FEDERAL COURT OF AUSTRALIA

J McPhee & Son (Aust) Pty Ltd v ACCC (No 2) [2000] FCA 754

COSTS – appeal – apportionment of costs – appellants partly successful as to quantum but unsuccessful on the majority of points raised

J McPHEE & SON (AUSTRALIA) PTY LIMITED & ORS v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

VG 162 of 1998

BLACK CJ, LEE & GOLDBERG JJ

8 JUNE 2000

MELBOURNE

THE COURT ORDERS THAT:

1.         The appellants pay 90% of the respondent’s costs of the appeal including reserved costs.

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

REASONS FOR JUDGMENT

THE COURT:

Introduction

1                     On 12 April 2000 the Court published its reasons for dismissing the appeal against the decision of Heerey J that the first appellant, J McPhee & Son (Australia) Pty Limited (“McPhee”), had engaged in conduct that involved contraventions of Pt IV (s 45) of the Trade Practices Act 1974 (Cth) (“the Act”) and that the second, third, fourth and fifth appellants, officers and employees of McPhee, were involved in those contraventions within the meaning of s 75B of the Act.  The appellants also appealed against his Honour’s order made on 27 March 1998 that McPhee pay pecuniary penalties totalling $3,750,000 and that the second, third, fourth and fifth appellants pay pecuniary penalties of, respectively, $100,000, $80,000, $60,000 and $15,000.  Each of the appellants, except the fifth appellant, appealed against the amount of the pecuniary penalties imposed.  In the reasons published on 12  April 2000 we determined that the appeal should be allowed in part and on 12 April 2000 we ordered that pars 1, 2, 3 and 4 of the order of Heerey J made on 27 March 1998 be set aside and that in lieu thereof it be ordered that the first, second, third, and fourth respondents pay the pecuniary penalties specified.  We gave the parties the opportunity to make written submissions on the issue of the costs of the appeal.

2                     No order was made by his Honour as to the findings of liability and the contraventions of the Act; the only order which was the subject of the appeal was the order for the payment of pecuniary penalties.  Nevertheless the appeal was conducted on the basis that there was a direct challenge to the finding of contraventions of the Act and most of the five day hearing was taken up with oral submissions on the issues of liability and the contraventions of the Act found against the appellants.  As well, substantial written submissions were filed by the appellants and the respondent on the issue of liability and the contraventions found by the primary judge.

3                     The appellants submitted that the costs of the appeal should follow the event or, in the alternative, that the costs of the appeal be apportioned to reflect the fact that the appeal was not wholly successful.  The respondent submitted that the appellants should pay all of its costs of the appeal or alternatively that the appellants should pay no less than 90% of its costs.

4                     As well as contesting the findings of contravention the appellants made oral and written submissions in relation to the amount of the penalties determined.  As they were successful on this issue, in a significant respect, it is appropriate that any order for costs reflect that measure of success.  However, because the issues of liability and contraventions of the Act occupied most of the hearing and also were the subject of a substantial part of the written submissions we conclude that the appropriate order is that the appellants pay 90% of the respondent’s costs of the appeal including reserved costs.  It follows that we do not accept that, for the purposes of the principle that costs ordinarily follow the event, “the event” was resolved in favour of the appellants; from the viewpoint of costs, the major aspect of “the event” was determined against the appellants.

5                     Although the fifth appellant did not appeal in respect of the penalty he was ordered to pay, he was represented by the same solicitors and counsel who represented the third and fourth appellants and in those circumstances no allowance need be made for the fact that he did not appeal against penalty.

Associate:

Dated:              8 June 2000