Viagogo AG v Australian Competition and Consumer Commission

1. The respondent is to pay the appellant's costs of the interlocutory application on the usual basis, to be agreed or taxed.
2. The appellant's application for indemnity costs is refused. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ABRAHAM J: 1 This judgment relates to the issue of costs arising from the grant of a temporary stay in relation to Order 7 of the primary judgment in this matter, Australian Competition and Consumer Commission v Viagogo AG (No 3) [2020] FCA 1423, pending resolution of the appeal therefrom: Viagogo AG v Australian Competition and Consumer [2021] FCA 175. 2 The appellant seeks its costs of the interlocutory application on an indemnity basis. It contended, in effect, that given the interaction between the appellant and respondent which resulted in the application having to be made, the respondent's conduct in the proceedings was unreasonable, as evidenced by the decision granting a temporary stay. The appellant also submitted that the position taken by the respondent during the hearing was, in some respects, inconsistent with that evinced prior to the application. The respondent, while accepting that costs should follow the event, objects to the grant of indemnity costs. It took issue with the appellant's characterisation of its conduct, and submitted, inter alia, that it was not unreasonable, let alone to the degree as to warrant such costs. 3 The principles regarding the award of costs are well established. Section 43 of the Federal Court of Australia Act 1976 (Cth) confers jurisdiction on the Court to award costs. Section 43 is a broad power, and the award of costs is discretionary: Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 234 CLR 52 at [25]; Gray v Richards (No 2) [2014] HCA 47 (2014) 89 ALJR 113 at [2]. That said, ordinarily, a successful party is entitled to an award of costs in its favour in the absence of special circumstances justifying some other order: see Ruddock v Vadarlis (No 2) [2001] FCA 1865; (2001) 115 FCR 229 at [11]; Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [67], [134]; Victoria v Sportsbet Pty Ltd (No 2) [2012] FCAFC 174 at [6]-[7]. Costs ordinarily follow the event and are awarded on a party-party basis unless there are particular or special circumstances which would warrant the Court making a special costs order, including an order that costs be assessed on an indemnity basis: Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 (Colgate-Palmolive) at 232-234. 4 In Colgate-Palmolive at 233 the Court, having referred to the principles, provided examples of the circumstances which may warrant the exercise of the discretion to award indemnity costs which include: evidence of a particular misconduct that causes loss of time to the court and the other parties; the fact that the proceedings were commenced for some ulterior motive; the fact the proceedings were commenced in willful disregard of known facts or clearly established law; the making of allegations that ought never to have been made, or the undue prolongation of a case by groundless contentions; an imprudent refusal of an offer to compromise; or an award of costs on an indemnity basis against a contemnor. The list was not intended to be exhaustive and nor are the categories of cases in which the discretion may be exercised to award indemnity costs closed. 5 The principles were recently summarised in Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 5) [2021] FCA 246, where Wigney J observed, inter alia, at [9]-[11]: [9]. The purpose of a costs order is to compensate the successful party, not to punish the unsuccessful one: King v Yurisich (No 2) [2007] FCAFC 51 at [19], citing Latoudis v Casey (1990) 170 CLR 534; Seven Network at [1099]. An award of indemnity costs is to "serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs": Hamod v New South Wales (2002) 188 ALR 659; [2002] FCAFC 97 at [20]; see also Kazal v Independent Commission Against Corruption and Ors (No 2) [2020] NSWSC 17 at [60]-[62]; Cirillo at [4]-[5]; Melbourne City Investments at [5]. [10]. The circumstances in which it may be found to be unreasonable for the successful party to be subjected to the expenditure of any costs are not fixed or closed, but have been found to include, relevantly: where "the applicant, properly advised, should have known that he had no chance of success" (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397 at 401; De Alwis v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 77 at [7]); where the moving party "persists in what should on proper consideration be seen to be a hopeless case" (J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (No 2) (1993) 46 IR 301 at 303); where the applicant's case was "always clearly foredoomed to fail" and "they ought to have known this to be so" (Smolle v Australian and New Zealand Banking Group Ltd (No 2) [2007] FCA 1967 at [25]); where an application is "wholly untenable and misconceived" (Henke v Carter [2002] FCA 492 at [22]); and where an applicant persists in prosecuting a proceeding without regard to the evidentiary difficulties in the case (Yates Property Corporation Pty Ltd v Boland (No 2) (1997) 147 ALR 685 at 693): see generally Melbourne City Investments at [5]; Seven Network at [1102]; Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 233. [11]. Two things should perhaps be noted about these descriptions of the types of cases in which an indemnity costs order may be warranted. First, they use expressions which suggest a high degree of certainty concerning the deficiencies in the losing party's case. It would appear not to be enough that the losing party's case was simply weak or tenuous. Second, and relatedly, the deficiencies must be sufficiently manifest and clear such that it can be inferred that the losing party would or should have appreciated them when the action was commenced or continued, at least if they had given proper consideration to, or been properly advised about, the merits of their case. 6 When regard is had to the facts of this case, there is no proper basis on which indemnity costs should be awarded. 7 At the heart of the appellant's submission, although not articulated as such, is the premise that it succeeded on obtaining a stay on the same material it had presented to the respondent. Therefore, the respondent's refusal to accept the material as sufficient resulting in the necessity to make an application, is unreasonable. That logic is not necessarily correct, and must plainly be fact specific. 8 The conduct of the proceedings was not so unreasonable as to warrant such an order. Rather, as recognised in the reasons granting a temporary stay, the evidence relied on by the appellant could have been more specific, and may not have been sufficient in other circumstances. There is also no basis to contend that the respondent's conduct in the hearing was inconsistent with its previous dealings with the appellant. 9 The respondent is to pay the appellant's costs of the interlocutory application on the usual basis, to be agreed or taxed. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Abraham.