//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2017] ACTSC 301
Supreme Court of the ACT
2017-10-18
Refshauge J
Original judgment source is linked above.
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Tuggeranong Town Centre Pty Limited v Brenda Hungerford Pty Limited (No 3)
CIVIL LAW - PRACTICE AND PROCEDURE - Costs - award of costs - general principles - quantum - quantified damages - consideration of principles - relative success of the parties on the issues raised - prescribed scale of costs applicable to transferred proceedings - rejection of a Calderbank offer -
STATUTES - INTERPRETATION - Leases (Commercial and Retail) Act 2001 (ACT) - "proceeding" - "in relation to" - "matters" - s 17 of the Leases (Commercial and Retail) Act 2001 (ACT) - s 154 Leases (Commercial and Retail) Act 2001 (ACT)
Conciliation and Arbitration Act 1904 (Cth), s 197A
Copyright Act 1968 (Cth)
Fair Work Act 2009 (Cth), s 570
Industrial Relations Act 1988 (Cth), ss 170EHA, 347
Leases (Commercial and Retail) Act 2001 (ACT), ss 17, 22(1), 107, 144, 152, 154
Magistrates Court (Civil Jurisdiction) Act 1982 (ACT), s 5
Privacy Act 1988 (Cth)
Tenancy Tribunal Act 1994 (ACT), ss 60, 62, 63, 64
Workplace Relations Act 1996 (Cth), ss 170CS, 347, 824
Court Procedures Rules 2006 (ACT), rr 461, 1002(2)(c), 1721, 1722, 1725, 1725(2)(c), 1725(3), 5433(3)(d), 6906, Div 2.17.5
Uniform Civil Procedure Rules 2005 (NSW), r 20.26(2)
Leases (Commercial and Retail) Regulation 2002 (ACT)
Alstom Power Ltd v Yokogawa Australia Pty Ltd (No 4) [2010] SASC 109
AMP Life Ltd v Lillium Pty Ltd [2000] VCAT 34; (2001) V Conv R 58-551
Antonino Guiseppina Ensabella and Sons Pty Ltd v Players on Downunder Pty Ltd [2000] VSCA 73; (2000) V Conv R 54-626
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175
Arthur McWitton Pty Ltd v Perpetual Trustee Co Ltd (Unreported, ACT Magistrates Court, Magistrate Burns, 9 March 2005)
Attorney-General of New South Wales v Brewery Employees Union of New South Wales [1908] HCA 94; (1908) 6 CLR 469
Australia and New Zealand Banking Group Ltd v Manny (No 4) [2013] ACTSC 236
Australian Competition and Consumer Commission v Maritime Union of Australia [2001] FCA 1549; 114 FCR 472
Bahonko v Sterjov [2007] FCA 1341; 163 FCR 318
Bahonko v Sterjov [2008] FCAFC 30; 166 FCR 415
Bishop v NSW (Unreported, Supreme Court of NSW, Dunford J, 17 November 2000)
Blake v Norris (1990) 20 NSWLR 300
Boxx v Peden [2017] ACTCA 39
Braithwaite v Philpot (Unreported, Supreme Court of the Australian Capital Territory, Master Connolly, 12 December 1997)
Business in Focus (Aust) Pty Ltd v Begun Property Pty Ltd [2006] FCA 264
Calderbank v Calderbank [1976] Fam 93
Cannon Real Estate Pty Ltd v Deisband Pty Ltd [2000] VCAT 36; (2000) V Conv R 58-555
Cardinal Project Services Pty Ltd v Hanave Pty Ltd [2011] NSWCA 399; 81 NSWLR 716
Carew v Heitanen [2014] ACTSC 179; 288 FLR 141
Chalmers v The Queen [2011] VSCA 436; 37 VR 464
Cheney v Spooner [1929] HCA 12; (1928) 41 CLR 532
Coccia v Australian Iron and Steel Pty Ltd (Unreported, NSW Court of Appeal, Hope, Glass and Samuels JJA, 9 October 1981)
Commonwealth of Australia v Davis Samuel Pty Limited and Ors (No 10) [2016] ACTSC 364
Commonwealth of Australia v Davis Samuel Pty Limited and Ors (No 11) [2017] ACTSC 2; 316 FLR 159
Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate (No 2) [2013] FCAFC 25; 209 FCR 464
Cressy v Miloriad (No 2) [2016] ACTSC 339; 317 FCR 267
Dibeek Holdings Pty Ltd v Notaras (1997) 141 FLR 364
Ditton v Gallagher (1992) 110 ACTR 12
Donald Campbell & Co Ltd v Pollak [1927] AC 732
DSE (Holdings) Pty Ltd v Intertan Inc [2004] FCA 1251; 51 ACSR 555
Duncan-Strelec v Tate [2010] NSWSC 1256
Earp Woolcock Beveridge & Co Ltd v Gordon [1927] NSWStRp 64; (1927) 44 WN (NSW) 123
Electrolytic Zinc Co of Australasia Ltd v Cieslak [1969] TASStRp 1; [1969] Tas SR 50
Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322
Esposito v Commonwealth (1988) 80 ACTR 9
Ex parte McCay; Re Consolidated Press Ltd [1936] NSWStRp 41; (1936) 36 SR (NSW) 592
Fencott v Muller (1983) 152 CLR 570
Financial Integrity Group Pty Ltd v Farmer (No 4) [2014] ACTSC 145
Forge v Rewers (No 2) [2017] ACTSC 273
Garnett v Bradley (1878) 3 App Cas 944
GBT Corporation Pty Ltd v Scott (1994) 116 FLR 266
GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 688; 201 ALR 55
Geneff v Peterson (1986) 19 IR 40
Gladstone Park Shopping Centre Pty Ltd v Ross Wills [1984] FCA 166; (1984) 6 FCR 496
Goldman Sachs JBWere Services Pty Ltd v Nikolich [2007] FCAFC 120; 163 FCR 62
GO & MJT Nominees Pty Ltd v Hollywell Homewares Pty Ltd [2010] QCA 368
Grout v Gunnedah Shire Council (No 3) (1995) 129 ALR 372
Hillman v Box (No 5) [2014] ACTSC 150
Hockey v Fairfax Media Publications Pty Ltd (No 2) [2015] FCA 750; 237 FCR 127
Hulanicki v Walton (No 2) [2015] ACTCA 45
Hunter Quarries Pty Ltd v Morrison (No 4) [2016] NSWIC 4; 92 NSWLR 1
Jackson v John Fairfax and Sons Ltd (1988) 96 FLR 145
John S Hayes & Associates Pty Ltd v Kimberley-Clark Australia Pty Ltd (1994) 52 FCR 201
Kingsley's Chicken Pty Ltd v Queensland Investment Corporation [2006] ACTCA 9
Kingsley's Chicken Pty Ltd v Queensland Investment Corporation (Unreported, ACT Magistrates Court, Magistrate Burns, 2 February 2007)
Kingsley's Chicken Pty Ltd v Queensland Investment Corporation (Unreported, ACT Magistrates Court, Magistrate Burns, 15 June 2007)
Kingsley's Chicken Pty Ltd v Queensland Investment Corporation [2009] ACTCA 9; 4 ACTLR 20
Kingsley's Chicken Pty Ltd v Queensland Investment Corporation [2009] ACTCA 14
Kyriacou v Southern Steel Supplies Pty Ltd (1971) 18 FLR 184
Leach v Nominal Defendant (QBE Insurance (Australia) Ltd (No 2) [2014] NSWCA 391
Leichhardt Municipal Council v Green [2004] NSWCA 341
Liangis Investments Pty Ltd v Ipex ITG Pty Ltd [2005] ACTCA 28
Luck v University of Southern Queensland [2009] FCAFC 73; 176 FCR 268
Mareva Building Consultants v Zevon (No 2) [2012] ACTSC 24
Maritime Union of Australia v Geraldton Port Authority [2000] FCA 16; 94 IR 404
Maltall Pty Ltd v J & C Iliopoulous & Bevendale Pty Ltd (No 2) (1998) V Conv R 59-528
McDonald v Parnell Laboratories (Aust) (No 2) [2007] FCA 2086; 164 FCR 591
Meadows v Vance [2016] FCCA 1814
Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; 229 FCR 221
MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd [1996] FCA 862; (1996) 70 FCR 236
Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692
Nelipa v Robertson [2009] ACTSC 16
NMFM Property Pty Ltd v Citibank Ltd (No 2) [2001] FCA 480; 109 FCR 77
Nutrientwater Pty Ltd v Baco Pty Ltd (No 2) [2010] FCA 304
O'Doherty v McMahon [1971] VicRp 75; [1971] VR 625
Papas v Grave [2013] NSWSC 849
Pell v Linnell (1868) LR 3 CP 441
Pires v DibbsBarker Canberra Pty Ltd [2014] ACTSC 283
PMT Partners Pty Ltd (in liq) v Australian National Parks and Wildlife Service [1995] HCA 36; (1995) 184 CLR 301
Proust v Blake (1989) 17 NSWLR 267
Pryor v City Offices Co (1883) 10 QBD 504
Qantas Airways Ltd v A F Little Pty Ltd [1981] 2 NSWLR 34
Qantas Airways Ltd v Transport Workers Union of Australia (No 2) [2011] FCA 816; 211 IR 119
Queensland v Brooks & McCabe [2006] QCA 523
Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1996) 189 CLR 146
R & R Industries (Australia) Pty Ltd v Marbletrend Pty Ltd [2010] FCA 1311
Re Judiciary and Navigation Acts [1921] HCA 20; (1921) 29 CLR 257
Re Struthers, Liquidator of Project Management, Architecture and Construction, Interior (PACI) Pty Ltd (No 3) [2005] NSWSC 1113; 64 NSWLR 392
Ryan v Primesafe [2015] FCA 8; 323 ALR 107
Salomon v Salomon & Co Ltd [1896] UKHL 1; [1897] AC 22
Sandvik Mining and Construction Australia Pty Ltd v Dempsey Australia Pty Ltd [2012] QSC 102
Seven Network (Operations) Ltd v Media Entertainment and Arts Alliance [2004] FCA 637; 148 FCR 145
Shackley v Australian Croation Club Ltd (1996) 141 ALR 736
Smallacombe v Lockyer Investment Co Pty Ltd [1993] FCA 169; (1993) 42 FCR 97
Smalley v Robey & Co [1962] 1 QB 577
Stanley v Service to Youth Council Inc (No 3) [2014] FCA 716; 225 FCR 357
Stelridge Pty Ltd v Handbags International Pty Ltd [1999] VCAT 8; (1999) V Conv R 58-532
Symes v Commonwealth (1987) 89 FLR 356
The Cutting Edge Victoria Pty Ltd v Industry Superannuation Property Trust Pty Ltd [2000] VCAT 2011; (2001) V Conv R 58-550
Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150
Thompson v Hodder [1989] FCA 493; (1989) 21 FCR 467
Trade Practices Commission v Nicholas Enterprises Pty Ltd [1979] FCA 143; 28 ALR 201
Tuggeranong Town Centre Pty Ltd v Brenda Hungerford Pty Ltd [2014] ACTSC 197
Tuggeranong Town Centre Pty Ltd v Brenda Hungerford Pty Ltd (No 2) [2017] ACTSC 88
Van Eeden v Henry [2005] NSWCA 14; 52 NSWLR 301
Van Zonneveld v Seaton [2005] NSWSC 175; (2005) DFC
Veda Advantage Ltd v Malouf Group Enterprises Pty Ltd (No 2) [2016] FCA 470
Village Building Co Ltd v Airservices Australia (No 2) [2008] FCA 1285
Viner (Minister for Industrial Relations) v Australian Building Construction Employees' & Builders' Labourers' Federation (1981) 56 FLR 5
Walker v Wambourne [1976] HCA 7; (1976) 137 CLR 1
Watkins Ltd v Plancorp No 6 Pty Ltd [1983] 2 Qd R 501
Whiley Investments (Qld) Pty Ltd v Pet's Paradise (Qld) Pty Ltd [2009] VSC 144
Woodger v Federal Capital Press of Australia Pty Ltd (1992) 107 ACTR 1
WorkCover Corporation of South Australia v Davey [2011] SASCFC 66; 110 SASR 173
Yogini v Eveille [2006] ACTSC 23
York v Green (1903) 19 WN (NSW) 309
Zuecker v Bruggmann [2016] QSC 115
Australian Capital Territory, Parliamentary Debates, Legislative Assembly, 18 October 2000
Australian Capital Territory, Parliamentary Debates, Legislative Assembly, 6 March 2001
Civil Procedure Act (LexisNexis Butterworths, 2002) looseleaf service 114
Leases (Commercial and Retail) Bill 2000 Explanatory Statement
Tuggeranong Town Centre Pty Ltd (Plaintiff and Cross Defendant)
Brenda Hungerford Pty Ltd (Defendant and Counter Claimant)
Mr C Erskine SC and Mr J Masters (Defendant and Counter-Claimant)
1. The defendant, Brenda Hungerford Pty Ltd, became, on 1 September 2003, lessee by assignment under a sublease (the Sublease) of premises in the shopping centre known as the Hyperdome, located in the southern Canberra district of Tuggeranong. At the time, the lessor was the third party in these proceedings, Leda Commercial Properties Pty Ltd. It subsequently transferred the property, including its interests in the Sublease, to the plaintiff, Tuggeranong Town Centre Pty Ltd.
2. Brenda Hungerford Pty Ltd abandoned the premises on 31 January 2008 and, when sued by Tuggeranong Town Centre Pty Ltd for the rent and other outgoings payable under the Sublease for the balance of the term, Brenda Hungerford Pty Ltd counterclaimed and joined the original lessor as a third party claiming damages said to be caused by various representations alleged to have been made in connection with its entry into and occupation of the premises under the Sublease.
3. I heard the proceedings in September and October 2014 and January 2015 and, on 28 April 2017, delivered judgment in the matter: Tuggeranong Town Centre Pty Ltd v Brenda Hungerford Pty Ltd (No 2) [2017] ACTSC 88 (TTC v BHPL).
4. In these reasons, I shall use the shortened references to the parties that I used in that decision: Brenda Hungerford Pty Ltd will be referred to as "BHPL", Tuggeranong Town Centre Pty Ltd as "TTC" and Leda Commercial Properties Pty Ltd as "Leda". Where there is a combined issue with both TTC and Leda, I shall refer to those parties collectively as "TTC/Leda".
5. The orders I made on 28 April 2017 were as follows:
6. Ultimately, the date for filing submissions was varied but I have now received submissions from the parties as to the costs order I should make on the Third Party Claims and on other matters. I also received two affidavits of Mark Duncan Flint made on 2 June 2017 and on 4 July 2017 respectively.
7. In the judgment, I outlined at [1251]-[1256], the order for costs I did make and my provisional view about the order for costs on which I sought submissions:
8. In the submissions, the parties also raised an issue about the costs order I had made and this needs to be addressed as well.
9. TTC commenced proceedings in the ACT Magistrates Court to recover the rent and other outgoings payable by BHPL under the Sublease from the date BHPL abandoned the premises until they were relet.
10. The proceedings were, however, removed into the ACT Supreme Court under either s 270 of the Magistrates Court Act 1930 (ACT) or s 152 of the Leases (Commercial and Retail) Act 2001 (ACT) (the Leases Act). The application by BHPL did not identify the provision under which it made the application, but identified the grounds as being its proposal to file a Counterclaim in which the amount of damages which BHPL wished to plead against TTC would exceed the then jurisdiction of the Magistrates Court. TTC consented to the application for removal, without any reservation, such as to costs.
11. In addition to the Counterclaim then pleaded, BHPL commenced Third Party Proceedings against Leda. BHPL filed a Defence to TTC's Claim with its Counterclaim, TTC filed a Defence to the Counterclaim and Leda filed a Defence to BHPL's Third Party Claim.
12. A number of issues arose out of the pleadings. I have set these out in TTC v BHPL at [46] (Statement of Claim and Defence), [55] (Counterclaim and Defence to the Counterclaim) and [70] (Third Party Claim and Defence to Third Party Claim).
13. So far as they are relevant to these reasons, they may be summarised as follows. The issues between TTC and BHPL on the Statement of Claim and Defence were that TTC claimed from BHPL the rent and other matters payable under the Sublease and BHPL denied liability on the grounds that it did not take an assignment but was granted a new Sublease which required Leda to give it a disclosure statement and it did not provide one; the benefit of the Sublease was said not to have been properly assigned by Leda to TTC; the status of the Bank Guarantee required of BHPL and on which TTC wished to make a call on the issuing bank for the outstanding moneys was challenged as not amenable to such a call; the amounts claimed constituted overcharging; TTC had interfered with BHPL's occupation by adversely affecting its trade; and the damages claimed under the Counterclaim were said to be able to be offset against the moneys claimed by TTC.
14. In the proceedings, however, BHPL barely referred to these matters, save for the claims under the Counterclaim. I held that Leda may have been required to give BHPL a disclosure statement but that this could not and did not relieve BHPL from its obligations under the Sublease. I rejected the other matters of defence raised by BHPL and, as is clear above (at [5]), entered judgment for TTC with costs.
15. The issues between TTC and BHPL on the Counterclaim and Defence to the Counterclaim may be summarised also. They consisted of claims that an employee of Leda and employees of TTC had made representations which were said to have been false and for the making of which there were no reasonable grounds. The making of the representations were said to have also amounted to unconscionable conduct.
16. These representations were said to have induced BHPL to take or refrain from taking action to its detriment, that the false representations were in breach of the Sublease and their making was unconscionable under the Leases Act, the Trade Practices Act 1974 (Cth), and in equity, and were false and misleading under the Trade Practices Act, under the Fair Trading Act 1992 (ACT) and under the Sublease, and also estopped TTC from relying on the Sublease.
17. In the proceedings on the Counterclaim, BHPL led evidence of the representations said to have been made by the employee of Leda and later robustly cross-examined the alleged maker of them, whom TTC/Leda called to deny making them, but BHPL did not then make any submissions about how TTC incurred any liability for them. So far as concerned the representations said to have been made by TTC's employees, BHPL also led evidence of them and robustly cross-examined the alleged makers, whom TTC/Leda also called to deny making them, but made no submissions about whether I should accept that they were made or that they entitled BHPL to relief. I found for TTC on the Counterclaim for whom I entered judgment on it with costs.
18. The issues between Leda and BHPL of the Third Party Claim and the Defence to the Third Party Claim were relevantly identical to those between TTC and BHPL on the Counterclaim and Defence to the Counterclaim.
19. In the proceedings against Leda, however, BHPL relied heavily and, in its submissions, almost exclusively, on the representations alleged to have been made by its employee. I found that some of them had been made and justified an award of damages against Leda in BHPL's favour. I found in TTC v BHPL at [187], however, that the making of the representations was not unconscionable. BHPL, although as noted above (at [17]), adduced evidence of the alleged making of representations by employees of TTC and vigorously cross-examined the alleged makers of them, did not make any submissions as to whether they had actually been made or how Leda might be held to be responsible for them. I found that Leda was liable to BHPL for the representations I found were made. BHPL, as also noted above (at [17]), barely referred in this context to the representations alleged in the Third Party Claim as having been made by employees of TTC nor how Leda might be liable for them. I found Leda not liable for them.
20. The question of damages occupied a considerable portion of the proceedings. In the first place, although arguably a matter of liability, there was much evidence given about building works done at the Hyperdome and the effect of them, particularly upon the business of BHPL, designed to show that this work, rather than the conduct of the business as operated by BHPL, caused its trading decline which led to its abandonment of the premises. There was also a good deal of evidence about steps taken by BHPL to engage in other activities, including the opening of two further shops elsewhere in Canberra to reverse the trading decline. I did not find that the building works had caused a decline in BHPL's business and held that the costs of opening the other shops were not compensable as damages otherwise payable for the misrepresentations that I found Leda had made through its employee. I ordered that Leda pay BHPL certain quantified damages and sought submissions on costs.
21. As noted above (at [16]), BHPL, in its Counterclaim and Third Party Claim, relied on, inter alia, a right to relief said to arise from breaches of the Leases Act.
154 Costs
The parties in a proceeding under this Act must bear their own costs unless the Magistrates Court or Supreme Court makes an order about costs.
23. This section was not in the Bill that was originally presented to the ACT Legislative Assembly by the then Government. It was introduced as an amendment by a member of a non-government party and ultimately accepted and incorporated into the Leases Act as made.
24. An inspection of the Hansard of the ACT Legislative Assembly on the debate on the amendment on 6 March 2001 at 666, shows that the mover, Ms K Tucker MLA, explained her reasons for the amendment which became s 154 of the Leases Act and which replaced a provision in the Bill that costs were payable or apportioned as ordered by the relevant Court or, if there was no order, by the unsuccessful party to the successful party.
25. Ms Tucker's reasons for moving the amendments were as follows:
This amendment simplifies the process of addressing the issue of costs. The bill as it now reads includes a provision that encourages the court to award costs against the unsuccessful party. In a situation where legal costs incurred by a large property owner are likely to outstrip the means of retail tenants, this provision would act as too great a disincentive for tenants seeking redress. My amendment simply mirrors the provision in the existing act that parties ordinarily carry their own costs. It still allows for the court to award costs when it believes such action is called for, but the notion of automatically indemnifying the successful party is removed.
26. In supporting the amendment on behalf of the Opposition, its leader, Mr J Stanhope MLA, said: "It is a recognition of the differential in economic power that exists between landlords and tenants."
27. Strictly, s 154 of the Leases Act could be regarded as a quite orthodox provision about costs. That is to say, costs can only be awarded by a court if given statutory jurisdiction to do so; the jurisdiction to award costs is a creature of statute: Garnett v Bradley (1878) 3 App Cas 944 at 953-4, 962. The section thus fulfils that function. If, then, no order is made, each party bears its own costs.
28. Ordinarily, a court is given a wide discretion as to how it should award costs. See, for example, r 1721 of the Court Procedures Rules 2006 (ACT) and Donald Campbell & Co Ltd v Pollak [1927] AC 732 at 809. Of course, the power is to be exercised judicially: Nelipa v Robertson [2009] ACTSC 16 at [85]. In its terms, s 154 of the Leases Act seems to be consistent with that position; it gives no apparent direction as to how the discretion is to be exercised. In that sense, it appears to be no different from any other power to award costs.
29. The mention first in the section, however, of the position that each party must bear their own costs may suggest that this is the ordinary or usual position. Reference to the speech by Ms Tucker confirms that position, namely that this is not intended to grant an unfettered discretion in the court to award costs, but only if the requirement that each party bear their own costs is set aside. The remedial nature of the Leases Act confirms this approach. This is how the section has been interpreted in the Magistrates Court where the majority of this litigation is conducted. See Arthur McWitton Pty Ltd v Perpetual Trustee Co Ltd (Unreported, ACT Magistrates Court, Magistrate Burns, 9 March 2005).
30. A number of issues arise out of this section. They are:
• Does the section apply to all or any part of the decision to be made as to the costs in this case?
• If so, how should the court approach the question of whether it should make an order?
31. I shall address each of these questions in turn.
32. The first matter that needs to be considered is what, in the context of the decision to be made as to costs, is a "proceeding" to which s 154 of the Leases Act applies.
33. The word "proceedings" was described by Samuels JA in Proust v Blake (1989) 17 NSWLR 267 at 270 as "protean", deriving its meaning from its context. This can be starkly shown by the fact that it has been held in statutory contexts to be equivalent to an "action" but not to mean a step in an action (Pryor v City Offices Co (1883) 10 QBD 504) or to mean or include a step in an action (Smalley v Robey & Co [1962] 1 QB 577).
34. The High Court has had some consideration of the meaning of "proceeding". In Cheney v Spooner [1929] HCA 12; (1928) 41 CLR 532 at 536-7, Isaacs and Gavan Duffy JJ described a proceeding as "merely some method permitted by law for moving a Court or a judicial officer to some authorized act, or some act of the Court or judicial officer". In the same case, Starke J said (at 538-9) of a "civil proceeding" that it "includes any application by a suitor to a Court in its civil jurisdiction for its intervention or action".
35. Thus, there is no doubt that what I heard and decided was, in that sense, a proceeding. That, however, does not end the inquiry for there are other considerations.
36. For example, it has been held to mean "an action between parties": Viner (Minister for Industrial Relations) v Australian Building Construction Employees' & Builders' Labourers' Federation (1981) 56 FLR 5 at 29. It has also been held to be contrasted with an action, which is said to be the invocation of the court other than by writ: Grout v Gunnedah Shire Council (No 3) (1995) 129 ALR 372 at 383.
37. That distinction is said by Brereton J in Re Struthers, Liquidator of Project Management, Architecture and Construction, Interior (PACI) Pty Ltd (No 3) [2005] NSWSC 1113; 64 NSWLR 392 at 397; [17], not to have survived,
38. The distinction, however, between the whole of the litigation being the proceeding and it being or including an interlocutory step in the litigation survives. Thus, a number of decisions make it clear that "proceeding" is used to mean the action or cause initiated by the appropriate originating process: Whiley Investments (Qld) Pty Ltd v Pet's Paradise (Qld) Pty Ltd [2009] VSC 144 at [21]. On the other hand, it has still been held to include a step in the litigation: Hunter Quarries Pty Ltd v Morrison (No 4) [2016] NSWIC 4; 92 NSWLR 1 at [74]- [75]; Coccia v Australian Iron and Steel Pty Ltd (Unreported, NSW Court of Appeal, Hope, Glass and Samuels JJA, 9 October 1981); Shackley v Australian Croation Club Ltd (1996) 141 ALR 736 at 744.
39. It is unsurprising, then, that Smart J said in Blake v Norris (1990) 20 NSWLR 300 at 306:
In Stroud's Judicial Dictionary, 5th ed, vol 4 at 2029-2035, some fifty-five instances are given of the use of the words "proceeding" or "proceedings" in legislation, rules of court or documents having legal significance. The meaning depends on the context in which the word is used. In some cases it is equivalent to "an action" whereas in others it may mean a step in an action. Sometimes it may include a counter claim. The Oxford Companion To Law (1980) by Professor Walker states (at 1002-1003) that "proceedings" is sometimes used as including, or meanings, an action or prosecution, and sometimes as meaning a step in an action. The word "proceeding" is capable of such a variety of meaning that dictionary definitions as to its ordinary or natural meaning are not of much use. They tend to highlight the number of meanings which the word can bear.
Any assistance as to its meaning has to be derived from the statutory context and the objects of the legislation in question.
40. The constituents of the litigation have also occasioned some difference of views. Thus, in Gladstone Park Shopping Centre Pty Ltd v Ross Wills [1984] FCA 166; (1984) 6 FCR 496 at 500, Jenkinson J held that "proceedings seems to comprehend all the claims and
cross-claims which share the same serial number..." See also Qantas Airways Ltd v A F Little Pty Ltd [1981] 2 NSWLR 34 at 54-5.
41. On the other hand, Moore J in Village Building Co Ltd v Airservices Australia (No 2) [2008] FCA 1285 at [12], held that a contempt application was, though commenced in the proceeding out of which it was said to have arisen (and, it appears, with the same "serial number"), nevertheless a separate proceeding. Similarly, Miles CJ in Jackson v John Fairfax and Sons Ltd (1988) 96 FLR 145 at 152 held that a part of the action that had been commenced could be transferred to another court under the Trade Practices Act as a "proceeding" transferrable out of the totality of the proceedings.
42. This does show the range of approaches. I have not examined in each case the context in or the legislation under which each decision was made, though it was clearly highly relevant to the determination of the relevant meaning.
43. In this case, I consider that, as submitted by TTC/Leda, there are, for the purposes of s 154 of the Leases Act three proceedings: the action by TTC on the Statement of Claim and the Defence of BHPL, the Counterclaim of BHPL and the Defence to the Counterclaim by TTC and, thirdly, the Third Party Claim of BHPL and the Defence to the Third Party Claim by Leda.
44. As I held in Australia and New Zealand Banking Group Ltd v Manny (No 4) [2013] ACTSC 236 at [81], a counterclaim is a separate proceeding, to be heard at the same time and, to a degree, integrated into, the primary litigation for convenience and in the interests of justice.
45. The same seems to me also to be essentially the position in respect of Third Party Claims.
46. Clearly, for some purposes, the totality of these various claims can be considered as a proceeding, as held by Jenkinson J in Gladstone Park Shopping Centre Pty Ltd v Ross Wills. That, however, as the cases clearly show, depends on the legislation.
47. In my view, the purpose of s 154 of the Leases Act is clearly to protect tenants, who, for the most part, will be economically weaker than their landlords, from oppressive costs which may stifle their participation in litigious dispute resolution about the leases into which they have entered.
48. Counterclaims and Third Party Proceedings, however, are able to be commenced for a wide range of claims that may have no connection with the plaintiff's claim, other than that the original claim is made against the plaintiff; a Counterclaim need not be connected with the subject matter of the plaintiff's claim, though that is more restricted if one of the defendants to the counterclaim is not already a plaintiff. See r 461 of the Court Procedures Rules; Watkins Ltd v Plancorp No 6 Pty Ltd [1983] 2 Qd R 501 at 504. Thus, a tenant sued by a landlord claiming unpaid rent may counterclaim for damages for defamation for statements made which may have no connection at all with the landlord-tenant relationship.
49. A Third Party Claim is not so unlimited in the claims that can be made in it, but the relationship between it and the plaintiff's cause of action is by no means direct. For example, were a tenant to be sued by the landlord for a breach of the terms of a lease, the tenant may wish to seek contribution or indemnity from a supplier of defective goods or services which led to the breach of the lease. While the plaintiff's action would clearly fall within the proceedings contemplated under the Leases Act, the third party claim would not be such an action, but may well be one simply about the provision of defective goods or services and not under the Leases Act.
50. Thus, the purpose of s 154 of the Leases Act does not seem to me to justify the particular provision it makes for a special rule as to costs in curial proceedings, where the particular circumstances, namely the landlord-tenant relationship, is irrelevant to the claim made in the Counterclaim or the Third Party Claim. I consider that, for the purposes of that section, each of the three claims I have identified are separate proceedings. It then requires consideration of each of them to determine whether they are amenable to the restrictions of the section. I shall deal with each in turn.
51. TTC's claim was for rent and outgoings due under the Sublease. There is no specific mention of such a claim or a right of such a claim under the Leases Act.
52. Section 17 of the Leases Act, however, does provide that the Act applies to a dispute about a matter mentioned in column 1 of Table 17 appearing at the end of the section if the subject lease was entered into and the relevant conduct occurred within the time periods specified in columns 2 and 3 respectively of the Table. In this case, all the time limits are relevantly met.
53. There are, in total, 10 items in the first column. None of the items refer expressly to a claim for unpaid rent or other outgoings or both.
any other dispute about a lease if the disputed matter is of a kind prescribed by regulation as suitable for resolution under this Act
55. The Leases (Commercial and Retail) Regulation 2002 (ACT) has been made under the Leases Act, but there is no regulation prescribed for the purpose of s 17.
any other matter not covered in column 1 of items 1 to 9 in relation to a lease or negotiations for entering into a lease or in relation to the use or occupation of premises to which the lease relates
57. This is, of course, an omnibus, comprehensive provision. The claim for rent would seem to be encompassed within "any other matter ... in relation to a lease".
58. "In relation to" is a phrase that has had considerable attention by the courts. It is not necessary to analyse the authorities in any detail.
59. In Australian Competition and Consumer Commission v Maritime Union of Australia [2001] FCA 1549; 114 FCR 472 at 487; [68], Hill J said:
The words "in relation to" are wide words which do no more, at least without reference to context, than signify the need for there to be some relationship or connection between two subject matters: see Smith v Commissioner of Taxation (Cth) (1987) 164 CLR 513 at 533 per Toohey J and PMT Partners Pty Ltd (In liq) v Australian National Parks and Wildlife Service [1995] HCA 36; (1995) 184 CLR 301 at 328 per Toohey and Gummow JJ. But the phrase is both "vague and indefinite": see per Taylor J in Tooheys Ltd v Commissioner of Stamp Duties (NSW) [1961] HCA 35; (1961) 105 CLR 602 at 620. Like the phrase "in respect of", the phrase "in relation to" will not, at least normally, apply to any connection or relationship no matter how remote: see Technical Products Pty Ltd v State Government Insurance Office (Qld) [1989] HCA 24; (1989) 167 CLR 45 at 51 per Dawson J. The extent of the relationship required will depend upon the context in which the words are used.
60. Further, the Leases Act is remedial legislation and that tends in favour of a wide and liberal interpretation: PMT Partners Pty Ltd (in liq) v Australian National Parks and Wildlife Service [1995] HCA 36; (1995) 184 CLR 301 at 328.
61. Thus, the Court of Appeal in Kingsley's Chicken Pty Ltd v Queensland Investment Corporation [2006] ACTCA 9 at [42]- [43], described the legislation and the approach to interpretation of it as follows:
62. This approach does confirm and is consistent with the approach I propose to adopt.
63. In any event, it is difficult to think of many more direct relationships with a lease than the payment of rent. It is, therefore, unsurprising that TTC/Leda assumed that the Leases Act applied and made no submissions to the contrary. BHPL did not make any different submission. That, in my view, was appropriate and correct.
64. In any event, the Defence of BHPL raised a number of matters under the Leases Act by way of defence, including the set-off of the matters pleaded in its Counterclaim. Arguably, this would also bring the proceedings under the Leases Act.
65. I am satisfied that this proceeding was a proceeding to which s 154 of the Leases Act applied.
BHPL's Counterclaim and TTC's Defence to the Counterclaim
66. BHPL submitted that the claims it brought in the Counterclaim were not subject to s 154 of the Leases Act.
67. It relied on the fact that the action was commenced in the Magistrates Court but then transferred to this Court because of the likelihood that BHPL's Counterclaim would exceed the jurisdiction of the Magistrates Court. The Counterclaim was then commenced in this Court.
68. Thus, it was submitted, the claim in the Counterclaim under the Trade Practices Act was brought in reliance on the jurisdiction conferred on this Court by s 86 of that Act, which appears to be quite unlimited, even as to locality, subject-matter or otherwise (s 86(2)) though the jurisdiction of the Magistrates Court was limited as to remedy to that available under its constituent legislation (s 86(3)), thus limiting the amount of damages able to be awarded by that Court at that time to $50 000. It was submitted that "the counterclaim brought by BHPL was always brought in this Court [i.e. the Supreme Court]". It seemed to be submitted that it followed that this meant that the Leases Act did not apply as it was submitted:
Hence, it was brought within the jurisdiction conferred on this court by the Trade Practices Act (and to the extent that that jurisdiction was continued by the Competition and Consumer Act). That jurisdiction was unlimited.
69. So much may be accepted. That, however, is not the end of the matter.
70. There is no doubt that BHPL expressly pleaded claims under the Leases Act in its Counterclaim. That is clearly within s 154 of that Act.
71. It also pleaded causes of action under the Trade Practices Act but also at common law and under the Fair Trading Act. BHPL, having raised the question of the jurisdiction of the Court, then submitted:
72. While s 144 of the Leases Act certainly does give the Magistrates Court jurisdiction under the Leases Act, I do not consider that it gives any kind of exclusive jurisdiction to the Magistrates Court. The intention of the section may be, as I have accepted, to create a court where, for the most part, disputes under the Leases Act will be heard. This seems to me to be a reasonable inference from the fact that it has been specially granted unlimited jurisdiction in such proceedings.
73. The Leases (Commercial and Retail) Bill 2000 Explanatory Statement is of no help as it blandly explains that "The Magistrates Court has jurisdiction under this Act". It does not, however, refer to "exclusive" or even "primary" jurisdiction. The Presentation Speech of the then Chief Minister, Mr G Humphries, on 18 October 2000 was a little more directed when he said (at 3170):
The Bill transfers jurisdiction with respect to commercial and retail tenancy matters from the Tenancy Tribunal to the Magistrates Court.
74. The Tenancy Tribunal, established under s 60 of the Tenancy Tribunal Act 1994 (ACT) had a membership, under ss 62-4, of a president who was a magistrate, deputy presidents who were magistrates or lawyers of five years standing and
non-presidential members who represented tenants and owners. It was abolished by the Leases Act from 1 July 2002.
75. When considering the jurisdiction of the Tenancy Tribunal, Higgins J in Dibeek Holdings Pty Ltd v Notaras (1997) 141 FLR 364 at 372-3 held that the jurisdiction of the Tenancy Tribunal was concurrent with that of the Supreme Court because of the entrenchment of the Supreme Court's jurisdiction under s 48A of the Australian Capital Territory (Self-Government) Act 1988 (Cth) and which could not be limited by the ACT Legislative Assembly.
76. Whether that is correct, I do not see that the ACT Legislative Assembly had limited the Supreme Court's jurisdiction by enacting the Leases Act or any of its provisions. Section 144 invests jurisdiction in the Magistrates Court but there is no suggestion in the words of the section that it is exclusive of any jurisdiction of the Supreme Court. Nor is there any extrinsic material to point to that conclusion. Indeed, s 152 provides for a transfer of proceedings from the Magistrates Court to the Supreme Court, thus at least investing the Supreme Court with jurisdiction under the Act, if not, in fact, acknowledging that it is already so invested.
77. This is re-inforced by the terms of s 154 of the Leases Act itself, which refers to proceedings under the Act in which either the Magistrates Court or the Supreme Court may make costs orders.
78. If, therefore, BHPL was submitting that the Supreme Court was not exercising jurisdiction under the Leases Act in respect of the proceedings on the Counterclaim, then I reject the suggestion. I was unable to give any other meaning to the submission.
79. What seemed to be the submission was that, as the Supreme Court was exercising jurisdiction under a Commonwealth Act, the Trade Practices Act, it was not exercising jurisdiction under the Leases Act. The problem with that submission, however, is that no party submitted and I did not find that the relevant causes of action - misleading and deceptive conduct, unconscionability - were not relevantly identical in each of the three Acts and the common law on which the Counterclaim relied.
80. The real question, therefore, is as to whether the claims which are independent of the claims under the Leases Act, though in relevantly identical terms, fall within the terms of s 154 of the Leases Act.
81. The relationship has not been authoritatively explored in this Territory so far as counsel's researches show.
82. My attention, however, was drawn to a decision of the Magistrates Court in Kingsley's Chicken Pty Ltd v Queensland Investment Corporation (Unreported, ACT Magistrates Court, Magistrate Burns, 15 June 2007) (Kingsley's Chicken (No 2)) in which his Honour considered the appropriate costs orders in proceedings in which claims had been made under the Leases Act but also under the Trade Practices Act.
83. There were two proceedings. One was commenced by the lessee for disqualification of the valuer appointed under the Leases Act for the purpose of assessing the market rent for a new lease of the subject premises.
84. The other proceeding was commenced also by the lessee seeking orders that the lessor was estopped from departing from representations said to have been made by it, in summary, committing itself to renewing the lease at market rent and engaging, in good faith, in negotiations to that end. In the alternative, the lessee alleged that the lessor's conduct in refusing to offer a new lease was unconscionable contrary to the Leases Act, that the holding over had created a new lease which required compliance with certain terms of the Leases Act and that correspondence sent by the lessor activated s 107 of the Leases Act entitling the lessee to an extension of the Sublease.
85. The lessor counterclaimed against the lessee alleging that the lessor had made misleading and deceptive representations in the course of the negotiations and that the lessor had suffered damages as a result. These claims were made under the Leases Act, it appears as a breach of s 36, but also under s 52 of the Trade Practices Act which, his Honour held, were "broader than those of it's claim under the Leases Act": Kingsley's Chicken Pty Ltd v Queensland Investment Corporation (Unreported, ACT Magistrates Court, Magistrate Burns, 2 February 2007) (Kingsley's Chicken (No 1)) at [25].
86. In the event, his Honour dismissed the claims by the lessor, dismissed the counterclaim by the lessee so far as it relied on misrepresentations alleged to have been made contrary to the Leases Act, but upheld the claim which relied on the Trade Practices Act, awarding the lessor damages of $82 795.21: Kingsley's Chicken (No 1) at [68]-[69], [73], [79]-[80], [85].
87. His Honour reserved the question of costs, reserving leave to the parties to relist the matter to apply for ancillary orders and costs.
88. The matter was relisted. It is relevant that the lessor sought an amendment to the judgment in its favour. The basis was that, at the time, the monetary jurisdictional limit of the Magistrates Court was $50 000 (s 5, Magistrates Court (Civil Jurisdiction) Act 1982 (ACT)), though s 144 of the Leases Act enlarged the jurisdiction of the Magistrates Court for applications under the Leases Act to an unlimited jurisdiction. The parties agreed that, as the judgment of the Court had been in respect of the claim under the Trade Practices Act, the limited jurisdiction applied rather than the extended jurisdiction of the Leases Act.
89. The learned Magistrate was not, of course, bound by the agreement of the parties, for this was a matter of jurisdiction. Jurisdiction cannot be conferred by consent: Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150 at 163; Luck v University of Southern Queensland [2009] FCAFC 73; 176 FCR 268 at 292; [97]; WorkCover Corporation of South Australia v Davey [2011] SASCFC 66; 110 SASR 173 at 186; [41]; Chalmers v The Queen [2011] VSCA 436; 37 VR 464 at 479; [73]; Cardinal Project Services Pty Ltd v Hanave Pty Ltd [2011] NSWCA 399; 81 NSWLR 716 at 727; [41].
90. Accordingly, his Honour considered the matter. His Honour held in Kingsley's Chicken (No 2) at [7] that, if both time periods specified in Table 17 to s 17 of the Leases Act applied, then the claims under the Trade Practices Act, based upon alleged misleading and deceptive conduct in negotiations for entering into a lease, would fall within item 10 of Table 17 of the Leases Act and thus be a proceeding under that Act. His Honour, however, held that the item did not apply because, in that case, there was no lease ultimately made and so the provision did not "sit well" with the terms of the section and the Table. Thus, his Honour concluded:
In short, if the negotiations in the present case had resulted in a lease being entered into it appears that the Leases (Commercial and Retail) Act would have applied to any claim under the Trade Practices Act that the lessee had engaged in misleading or deceptive conduct in negotiations leading up to the lease because such a dispute would be encompassed by item 10 to the schedule to section 17. As the negotiations in the present matter did not lead to the parties entering into a lease the Leases (Commercial and Retail) Act does not apply, with the consequence that the limitations in this Court's jurisdiction found in the Magistrates Court Act do apply. A similar legislative intention to confine the operation of the Act regarding misleading conduct for pre-contractual misinformation to cases where a lease is ultimately entered into between the parties is to be found in section 37.
91. I am not, of course, bound by this decision, but it is clear that the legislative intention under the Leases Act is that the primary court to exercise jurisdiction in respect of commercial and retail leases would be the Magistrates Court, thus becoming something akin to an expert tribunal and so appropriate respect should be accorded to its decisions.
92. The dispute between Kingsley's Chicken Pty Ltd and the Queensland Investment Corporation (and the managing agent for the premises in which the leased premises were located, Canberra Centre Investments Pty Ltd) was correctly described by BHPL in its submissions as a "saga". There were a number of hearings in the Magistrates Court, the Supreme Court, and the Court of Appeal, and an unsuccessful application for special leave to appeal to the High Court of Australia.
93. In the final appeal to the Court of Appeal (Kingsley's Chicken Pty Ltd v Queensland Investment Corporation [2009] ACTCA 9; 4 ACTLR 20) from Kingsley's Chicken (No 1), the Court invited the parties to make submissions as to costs. After receiving those submissions, the Court proceeded to make orders in respect of the proceedings in the Magistrates Court, Supreme Court and Court of Appeal: Kingsley's Chicken Pty Ltd v Queensland Investment Corporation [2009] ACTCA 14. There was, in the decision, no express consideration of s 154 of the Leases Act and no express consideration of the issue resolved by his Honour as explained above (at [90]). The Court, however, effectively adopted what his Honour had decided, for it ordered:
The order made by Magistrate Burns on 15 June 2007 in CL 06/31 that the applicant/lessee is to pay the respondent/lessor's costs of the respondent claim under the Trade Practices Act 1974 (Cth) on a party/party basis as agreed or taxed at 90 per cent of the Supreme Court Scale, be set aside and in lieu thereof there be an order that the respondent/lessor pay the applicant/lessee's costs of the respondent/lessor's claim under the Trade Practices Act 1974 (Cth) on a party/party basis as agreed or assessed at 90 per cent of the Supreme Court Scale.
94. The Court of Appeal, however, was not asked to and did not review whether the division of the proceedings in this way was appropriate. While, thus, the decision is of some assistance, the basis on which the decision was made, namely that in Kingsley's Chicken (No 2) Magistrate Burns considered that there was no lease and so the Leases Act did not apply, but had there been a lease then the Trade Practices Act claim would fall under s 154 of the Leases Act by virtue of Item 10 of Table 17, cannot be regarded as binding on me or determinative of the issue I must decide, but is helpful.
95. In this case, of course, there was a lease, the Sublease. Further, as noted above (at [79]), there was no difference between the causes of action either as pleaded or as argued in relation to them as they arose under the Leases Act, the common law, the Trade Practices Act, and the Fair Trading Act in the circumstance of this case.
96. When, in its submission referred to above (at [78]), BHPL submitted that the Counterclaim had to be "anchored in the particular causes of action found in the Leases Act", it is not clear how the Court could make that finding, for, while, for obvious reasons, authorities addressing the misleading and deceptive conduct and unconscionability provisions of the Trade Practices Act were those on which the parties and the Court relied, this was because of a plethora of such cases and a dearth of cases on the other legislation, including the Leases Act, about these causes of action.
97. It seems to me generally that the approach to these causes of action is generally that the same conduct that is misleading and deceptive under the Trade Practices Act will be misleading and deceptive conduct under the Leases Act. See GO & MJT Nominees Pty Ltd v Hollywell Homewares Pty Ltd [2010] QCA 368 at [46]. There is every reason to suppose that this will apply to the same causes of action under the Fair Trading Act also.
98. That there was a difference between causes of action under the Leases Act and the Trade Practices Act in Kingsley's Chicken (No 1) appears to have stemmed from different alleged representations, which made the causes of action in that case different, but the principles the same.
99. In this case, the representations were not different. Indeed, the same representations were said to have given rise to misleading and deceptive conduct under both the Trade Practices Act and the Fair Trading Act: TTC v BHPL at [53], [64].
100. A cause of action in unconscionable conduct was also pleaded. It relied on a prohibition of such conduct under the Trade Practices Act and the Leases Act. The alleged conduct, however, was the making of the same representations which were also alleged to constitute misleading and deceptive conduct. In addition, the claim of unconscionability was also pleaded in equity. This is hardly surprising, for unconscionable conduct under s 51AA of the Trade Practices Act is "conduct that is unconscionable within the meaning of the unwritten law from time to time of the States and Territories".
101. While there is no similar explanation of what is "unconscionable conduct" in s 22(1) of the Leases Act in relation to that concept in the Trade Practices Act, by the same token, there is no definition in the Leases Act, so the ordinary meaning of the word in the unwritten law is, it seems to me, its meaning under the Leases Act also. Where words have acquired a legal meaning, prima facie, that will be the meaning that the courts will assume the legislature has intended to use in legislation it enacts with such terms: Attorney-General of New South Wales v Brewery Employees Union of New South Wales [1908] HCA 94; (1908) 6 CLR 469 at 531.
102. Further, the same representations were alleged to have breached clause 18.1 of the Sublease. Such a dispute would, it seems to me, fall clearly within item 10 of Table 17 of the Leases Act.
103. Accordingly, while I did not uphold the claim by BHPL of unconscionability, the characterisation of proceedings as being "under [the Leases Act]" is not dependent upon the claim being upheld. A claim brought under the Leases Act is such a claim whether the claim is upheld or not.
104. Thus, the various causes of action were inextricably bound up with each of the legislative and common law bases for the claims and one did not predominate.
105. In this context, the question must be considered as to whether the proceedings can be characterised as proceedings "under [the Leases Act]" for the purposes of s 154 of the Leases Act.
106. I reject the submission of BHPL, as noted above (at [68]), that the Counterclaim was not brought under the Leases Act because it was brought in this Court under the Trade Practices Act. It was also brought under the Leases Act (both expressly and by reference to the terms of the Sublease), under the Fair Trading Act and under the law of equity and none of these can be said to have been the dominant cause of action, though some were more successful than others.
107. On this issue, TTC/Leda made submissions which looked at an analogous situation, s 824 of the Workplace Relations Act 1996 (Cth) and its successor, s 570 of the Fair Work Act 2009 (Cth), to explain how a provision such as s 154 of the Leases Act might apply to litigation with multiple causes of action. Similar provisions were made in predecessors to these Acts. Thus, in the Conciliation and Arbitration Act 1904 (Cth) since 1973, s 197A dealt with costs in all the various jurisdictions under the Act. The section was as follows:
197A A party to -
(a) a proceeding before the Commission or the Registrar;
(b) a proceeding, including an appeal, before the Court, or before a court of a State or Territory, in a matter arising under this Act; or
(c) a proceeding before the High Court -
(i) being an appeal from a judgment, decree, order or sentence of the Court or any other court under this Act; or
(ii) being a proceeding in respect of an award proposed to be made, made or purporting to have been made, a decision proposed to be given, given or purporting to have been given, or any other act proposed to be done, done or purporting to have been done, under this Act or in respect of a failure to make an award, give a decision or do any other act that is required or permitted by this Act to be made, given or done, shall not be ordered to pay any costs incurred by any other party to that proceeding except where the party against whom the order is made instituted the proceeding vexatiously or without reasonable cause.
108. In interpreting this provision, Gray J said in Geneff v Peterson (1986) 19 IR 40 at 90:
[T]he section operates in relation to a "proceeding". There is only one proceeding before the Court, although that proceeding involves a number of separate claims, each of which might have been the subject of a separate proceeding. ... In my view, it is impossible to split the claims within a proceeding for the purpose of the application of s 197A.
109. Significantly, in Thompson v Hodder [1989] FCA 493; (1989) 21 FCR 467 at 471, the Full Court held:
in the light of the authorities relating to the word "matter", we doubt whether the Court should seek to discern within a single "proceeding" those elements which might have been brought otherwise than in a matter arising under the Act, for the purpose of attaching an order for costs to those elements. Provided that they are elements of the single justiciable controversy, in which the provisions of the Act are called in aid, by way of claim or defence, it may be said that they are in a matter arising under the Act.
110. In 1989, the Conciliation and Arbitration Act was repealed and replaced by the Industrial Relations Act 1988 (Cth) in which s 347 made essentially the same provision as under s 197A of the Conciliation and Arbitration Act.
111. Section 347 of the Industrial Relations Act was subject to a comprehensive consideration in a number of Full Court and single judge authorities which R D Nicholson J examined carefully in Maritime Union of Australia v Geraldton Port Authority [2000] FCA 16; 94 IR 404 at 419; [65] and concluded that authority justified a finding that:
the expression in s 347 ... provisions reading 'proceeding in a matter arising under this Act' comprehends not only the trial of a statutory federal claim but also the trial of a common law claim brought in the accrued or associated jurisdiction of the Court. That is, it is accepted for the fourth respondent that this authority establishes that the severance of different causes of action in the one proceeding is not possible for the purposes of s 347 of the Act.
112. The Industrial Relations Act was comprehensively amended in 1996, including being renamed the Workplace Relations Act. Later, in 2005, an amendment renumbered s 347 to become s 824.
113. In 1995, a new provision, s 170EHA was inserted into the Industrial Relations Act relating to costs in proceedings relating to termination of employment. That became s 170CS of the Workplace Relations Act in 1996. It was relevantly identical to s 347.
114. Section 824 of the Workplace Relations Act was in the following terms:
(1) A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) must not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause.
(2) Despite subsection (1), if a court hearing a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) is satisfied that a party to the proceeding has, by an unreasonable act or omission, caused another party to the proceeding to incur costs in connection with the proceeding, the court may order the first-mentioned party to pay some or all of those costs.
(3) In subsections (1) and (2):
Costs includes all legal and professional costs and disbursements and expenses of witnesses.
115. Regrettably, the Federal Court did not resolve this matter definitively under the Workplace Relations Act. As helpfully summarised by White J in Stanley v Service to Youth Council Inc (No 3) [2014] FCA 716; 225 FCR 357 at 360-1; [14]:
There are conflicting decisions at both the Full Court and single judge level regarding the effect of s 347 of the Industrial Relations Act 1988 (Cth), s 824 of the WR Act, and other predecessors of s 570. The Full Court decisions are more pertinent presently. Those which indicate that, when there is a single proceeding, no distinction should be drawn between the claims arising under the FW Act (or its predecessors), on the one hand, and non-federal claims, on the other, include Thompson v Holder [1989] FCA 493; (1989) 21 FCR 467 at 471 (although the Full Court was not then addressing the present issue); Byrne v Australian Airlines Ltd [1994] FCA 888; (1994) 47 FCR 300 at 351, 367-368; and Goldman Sachs JBWere Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62 at [94]- [95], [164]-[165], [380]. Decisions involving claims arising under two separate federal laws in which a different view was taken include Bahonko v Sterjov ; and .
116. In Qantas Airways Ltd v Transport Workers Union of Australia (No 2) [2011] FCA 816; 211 IR 119 at 182; [205], Moore J concluded that Bahonko v Sterjov [2008] FCAFC 30; 166 FCR 415 was a special case and not authority for a separation of costs provisions in respect of particular causes of action to be dealt with separately from that under the Act. This, his Honour held, followed from what he described as:
[t]he orthodox approach ... that s 824 operates in relation to any claim is advanced as part of a matter constituted by the entire controversy between the parties to that proceeding.
117. This, his Honour held, was "apparent" from what Black CJ had said in Goldman Sachs JBWere Services Pty Ltd v Nikolich [2007] FCAFC 120; 163 FCR 62 at 64; [80], where his Honour stated that it was "well settled" that the section applied not only to claims under the Act, "but also in respect of claims joined in the same proceedings, including common law claims". See also Jessup J at 70; [380], though his Honour's formulation was a little narrower.
118. In Seven Network (Operations) Ltd v Media Entertainment and Arts Alliance [2004] FCA 637; 148 FCR 145 (Seven Network), proceedings were commenced alleging contraventions of provisions of the Workplace Relations Act. Later, a second respondent was joined against which company breaches only of other Federal Acts, the Privacy Act 1988 (Cth) and the Copyright Act 1968 (Cth), were alleged, breaches that had also been alleged against the first respondent.
119. Gyles J held in Seven Network at 169; [60]-[61], that as there was never a claim against the second respondent under the Workplace Relations Act and only under other Federal Acts, s 347 did not apply and ordered that, so far as the second respondent was concerned, costs followed the event.
120. Despite what his Honour had earlier said, Jessup J, at first instance in Bahonko v Sterjov [2007] FCA 1341; 163 FCR 318 at 321; [8], held that Seven Network was the only decision that had actually considered a costs application "by reference to the fact that the proceedings involved claims arising under different federal statutes", including the Workplace Relations Act and felt obliged to follow it in that case where claims were also made under the Human Rights and Equal Opportunity Commission Act 1986 (Cth).
121. Similarly, in McDonald v Parnell Laboratories (Aust) (No 2) [2007] FCA 2086; 164 FCR 591 at 596; [18], Buchanan J also followed Seven Network in a case where the claims under the Workplace Relations Act were all withdrawn prior to hearing. The only remaining claims were under the Sex Discrimination Act 1984 (Cth) and at common law in contract and tort. His Honour ordered costs, holding that s 824 of the Workplace Relations Act did not apply.
122. Thus, there were conflicting decisions, though a trend to making costs orders where other claims were at least significant.
123. Finally, in Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate (No 2) [2013] FCAFC 25; 209 FCR 464, the Full Court gave a comprehensive consideration to the cases and concluded at 484; [64]:
in our view where the matter arises under two Acts of the Parliament, s 824 of the [Workplace Relations Act] does not apply to the entirety of the proceeding to limit the power of the Court to make a costs order. This does not mean that the Court does not have jurisdiction or that its jurisdiction is not federal jurisdiction.
124. This decision was, despite the comments in Stanley v Services to Youth Council Inc (No 3), regarded as settling the issue in respect of s 824 of the Workplace Relations Act.
125. In 2009, when the Fair Work Act was enacted, most of the provisions of the Workplace Relations Act, save those dealing with the Registration as Accountability and Organisations as well as some others, were repealed; those not repealed were retained in the Act, renamed the Fair Work (Registered Organisations) Act 2009 (Cth).
126. In particular, s 824 of the Workplace Relations Act was repealed and in substance replaced by s 570 of the Fair Work Act.
127. Section 570 of the Fair Work Act as from 1 January 2013, is similar in general terms but has some differences in expression which the courts have found relevant. It is in the following terms:
(1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.
(2) The party may be ordered to pay the costs only if:
- (a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or
- (b) the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or
- (c) the court is satisfied of both of the following:
- (i) the party unreasonably refused to participate in a matter before the FWC;
- (ii) the matter arose from the same facts as the proceedings.
128. There is a relevant difference with s 154 of the Leases Act, for it refers to "a proceeding under [the Leases Act]" whereas s 824 of the Workplace Relations Act refers to "a matter arising under the Act". A matter is not a legal proceeding but is the subject matter (or a subject matter) of a legal proceeding: Re Judiciary and Navigation Acts [1921] HCA 20; (1921) 29 CLR 257 at 266.
129. Nevertheless, the Federal Court has had to consider the effect of this section, too, where claims under other legislation, such as the Trade Practices Act, have been included in the relevant proceedings.
130. I have already referred to Stanley v Service to Youth Council Inc (No 3) which was one such case. White J considered the decisions under s 824 of the Workplace Relations Act but in circumstances where his Honour noted the difference in the terms of s 570 of the Fair Work Act at the time his Honour was considering it. It had been enacted in 2009 in somewhat different terms not presently relevant, but was amended from 1 January 2013 to be closer in form and substance to s 824 of the Workplace Relations Act.
131. Nevertheless, White J considered the differences material, indeed, that, in the circumstances of its history and the fact the legislature did not revert to precisely the same terms as the earlier section, these differences "support an inference that the legislative intention is that the costs limitation effected by s 570 should be greater than that afforded by s 824 of the [Workplace Relations Act] and its predecessors": at 363; [25].
The limitation on courts' powers with respect to costs operates in respect of any "party to proceedings", provided that those proceedings relate to a "matter" arising under the [Fair Work Act]. On its face, the limitation operates whenever those considerations are satisfied, whether or not the proceedings also include claims under other federal legislation or in the accrued jurisdiction. The [Fair Work Act] does not define the word "proceedings", but generally it is used to refer to the action or means by which a party moves a court to grant the desired relief, rather than to individual claims or causes of action in the action.
133. In the proceedings, the applicant had made claims under s 46PO of the Australian Human Rights Commission Act 1986 (Cth) in respect of alleged contraventions of the Sex Discrimination Act, as well as claims under the Fair Work Act.
134. His Honour's consideration led him to conclude at 364; [34]-[36]:
135. His Honour's construction of the provision was adopted by a unanimous five member Full Court in Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; 229 FCR 221 at 254; [157], holding that s 570 of the Fair Work Act applied to the whole proceedings which consisted of claims under that Act as well as at common law, thus precluding the court from awarding costs except in accordance with the section.
136. Two caveats from the authorities should be noted. In Goldman Sachs JBWere Services Pty Ltd v Nikolich at 65; [94], Black CJ noted that a separate provision as to costs under the Workplace Relations Act should, his Honour considered, be given the same operation as s 347 of that Act and then added:
The circumstance that this might possibly permit a colourable application under [the provision of the Act under which the proceedings were taken] for the purpose of providing a protective cloak over a common law action does not point against this conclusion. Abuses of that nature do not appear to have emerged in relation to s 347 and, in any case, improperly joined proceedings can be severed and there may also be potential for the operation of the provisos.
137. Similarly, in Stanley v Service to Youth Council Inc (No 3) at 364; [33], White J noted that the matter arising under the Fair Work Act may be "so minor as to be insignificant in comparison with other causes of action" that there may need to be separate consideration of the circumstances. His Honour did not need to consider that further.
138. Despite the different terms used in the various industrial legislation to which I have referred, the general tenor of decisions, except the more recent ones in relation to s 824 of the Workplace Relations Act, suggest that a provision such as s 154 of the Leases Act should apply to the whole of the controversy being considered by the Court, not just those parts "directly" under or referable to the Leases Act, unless those latter issues are "colourable" or trivial.
139. Nevertheless, the analogy between these various provisions and s 154 of the Leases Act is a problematic one. In that section, there is no reference to "matters" which was significant in the consideration of the other provisions. It was a significant consideration in decisions such as Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate (No 2) and Stanley v Service to Youth Council Inc (No 3). On the other hand, the use of the term "matter" in some cases seems to extend into a wider concept given the broad interpretation given the term by Fencott v Muller (1983) 152 CLR 570 at 606-7, namely a justiciable controversy which may include claims under both (in that case) federal law and non-federal law. In attempting to provide a formula to decide what claims are disparate and what are not, the plurality decided a "sound guide" would be "common transactions and facts".
140. Using this guide, it seems to me that the claims in this case are all part of the one justiciable controversy. They arise out of the same facts and transaction; only the liability flowing from the facts and transactions flows from different statutes and the law of contract (through the Sublease), which each act upon the same facts and transactions. Indeed, in a number of respects, the liability, though with different statutory and legal bases, is otherwise identical in content, reach and consequence.
141. If the proceeding is the vehicle which brings these claims to the Court for adjudication and resolution, then it seems to me that the proceeding is under the Leases Act. That it is also under the Trade Practices Act, the Fair Trading Act and the common law of contract and equity does not deny that first proposition.
142. Thus, it seems to me that the approach of Gray J in Geneff v Peterson and the more recent decision of Melbourne Stadiums Ltd v Sautner is apposite, despite the verbal differences in the respective sections.
143. Further, the width of item 10 in Table 17 of the Leases Act would support this approach for even the action under the Trade Practices Act is one which would fall within that item, as held in Kingsley's Chicken (No 2).
144. The actual circumstances of this action confirms the appropriateness of that construction, for it would simply be impossible to separate those parts of the proceedings which related to different causes of action when the facts on which they were based were identical. It would be bizarre to require the Court to apportion parts of the proceeding to the Trade Practices Act and to the Leases Act when there was absolutely no distinction in the evidence given for both.
145. That gives a very wide scope to the reach of the Leases Act, for it would be applicable even were the Leases Act itself not to be mentioned at all. Thus, the Leases Act would apply to a claim entirely under the Trade Practices Act, if it were, for example, "in relation to a lease or negotiations for entering into a lease" or entirely under the common law of contract if it were, for example, "in relation to the use or occupation of premises to which the lease relates". That is, of course, consistent with Kingsley's Chicken (No 2).
146. Of course, to the extent that any provisions of the Leases Act were inconsistent with the Trade Practices Act, then s 28 of the Australian Capital Territory (Self-Government) Act would render them irrelevant and unenforceable in relation to any proceedings under that latter Act.
147. The Trade Practices Act, however, gives little direction to courts as to the procedure applicable to proceedings under it. The principal provision is s 86 which invests a number of courts with jurisdiction. It makes no mention of costs but relies on the costs provisions of the relevant court: Trade Practices Commission v Nicholas Enterprises Pty Ltd [1979] FCA 143; 28 ALR 201 at 206.
148. Other provisions in Part VI (Enforcement and Remedies) of the Trade Practices Act deal with courts but none are relevant, save, arguably, s 87 which provides for ancillary orders which are "such order or orders as [the court] thinks appropriate ... that ... will compensate ... for the loss or damage or will prevent or reduce the loss or damage". Those orders are limited, however, to orders specified under s 87(2) and, so far as payment of money is concerned, refer to what is generally referred to as damages. In any event, they are unlikely to include payment of costs for the reasons explained in Boxx v Peden [2017] ACTCA 39.
149. Accordingly, I am satisfied that the Trade Practices Act does not make any inconsistent provision to s 154 of the Leases Act. That section applies to the proceedings constituted by BHPL's Counterclaim and TTC's Defence to the Counterclaim.
BHPL's Third Party Claim and Leda's Defence to the Third Party Claim
150. For the reasons already advanced, I find that s 154 of the Leases Act applies to the proceedings constituted by BHPL's Third Party Claim and Leda's Defence to the Third Party Claim.
151. The final issue is the question of how s 154 of the Leases Act is to be construed and how it operates in respect of proceedings.
152. I have indicated above (at [27]-[29]) that, although literally expressed in a way consistent with the ordinary unfettered discretion that this Court has under r 1721 of the Court Procedures Rules, the section should be construed as requiring the Court to give primacy to the consideration that each party should pay its or their own costs unless the Court considers that some other order is appropriate.
153. The Leases Act gives no direct considerations or principles on which the Court should act. Clearly, one important consideration would be the interests of justice and the power should be exercised judicially, including only after giving the parties an opportunity to be heard.
154. In the circumstances, it seems to me that I should construe the provision in the light of the evident policy that parties, especially tenants, with genuine grievances and an arguable evidentiary and legal basis for them, should not be deterred from asserting their rights because of the risks of an adverse costs order. As Mortimer J explained in Ryan v Primesafe [2015] FCA 8; 323 ALR 107 at 122; [64], it is an issue of access to justice.
155. The only superior court decision that has addressed this issue in relation to the Leases Act is Liangis Investments Pty Ltd v Ipex ITG Pty Ltd [2005] ACTCA 28. In that case, the Court of Appeal, after referring to s 154 of the Leases Act said at [5]:
Whilst the discretion implicit in this provision is not constrained by any requirement that special or exceptional circumstances be demonstrated, there must be some identifiable factor or factors sufficient to justify a departure from the normal rule.
156. The Court of Appeal at [7] went on to hold (though the apparently joint reasons for the decision of the Court used the pronoun "I") that apparent unreasonable behaviour of the parties asserted by each of them in failing to "embrace overtures of settlement from the other" was insufficient to depart from "the normal rule", namely that there be no order as to costs.
157. As well as Kingsley's Chicken (No 2), the Magistrates Court has given some consideration to the section. In Arthur McWitton Pty Ltd v Perpetual Trustee Co Ltd Magistrate Burns had to apply the section.
158. Though giving no detailed consideration to its legislative history on any analogous authorities, his Honour said (at [4]):
Section 154 of the Leases Act provides the usual rule concerning costs in applications under that Act. The usual rule is that each party pay their own costs. The Court has a discretion to depart from the usual rule where the circumstances of the particular case make it just to do so. The Court's reasons for departing from the usual rule do not need to identify special or exceptional circumstances, but the Court must be satisfied that there are cogent reasons to depart from the usual rule.
159. His Honour accepted (at [6]), that the fact that a party was successful in the litigation was not in itself a good reason from departing from "the usual rule". His Honour considered (at [8]) that, in that case, the applicants' case was "utterly misconceived from the outset" as was its original claim for damages. In addition, the dilatoriness in preparation and prosecution of the proceedings, and the complexity of the financial and legal issues combined to justify a departure and his Honour made an order for costs.
160. In Victoria, the relevant jurisdiction is exercised by the Victorian Civil and Administrative Tribunal (the Tribunal) and, in that Tribunal, s 107 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) makes similar provision, if rather more clearly favouring an order that each party pay its or their own costs. Like s 570 of the Fair Work Act, however, and unlike s 154 of the Leases Act, it does provide some guidelines setting out the circumstances that a court (or, in the Victorian case, the Tribunal) must consider before making an order for costs.
161. In Maltall Pty Ltd v J & C Iliopoulous & Bevendale Pty Ltd (No 2) (1998) V Conv R
59-528 at 68,120, Deputy President of the Tribunal, Mr M F Macnamara, held that the commercial nature and complexity of most retail tenancy disputes meant that costs would generally be awarded on the usual basis in such litigation. Mr Macnamara followed that reasoning in other cases: The Cutting Edge Victoria Pty Ltd v Industry Superannuation Property Trust Pty Ltd [2000] VCAT 2011; (2001) V Conv R 58-550 at 65,014; [31].
162. That approach has, however, not always been followed. In Stelridge Pty Ltd v Handbags International Pty Ltd [1999] VCAT 8; (1999) V Conv R 58-532 at 68,146; [3], Davey CCJ, Vice President of the Tribunal, held that costs were to be considered on a case-by-case basis and not by a general rule. His Honour held that different rules should not be followed as to costs in the different jurisdictions of the Tribunal.
163. In Antonino Guiseppina Ensabella and Sons Pty Ltd v Players on Downunder Pty Ltd [2000] VSCA 73; (2000) V Conv R 54-626 at 64,488; [43], Phillips JA, with whom Ormiston and Charles JJA agreed, held, for similar reasons used by Mr Macnamara, that the complexity of the proceedings was a relevant factor and justified an order for costs. His Honour noted, however, that s 109 of the Victorian Civil and Administrative Tribunal Act applied to all proceedings in the Tribunal and that where one jurisdiction was more complex, this may justify a departure from the otherwise usual position. Davey CCJ acknowledged the support provided by this decision to the position adopted by Mr Macnamara: AMP Life Ltd v Lillium Pty Ltd [2000] VCAT 34; (2001) V Conv R
164. In Cannon Real Estate Pty Ltd v Deisband Pty Ltd [2000] VCAT 36; (2000) V Conv R 58-555 at 65,045; [8], Davey CCJ, however, did observe that retail tenancy proceedings involve more complex issues thus commonly open to the discretion to award costs in favour of a successful party.
165. In this case, of course, s 154 of the Leases Act is a specific provision relating to resolution of disputes related to commercial and retail leases and applies to no other proceedings. While some tenants will be at some economic disadvantage compared to landlords, that is by no means universally true; supermarkets operated by Woolworths Ltd and Coles Supermarkets Australia Pty Ltd commonly rent premises, especially in shopping centres, and can hardly be described as economically disadvantaged compared to landlords.
166. Nevertheless, the complexity of proceedings seems to me to be a relevant factor to consider in applying s 154 of the Leases Act. It should, however, not be elevated to a rule or principle that all such proceedings fall into such a category, but merely to be a relevant consideration when considering application of the section.
167. TTC/Leda, in its submissions, also relied on the need to take into account the approach that courts now take in the attempt seen as important to control the costs of litigation. This is a statutory direction in s 5A(1)(b) of the Court Procedures Act 2004 (ACT).
168. Thus, White J said in Hockey v Fairfax Media Publications Pty Ltd (No 2) [2015] FCA 750; 237 FCR 127 at 143; [88], in response to authorities which has suggested restraint in moderating the rule that costs follow the event because the successful party fails on many issues it had pleaded:
However, courts are now more ready to apportion the costs awarded to a party who succeeds in only some of the claims he or she brings. This may reflect the increasing factual and legal complexity of modern litigation and the multiplicity of factual and legal issues it entails, and the tendency of applicants to pursue multiple claims involving different factual enquiries in the one proceeding. It may also reflect an encouragement by the courts to applicants to exercise some discrimination in their selection of the claims they litigate. It is to be remembered that the inclusion of multiple causes of action in the one proceeding, even if based on a common substratum of fact, adds to the costs of the pleadings, interlocutory activity, preparation and presentation of the evidence at trial as well as of the trial itself. Nowadays, courts are particularly conscious of their role in attempting to control the cost of litigation.
169. Nevertheless, in that case, his Honour resisted the temptation to apply a simplistic mathematical approach to the disaggregation of issues, saying at 145-6; [98]-[101]:
170. Again, an analysis of the issues in the proceedings and the success of each party in relation to these seems to me to be a relevant consideration, but not one that should be approached in a purely mathematical way. Nor will it be, in itself, determinative. After all, a successful party can often only gain an award of damages at all by taking the proceedings.
171. The nature of the issues is also relevant. While not expressed in the section, I see no reason why the prosecution of a claim or defence that is frivolous or vexatious should not attract an adverse costs order.
172. The Court should also be astute to ensure that the luxury of the prima facie no costs jurisdiction is not abused for the ordinary obligations of the courts under s 5A of the Court Procedures Act in which the parties are required to assist the courts still apply and should be reflected in the need to encourage compliance. Thus, the conduct of the parties in the proceedings is also relevant. A party who unreasonably delays or lengthens the proceeding or conducts their or its case with lack of diligence or incompetently may be ordered to pay the costs occasioned by such conduct or, indeed, of the whole proceedings.
173. These considerations are not exhaustive of the matters that need to be considered by a court when considering whether there should be an order for costs.
174. It is also important to state clearly that merely success in a party's claim nor its failure will be sufficient of itself to justify an order for costs in favour of or adverse to that party. To apply that rule would clearly undermine the intent and operation of s 154 of the Leases Act as I have found it to be.
175. Similarly, it should be clear that the overriding consideration should be the interests of justice and fairness to the parties which should be the ultimate touchstone for any order, whether that be that there be no order as to costs or that there be an order that a party bear the costs of another party.
176. I will then apply these considerations and approaches to the proceedings as I have described them.
177. I have already ordered that BHPL pay TTC's costs of TTC's claim for rent and other outgoings, despite s 154 of the Leases Act.
178. TTC/Leda have appealed against my decision. BHPL has cross-appealed. The orders I made on 28 April 2017 have now been recorded in a sealed order of the Court. There are formidable obstacles in varying an order once entered into the records of the Court in this way. See Commonwealth of Australia v Davis Samuel Pty Limited and Ors (No 11) [2017] ACTSC 2; 316 FLR 159 at 180-3; [98]- [114]. There was, in this case, no application for amendment under the slip rule or otherwise to set aside the order or revisit it and so the submission by BHPL is misconceived. Nevertheless, I should explain why I made the order that I did.
179. While TTC's success in its claim is, in itself, insufficient to justify such an order, there were other considerations that did so.
180. As may be proper, BHPL did not initially controvert the order when pronounced and able to be recalled, though, given that no party had drawn my attention to s 154 of the Leases Act, that may have been understandable in the circumstances. In the end, it did submit that there should be no order as to costs of TTC's claim which would have required me to vacate that order.
181. BHPL also raised an issue as to the quantum of such costs. I shall deal with that separately below.
182. BHPL raised three issues in the context of these proceedings: the commonality of the representation of TTC and Leda, the fact that its abandonment of the premises, as I found in TTC v Leda at [1102]-[1103], was an appropriate response to BHPL's situation and that the issues in the proceedings were narrowed during the hearing so that the issues on TTC's claim occupied very little time.
183. TTC, however, submitted that there were relevant matters that made the claim one in which s 154 of the Leases Act should not apply. These were that TTC was required to defend allegations of BHPL that were not seriously pressed and that this was done at or after trial by which time substantial preparation had been required to be completed and hearing time occupied.
184. I do not consider that there is a need to revisit the order for costs made against BHPL in favour of TTC, notwithstanding s 154 of the Leases Act.
185. Had the proceedings merely been an undefended claim for rent and outgoings, then there may well have been a case for there being no order as to costs, especially in the light of some matters raised but not pressed by BHPL. For example, genuine efforts to negotiate its release from the Sublease, genuine attempts to sell the business, especially if thwarted by TTC as alleged by BHPL (on which I did not have to make a finding), would be matters that may support such an order.
186. I do not accept, however, that the fact that abandonment was a reasonable response to achieve the mitigation I found was required would justify the Court making no order for costs. The justification for abandonment did not relieve BHPL from paying what contractually it was bound to pay under the Sublease. Had BHPL raised matters of dispute which it prosecuted diligently and which had a reasonable legal and evidentiary basis, or had BHPL consented to judgment for the claimed amount, these may well have justified an order that each party pay its own costs.
187. While BHPL did, to an extent, limit the issues at trial that it had raised in its Defence, it did not formally abandon them and, of course, there was a good deal of evidence relating to those issues in affidavits that were filed even though not read by BHPL. TTC had to respond to that evidence and did so in affidavits read without relevant objection. Further, the issues were complex.
188. BHPL submitted that its narrowing of the issues meant that, in the reasons, only a few paragraphs (TTC v BHPL at [1197]-[1204]) were necessary to deal with them. That is not correct, for the issues it raised included the level of outgoings (TTC v BHPL at [188]-[195]) and the question of the assignment requiring a disclosure statement (TTC v BHPL at [148]-[177]) which had also to be addressed. In any event, this is only one matter for consideration.
189. That, effectively, the abandonment of these issues occurred in the final written submissions meant that there was considerable preparation to address these issues as identified by TTC, including its preparation and filing of a very substantial affidavit made by Mr Jeremy Wilson, and that is relevant.
190. In my view, these matters do not justify an order on the TTC Claim, to which BHPL filed a Defence, that each party pay its own costs. They justify the order I made that BHPL pay TTC's costs.
BHPL's Counterclaim and TTC's Defence to the Counterclaim
191. Again, I ordered that BHPL pay TTC's costs of the Counterclaim when I dismissed it. Again, it is necessary to give my reasons in the context of s 154 of the Leases Act, though no application was made under the slip rule or otherwise.
192. Again, that the Counterclaim was dismissed is not, of itself, sufficient to justify the order for costs that I made. More is required.
193. BHPL submitted that it was important to give effect to the fact that the issues arising from the Counterclaim were relevantly the same as those arising from the Third Party Claim so that there was a need to avoid double payment of costs. Thus, so far as the Counterclaim was concerned, TTC should not have costs that were truly payable in respect of the Third Party Claim in regard to which it was successful against Leda.
The Hyperdome was owned by Leda until December 2005, then a joint venture was formed being TTC, which was owned 50% by Leda and 50% by Centro. Centro was given the management rights. TTC and LEDA had joint business interests as result of these arrangements and joint legal interests in relation to the matters which were pleaded against each of those parties.
195. I do not know that there was evidence of the ownership structure of TTC but it does not appear to me that this is relevant. TTC and Leda are separate entities and there is no occasion to "lift the corporate veil": Salomon v Salomon & Co Ltd [1896] UKHL 1; [1897] AC 22. Indeed, even in the case of a wholly owned subsidiary, the subsidiary has an obligation to protect its interests rather than that of its owner: Walker v Wambourne [1976] HCA 7; (1976) 137 CLR 1 at 7. The "practical" reality must give way to the legal reality: Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 at 694-5. I consider the submission irrelevant to the question of what costs order should be made.
196. BHPL also submitted that the success that TTC/Leda had in the Third Party Claim/Counterclaim were on "minor issues" and submitted that "the vast majority of the substantive issues were decided in favour of BHPL". It produced a table which it submitted showed this to be so. TTC disputed that the table showed any such result.
197. As noted above (at [15]), the BHPL claims related to representations said to have been made by an employee of Leda and representations said to have been made by employees of TTC.
198. Although I found that the employee of Leda, Mr Timothy Beirne, had engaged in, by silence, misleading and deceptive conduct, BHPL adduced no evidence and made no submissions to explain how TTC could be liable to BHPL for events that occurred before TTC was the lessor of the leased premises and, indeed, it may be, even before it was registered as a corporation.
199. Thus, there was no evidentiary or legal basis articulated for its claim against TTC in respect of those representations.
200. Representations alleged to have been made by employees of TTC, however, were asserted and, had they been proved, may have rendered TTC liable to BHPL.
201. I found (TTC v BHPL at [105]-[108]) that no statements made by Mr Lord were misleading or deceptive, (TTC v BHPL at [109]-[128]) that Mr McCann did not make one of the representations alleged and that the other representations, including in one case even on BHPL's own evidence, not to be misleading or deceptive, and finally (TTC v BHPL at [131]-[134]) that Mr Cooper made no representation as alleged in the pleadings, though not addressed in BHPL's evidence (TTC v BHPL at [130]-[135]).
202. While the makers of these alleged misrepresentations were cross-examined about them, the evidence adduced by BHPL to suggest they were made was thin to say the least and it was unsurprising that they were not the subject of any final submissions by BHPL.
203. Thus BHPL effectively did not rely on them in the final prosecution of its case, but they were never formally withdrawn. This, as TTC pointed out, meant that TTC had to have affidavits prepared by the employees and have them available for cross-examination and make submissions for claims that ultimately were not pressed.
204. This was the nub of the Counterclaim. There were other collateral issues in the case as identified in the table prepared by BHPL but none of them were, in fact, directly relevant to the Counterclaim as opposed to the Third Party Claim. Some of them were relevant to the conversations Mr Beirne had with Ms Brenda Hungerford of BHPL. That, however, was not ultimately relevant to the Counterclaim because there was no link between Mr Beirne and TTC that rendered or, indeed, could render, TTC liable to BHPL.
205. The conduct of BHPL in pleading matters on which it did not ultimately rely is a relevant factor in deciding whether a costs order should be made, despite s 154 of the Leases Act. That may not be sufficient in itself, for there may, in appropriate cases, be justification for that and also, for example, amelioration by making a timely and explicable abandonment of a claim that became untenable.
206. None of that applies here. There was neither timely nor express abandonment of the claims. They required significant preparation by TTC with no amelioration and they were abandoned rather by implication and without explanation after being addressed to a degree in evidence.
207. In my view, there was a justification for the costs order made.
208. Further, I do not consider that there is any justification for making an order for costs of issues. I accept that BHPL was not unsuccessful on all the issues it raised in the Counterclaim, but they were marginal in the context and I think the approach of White J in Hockey v Fairfax Media Publications Pty Ltd (No 2) is appropriate. The main issues were those on which BHPL was unsuccessful and those on which it was successful do not justify, either in the time of hearing, in contribution to the reasons or in the amount of preparation in comparison to each other, any other order than that BHPL should pay TTC's costs.
209. These are my reasons for the order that I made.
BHPL's Third Party Claim and Leda's Defence to the Third Party Claim
210. That BHPL was successful in its Third Party Claim to a degree does not, of itself, justify an order for costs. While the rationale for s 154 of the Leases Act is expressed as the likely economic disadvantage of tenants in comparison to landlords, it does not, in my view, justify a differential approach to costs based on whether the successful party is the landlord or the tenant and I do not see that stated or implied in any of the extrinsic material on which I relied in construing the section.
211. Nevertheless, the success of a litigant is a relevant factor which is neither irrelevant nor to be ignored.
212. While BHPL submitted that s 154 of the Leases Act did apply to TTC's claim, it submitted that, as its success in the Third Party Claim relied on the Trade Practices Act, it was entitled to its costs.
213. I have rejected that approach above (at [106]) and say that the section does apply. It seems to me, however, that the complexity of the proceedings does justify a departure from the normal rule that each party pay its own costs. Neither party addressed this issue.
214. A central issue between the parties in their submissions on costs was the question of the number of issues raised and the relative success of the parties in those issues.
215. Leda submitted that the vast majority of issues raised in the Third Party Claim and its Defence to it were decided in its favour and that, to a large extent, issues raised in the pleadings were abandoned or, at least, not pressed.
216. BHPL maintained that it had a success in its claim that "substantially outweighs the success of TTC and Leda". It further submitted that much of the description of its tenure at the Hyperdome would have had to have been adduced as evidence in any event, as a principal argument of TTC/Leda (but, here, relevantly, Leda) was that BHPL was the author of its own misfortune not any misrepresentations made by Mr Beirne (or, so far as TTC was concerned, its employees).
217. This was rather a complicated matter, for the nub of the case did rather shift along the way. Thus, at the end of the day, the central issue became whether Mr Beirne did, by omission or silence, misrepresent the changes to the Hyperdome and Ms Hungerford's likely response had he not done so.
218. On these issues, BHPL was successful; I found that Mr Beirne did make such misrepresentations and that BHPL would not have entered into the Sublease had he not done so.
219. That made much of the other evidence irrelevant, but did not necessarily render it inappropriate that it be adduced.
220. Thus, Leda sought to show that BHPL made poor choices when addressing the decline of its business and to show that Leda's developments to the Hyperdome had not contributed, at least to any relevant degree, to the deterioration of BHPL's business. On these matters, Leda was largely successful.
221. BHPL's approach on damages did vary during the proceedings. It did strongly promote, in the preparatory phase and in the hearing, its case that the alterations and developments at the Hyperdome had significantly affected its business adversely.
222. Its final position, however, was that all the losses it had sustained were recoverable because it would never had entered into the Sublease had Mr Beirne not failed to respond accurately to Ms Hungerford's request for information. It was partially successful on this issue, though not wholly.
223. This largely left the other issues sidelined though addressed to some extent in BHPL's submissions in the alternative. It is a difficult question as to whether, by concentrating on the one issue, on which it was successful, there is some need to recognise in a costs order the consequent failure of the alternative scenarios that that issue rendered largely irrelevant.
224. Thus, Leda criticised BHPL for failing to rely on any of its non-economic expert witnesses whose evidence was in reality directed to the case made by Leda in defence that it was not the cause of the business losses made by BHPL during the conduct of its business at the Hyperdome. In general terms, though it was not necessary for me to deal with these issues in great detail, I found in favour of Leda on them: TTC v BHPL at [510], [722]-[723], [825]-[829].
225. It is fair to add that, as pointed out by TTC/Leda, BHPL did not establish unconscionability, any equity, any estoppel, or any statutory interference with trade. It failed to establish a causative link between its further businesses at Yarralumla and Manuka and its losses. Its claim for losses was substantially rejected.
226. The success or not of these issues is not, in my view, determinative of BHPL's entitlement to costs though it must moderate them. That a party addresses an issue which is a legitimate alternative to a successful claim need not necessarily deprive it of costs unless shown to be unreasonably raised, either through lack of evidence or lack of a legal basis.
227. While legitimately challenging, mostly successfully, the evidence of BHPL, Leda cannot be said to have shown that the evidence was, in general, so lacking in cogency that BHPL should not have, or should have known that it should not have, relied on it. Some of the evidence did come close to that with the rather unhappy, almost inappropriately close, relationship between BHPL and its lawyers with some of the expert witnesses.
228. Nevertheless, it does seem to me that, in abandoning its alternate claim, BHPL realised that it only really had the claim on which it was (partially) successful on which it could rely. On the other hand, it did not expressly abandon those other claims, nor, indeed, make some alternative submissions on a number and requiring them to be addressed by me.
229. The case, however, was complex. While recognising the different statutory context of the Victorian Civil and Administrative Tribunal, it does seem to me that the factor which it has found very significant in commercial and retail tenancy cases is at the very least a relevant one, namely the complexity of the case. That is particularly relevant here, where BHPL prosecuted a range of causes of action, largely identical, but which increased the complexity of the proceedings for no apparent benefit. Indeed, it made no submissions on most of them. There was, for example, barely a reference to the Fair Trading Act in the proceedings, save in the pleadings.
230. In my view, BHPL is entitled to some costs of the Third Party Claim, for it had to come to court to obtain relief, which it did gain, though not as much as it sought. This is, however, to be moderated by the fact that there were substantial issues which took a significant portion of the preparation and hearing of the proceedings which either it abandoned or on which it was unsuccessful or both. While it is not required that a party should be dissuaded from promoting an alternative case by risking costs should its alternative case fail, that must, as so much of the discretion as to costs does, depend on the precise circumstances of the case.
231. Neither party has directly persuaded me that my preliminary view about how the failures of part of BHPL's case should be recognised, but the more detailed explanation has somewhat moderated my view. After all, BHPL was successful on its main issue and had to take the proceedings to recover any damages and this ought properly to be reflected in the order for costs.
232. Subject to what is discussed below, I consider that BHPL should have half its costs of the Third Party Claim.
233. BHPL raised an issue as to the basis of the costs order made in favour of TTC on its primary claim for rent and outgoings. It suggested that the costs of TTC's claim should be assessed at half of the prescribed scale of costs and half its disbursements.
234. As noted above (at [9]), the proceedings were commenced in the Magistrates Court. Where proceedings are conducted in the Magistrates Court, the costs payable under a costs order in that court are less than those payable in the Supreme Court unless the recovered amount is not less than $50 000: r 1722 of the Court Procedures Rules.
235. Under r 1725 of the Court Procedures Rules, however, where in a proceeding in the Supreme Court, a plaintiff's claim is one over which the Magistrates Court would have had jurisdiction and power to hear and determine, then, on judgment in the plaintiff's favour, the costs payable are, for a judgment sum of between $50 000 and $100 000, calculated at 50 per cent of the amount payable as costs in the Supreme Court and 50 per cent of the disbursements.
236. That provision is, however, subject to another order if the Court so decides: r 1725(3) of the Court Procedures Rules.
237. Such provisions are common in other Australian jurisdictions. The purpose has been described by Menhennitt J, delivering the unanimous decision of the Court in O'Doherty v McMahon [1971] VicRp 75; [1971] VR 625 at 628, as follows:
The object of the rule is to protect the defendant against the unnecessary expense of higher costs in a court which is not appropriate for the case. The plaintiff, however, is left free to select his court. If he fails, no protection of the defendant is necessary because he receives costs applicable in the court to which he is taken. If he succeeds, the defendant is liable for costs appropriate to the court to which he is taken, provided, however, that the plaintiff obtains more than half of the amount which the lower court has jurisdiction to award. If the plaintiff recovers less than that amount the defendant is liable only for costs applicable in the lower court, in the absence of a special order.
238. That purpose was accepted in this jurisdiction as the purpose of the predecessor to r 1725 of the Court Procedures Rule, namely O 65 r 7A of the Supreme Court Rules 1937 (ACT): Ditton v Gallagher (1992) 110 ACTR 12 at 16.
239. There has been some consideration of such provisions, especially in the context of personal injuries actions and defamation actions.
240. Rule 1725 of the Court Procedures Rules commenced on 1 January 2012 and was not retrospective: Mareva Building Consultants v Zevon (No 2) [2012] ACTSC 24 at [19]. It applied, however, to judgments delivered after that date.
241. Clearly in its terms it applies to first instance proceedings. The terms of the rule made it clear that it does not apply to appeals from the Magistrates Court, as was found in Kyriacou v Southern Steel Supplies Pty Ltd (1971) 18 FLR 184 that its predecessor, O 65 r 7A of the Supreme Court Rules, did not so apply.
242. It applies to orders for costs where the circumstances of the rule apply; that is to say, unless the court makes a special order under r 1725(3) of the Court Procedures Rules, the rule will reduce the costs recoverable under any order for costs made by the Court. There is no need for any special reference in such an order, unless the Court decides that a different amount should be the subject of an order.
243. Clearly, matters of fairness will be a significant consideration: Mareva Building Consultants v Zevon (No 2) at [21]. In addition, issues of the complexity of the proceedings and the conduct of the parties will be relevant: Yogini v Eveille [2006] ACTSC 23 at [25].
244. Other matters that have been considered relevant by the courts include the following.
245. In Symes v Commonwealth (1987) 89 FLR 356 at 358, Gallop J held that the reasonable estimate by a plaintiff's adviser of damages ultimately payable was relevant and that they should not be required, as a reasonable basis for a transfer of proceedings from the Magistrates Court to the Supreme Court without risk of a costs penalty, to estimate too finely the likely reduction through a finding of contributory negligence. As Miles CJ said in Esposito v Commonwealth (1988) 80 ACTR 9 at 12, the estimates of a plaintiff's lawyers are "always a material, but not a deciding factor".
246. The complexity of a case is clearly a relevant factor which may well be determinative in an appropriate case as pointed out by Miles CJ in Woodger v Federal Capital Press of Australia Pty Ltd (1992) 107 ACTR 1 at 40. While many defamation cases are complex, this does not mean that there is a special rule that in all defamation cases a special order should be made or more readily made: Humphries v TWT Ltd (1993) 113 FLR 422 at 425. In that case, however, the complexity of the issues justified the case being conducted in the Supreme Court, though this was apparent only after the pleadings had been closed.
247. In personal injury cases, there should not be an assumption that the Magistrates Court cannot deal with medical issues that are not straightforward: Esposito v Commonwealth at 13. In that case, Miles CJ also pointed out that there may, however, be differences between claims for personal injuries arising out of workplace incidents and motor vehicle collisions. Similarly, given the present significant level of monetary jurisdiction in the Magistrates Court, it should not be assumed that it cannot deal with commercial matters, including tenancy matters, of some factual or legal complexity.
248. The quantum of damages actually awarded will be a relevant factor: Cressy v Miloriad (No 2) [2016] ACTSC 339; 317 FCR 267 at 280; [61]. This will, of course, include a consideration of the reasons why the amount was awarded and that may include the difficulty of the assessment.
249. The order to be made under r 1725(3) of the Court Procedures Rules is entirely in the court's discretion and need not go as far as requiring the costs to be instead payable in the Supreme Court, rather than some lesser costs, such as to be paid on the scale appropriate as in the Magistrates Court: Cressy v Miloriad (No 2).
250. Many of the issues arising out of r 1725 of the Court Procedures Rules relate to transfers to the Supreme Court because the likely damages turn out to appear that they may well exceed the jurisdictional limit of the Magistrates Court. Such transfers are regularly made and the threshold is not high, for the irremediable consequences for the party seeking the transfer usually outweigh the consequences to the other party which may well be able to be addressed in costs: Braithwaite v Philpot (Unreported, Supreme Court of the Australian Capital Territory, Master Connolly, 12 December 1997) at 3.
251. The question of costs must, as Master Connolly pointed out in Kneipp v Halliday [1998] SCACT 33 at [3], always be borne in mind when litigants contemplate a transfer of proceedings.
252. In this case, it was not the plaintiff, namely TTC, who sought the transfer, but the defendant, BHPL. TTC consented to the transfer, even though its claim would never reach the upper jurisdictional threshold of the Magistrates Court and it would be likely to suffer a costs penalty greater than the recoverable costs if the proceedings had remained in the Magistrates Court.
253. Where a plaintiff has been required to transfer the proceedings commenced in the Magistrates Court by him, her or it to the Supreme Court because the defendant wishes to plead a Counterclaim exceeding the monetary jurisdictional limit of the Magistrates Court, the plaintiff runs a very great risk of a much reduced recovery in costs and a discount on the disbursements such as counsel's fees.
254. This may be a reason to oppose such a transfer unless, in some way, the plaintiff is protected as to costs. This is the kind of consideration that may well justify the warning given by Master Connolly in Kneipp v Halliday. It is not for me to speculate on how a plaintiff may protect his, her or its interests as to costs in such a situation but, at the very least, consideration should be given to an application under r 1725(3) of the Court Procedures Rules when costs are under consideration.
255. In the case of a transfer so the defendant can plead a Counterclaim exceeding the monetary jurisdiction of the Magistrates Court where the plaintiff's claim does not exceed that jurisdiction, it may well be appropriate at judgment for an order to be made under r 1725(3) of the Court Procedures Rules. That order may well simply be that the plaintiff's costs be paid as if the proceedings had remained in the Magistrates Court, as was ordered in Cressy v Miloriad (No 2) at 280; [61]. If, however, the proceedings in the Supreme Court required work of a different complexity or extent as a result of the transfer, it may be appropriate to make an order that the costs be payable on the scale applicable to Supreme Court proceedings.
256. In this case, TTC made no submissions on the issue. In particular, it did not seek an order under r 1725(3) of the Court Procedures Rules. For the reasons considered in the last paragraph, such an order may have been appropriate in this case, but TTC has not sought it.
257. In any event, it may not have been available. As I have noted above (at [178]), the orders made on 28 April 2017 were recorded in a formal sealed order on 4 July 2017. This was, of course, a necessary preliminary to the hearing of an appeal: r 5433(3)(d) of the Court Procedures Rules.
258. The sealing of the order means that, unless TTC can justify an application under r 6906 of the Court Procedures Rules (the "slip rule"): see Commonwealth of Australia v Davis Samuel Pty Limited and Ors (No 10) [2016] ACTSC 364 at [5]- [6], then the Court now has no power to make an order under r 1725(3). See Carew v Heitanen [2014] ACTSC 179; 288 FLR 141 at 150; [45]- [46].
259. The consequence is that r 1725 of the Court Procedures Rules applies and TTC, on its claim is limited to 50 per cent of the costs recoverable under the prescribed scale in the fourth Schedule of the Court Procedures Rules and 50 per cent of the disbursements applicable to that claim. For good order, I shall, as Mossop M did in Carew v Heitanen make a declaration accordingly.
260. This, of course, does not affect the Counterclaim which is relevantly a separate proceeding and for which, subject to other matters dealt with in those reasons, costs are recoverable in accordance with the prescribed scale applicable to Supreme Court proceedings.
261. By letter dated 29 August 2014, TTC/Leda made an offer to BHPL to compromise the proceedings between all parties. A copy was annexed to Mr Flint's July affidavit. Though the offer was made on a without prejudice basis, so that it could not be used as an admission in any of the proceedings, that privilege did not extend to considerations of costs.
262. It was, thus, what is known as a "Calderbank letter" or "Calderbank offer" after Calderbank v Calderbank [1976] Fam 93, a decision of the UK Court of Appeal which accepted that an offer made during proceedings which was reasonable and which reasonably should have been accepted but was not should ordinarily have a consequence for costs.
263. As the ACT Court of Appeal pointed out in Hulanicki v Walton (No 2) [2015] ACTCA 45 at [13], the acceptance of reasonable offers of compromise is in the interests of litigants and the public.
264. The material terms of the offer made by TTC/Leda were:
(1) TTC/Leda would pay to BHPL $600,000.00;
(2) TTC/Leda would waive claims against BHPL totalling $89,215.01;
(3) The parties would bear their own costs.
265. The offer in the letter dated 29 August 2014 was sent by email. I do not know the time it was sent. It required a response by 5:00pm on 3 September 2014. That is three working days, if 29 August 2014 itself is not included. It was, however, accompanied by a detailed 7 page assessment of the strength of the respective cases as the "Outline of Reasons for Offer". The trial effectively commenced with preliminary matters on 16 September 2014 and with a view the next day.
266. I set out in Pires v DibbsBarker Canberra Pty Ltd [2014] ACTSC 283 at [97]- [98], the principles for determining whether an offer was a Calderbank offer or not. In my view, applying these principles, the letter contained a Calderbank offer and BHPL did not submit to the contrary.
267. As pointed out in Pires v DibbsBarker Canberra, a very important, almost universal, condition for a Calderbank offer to be operative is that the ultimate judgment in the offeree's favour should be less favourable than that offered by the offeror in the Calderbank offer. Almost as important, is that the offeree's rejection of the offer, or non-acceptance, must have been unreasonable in all the circumstances.
268. The effect of the rejection of a Calderbank offer is to justify a costs sanction as a consequence. Such consequences have been described by Higgins J, with whom Miles CJ and Gallop J agreed, in Quirk v Bawden (1992) 112 ACTR 1 at 6 as follows:
Accordingly, I believe that this court should apply an appropriate costs sanction where a party has declined to accept or to make, as the case may be, a reasonable offer of settlement. It may, in some cases, be sufficient to deprive an otherwise successful party of all or part of the costs that otherwise would follow the event. In other cases, it may be appropriate to award some or all costs of an action on a more favourable than usual basis to a party who has been put to the expense of continuing litigation that ought reasonably to have been earlier settled.
269. The "more favourable than usual basis" of an award of costs to which his Honour referred is usually an order that the party rejecting or not accepting the offer should, from the date of the offer, pay the party making the offer the offeror's costs on an indemnity basis.
270. TTC/Leda submitted that the offer was more favourable than the judgment sum obtained by BHPL; BHPL submitted to the contrary.
271. TTC/Leda argued in the following way. It submitted that the effect of the offer was to benefit BHPL in the sum of $689 215.01, comprising a payment and a waiver of claims. TTC/Leda then submitted that to compare the offer with the judgment, the following considerations must be taken into account:
(i) the interest between the date of the offer (29 August 2014) and the date of judgment (28 April 2017);
(ii) the costs orders against BHPL made in favour of TTC/Leda in the following interlocutory proceedings:
- (a) Tuggeranong Town Centre Pty Ltd v Brenda Hungerford Pty Ltd [2014] ACTSC 197 - for amendment of its defence, Third Party Claim and reply to the amended answer to the Counterclaim and for leave to receive a rebutter;
- (b) Tuggeranong Town Centre Pty Ltd v Brenda Hungerford Pty Ltd [2015] ACTSC 9 - for leave to re-open the proceedings;
(iii) the costs I have accepted in these reasons should be paid by BHPL to TTC in respect of TTC'S successful claim and BHPL's unsuccessful Counterclaim; and
(iv) the costs incurred by BHPL after 29 August 2014.
272. None of the amounts have been precisely quantified. TTC/Leda suggested that these amounts be quantified as follows:
(i) Interest from 29 August 2014 to 28 April 2017: $103 000 but "rounded down" to $100 000. That is generous to BHPL but reasonable having regard to the calculations I made.
(ii) Costs of the interlocutory applications: $80 000 reduced to $50 000 on taxation. Both these applications related in the first case wholly and in the second case mostly to the proceedings in which full scale costs are to be awarded, thus I do not need to consider whether r 1725 of the Court Procedures Rules applies to interlocutory applications, the costs of which may be assessable prior to final judgment. See Ditton v Gallagher at 17. The rule itself is of no help, though its terms may suggest that it would not.
(iii) Costs of TTC and Leda payable by BHPL: $350 000 reduced from a total of
$704 412.74. It is difficult to determine how reasonable this estimate is, for TTC will recover a much reduced amount on its claim, though it is fair to say that most of the legal work done for TTC would have involved the Counterclaim. The work on the Third Party Claim would have, for the most part, been done at the same time, not requiring much, though some by way of separate costs.
(iv) Costs incurred by BHPL after 29 August 2014: Exceeding $111 000 given that, after August 2014, BHPL incurred the fees of senior and junior counsel, solicitors and expert witnesses for a trial lasting over 20 days. Given that, on the amounts usually allowed for counsel at trial on assessment, the fees for counsel for the trial alone would likely have exceeded this amount. See Civil Procedure Act (LexisNexis Butterworths, 2002) looseleaf service 114, 52,785; [64,500].
273. In order to place the costs in (ii), (iii) and (iv) in context, I note from Mr Flint's affidavits that the total costs charged by TTC/Leda by its lawyers were $1 260 968.45 and a summary of the costs and disbursements charged to BHPL to 2 February 2015 showed an amount of $2 185 785.59.
274. BHPL was awarded $1 377 561.94 in damages to 28 April 2017 but required to pay $88 223.06 to TTC and costs. Those latter costs would be calculated at half the prescribed scale of party and party costs according to the fourth Schedule of the Court Procedures Rules and half the disbursements. BHPL, however, was also ordered to pay the costs of the Counterclaim and that would be at the rate of the prescribed scale.
275. Of the quantified sums, BHPL recovered a net amount of $1 289 338.88. That is $600 123.87 greater than the net amount of the damages payable and debt waived under the Calderbank offer.
276. The amounts quantified by TTC/Leda at (i) and (iii) above (at [272]) total $500 000. Thus, it was submitted, unless BHPL incurred costs less than $100 123.87 (i.e. $600 123.87 less $500 000) the Calderbank offer would have exceeded BHPL's actual recovery.
277. As noted above (at [272](iv)), the costs incurred by BHPL would almost certainly have exceeded $100 123.87 by a substantial amount.
278. BHPL submitted that the submission made by TTC/Leda was premised on an order that BHPL either bear its own costs or pay Leda's costs. For the reasons set out above (at [210]-[232]), I have rejected that claim and, indeed, ordered that Leda pay one half of BHPL's costs. This complicates the matter, for neither party, unsurprisingly, has quantified the costs payable by Leda to BHPL.
279. On the assumption, which I do not make, except for the hypothetical purpose of testing this submission, that BHPL's costs of the third Party Claim were similar to those of TTC in defending the Counterclaim, then BHPL would recover $175 000 in costs. That would then require BHPL to have incurred not less than $275 000 in costs since August 2014 in order to have recovered them by Calderbank offer. While that is clearly possible, given the total charges to which I have referred above (at [273]), it is not so certain as to be inevitable. The assessment process will substantially reduce total costs when only party and party costs are payable, but there are still very substantial amounts charged and which, no doubt, will be sought to be recovered.
280. The complexity of these calculations make the question of whether the Calderbank offer was effective very problematic.
281. Whether a Calderbank offer is effective to justify a special costs order depends on whether it was unreasonable to reject it. The considerations as to that have been helpfully summarised by Katzmann J in Veda Advantage Ltd v Malouf Group Enterprises Pty Ltd (No 2) [2016] FCA 470 at [31], where her Honour said:
[R]efusal to accept an offer not made in compliance with the rules (a Calderbank offer, see Calderbank v Calderbank [1975] 3 All ER 333) does not give rise to any presumption in favour of the offeror. The offeror needs to show that there was a genuine offer of compromise, and that it was unreasonable for the offeree not to accept it: Black v Lipovac at [217]-[218]. In deciding whether it is unreasonable for an offer to be rejected, the following matters should ordinarily be considered:
See Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435 at [25].
282. It is also the case that, where the costs of proceedings are involved, the courts have been cautious about making special costs orders.
283. Sometimes, a party will make what is sometimes called a "walk away offer", that is an offer where each party "walks away from the proceedings"; the plaintiff abandons the proceedings with no order as to costs in favour of either party: Bishop v NSW (Unreported, Supreme Court of NSW, Dunford J, 17 November 2000). The plaintiff thereby avoids a risk of an anticipated costs order: Papas v Grave [2013] NSWSC 849 at [58]. Although often described as an offer where the offeror expresses its willingness to settle on the ground that each party bears its own costs (e.g. Leach v Nominal Defendant (QBE Insurance (Australia) Ltd (No 2) [2014] NSWCA 391 at [50]), there is, in fact, more than that, for the plaintiff must give up his, her or its claim and the defendant any counterclaim, though some small concession by one party may still be considered within the concept: Nutrientwater Pty Ltd v Baco Pty Ltd (No 2) [2010] FCA 304 at [31].
284. At one stage, the authorities seemed to hold that a walk away offer could not be a Calderbank offer. See Nutrientwater Pty Ltd v Baco Pty Ltd at [31] and the cases there cited. That approach was disapproved in Leichhardt Municipal Council v Green [2004] NSWCA 341 at [31]- [40], where it was held that such an offer was capable of constituting a genuine compromise because it can be a realistic and genuine attempt to resolve the dispute by agreement. It may not be so if it constitutes mere capitulation by a plaintiff in which the question of costs may not be significant as in Duncan-Strelec v Tate [2010] NSWSC 1256 at [22].
285. This was clearly not such an offer though, as appears, there can still be a problem where costs are part of the offer. This is more clearly shown where an offer is made inclusive of costs. In Van Zonneveld v Seaton [2005] NSWSC 175; (2005) DFC
95-311 at 78,306; [6], Campbell J said that such an offer is not:
one which is suited to being an effective Calderbank offer, because it usually does not allow the Court to decide whether the verdict eventually given is one under which the offeree fares worse than he or she would have done if he or she had accepted the offer.
286. See also GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 688; 201 ALR 55 at 63; [34], and the cases there cited.
287. Thus, in Smallacombe v Lockyer Investment Co Pty Ltd [1993] FCA 169; (1993) 42 FCR 97 at 101-2, Spender J identified some of the problems as follows:
However, I am satisfied that I should not have regard to the making of an offer which is, in effect, an all-up offer ... It requires an applicant to assess two components: the likely value of the claim and the likely party and party costs to date as they would tax. It is not analogous to the offer considered in any of the cases, and Mr Doyle, counsel for the respondent, has been unable to cite a case where an all-up offer of settlement of claim, that is, one including costs, has been considered.
To give effect to such an offer would tend against lean litigation. Not all firms conduct litigation so that the costs recoverable on taxation in similar litigation is the same or of the same order. To accept the all-up offer as a relevant consideration on costs would, over time, reward the firm whose costs were "padded" although still recoverable on a party and party basis, and disadvantage those firms who conducted litigation with tight efficiency.
In my view, it would not promote the finality of litigation, but fragment it. This is demonstrated by what was suggested by counsel for the respondent in this case. It was suggested that the question of costs be adjourned until there was a taxation of costs up until 21 May 1991. If those costs were clearly over $110,000 (which was the difference between the judgment awarded, adjusted for interest up to that date, and the offer) the submission was that the applicants should have their costs. If the taxed costs up to that date were significantly under $110,000 it was submitted that the applicants should pay the respondent's costs subsequent to that date.
The position if the taxation should approximate very closely to the difference between the amount of the judgment as adjusted as at that date and the offer seems to be somewhat conjectural. Two consequences might be suggested: on the one hand, it really is a question of precise dollar and cents so that if there is a shortfall, however small, then the respondent would be liable for costs, but if there was a surplus, however small, the respondent would have the applicants pay their costs subsequent to that date, or alternatively, the matter might be brought back before a judge to examine the position and to exercise the court's discretion in the light of the closeness of the result.
288. That approach has now been formalised in a number of court schemes where rules or other provisions require an offer of compromise to be exclusive of costs. See r 1002(2)(c) of the Court Procedures Rules; r 20.26(2) of the Uniform Civil Procedure Rules 2005 (NSW); Forge v Rewers (No 2) [2017] ACTSC 273 at [22]- [23].
289. This approach, however, does not alter the discretion available to a court under the principles that have been established in relation to Calderbank offers, and an offer inclusive of costs may still be accepted as a genuine assessable compromise: DSE (Holdings) Pty Ltd v Intertan Inc [2004] FCA 1251; 51 ACSR 555 at 557; [12]- [13].
290. Indeed, as Basten J pointed out in Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 at [143]:
If a party in receipt of an offer wishes to know how far the sum offered will go in meeting its costs up to that time, all it has to do is ask its lawyers. In an age where lawyers are required to provide advance estimates of their fees and in circumstances where commercial services are billed on a monthly basis, it is unrealistic to suggest that the recipient of an inclusive offer will be confused or otherwise unable to assess the financial risk of proceeding with litigation. In any event, the offeree is likely to be liable for legal fees exceeding the costs recoverable from the other party. Most litigants, in considering offers, will want to know from their own lawyers, how much they will receive in the hand. Of course, if the offer is not left open for a reasonable time, that might itself make
non-acceptance a reasonable course. However, an offeree which is genuinely seeking to assess its position, might be advised to seek more time, if it thinks that is reasonably required.
291. While not unsympathetic to his Honour's views, this case was rather different in the complexity of the costs issues as shown by the consideration of that issue in these reasons.
292. Further, while I have taken into account, in these reasons, the failure of BHPL to address a number of issues that it raised on the pleadings that seemed, given the way that the proceedings were conducted, to have been a tactical decision made once Mr Beirne admitted that he accepted the omissions he made in informing Ms Hungerford of developments at the Hyperdome were omissions he should not have left unsaid.
293. Had that admission not been made, the other issues, which were canvassed in the evidence, may well have been pursued more vigorously or not at all and, while ultimately not accepted by me, that was assisted by the significant absence of cogent submissions on some of the issues from BHPL.
294. The issue I must determine is whether the rejection or non-acceptance of the offer was reasonable. Simply for a party to reject an offer of compromise or not accept it, followed by a result more favourable to the offeror, does not automatically lead to an order for payment of costs on an indemnity basis: John S Hayes & Associates Pty Ltd v Kimberley-Clark Australia Pty Ltd (1994) 52 FCR 201 at 204-6; MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd [1996] FCA 862; (1996) 70 FCR 236 at 239. A party seeking such a favourable order must show that the rejection of the offer was impudent or plainly unreasonable: NMFM Property Pty Ltd v Citibank Ltd (No 2) [2001] FCA 480; 109 FCR 77 at 98; [82].
295. As noted above, there are a number of uncertainties in the quantification of the costs which are an essential issue in assessing whether the ultimate judgment in all its components was more favourable to TTC/Leda than the Calderbank offer. While I think the result is likely to be in favour of TTC/Leda, it is very difficult to be sure given the various issues involved and it is at this stage largely speculative. While my inclination is to find that it is more favourable, the difficulty in being certain is relevant when it is accepted that this is only after the issues have been subject to exhaustive inquiry, well after the Calderbank offer was made. That is relevant in assessing the situation that faced BHPL at the time the Calderbank offer was made.
296. I am also concerned that, despite the detailed explanation of the Calderbank offer in the document attached to the letter of 29 August 2014, the time allowed for its acceptance was very short. As I said in Financial Integrity Group Pty Ltd v Farmer (No 4) [2014] ACTSC 145 at [29], of an offer open for 14 days:
The time allowed for a response was fourteen days. That is a usual period of time that is commonly permitted. A more limited time, such as four days, may result in the court concluding that there is no realistic opportunity to assess it as in Collex Pty Ltd v Roads and Traffic Authority (NSW) [2007] NSWLEC 433; (2007) 154 LGERA 95 at 103; [46]. I consider the period for which the offer of compromise was open for acceptance was reasonable.
297. As I pointed out in Hillman v Box (No 5) [2014] ACTSC 150 at [42], periods of five, seven and even 10 days can be considered too short, depending on the circumstances.
298. While the letter was sent 13 working days prior to the commencement of the trial and, therefore, at a stage where the parties can be expected to be not only familiar with the issues, but have assessed the relative strengths of the case each had to put and what would be put against it and likely to know the costs incurred to that date and to be incurred at trial, the complexity of the costs issues which were critical in the case for a special costs order put by TTC/Leda is very significant.
299. I accept that in the particular circumstances of this case, the complexity of the costs issues as at August 2014 and now the uncertainties of the results of an assessment of the costs by reference to the relevant scales in the light of the very short period for which the offer was open means that I do not find that it was unreasonable for BHPL not to have accepted the offer made by TTC/Leda.
301. The assessment of costs under Div 2.17.5 of the Court Procedures Rules will be a complex matter. I can foresee that there may be some guidance that will be needed by the Registrar or other officer who conducts the assessment but it does not seem to me that this can be done hypothetically.
302. I have rejected the submission of BHPL that the issues decided in favour of TTC/Leda in the Counterclaim proceedings and the Third Party proceedings were "largely minor issues" and I reject the contention that "the vast majority of the substantive issues were decided in favour of BHPL." That was simply not so.
303. For example, to describe the finding that the alleged representations of Mr Lord, Mr Cooper and Mr McCann were "minor issues" shows a disturbingly distorted view of "minor" when those alleged representations were, in reality, the whole basis of the claim against TTC. The only other basis of that claim was the alleged misrepresentations of Mr Beirne and, as I have noted, BHPL did not even try to show how those statements could have rendered TTC liable.
304. Similarly, while I found that the assignment of the Sublease may have required a disclosure statement under the Leases Act to be prepared, it did not result in any liability to either Leda or TTC nor to negate any claim TTC made. It was, in effect, irrelevant to the proceedings.
305. It is clear that, so far as work was done for TTC on the Counterclaim, it should be recovered. I accept that, as Higgins J held in GBT Corporation Pty Ltd v Scott (1994) 116 FLR 266 at 267, where counsel appears for two litigants, even where they may have somewhat different interests, only one fee is allowed for each item of work, notwithstanding that it is completed for both.
306. BHPL referred also on this point to Ex parte McCay; Re Consolidated Press Ltd [1936] NSWStRp 41; (1936) 36 SR (NSW) 592. That case, however, involved the situation where contempt applications were brought by two persons against the same publisher. The Court held there was "no possible cleavage" between the two applications which arose out of the same paragraph of the publication and so the issues were identical. Thus, only one set of costs of the hearing were allowed, but that was limited to the period after the grant of the rule nisi up to which each party was allowed its costs.
307. In this case, there were different issues - the liability of TTC for any misrepresentations by Mr Beirne raised different issues to those that such liability raised for Leda and vice versa for any misrepresentations by Messrs Cooper, Lord or McCann. Much of the issues about the developments and the operation of BHPL's business were, relevantly identical for both TTC and Leda, but there were timing issues (e.g. about when the Coles travelator worked or did not).
308. Thus, the Court in Ex parte McCay; Re Consolidated Press Ltd accepted that there were two sets of costs up to the granting of the rule nisi but because of unanimity of issue thereafter, only effectively one set of costs (each applicant receiving half of the costs of the hearing). That ruling accepts, as I do, that there are circumstances where a proceeding with great similarity justifies two sets of costs.
309. On the other hand, that was a different case for, unlike this case, there was in that case separate representation. In this case, that was not the situation and clearly counsel and solicitor cannot charge double for the same work, just because there were two clients.
310. BHPL also referred to York v Green (1903) 19 WN (NSW) 309, in which each of the two defendants separately moved the Court both seeking to dismiss the plaintiff's claim and, though their interests in the proceedings were adverse so that separate representation was otherwise inevitable, on the motions there was no dispute so each party was awarded half costs. The situation there bears no real analogy to this situation noting, again, that there was here only one legal representative for the plaintiff and third party.
311. Finally, BHPL referred to Van Eeden v Henry [2005] NSWCA 14; 52 NSWLR 301 which was a claim arising out of a motor vehicle collision between two cars, the drivers of which sued each other. The matters were complicated because of the intervention of compulsory third party insurers. Spigelman CJ, with whom Sheller and McColl JJA agreed, said at 307; [64]:
A court should exercise the discretion to award costs so as to create an incentive to ensure that only one set of legal representatives are appointed to represent an individual party who appears in a dual capacity as a plaintiff and a defendant, whether in separate proceedings or in proceedings involving a cross-claim. There will be cases where dual representation is appropriate. A party should seek the leave of the court in advance to be separately represented and, if leave is granted, full costs will generally be awarded.
312. In this case, there was no separate representation and so no leave was sought nor necessary.
313. Because of the particular and, perhaps, somewhat peculiar circumstances, this case is of no assistance here.
314. In my view, TTC will be able to recover most of its costs on the Counterclaim for it succeeded on the relevant issues raised against it and, insofar as some of those issues were also raised in the Third Party Claim, the majority were found in favour of Leda and so there is no reason to deprive TTC of its costs for the work done for it, even if also done for Leda, so far as TTC and Leda succeeded on the issue. Clearly, there cannot be two amounts of costs for the same work, but TTC should not be deprived of its costs for succeeding on an issue just because the same issue was raised in the Third Party Claim where Leda was ultimately unsuccessful, but not on all issues and not on many where TTC was successful on the counterclaim.
315. That will require a careful exercise of judgement in the assessment, but I am confident that it can be achieved. It may be that TTC would, in some circumstances, receive half its costs of the work done for it in the circumstances described.
316. Insofar as BHPL seeks an order that there be "one set of costs", that is not possible, for there are different costs orders in the different proceedings. The costs assessment will have to discriminate between them but, of course, not result in effectively allowing two sets of costs for the same work.
317. On 28 and 29 January 2015, senior counsel for BHPL was unable to attend as he was unwell. Junior counsel did not attend and BHPL was represented by its solicitor. I reserved the costs of those days.
318. On 30 September 2014, the proceedings were adjourned without a substantive hearing. This was occasioned because a witness for BHPL, Mr David Mackennal, was, it was decided by BHPL, would not be called. That decision was apparently made on the weekend but not communicated until 6:00pm on Monday, 29 September 2014, so that arrangements which had been made for his cross-examination became irrelevant at late notice and alternative arrangements for other witnesses could not be made. I also reserved the question of the costs.
319. TTC/Leda seek their costs thrown away for these three days.
320. In my view, the costs thrown away by TTC/Leda by the adjournment on 30 September 2014, occasioned by the decision of BHPL not to call Mr Mackennal and not communicating that in a timely manner, should be paid by BHPL.
321. The question of the adjournments on 28 and 29 January 2015 is more complicated. The authorities do not speak with one voice on the issue of costs thrown away occasioned by illness of judge, witness or counsel.
322. As a starting point, some principles can be divined from the approach courts take to the costs of an aborted trial. Thus, in Electrolytic Zinc Co of Australasia Ltd v Cieslak [1969] TASStRp 1; [1969] Tas SR 50 at 55, the Full Court said:
If a trial proves abortive for a reason beyond the control of the parties and not due to the fault of either of them, that in our view is (unfortunately) an accident of litigation of which both parties run the risk until the litigation is decided. When it is decided, we think the ordinary rule should apply - the loser should pay, in the absence of circumstances indicating some other result.
323. To a similar effect was what fell from Keane JA in Queensland v Brooks & McCabe [2006] QCA 523 at [5], where a hearing had to be vacated because of the illness of one of the judges on the Court of Appeal:
It is true that neither party was responsible for the circumstances which led to the vacation of the first hearing. But that is no reason to deny the successful party costs necessarily incurred by it in relation to the determination of the appeal in its favour. There is no principle of law that a successful party should recover only those costs which it has incurred by reason of the default of the other party.
324. Some older authorities take a rather different approach. Thus, in Pell v Linnell (1868) LR 3 CP 441 at 443, the Court of Common Pleas held that, where a trial was suspended by "act of God", that is by no fault of a party, then there should be no order as to costs. That approach was followed in Earp Woolcock Beveridge & Co Ltd v Gordon [1927] NSWStRp 64; (1927) 44 WN (NSW) 123.
325. Nevertheless, costs orders have been made against parties who have secured adjournments, even where they did not act unreasonably. In Business in Focus (Aust) Pty Ltd v Begun Property Pty Ltd [2006] FCA 264, an adjournment was sought because the applicants had to change their solicitors as a result of "inactivity by their former solicitors", resulting in "associated complications" which would result in "a very real prejudice to them" if they were forced to proceed. The adjournment was granted but they were ordered to pay the costs. This is, perhaps, an unremarkable example of the payments of costs where an indulgence is granted to a party.
326. The Court relied heavily on what was said by the High Court in Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1996) 189 CLR 146. That reliance would now be moderated following the decision of the High Court in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175, though this would probably not affect the order for costs if the adjournment were still granted.
327. In R & R Industries (Australia) Pty Ltd v Marbletrend Pty Ltd [2010] FCA 1311, a trial had to be vacated because the applicant's solicitor had been rendered quite seriously ill and his treatment prevented him from properly preparing for trial. The solicitor was a sole practitioner with only a single employee. Again, the trial was adjourned but the applicant was ordered to pay the costs thrown away by reason of the adjournment.
328. On the other hand, in Alstom Power Ltd v Yokogawa Australia Pty Ltd (No 4) [2010] SASC 109, senior counsel for the defendants was, on medical advice, unable to continue with the proceedings. The trial had to be adjourned for at least eight weeks. The Court (at [11]), considered that there was no default by the defendants, and that the adjournment was "caused by one of the many exigencies which may affect the smooth running of a trial". It was expressly found that the complexity meant that it would be "unreasonable ... to continue with one counsel unassisted by a second counsel".
329. The Court referred to the principle that "a party who seeks a dispensation, indulgence or favour of the court is, as a general rule, ordered to pay the other party's costs of the application" and then continued (at [13]-[14]):
[13] ... I do not consider that I was granting an indulgence to the defendants. I was merely endeavouring to ensure that, in the unfortunate circumstances which had happened, the defendants would not be unduly prejudiced in the conduct of their case. If the indulgence granted to the defendants were a result of the defendants' default then the case might well be different.
[14] In all the circumstances I refuse the plaintiff's application [for its costs thrown away to be paid by the defendant]. The costs of the adjournment incurred by both sides, unfortunate as that may be, are a regrettable but necessary incident of this trial.
330. A modification of that approach was adopted in Sandvik Mining and Construction Australia Pty Ltd v Dempsey Australia Pty Ltd [2012] QSC 102, where an adjournment of a six week trial was also granted five days before it was listed to commence because senior counsel became ill. It was considered "unreasonable to expect junior counsel for the defendants to run the matter alone".
331. In that case, the plaintiff vigorously opposed the adjournment but then submitted that no order be made as to costs, while the defendant sought an order that the costs thrown away by the adjournment be costs in the cause.
While the defendants themselves were in no way to blame for the need for an adjournment, the necessity for an adjournment does come from their side of the record. Costs thrown away on a six week trial are potentially very significant. The need for the adjournment in no way comes from the plaintiff. Even if the plaintiff is not successful at the end of the trial, there is no good reason why it should pay the costs thrown away because of this adjournment ... The plaintiff however has not asked for its costs, it has asked that there be no order as to costs of the adjournment. In effect that will mean the parties bear their own costs thrown away by the adjournment. In the circumstances it seems to me that it is a more just order than that sought by the defendants.
333. In Zuecker v Bruggmann [2016] QSC 115, an elderly litigant in person was the defendant and became ill resulting in the adjournment of the trial. While there were suggestions that the illness was a convenience which impacted when it suited, that suggestion was rejected by the trial judge who, however, followed what Keane JA had said in Queensland v Brooks & McCabe, quoted above (at [323]) and ordered that the costs of the plaintiff thrown away by the adjournment be the plaintiff's costs in the proceedings.
334. Finally, in Meadows v Vance [2016] FCCA 1814, the trial had to be adjourned when counsel for the applicant had to attend for urgent medical tests. The case, listed for resumption of an adjourned hearing for 1 and 2 December 2015, had to be adjourned to 15 December 2015. The Court considered (at [144]) that the parties knew on 1 December 2015 that the proceedings would not proceed on 2 December 2015 at that time. Accordingly, the Court ordered that the costs thrown away on 1 December 2015 should be paid by the applicant but not for 2 December 2015.
335. There is, on these authorities, no clear line of principle, save that it is not necessary for there to be a default or misconduct on the part of a party before that party should bear the costs thrown away occasioned by an adjournment it or its lawyers have caused.
336. In this case, senior counsel was supported by junior counsel who did take an active part in the proceedings and conducted a significant part of the cross-examination. It seems to me that there was no real reason why the proceedings could not have continued on 29 January 2015 with junior counsel, though I do not consider that would have been reasonable on 28 January 2015.
337. Having considered the authorities carefully and the approach taken by them, I am of the view that there should be no order for costs thrown away in respect of 28 January 2015 but that BHPL should pay TTC's costs thrown away for 29 January 2015 but, to make it clear, BHPL should not recover from Leda any costs in respect of 29 January 2015.
338. In short, neither party bore any responsibility for the adjournment on 28 January 2015, but BHPL should have been able to proceed the next day. Because of the different orders for costs, it is not possible to make a simple order that the costs of 28 January 2015 be part of the ordinary costs of the proceedings. I do not consider that either BHPL or Leda should bear any costs of any other party of 29 January 2015 in respect of the Third Party proceedings because of the partial success of both, but that TTC, because it was entirely successful, should recover its costs thrown away for the second adjourned day.
339. The costs have been very complex in this case. I do not propose to disturb the orders I have already made; as will be seen from these reasons, they are justified.
340. I will, however, make a declaration as to the costs of the Claim by TTC.
341. I will make orders as to the costs of the other matters in these reasons in accordance with them.
I certify that the preceding three hundred and forty-one [341] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Refshauge.
Tuggeranong Town Centre Pty Limited
Brenda Hungerford Pty Limited
(1908) 6 CLR 469
(1990) 20 NSWLR 300
(1928) 41 CLR 532
(1997) 141 FLR 364
(1983) 152 CLR 570
(1994) 116 FLR 266
(1986) 19 IR 40
(1984) 6 FCR 496
(1995) 129 ALR 372
(1993) 113 FLR 422
(1988) 96 FLR 145
(1994) 52 FCR 201
(1971) 18 FLR 184
(1996) 70 FCR 236
(1995) 184 CLR 301
(1989) 17 NSWLR 267
(1996) 189 CLR 146
(1921) 29 CLR 257
(1996) 141 ALR 736
(1993) 42 FCR 97
(1987) 89 FLR 356
(1981) 148 CLR 150
(1989) 21 FCR 467
(1981) 56 FLR 5
(1976) 137 CLR 1
(1987) 164 CLR 513
(1961) 105 CLR 602
(1989) 167 CLR 45
(1994) 47 FCR 300
(2007) 163 FCR 62
(2008) 166 FCR 415
(2005) 13 VR 435
(2007) 154 LGERA 95