Federal Court of Australia

Impiombato v BHP Group Limited (No 2) [2025] FCAFC 28

ORDERS

THE COURT ORDERS THAT:

1.    Order 1 of the orders of the Court made on 10 July 2024 in VID 649 of 2018 be set aside and replaced by the following order:

The Applicants pay the Respondent’s costs thrown away by reason of the amendments made pursuant to Order 1 of the orders of the Court made on 6 June 2024.

2.    Order 1 of the orders of the Court made on 19 July 2024 in VID 649 of 2018 be set aside and replaced by the following order:

The Applicants pay 50% of the Respondent’s costs of the Applicants’ interlocutory application dated 5 December 2023, as agreed or taxed.

3.    The Respondents pay 50% of the Appellant’s costs of the appeal, as agreed or taxed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BEACH AND O’BRYAN JJ:

Introduction

1    On 12 February 2025, the Full Court made orders and delivered reasons for judgment in Impiombato v BHP Group Limited [2025] FCAFC 9 (Appeal Reasons). The Appeal Reasons related to two appeals arising from two interlocutory judgments, each of which concerned the description of group members in the underlying representative proceeding.

2    The first appeal (VID 989 of 2023), brought by the applicants in the underlying proceeding (applicants), was an appeal from orders of the Court made on 3 November 2023 refusing to approve the form of op-out notices proposed by the applicants, reasons for which were published in Impiombato v BHP Group Limited (No 4) [2023] FCA 1354. That appeal was dismissed and the applicants were ordered to pay the costs of the appeal incurred by the respondent in the underlying proceeding (BHP).

3    These reasons concern the orders as to costs to be made in the second appeal (VID 553 of 2024). The second appeal was brought by BHP from orders of the Court made on 6 June 2024 granting the applicants leave to amend the originating application and statement of claim and ordering that the amendments take effect from the date the claim was filed, reasons for which were published in Impiombato v BHP Group Limited (No 5) [2024] FCA 591 (Impiombato No 5). That appeal was allowed in part.

4    By way of further background, on 5 December 2023 the applicants filed an interlocutory application (which will be referred to as the amendment application) to amend their originating application and statement of claim in order to amend the group definition (and thereby include new group members) and to include claims in respect of the acquisition of ordinary shares in BHP Ltd and BHP Plc on trading platforms or exchanges other than the ASX, LSE and JSE, and also through off-market trades (and thereby include new claims brought on behalf of existing and new group members). The applicants also sought an order that the amendments take effect from the commencement of the proceeding on 31 May 2018.

5    BHP did not oppose the grant of leave to amend, but it did oppose the making of the “relate back” order (that the amendments take effect on and from the commencement of the proceeding).

6    The primary judge granted the applicants leave to amend and also made the “relate back” order sought by the applicants, which are reflected in orders 1 and 2 made by his Honour on 6 June 2024. On the question of costs, his Honour ordered:

(a)    on 10 July 2024, that the applicants pay BHP’s costs thrown away by reason of the amendments made pursuant to orders 1 and 2 of the orders made on 6 June 2024; and

(b)    on 19 July 2024, that BHP pay the applicants’ costs of and incidental to the amendment application.

7    BHP’s appeal raised a relatively narrow issue: whether there was error in the discretionary judgment of the primary judge that the amendments to the originating application and statement of claim should take effect from the commencement of the proceeding. In the Appeal Reasons, it was concluded that the decision of the primary judge was affected by relevant error and the discretion concerning the date from which the amendments would take effect was re-exercised. The order of the primary judge stipulating that all of the amendments take effect from the commencement of the proceeding was set aside and replaced by orders to the effect that:

(a)    the amendments made to the description of group members (which are referred to herein as the group definition amendments for convenience) take effect on and from the date that the applicants filed their application for leave to amend, being 5 December 2023; and

(b)    all other amendments made to the statement of claim (which are referred to herein as the additional claims amendments for convenience) take effect on and from the commencement of the proceeding.

8    That outcome necessitates reconsideration of the orders of the primary judge with respect to the costs of the amendment application and an assessment of the appropriate orders with respect to the costs of the appeal. The parties were given an opportunity to file written submissions with respect to the question of costs, with that question to be determined on the papers. These reasons concern that question.

9    Both parties filed written submissions on 26 February 2025. In short, BHP contends that the applicants should bear the costs of the amendment application before the primary judge, as well as the costs of the appeal. The applicants contend that, in light of the mixed outcome of the appeal, the appropriate orders are that:

(a)    the applicants pay BHP’s costs of the amendment application before the primary judge and on the appeal in respect of the group definition amendments;

(b)    BHP pay the applicants’ costs of the amendment application before the primary judge and on the appeal in respect of the additional claims amendments; and

(c)    the applicants pay BHP’s costs thrown away by reason of the amendments.

10    For the reasons that follow, we consider that the appropriate orders are that:

(a)    the applicants pay 50% of BHP’s costs of the amendment application before the primary judge and of the appeal; and

(b)    the applicants pay BHP’s costs thrown away by reason of the amendments.

11    These reasons assume familiarity with Impiombato No 5 and the Appeal Reasons, and repetition will be avoided as far as possible.

Applicable principles

12    Section 43 of the Federal Court of Australia Act 1976 (Cth) gives the court a broad discretion in awarding costs. The discretion must be exercised judicially, by reference only to considerations relevant to its exercise and upon facts connected with or leading up to the litigation: Northern Territory v Sangare (2019) 265 CLR 164 (Sangare) at [24].

13    While not a rigid rule, usually the discretion to award costs is exercised in favour of a successful party: Oshlack v Richmond River Council (1998) 193 CLR 72 at [35] per Gaudron and Gummow JJ, [66]-[67] per McHugh J and [134] per Kirby J; Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52 at [25] per Gleeson CJ, Gummow, Hayne and Crennan JJ; Sangare at [25]. A successful party may be deprived of a proportion of its costs, or even required to pay costs to the other party, if the successful party succeeded only upon a portion of its claim, or failed on issues that were not reasonably pursued, or where the result of the litigation might be described as mixed: Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at [11]ff; Queensland North Australia Pty Ltd v Takeovers Panel (No 2) (2015) 236 FCR 370 at [11]. However, the mere fact that a court does not accept all of a successful party’s arguments does not make it appropriate to apportion costs on an issue by issue basis: Australian Trade Commission v Disktravel [2000] FCA 62 at [3]-[4]; The State of Victoria v Sportsbet Pty Ltd (No 2) [2012] FCAFC 174 at [8]; Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53; 327 ALR 192 at [6] . Where an appellant is successful on appeal, the court would ordinarily order the unsuccessful respondent to pay the costs of the appeal and the proceeding at first instance unless there are special circumstances that warrant another order: Commissioner of Taxation v AusNet Transmission Group Pty Ltd (No 2) [2015] FCAFC 124 at [10].

BHP’s submissions

14    BHP submitted that its appeal was allowed and, as the successful party, it is prima facie entitled to an award of costs in its favour. It submitted that it only opposed the application to amend insofar as the applicants sought an order that the amendments relate back to the commencement of the proceeding, and that the core of the dispute before the primary judge and on appeal was the date on which the group definition amendments would take effect. BHP submitted that it succeeded on the principal issue in dispute between the parties and therefore should obtain its costs as the successful party.

15    BHP further submitted that the circumstances of this case do not justify apportioning the costs of the application or the appeal on an issues basis. BHP argued that this is not a case in which it unreasonably raised a discrete, substantial issue upon which it failed. BHP also submitted that the nature of the issues in dispute make apportionment impractical as it is not possible to separate the costs incurred in connection with the relation-back arguments in respect of the group definition amendments on the one hand and the additional claims amendments on the other.

Applicants’ submissions

16    The applicants submitted that there were two distinct issues on the appeal and BHP was successful on one of the issues (being the relation-back arguments in respect of the group definition amendments) and the applicants were successful on the other (being the relation-back arguments in respect of the additional claims amendments). The applicants argued that the two issues were distinct and separable in that the two issues: concerned distinct discretionary powers of the court and applicable legal principles; were the subject of separate grounds of appeal; were dealt with separately in the parties’ submissions; and were dealt with separately by both the primary judge and the Full Court (and the outcome of one issue was not determinative of the other). The applicants also submitted that, although BHP succeeded on the first issue, the Court rejected several discrete grounds of its appeal, and BHP “stepped back” from several other grounds during the course of the hearing of the appeal (referring to Appeal Reasons at [176] and [190]).

17    In light of the mixed outcome of the appeal, the applicants submitted that it is appropriate that the separate issues be the subject of separate costs orders, with the unsuccessful party on each issue paying the other party’s costs in respect of that issue. In the alternative, the applicant submitted that the appropriate order is that the parties bear their own costs, having regard to: the parties’ mixed success on the two primary issues; the time that was dedicated to both issues during the course of the hearing; and the fact that BHP was unsuccessful on several discrete grounds of its appeal.

Consideration

18    As explained in the Appeal Reasons, the amendment application involved two categories of amendments: the first category consisted of amendments to the group definition and the second category consisted of amendments to the scope of the claims made. Despite that, the parties’ arguments before the primary judge and on the appeal focused principally on the first category of amendments, being the group definition amendments. Prior to the hearing of the appeal, neither of the parties submitted that separate legal principles govern the group definition amendments and the additional claims amendments and that the Court should consider whether the two categories of amendment ought to take effect from different dates. That outcome, which the Full Court ultimately considered appropriate, was raised by the Full Court in the course of argument on the appeal.

19    It follows that we do not fully accept the applicants’ contention that there were two distinct issues in contest between the parties and that BHP was successful in its arguments concerning the group definition amendments, while the applicants were successful in their arguments concerning the additional claims amendments. That does not reflect how the amendment application was argued before either the primary judge or on appeal.

20    The award of costs ought to take account of the following factors. First, the parties were required to come to Court because the applicants wished to amend their originating application and statement of claim. In that sense, the applicants were responsible for BHP having to consider and respond to the amendment application. Second, BHP did not oppose the amendments and only opposed the application to relate the amendments back to the commencement of the proceeding. Third, BHP was successful in its opposition to the group definition amendments having effect from the commencement of the proceeding, although it was ultimately unsuccessful in its opposition in respect of the additional claims amendments. Fourth, while both parties had a degree of success and failure on the questions of fact and law that were agitated on the amendment application, overall BHP was successful on the more significant questions, including the relevant principles to be applied in respect of the group definition amendments and the factual questions of mistake and prejudice.

21    Taking all of those considerations into account, we consider that the appropriate order is that the applicants pay 50% of BHP’s costs of the application before the primary judge and on the appeal. That order appropriately reflects the fact that BHP was predominantly successful, justifying an award of costs in its favour, but that the percentage of costs should be reduced to reflect the fact that BHP was not successful in its opposition to the additional claims amendments taking effect from the commencement of the proceeding.

22    As noted earlier, on 19 July 2024 the primary judge made an order that BHP pay the applicants’ costs of and incidental to the amendment application. It will be necessary to set that order aside and replace it with an order that the applicants pay 50% of BHP’s costs of the amendment application before the primary judge. A further order to the same effect will be made in respect of the costs of the appeal.

23    As also noted earlier, on 10 July 2024 the primary judge made an order that the applicants pay BHP’s costs thrown away by reason of the amendments made pursuant to orders 1 and 2 of the orders of the primary judge made on 6 June 2024. That order remains appropriate, however it should be varied to reflect the fact that order 2 made by the primary judge on 6 June 2024 (concerning the date on which the amendments take effect) was set aside by the Full Court on 12 February 2025. For the sake of clarity, order 1 made by the primary judge on 10 July 2024 should be set aside and replaced by an order that the applicants pay BHP’s costs thrown away by reason of the amendments made pursuant to order 1 of the orders of the Court made on 6 June 2024.

Associate:

Dated:    14 March 2025

REASONS FOR JUDGMENT

LEE J:

24    Although, for reasons I have explained, I would have made different orders as to the substantive disposition of the second appeal, I agree the order as to costs proposed by Beach and O’Bryan JJ provides for a proper and just resolution of the issue as to costs (given the other orders made by the Full Court).

Associate:

Dated: 14 March 2025