounds for making some of the representations that it was alleged to have made. Moreover, it became unnecessary to deal in any detail with the question whether the Bank had reasonable grounds to rely on a number of representations (such as representations concerning the Bank's credit criteria) because the case based on those representations was largely abandoned by the OMB Parties.
28The principal issue in relation to the reasonable grounds defence was whether the Bank had reasonable grounds for making representations concerning the ability of an OMB to write $4 million per month in new lending. Even in relation to that representation, there was a question of what Mr Allsopp said. I concluded that Mr Allsopp may well have said that it was possible for an OMB to write $4 million worth of new lending each month without conveying the impression that that figure could or would be achieved by any particular OMB. I concluded that Mr Allsopp had reasonable grounds for making a representation in those terms.
29A substantial amount of evidence was directed at establishing that the Bank had reasonable grounds for believing that a metropolitan OMB could write loans of $4 million per month after approximately 4 months of operation and that, if it did so, it would break even within a reasonable period of time. Ultimately, the Bank failed to establish either limb of that proposition. But the reasons it failed were quite limited. Essentially, it failed because I was not satisfied that it had reasonable grounds for believing its own experience in Queensland and the experience of branches of other banks in New South Wales were comparable to the position of a new OMB operated by people without the necessary qualifications, experience and connections in New South Wales. Much of the material led by the OMB Parties in relation to reasonable grounds was largely irrelevant to the grounds on which the Bank failed; and if the reasonable grounds defence took up an unnecessary amount of time, the OMB Parties must bear some of the responsibility for that. A substantial part of the material relevant to the grounds on which the Bank failed - such as material concerning the qualifications and experience of the Owner Managers - was material that would have been led in any event. For those reasons, I do not think that the issue of reasonable grounds was a sufficiently distinct one on which the Bank lost to justify some special costs order.
30The Representations Deed was relevant to the question of reliance, as well as the claim raised by the Bank, although ultimately I did not rely on it for any of the conclusions I reached. A minimal amount of time in the case was spent on it. For those reasons, no special costs order should be made in relation to that part of the Bank's claim.
31In relation to the claim in the Traderight proceeding, the Bank claimed damages on the basis that Traderight, in breach of cl 7.5 of the OMB Agency Agreement, had failed to reimburse it for a number of bad debts which it alleged were attributable to the failure by Traderight or its personnel to observe the Bank's policies, practices and procedures. The Traderight Parties resisted that claim on two bases. First, they submitted that Traderight had not breached the relevant policies. Second, they alleged that the Bank had not proved that the debts were bad ones. I accepted the second submission, and did not deal with the first, although there was considerable evidence that Traderight had not complied with the relevant policies. Again, the issue on which the Bank lost took up so little time in the case that, in my opinion, it is not appropriate to seek to separate out those costs.
32As to the psychiatric injury claims, it was necessary in order to consider any limitation defence to consider the factual details of the claim. That factual material was relevant to other aspects of the claims, on which the relevant OMB Parties were unsuccessful. The limitation defences raised legal issues concerning the operation of those defences. However, those issues took up virtually no time in the overall context of the proceedings. In some cases, the Bank was only unsuccessful in relation to its limitation defences because I was not prepared to make an order concerning when the amendments made by the OMB Parties to raise the psychiatric injury claims should take effect, with the result that the amendments took effect when the original claim was filed. For those reasons, it is not possible to separate out the costs of the limitation defence from other aspects of the claim and it would not be appropriate to impose some separate costs order in respect of them.
33As the Bank pointed out in its submissions, it was not correct to say that the Bank lost on issues of causation in relation to the psychiatric injury claims. On the findings I made, any economic loss suffered by Mr and Mrs Sargent was not caused by the psychiatric illnesses from which they suffered. In any event, in my opinion, it is artificial to attempt to separate issues of reliance from issues of duty and breach in this case. The relevant OMB Parties brought claims based on psychiatric injuries they alleged they suffered as a consequence of the Bank's conduct. Those claims failed because the relevant OMB Parties failed to establish that they suffered a psychiatric injury as a consequence of any misleading or deceptive conduct, any unconscionable conduct or any negligent conduct of the Bank. Any attempt to divide the issues further for the purposes of determining the question of costs strikes me as artificial.
34The OMB Parties seek different costs orders in relation to 4 interlocutory applications. The first was an application by the OMB Parties to amend their claims to plead that the Bank engaged in misleading and deceptive conduct by silence. That application, which the Bank resisted, was partially successful: see Traderight (NSW) Pty Ltd v Bank of Queensland Limited (No 9) [2012] NSWSC 154. However, the claims themselves failed. In my opinion, it is appropriate that the costs of the motion follow the event. The Bank should not be penalised for resisting the bringing of a claim that failed.
35The second interlocutory application was an application brought by the Bank to obtain access to documents produced by Professor Burton, an expert on marketing called by the OMB Parties, in respect of which a claim for privilege was made. The Bank was unsuccessful in obtaining those documents. In the normal course of events, an order might have been made requiring the Bank to pay the OMB Parties' costs of that motion. However, no costs order was made at the time. As things transpired, Professor Burton's report was of no assistance and it is doubtful that it should ever have been served. In those circumstances, in my opinion, there is no reason to treat the costs of this application differently from the costs of the proceedings generally.
36The third interlocutory application was the Bank's application that the evidence of what Mr Allsopp was alleged to have said to each Owner Manager not be admitted as evidence of what he said to each other Owner Manager on the ground that it was tendency evidence that did not meet the requirements of s 97(1) of the Evidence Act 1995 (NSW). That motion was stood over to the trial and was ultimately not pressed by the Bank. Although some work was done by the OMB Parties in relation to the motion, the issue became wrapped up with the conduct of the trial. For those reasons, I do not think a separate costs order should be made in relation to that motion.
37The last interlocutory application in relation to which a special costs order is sought was an application made by the Bank that it be permitted to cross-examine Ms Chen in circumstances where her affidavit had been read but the LJH Group Parties chose not to make her available for cross-examination. I rejected that application: see Traderight (NSW) Pty Ltd v Bank of Queensland Limited (No 12) [2012] NSWSC 1363. In my opinion, that should not be treated as a separate application. It was an application concerning the general conduct of the trial and should be treated as part of the costs of the trial, which the OMB Parties should bear.
38In my opinion, the costs of what is referred to as the "Constitutional issue" fall into a different category.
39In the Rossmick, SME and JFS proceedings, the OMB Parties originally commenced proceedings in the Industrial Court of New South Wales seeking relief under s 106 of the IR Act. Those proceedings were transferred to this Court by order of Hamilton J made on 2 November 2007. However, prior to their transfer, the Bank commenced proceedings out of the Queensland registry of the Federal Court seeking prohibition against the Industrial Court to restrain it from hearing the proceedings then before it on the basis that the operation of s 106 of the IR Act was excluded by the Independent Contractors Act 2006 (Cth) in relation to services contracts. An application by the OMB Parties to transfer those proceedings failed before Greenwood J (see Bank of Queensland Limited v Industrial Court of New South Wales [2008] FCA 324; (2008) 170 IR 457). Greenwood J also ordered that certain paragraphs of the defence filed by the OMB Parties be struck out. He reserved the question of costs. The OMB Parties appealed to the Full Court in relation to Greenwood J's decision to strike out certain paragraphs of the defence. That appeal was upheld in part and the Full Court ordered that the parties each bear their own costs of the hearing before it and at first instance: Rossmick No 1 Pty Ltd v Bank of Queensland Limited [2008] FCAFC 81 at [18]. The Full Court observed (at [6]) that no appeal lay against an order dismissing an application to cross-vest proceedings and concluded that it could not itself cross-vest the appeal before it.
40On 27 March 2008, the Bank amended its claim. The amended claim still sought prohibition against the Industrial Court despite the fact that Hamilton J had made orders transferring the proceedings to this Court in November 2007. The OMB Parties filed an amended defence on 7 July 2008 and the Bank sought to strike out paragraphs of that defence. That application was heard by Logan J, who ordered that various paragraphs be struck out: Bank of Queensland Limited v Industrial Court of New South Wales (No 2) [2008] FCA 1435. His Honour reserved the question of costs. The OMB Parties appealed that decision. The appeal was heard by the Full Court on 26 November 2008. During the course of argument, the Full Court raised serious concerns about proceeding to hear the appeal. One concern was that the proceedings before the Court and those before the Industrial Court (although in fact transferred) raised similar factual issues. Another was how it could be appropriate to seek prohibition against a State Industrial Court in the Federal Court, a course of action described by Spender J in argument "to be the most arrogant and highhanded application of the bank you could possibly imagine". Eventually, the Bank accepted that the appropriate course was for the appeal and underlying proceedings to be transferred to the Supreme Court and orders to that effect were made by consent.
41The appeal from Logan J then came before the Court of Appeal on 4 April 2012. At that time, the Court of Appeal stayed the cross-vested proceedings on the basis that any defence by the Bank to the claim under s 106 of the IR Act ought to be raised in these proceedings: see Rossmick No 1 Pty Ltd v Bank of Queensland [2012] NSWCA 85. The Court directed that the costs of the parties in the Court of Appeal should be costs in the proceedings which are the subject of my principal judgment. At [21], it also said this in relation to costs:
If, at the end of the day, there is reason to separate out particular costs for special orders, that can be done by the trial judge. As the costs of the constitutional proceeding in the Federal Court were reserved for determination in the Equity Division, it is convenient that the costs in this Court, which depend primarily on steps taken prior to the hearing in this Court, should also be determined by the trial judge.
42The position, then, appears to be this. The underlying proceedings that were before Logan J were transferred to the Equity Division of this Court and stayed by order of the Court of Appeal. The costs of the motion heard by Greenwood J in those proceedings were dealt with by the Full Court. Apart from that, no order for costs was made in those proceedings. It appears that it is open to me to deal with those costs now.
43The costs of the appeal from the decision of Logan J were not dealt with by the Full Court. However, the Court of Appeal ordered that the costs of the parties before it should be costs in the proceedings I have dealt with in my principal judgment; and it seems to me those costs must include the costs of the hearing before the Full Court, since those costs became costs in the proceedings that were before the Court of Appeal.
44I concluded in my principal judgment that the Bank's defence based on the Independent Contractors Act should succeed. Clearly, the Bank should have its costs of that defence.
45However, in my opinion, the proceedings that were stayed by the Court of Appeal should not have been commenced. As the Court of Appeal pointed out, there was a perfectly simple and orthodox means by which the Bank was able to raise its defence based on the Independent Contractors Act. The Bank submitted that it was reasonable to commence separate proceedings because those separate proceedings involved a discrete point which could be dealt with promptly and, had they been successful, would have disposed of the claim under the IR Act. I do not accept that submission. The defence based on the Independent Contractors Act depended on characterising the relationship between the Bank and the relevant OMB Parties. That necessarily involved an investigation of that relationship. It was inevitable that there would be overlapping factual issues. In my opinion, the Bank should pay the OMB Parties' costs of the transferred proceedings, including the costs of the proceedings before the Court of Appeal, to the extent that those costs have not been dealt with by orders of the Federal Court.