Versace v Monte

REASONS FOR JUDGMENT 1 On 29 April 2002, I made declarations in this matter which included the following: "1. The respondents made representations that the first respondent ('Monte'), or one or more of the companies with which he is associated, including the second respondent ('Monte companies'): (i) was employed or engaged by Gianni Versace; (ii) had a business relationship with Gianni Versace, (iii) had a personal relationship with Gianni Versace; (iv) spoke and otherwise communicated with Gianni Versace, and the Court declares that each of those representations was: (a) false and untrue; and (b) misleading and/or likely to mislead, and deceptive and/or likely to deceive, contrary to section 52 of the Trade Practices Act 1974." 2 I also ordered that: "15. The respondents pay the applicants' costs in these proceedings including reserved costs. 16. The costs in order 15 above be taxed and paid forthwith." 3 I also granted an injunction to restrain the respondents from making the representations specified in order 1. 4 The trial was lengthy extending over ten days and my reasons for judgment were delivered on 8 March 2002 when the matter was stood over to allow for draft orders to be formulated by the applicants and served on the respondents. These were duly drawn up and sent to the respondents' solicitors in draft form on 22 March 2002. 5 The matter was re-listed before the Court on 10 April 2002 in relation to the form of orders which should be made. On that occasion I asked whether the applicants were seeking an indemnity order in relation to costs and counsel for the applicants, Mr Cobden, said that they were being sought on the "usual basis". 6 The draft orders sent on 22 March 2002 contained orders 1, 15 and 16 in the form referred to above. 7 On 24 April 2002, having had time to consider the draft orders, the solicitors for the respondents wrote to the applicants' solicitors in these terms: "RE: FRANK MONTE ats VERSACE SPA & ORS We refer to your proposed orders and the directions hearing before Mr Justice Tamberlin on 29 April next. Our clients agree to the proposed orders with the following exceptions:- A. Orders 1(i)(v) and 12 (a)(iv) on the grounds that these representations were not pleaded in the amended statement of claim ('ASC'). B. 6(a)-(f) on the grounds that these paragraphs refer to one or more of the Versace companies when the pleaded imputations in paragraph 27 of the ASC were directed only to the First Applicant that is to say Gianni Versace Spa. C. 13 on the grounds that whether the book was a work of fact was not pleaded and that the Court has jurisdiction only in respect of the imputations and representations concerning the Applicants and not the facts and matters referred to in the remainder of the book. D. The words after 14 (c)(iv) commencing with 'or any' and ending with the word 'above' on the grounds that the orders are directed to the specific statements and the words 'like effect' would be presumed to be incorporated depending on the nature of the statement." (Emphasis added) 8 When the matter next came before me, on 29 April 2002, there was no objection raised by the legal representatives of the respondents, as to the making of orders 15 and 16 in the above form. These orders had been foreshadowed in oral and written submissions made on behalf of the applicants at the close of the hearing on liability. In fact a search of the transcript shows that counsel for the respondents referred to the applicants' submissions in relation to these foreshadowed orders during the hearing on liability. There were no submissions made before me on 29 April 2002 in opposition to the costs orders proposed. 9 In terms, the letter of 24 April 2002 sent from the respondents' solicitors indicates that the respondents had agreed and given instructions to their solicitors to oppose only the specified matters, which did not include the costs orders. At that time the respondents had retained experienced legal representatives and the orders were made after ample opportunity had been given to the parties to be heard on the question as to the taxation and recovery of costs forthwith. 10 Initially the application now before me was made before another Judge of the Court, but upon the matter coming on for hearing, both parties agreed that it would be more appropriate for the application to be made before me, having regard to the duration and complexity of the issues canvassed at the original hearing.

taxation of costs forthwith 16 Order 62 r 3(3) of the Federal Court Rules ("FCR") states: "(3) An order for costs of an interlocutory proceeding shall not, unless the Court otherwise orders, entitle a party to have a bill of costs taxed until the principal proceeding in which the interlocutory order was made is concluded or further order." 17 The general rule therefore is that costs should not be taxed forthwith unless there is a specific order requiring such taxation. 18 The making of an order that costs be taxed forthwith is discretionary and the Court's discretion is a broad one. It should be exercised in favour of a party who establishes that the demands of justice require that there be a departure from what is the general practice envisaged by the rule, namely that an order for costs in relation to an interlocutory determination will not entitle the party to have a bill of cost taxed until the principle proceeding in which the interlocutory order was made is concluded: see McKellar v Container Terminal Management Services Ltd [1999] FCA 1639 and Sereika v Cardinal Financial Services Ltd [2001] FCA 687, and cases there cited. However it is also important to recognise that costs of a successful interlocutory hearing are part of the fruits of the interlocutory judgment which the party has obtained and the general principle is that parties should not, without sound reason, be kept from the benefits of a judgment. In my opinion, the present is an unusual case, in which the defences were so lacking in substance and the hardship to the applicants so sufficient that costs should be permitted to be taxed and recovered at this stage. 19 It was submitted for the respondents that the present case is not analogous to those decisions in which an order to pay costs forthwith were made because it is not one that involves complex litigation, nor does it involve pleadings which have been found to be without substance and which are vexatious or oppressive. However, the proceeding was complex. There were numerous defences raised, none of which were found to have any substance and there were substantial costs thrown away as a result of the respondents' revised evidence in relation to the authenticity of material originally said to have emanated from Gianni Versace. 20 As mentioned above the only evidence and basis upon which it is suggested that this order should be reconsidered and varied is that counsel for the respondents cannot recollect seeing order 16 when he looked at the draft orders presented to him. There is no suggestion, however, that the solicitor for the respondents did not see the order and nor is there any evidence that Mr Monte did not appreciate that order 16 was sought. The letter of 24 April 2002 expressly indicates that instructions had been taken by the solicitor in relation to the draft orders and that those instructions did not contain any reference to disputing in any way orders 15 and 16 of the draft orders which had been provided. There is no evidence that the respondents would have pursued a different course of action or that instructions would have been different if counsel for the respondents had considered the terms of the order. Prior to the orders being made there was no objection taken to the making of order 16. Nor was any submission to the contrary advanced to me at the hearing when the orders were made. At the time the orders were made by me there had been ample opportunity for the respondents to obtain considered advice from experienced legal advisers and formulate more detailed submissions. This was not done and no satisfactory explanation has been provided. 21 The evidence produced to me does not suggest that either the respondents or their solicitors were unaware of the provision of order 16 as to costs. Counsel for the respondents says that he does not recall seeing order 16. This can be accepted but he does not deny that the order was contained in the material placed before him for consideration. The statement by counsel for the respondents as to his non-recollection is not disputed. But it is not suggested that the respondents or their solicitors did not see or appreciate the nature or effect of the orders. The affidavit of Mr Bilinsky in support of this application simply asserts that counsel received the draft orders and did not recall seeing the order in question. 22 In the present case, every issue of significance in the proceeding has been found against the respondents. It was found that the first respondent had made false statements not only in his book and to the media but also to the Court in giving his evidence and asserting a relationship with Gianni Versace. It is apparent that the applicants' costs to date will be large and there is no reason established in my view for denying them recovery of costs incurred to date until after final determination of the proceedings. The evidence to which I was referred by Mr Cobden on the hearing indicates that the respondents are without substantial funds, and this means that the problem of recovery and hardship to the applicants will be compounded if they are unable to recover costs in respect of the liability issue at this stage. The hearing relating to damages is expected to take over four days and there must necessarily be incurred other substantial costs and expenses apart from the costs of the hearing on liability. 23 In view of these circumstances, I am not satisfied that any reason has been shown which would warrant the reopening or variation of order 16 in any way and I therefore refuse the application in relation to that aspect of the mater. I also consider that leave to appeal against order 16 should not be granted having regard to the matters referred to above. I consider that substantial injustice would be suffered by the applicants if they had to wait a further lengthy period for resolution of the quantum of damages.

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Judgment (8 paragraphs)

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