on appeal from a judge of the federal court of australia

THE COURT ORDERS THAT:

1.              The respondents pay the appellantÕs costs of the appeal.

2.              The costs order of Spender J of 16 January 1998 be set aside but only in so far as that order applies to the costs of the issues raised in paragraphs 1, 2, 3, 4, 5, 7 and 8 of the notice of motion filed 5 December 1997.

3.              The respondents pay the appellantÕs costs of and incidental to the said notice of motion in so far as it raised for determination the issues in paragraphs 1, 2, 3, 4, 5, 7 and 8.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

OÕLOUGHLIN AND DRUMMOND JJ:

When the Court delivered judgment on 20 November last in favour of the appellant, the question of what should be done about the costs of the appeal was adjourned to give the parties the opportunity of making written submissions.

The respondents submit that there should be no order in respect of the costs of the appeal, firstly, because the matter came before the Court in the form of an application by the appellant for leave to appeal out of time, an application said to have been allowed Òas a matter of indulgenceÓ, and, secondly, because leave having been granted, the appeal only succeeded on a point not raised in the draft notice of appeal filed with the application for leave.

The application for leave was granted against the background of an absence of objection by the respondents. The circumstances in which the appellant was allowed to argue the point on which it ultimately succeeded are set out at p 10 of the majority judgment: the respondents did not oppose the appellant raising this point on the hearing, a point clearly foreshadowed in the appellantÕs written outline distributed before the hearing commenced. The respondentsÕ acquiescence in the appeal being conducted as it was deprives their second submission, in respect of the costs of the appeal, of any substance.

The appellant, as the successful party, should have its costs of the appeal, in accordance with the general rule.

The parties in their written submissions have also raised the question of what is to be done about the order for costs made by the learned primary judge. Having dismissed the appellantÕs motion for, among other things, a declaration that the respondents were not entitled to commence the proceedings under Part IVA the Federal Court of Australia Act 1976 (Cth), the learned primary judge ordered that the costs of the motion be the respondentsÕ costs in the principal proceedings.

The respondents submit that this costs order should not be disturbed because the hearing of the motion involved a procedural step only and no order could have been made on the motion terminating the entire proceedings. The respondents further submit that, if the learned primary judge had found in favour of the appellant on the respondentsÕ motion, the respondents intended to apply for an order joining the eighteen identified class members as applicants in the proceedings, a course they intend to follow when the matter comes back on before the docket judge. The appellant submits that, in view of the majority decision on the appeal, the learned primary judgeÕs costs order cannot stand and that this Court should order that the respondents pay the appellantÕs costs of the respondentsÕ notice of motion or, alternatively, that those costs be the appellantÕs costs in the principal proceedings.

A proceeding commenced under Part IVA the Federal Court of Australia Act is a proceeding by and on behalf of the representative party with the super-added characteristic that it is also brought on behalf of the described group members. Where the Court determines that a proceeding commenced under Part IVA is not authorised by s 33C to be commenced as a representative proceeding or where it orders, under any of ss 33L, 33M or 33N, that a representative proceeding no longer continue under Part IVA, the effect of such a determination is to extinguish the representative aspect of the proceeding but to leave unaffected its character as a proceeding brought for the benefit of the representative party itself. The implication in each of ss 33L(b), 33M(c) and 33N(1) is that once an order terminating the representative character of a proceeding brought under Part IVA is made, that same proceeding continues, but as an action brought by and for the sole benefit of the representative party. What is implied in these provisions is expressly stated in s 33P(a). It follows (as the respondents submit) that their proceedings have not terminated despite the decision of this Court.

However, we accept the submission of the appellant that, in view of the majority decision, the learned primary judgeÕs order that the respondentsÕ costs of their motion on which they succeeded before him should be their costs in the principal proceedings cannot stand. The intention of this order plainly enough is that the respondents should have their costs of the motion if they succeeded in Òthe principal proceedingsÓ, ie, in what was then a representative proceeding, but not otherwise. The issues for determination by the learned primary judge were whether it was open to the respondents to commence the action under Part IVA and, if so, whether it was appropriate for it to continue as a proceeding under that Part. The outcome of the appeal is that the appellant has been successful in reversing the primary judgeÕs determination in the respondentsÕ favour on these issues.

That the respondents may have intended (and may still intend) to seek joinder of the eighteen identified group members provides no ground for relieving them of the ordinary consequences, so far as costs are concerned, of persisting, ultimately unsuccessfully, in suing on behalf of a much larger group of persons.

We therefore consider that the appellant should have its costs of the respondentsÕ notice of motion filed 5 December 1997, in so far as the motion raised for determination questions as to the respondentsÕ entitlement to commence and to continue the proceedings as a representative proceeding.

Foster J having retired since judgment was delivered on 20 November last, and it having become impossible for the Court to dispose of the question of costs prior to his retirement, this judgment on costs is given, pursuant to s 14(3) the Federal Court of Australia Act, with

the consent of the parties.

Associate:                  

Dated:             17/12/98