FEDERAL COURT OF AUSTRALIA

All Services Australia Pty Ltd v Telstra Corp Ltd [2000] FCA 375

COSTS Whether delay in pleading case warrants payment of costs, the subject of order, prior to the conclusion of proceedings.

Trade Practices Act 1974 (Cth) s 52

Life Airbag Company of Australia Pty Ltd v Life Airbag Company (NZ) Ltd (Branson J 22 May 1998 unreported) referred to

Harris v Cigna Insurance Australia Ltd (1995) ATPR 41-445 referred to

Batten v CTMS Ltd [1999] FCA 1576 discussed

McKellar v Container Terminal Management Services Limited [1999] FCA 1639 referred to

ALL SERVICES AUSTRALIA PTY LIMITED v TELSTRA CORPORATION LIMITED

QG 134 of 1998

KIEFEL J

BRISBANE

28 MARCH 2000

THE COURT ORDERS THAT:

1. The motion be dismissed.

2. The respondnet pay the Applicant’s costs of the motion.

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

REASONS FOR JUDGMENT

1                     On 17 December 1999, I made an order that the applicant (“ASA”) pay the costs of the respondent (“Telstra”) with respect to the directions hearing that day; reserving the question whether those costs should be taxed and paid forthwith. Telstra at that time raised the question of orders for costs which had been made in previous directions hearings and indicated that it would seek an order that those costs also be taxed and paid forthwith.

2                     The application in these proceedings was filed on 23 October 1998 and the matter first came before me on 11 December 1998, at which time I gave directions for the filing of an amended application and statement of claim by 1 February 1999, and for discovery and inspection of documents by 9 April 1999. I referred at that directions hearing to the need to particularise damage - a matter which is often absent in claims under s 52 Trade Practices Act 1974 (Cth). ASA was ordered to pay Telstra’s costs thrown away by the amendment, but the costs of the directions hearing otherwise were to be costs in the proceedings. In clarifying its motion, Telstra seeks only a further order that the costs order made in its favour be taxed and paid forthwith. It does not seek to vary the second order.

3                     A later memorandum of fees from ASA’s expert accountant shows that it did, in January 1999 put in train the obtaining of expert evidence with respect to loss and damage. In its case, these relate largely to hypothetical profits and I think it may be accepted that their estimation is entirely straight forward. It would seem that at about the same time, in February and March 1999, ASA was telling Telstra that it would soon be in a position to forward particulars of damage. That was, to say the least, rather optimistic.

4                     On 15 April 1999, the Deputy District Registrar made a fresh set of directions, by consent, for the close of pleadings, discovery and inspection, and mediation. The basis for the fresh set of directions appears to have been that ASA had filed a further amended statement of claim on 12 April 1999. One of the directions acknowledged that this had been done. The parties, in their consent orders did not however address the need for particulars of damage. It was agreed that ASA was to pay Telstra’s costs thrown away by the further amendments and otherwise the parties’ costs were to be in the proceedings. Again, Telstra does not seek to vary the latter order but seeks the further orders with respect to the order already made in its favour.

5                     On 6 October 1999 and 20 October 1999, it is said that the Deputy District Registrar conducted two case review conferences. It would seem to me that at least by this time it had become apparent that the pleadings would not be closed until particulars of damage were obtained. On each occasion orders were said to have been made, by consent, that ASA file its particulars of damage - on the first occasion by 20 October and on the second by 10 November. ASA and the second respondent to the cross-claim were, again by consent, to pay the costs of the first case review conference; but on the second the parties were apparently agreed that they should be costs in the cause. Telstra seeks to vary that latter order. The further hearing of case review by conference scheduled for 24 November was adjourned. No order for costs was made

6                     It was pointed out in submissions that some delay was encountered by amendments to substantive pleas in the statement of claim and that these are not even concluded. It would seem that ASA has foreshadowed a plea of fraud and breach of fiduciary duty but I am not in a position to assess these claims nor whether the lateness in their plea is explicable. For the purposes of this motion I put these matters to one side.

7                     The principal complaint on behalf of Telstra, it seemed to me, was the time taken to provide particulars of loss and damage. It points to the fact that ASA’s case was not properly constituted until that was done, in January 2000. It also seeks to widen its claim to other orders for costs which were connected with substantive amendments. No submissions are, however, made concerning the need for the amendments or how they may have reflected upon the claim as originally pleaded. I take it that it is not suggested that the amendments were such as to indicate that ASA did not really know the nature of the claim it sought to bring, or that its claim was, save with respect to the omission of loss and damage, significantly deficient. This may be contrasted with the position in other cases, to which I shall later refer.

8                     With respect to the particulars of loss and damage, the applicant’s expert was seeking further information between January and November 1999 except for a unexplained gap of two months. As I have earlier said, it may be accepted that the calculation of loss was not entirely straight forward. Two matters, however, particularly delayed the completion of the draft report which was available to ASA’s present solicitors in July 1999. In the first place, ASA did not, or was unable to, pay the expert’s fees. Payment of them was arranged only at the time that the motion for strike out was brought in December 1999. It was also said that ASA’s former solicitors refused to release their file until sometime shortly after October 1999, but it is not clear to me what this has to do with the completion of the claim for damages.

9                     In summary, this action concerned two sets of costs thrown away on amendments to their substantive claim; three sets of orders on case review conference and the further order made on the motion to strike out on 17 December 1999.

10                  I would not be minded to vary the order made on the second case review conference, nor that with respect to the adjournment of the third. At the second conference Telstra consented to orders that costs be in the cause and it has not been explained why that agreed position should be changed. It was aware of ASA’s non-compliance to that point and if there was some other fact which influenced Telstra’s decision it was not adverted to. With respect to the conference on 24 November 1999, it was not suggested that any order was sought. This may be because of the shortness of the mention and because Telstra had only that morning filed its motion to strike out.

11                  The making of an order under O 62 r 3 is justified where a Court can conclude that a party in whose favour costs orders have been made to date should not be required to wait until the finalisation of the proceedings to obtain payment of them. This may be so where, through no fault of that party, there has been substantial delay in the proceedings, having the effect of substantially postponing a final determination in the matter. This most commonly arises where an applicant has attempted a number of versions of the statement of claim with the result that additional directions hearings were necessary, which should not have been; interlocutory applications had to be brought; and, moreover, substantial delays were incurred in the attempt to plead a case: see Life Airbag Company of Australia Pty Ltd v Life Airbag Company (NZ) Ltd (Branson J 22 May 1999 unreported); Harris v Signa Insurance Australia Ltd (1995) ATPR 41-445; Batten v CTMS Ltd (1999) FCA 1576 and generally McKellar v Container Terminal Management Services Limited (1999) FCA 1639. In Batten, the effect of the delay was that the matter could not advance, since the respondent could not be required to plead to the statement of claim in its earlier forms. That there has been some delay in a proceeding does not itself suggest an order for payment, in the interim, of costs is appropriate.

12                  Telstra points to the overall delay which includes the two earlier amendments of the substantial claim. It is not, however, every occurrence of delay which will be relevant; rather it will be the effect upon the proceeding and the position in which the other party is then placed. As I have said, there is nothing to indicate that the early amendments meant that the proceedings were not properly pleaded in the first place and Telstra was in fact able to file a defence in June. The question of ASA’s loss and damage was, in a sense, a discrete matter standing apart from the factual matrix of the case. The real delay occurred from the middle of last year through to 14 January 2000 because ASA did not provide the necessary particulars of its loss and damage. I am however unpersuaded that, in what is going to be a fairly complex action, the delay in Telstra taxing its costs will amount to much. To hold otherwise would seem to me to be effecting some form of punishment on ASA. It is also to be recalled that, subject to one qualification I add below, Telstra is said to have consented to orders at the case review conferences of 6 and 20 October 1999, and that it was only until ASA’s failure to provide by the third scheduled conference date that it took action. Telstra was, I think, justified in bringing the matter back before the Court for final orders with respect to the plea of loss and damage, but by itself that does not justify the making of an order under O 62 r 3. (The qualification I mention is that the copy of the order for costs said to have been made on 6 October 1999 is not signed and there is no such order appearing on the Court file. A notation appears that the date is vacated. It is not necessary to resolve these matters).

13                  The motion will be dismissed.

Associate:

Dated: 28 March 2000