FEDERAL COURT OF AUSTRALIA

Bell v Macquarie Bank Limited [2000] FCA 1521

MICHAEL CHARLES BELL AND CHARLES JOSEPH BERG v MACQUARIE BANK LIMITED AND MACQUARIE INTERNATIONAL CAPITAL MARKETS LIMITED

NG 1042 OF 1997

LEHANE J

13 OCTOBER 2000

SYDNEY

THE COURT ORDERS THAT:

1.                  The respondents pay the applicants’ costs of, and thrown away on account of, the respondents’ amended notice of motion filed on 14 September 2000 and their notice of motion filed on 16 August 2000.

2.                  The respondents pay the applicants’ costs of the applicants’ notice of motion filed on 24 March 1998 and heard on 15 May 1998, including the costs of the hearing on 15 May 1998.

3.                  The applicants pay the respondents’ costs of the proceeding, including the costs of the hearing on 13 October 2000 with the exception of the costs referred to in orders 1 and 2.     

REASONS FOR JUDGMENT

1                     The applicants discontinued these proceedings by a notice of discontinuance filed on 18 August 2000.  The matter now before me is the applicants’ notice of motion filed on 14 August 2000 by which they seek an order that the first respondent pay their costs of a notice of motion dated 24 March 1998 up to and including the hearing of that motion on 15 May 1998, and that otherwise there be no order as to the costs of this proceeding.

2                     There was also listed for hearing this morning an amended notice of motion filed by the respondents on 14 September 2000 by which they sought a number of orders, the first of which was an order that the notice of discontinuance filed by the applicants be set aside.  Senior counsel who appeared for the respondents this morning indicated that the respondents did not propose to proceed with that motion and accepted that the usual costs consequences would follow from its abandonment.  The appropriate consequences are, in my view, that the respondents should pay the applicants’ costs of, and thrown away on account of, the respondents’ amended notice of motion and its predecessor, a notice of motion filed on 16 August 2000.

3                     I turn then to the applicants’ motion.  The starting point is O 22 of the Federal Court Rules.  The notice of discontinuance was filed under O 22 r 2(1)(b). Under that rule, the applicants were entitled (the directions hearing having occurred, the proceeding continuing on pleadings but the pleadings not being closed) to discontinue without the leave of the Court or the consent of any other party.

4                     The proceeding being discontinued under O 22 r 2(1)(b), O 22 r 3 prima facie applies: that rule provides that a party who discontinues in those circumstances is liable to pay the costs of the other parties occasioned by the whole or the relevant part of the proceeding.  In this case, the whole proceeding has been discontinued, so that the relevant costs are those occasioned by the whole proceeding.  Order 62 r 26 provides however that, where a party to a proceeding discontinues under O 22 r 2 without leave, the discontinuing party shall, “unless the Court otherwise orders”, pay the costs of the other parties.  That rule reflects the general discretion as to costs which the Court has under s 43(1) of the Federal Court of Australia Act 1976 (Cth).

5                     Leaving aside, therefore, the costs of the respondents’ motion and amended motion to which I have already referred, the ordinary result of the applicants’ discontinuance would be that they would be required to pay the respondents’ costs of the proceeding.  The question is whether the applicants have established that, in the particular circumstances of this case, there is any particular matter which should, as a matter of discretion, displace that ordinary consequence.  The applicants contend that the circumstances in which an earlier motion filed by them was argued and decided on 15 May 1998 constitute such a matter.  By that motion the applicants sought orders deferring this proceeding pending the conclusion of related proceedings which they had commenced in the Industrial Relations Commission of New South Wales and in which they sought (and continue to pursue) relief in respect of substantially the same conduct which they alleged against the respondents in this proceeding. 

6                     The respondents opposed the motion, asserting that this proceeding ought to continue in the ordinary course despite the existence of the concurrent proceeding in the Industrial Relations Commission.  For reasons which I then gave, I concluded that the applicants should substantially succeed on their motion; the result was that the proceeding was stood over for a substantial period and has been stood over successively on a number of more recent occasions.  On the question of the costs of the motion, I said this:

The question of costs may, I think, be dealt with in this way.  The matter before me is of course an interlocutory motion.  Without a special order it would not be possible to tax or require payment of costs at this stage and in the circumstances, although I have heard no argument about this, it would not be appropriate, in accordance with the ordinary practice of the Court, to make an order of that kind at this stage. 

My tentative view, and I put it this way for a reason which will appear, is that this is a case where ultimately the applicants should be entitled to their costs of the motion.  It is evident that the costs have been fairly considerable.  The applicants have, over substantial opposition, been successful: subject, of course, to this, that the outcome of matters before the Commission over the next short while might conceivably cast a somewhat different light on it.  I think, therefore, that I do no injustice, having given that indication, by not dealing immediately with the question of costs of the motion.

7                     Counsel for the applicants now contends that, relevantly, the circumstances which suggested to me that that was an appropriate view to take have not changed and that that view should be confirmed and given effect in the appropriate order.  Senior counsel for the respondents, on the other hand, submits in summary that the applicants have always made it clear that the proceeding in this Court was a fall-back; that it was never particularly likely, whether the applicants should succeed or fail in the Commission, that this proceeding would actually go to trial; and that, as the applicants have now made a deliberate decision to discontinue, all the costs incurred in the proceeding may be regarded as unnecessarily incurred and the applicants should accept the usual consequences of their decision to discontinue.

8                     It is necessary to interpolate an account of one aspect of the circumstances in which the applicants have discontinued.  Both parties initially took the view, which was generally accepted as correct, that there was no tribunal or court which could deal both with the claims under the Trade Practices Act 1974 (Cth), which the applicants sought to pursue in this Court, and the claims for relief which they pursued in the Commission.  It has since become evident, as a result of subsequent authority in the Supreme Court, that the Supreme Court has power to deal both with the Trade Practices Act claims and with the claims for relief pursued in the Commission.  That being so, the Chief Judge of the Equity Division of the Supreme Court has made, on the application of the present respondents, a conditional order for the transfer to the Supreme Court of the proceeding before the Commission.  One of the conditions of the order is that this proceeding be transferred to the Supreme Court as well, that being a step which, of course, the Supreme Court could not order.  His Honour also made it clear that the considerations which led him to the conclusion that it was appropriate that proceedings continue in the Supreme Court, rather than in the Commission, would change very significantly should this proceeding be discontinued.  His Honour made it clear that, should that happen, it would no longer be appropriate that the order for transfer to the Supreme Court of the proceeding before the Commission become unconditional. 

9                     What in those circumstances has happened, as counsel for the applicants acknowledged, is that the applicants have taken a decision that the utility of the proceeding presently in this Court, in pursuit of claims under the Trade Practices Act, is outweighed by the desirability of maintaining the present proceeding - and the applicants’ place in the queue - in the Commission. 

10                  In all those circumstances, the question is whether I should now take a different view than I took in May 1998 of the actions of the applicants in commencing concurrent proceedings in this Court and the Commission and seeking (in the event successfully) to defer this proceeding pending the outcome of the proceeding in the Commission.

11                  In a sense, that is a question on which it is not easy to form a firm view.  The pleadings in this proceeding are not closed.  I have, of course, heard no evidence.  I am therefore in no position to make an assessment of the applicants’ case or of the extent to which they might usefully pursue it following the various possible outcomes of their claims before the Commission.  Despite that, however, I see no reason to depart from the view which I took in May 1998, having regard to the circumstances that existed then, that it was reasonable, given the statutory limitation periods, for the applicants to have commenced proceedings here as well as in the Commission and to defer this proceeding pending the conclusion of the proceeding in the Commission.

12                  Nor do I think that what has occurred since requires me to take a different view than that which I took in May 1998.  It was always contemplated that this proceeding might not travel for any great distance.  It was accepted that it was reasonably likely that it would not go to trial.  It was, on the other hand, at least conceivable that this proceeding would be tried whether the applicants were successful in the Industrial Relations Commission or whether they failed there.  That is what the applicants have consistently said, and I see no reason to doubt it.  But if the proceeding in the Commission had, at this point, concluded, the applicants being either successful or unsuccessful, and had the applicants discontinued this proceeding in the light of what had happened in the Commission, it would not have followed, I think, that I should have taken a different view of the appropriate costs outcome of what had occurred in May 1998: those circumstances would not alone have provided retrospective justification for the respondents’ attempt to force this case on or cast retrospective doubt on the propriety of commencing this proceeding and then seeking to defer it.

13                  If that is right, I think it is equally true that, in the somewhat different circumstances that now present themselves, I should not take a different view on that question from that which I took in May 1998.  In short, the proceeding, on the view which I took and which I am not persuaded was incorrect, was one which ought to have awaited the outcome of the proceeding in the Commission.  It would not have been appropriate to force this proceeding on while there was a more than serious prospect that the proceeding in the Commission would be dealt with reasonably quickly and at least limit the scope of any trial in this proceeding.

14                  Thus, I think the applicants acted reasonably in commencing this proceeding and in seeking its deferral and, while the respondents are not to be criticised as having acted unreasonably in seeking to have it brought on, I do not think that the mere circumstance that this proceeding has been discontinued earlier, and in different circumstances, than might originally have been contemplated should lead to a different conclusion as to costs than the tentative view which I expressed in May 1998.  Accordingly, my view is that the applicants should have their costs of the motion heard on 15 May 1998, including, of course, the costs of the hearing on that day.

15                  Otherwise, however, I see nothing to displace the ordinary rule that the applicants should pay the respondents’ costs of the proceeding.  Accordingly, in addition to the orders foreshadowed in relation to the respondents’ motion and amended motion, there should be orders, first, that the respondents pay the applicants’ costs of the motion heard on 15 May 1998, including the hearing on that day; and, secondly, that, with that exception and with the further exception of the costs of the respondents’ notice of motion of 16 August 2000 and amended notice of motion of 14 September 2000, the applicants should pay the respondents’ costs of the proceeding.  Those costs should include the costs of this morning's hearing.  The extent of the applicants’ success on their motion is not sufficient to persuade me that, in this respect, the usual consequence of discontinuance should not follow.

Associate:

Dated:              25 October 2000