FEDERAL COURT OF AUSTRALIA

Versace v Monte [2002] FCA 781

PRACTICE AND PROCEDURE – Notice of Motion seeking leave to appeal from orders and declarations and reconsideration of order as to costs – whether orders final or interlocutory – order as to taxation of costs forthwith – whether circumstances warrant an order that cost be taxed forthwith – whether order as to taxation of costs should be reconsidered on basis of oversight by counsel – whether declarations and orders made by the court outside the pleadings – whether issues fully litigated – orders based on findings made by the court – whether circumstances warrant fragmentation of appeal process

Computer Edge Pty Ltd v Apple Computer Inc and Anor (1984) 54 ALR 767 cited

Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (1998) 155 ALR 94 cited

McKellar v Container Terminal Management Services Ltd  [1999] FCA 1639 cited

Sereika v Cardinal Financial Services Ltd [2001] FCA 687 cited

Maloney v Commissioner for Railways (NSW) (1978) 52 ALJR 292 discussed

Briginshaw v Briginshaw (1938) 60 CLR 336 cited

GIANNI VERSACE SpA, SANTO VERSACE and DONATELLA VERSACE v

FRANK MONTE aka FRANCOIS FERDINAND MONTENERI and ARKITUDE HOLDINGS PTY LIMITED (ACN 096 646 016)

N 1184 of 2001

TAMBERLIN J

SYDNEY

19 JUNE 2002

THE COURT ORDERS THAT:

1. The Notice of Motion filed by the respondents on 6 May 2002 is dismissed.
2. The respondents pay the applicants’ costs of the Notice of Motion.

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

REASONS FOR JUDGMENT

1                     On 29 April 2002, I made declarations in this matter which included the following:

“1.       The respondents made representations that the first respondent (‘Monte’), or one or more of the companies with which he is associated, including the second respondent (‘Monte companies’):

            (i)         was employed or engaged by Gianni Versace;

            (ii)        had a business relationship with Gianni Versace,

            (iii)       had a personal relationship with Gianni Versace;

            (iv)       spoke and otherwise communicated with Gianni Versace,

            and the Court declares that each of those representations was:

            (a)        false and untrue; and

(b)       misleading and/or likely to mislead, and deceptive and/or likely to deceive, contrary to section 52 of the Trade Practices Act 1974.”

2                     I also ordered that:

“15.     The respondents pay the applicants’ costs in these proceedings including reserved costs.

16.       The costs in order 15 above be taxed and paid forthwith.”

3                     I also granted an injunction to restrain the respondents from making the representations specified in order 1.

4                     The trial was lengthy extending over ten days and my reasons for judgment were delivered on 8 March 2002 when the matter was stood over to allow for draft orders to be formulated by the applicants and served on the respondents.  These were duly drawn up and sent to the respondents’ solicitors in draft form on 22 March 2002.

5                     The matter was re-listed before the Court on 10 April 2002 in relation to the form of orders which should be made.  On that occasion I asked whether the applicants were seeking an indemnity order in relation to costs and counsel for the applicants, Mr Cobden, said that they were being sought on the “usual basis”. 

6                     The draft orders sent on 22 March 2002 contained orders 1, 15 and 16 in the form referred to above.

7                     On 24 April 2002, having had time to consider the draft orders, the solicitors for the respondents wrote to the applicants’ solicitors in these terms:

“RE: FRANK MONTE ats VERSACE SPA & ORS

We refer to your proposed orders and the directions hearing before Mr Justice Tamberlin on 29 April next.

Our clients agree to the proposed orders with the following exceptions:-

A.        Orders 1(i)(v) and 12 (a)(iv) on the grounds that these representations were not pleaded in the amended statement of claim (‘ASC’).

B.         6(a)-(f) on the grounds that these paragraphs refer to one or more of the Versace companies when the pleaded imputations in paragraph 27 of the ASC were directed only to the First Applicant that is to say Gianni Versace Spa.

C.        13 on the grounds that whether the book was a work of fact was not pleaded and that the Court has jurisdiction only in respect of the imputations and representations concerning the Applicants and not the facts and matters referred to in the remainder of the book.

D.        The words after 14 (c)(iv) commencing with ‘or any’ and ending with the word ‘above’ on the grounds that the orders are directed to the specific statements and the words ‘like effect’ would be presumed to be incorporated depending on the nature of the statement.” (Emphasis added)

8                     When the matter next came before me, on 29 April 2002, there was no objection raised by the legal representatives of the respondents, as to the making of orders 15 and 16 in the above form.  These orders had been foreshadowed in oral and written submissions made on behalf of the applicants at the close of the hearing on liability.  In fact a search of the transcript shows that counsel for the respondents referred to the applicants’ submissions in relation to these foreshadowed orders during the hearing on liability.  There were no submissions made before me on 29 April 2002 in opposition to the costs orders proposed.

9                     In terms, the letter of 24 April 2002 sent from the respondents’ solicitors indicates that the respondents had agreed and given instructions to their solicitors to oppose only the specified matters, which did not include the costs orders.  At that time the respondents had retained experienced legal representatives and the orders were made after ample opportunity had been given to the parties to be heard on the question as to the taxation and recovery of costs forthwith.

10                  Initially the application now before me was made before another Judge of the Court, but upon the matter coming on for hearing, both parties agreed that it would be more appropriate for the application to be made before me, having regard to the duration and complexity of the issues canvassed at the original hearing.

interlocutory or final judgment

11                  The issue as to the amount of damages in these proceedings was separated for determination as a separate issue after resolution of questions as to liability and related matters.  This was effected by an order made on 15 August 2001.  The declarations made, the injunctions granted, and the orders as to costs up to the close of the initial hearing, were in the nature of final relief in that they are cast in final form and operated immediately.  However, notwithstanding their finality as to form and operation it is well settled that the test for determining whether a judgment is final is whether the judgment finally determines all the rights of the parties.  The authorities observe that the Court in applying the test must have regard to the legal rather than the practical effect of the judgment so that the question is whether the whole judgment finally determines in a legal sense all the rights of the parties that were at issue in the proceedings: see Computer Edge Pty Ltd v Apple Computer Inc and Anor (1984) 54 ALR 767 at 767-8 and the cases cited and considered by the Full Court in Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (1998) 155 ALR 94 at 104-107 and 111-116.

12                  It follows that in the present case, where the question of damages is yet to be considered, the orders referred to in the respondents’ application are interlocutory in nature notwithstanding their form and operation.  As a consequence it is necessary to obtain leave to appeal from those orders at this stage of the proceedings.

13                  On 6 May 2002, the respondents made an application to the Court in these terms:

“1.       That under FCR order 52, rule 10(2), the Respondents have leave to appeal from the following parts of the orders made by Justice Tamberlin on 29 April 2002:

(I)        The declaration set out in Order No 1, to the extent that it relates to representations that ‘Monte’ or ‘Monte companies’ spoke and otherwise communicated with Gianni Versace [paragraph 1 (iv)];

(II)       The order set out in Order No 12 to the extent that it relates to representations that ‘Monte’ or ‘Monte companies’ spoke and otherwise communicated with Gianni Versace [paragraph 12 (a) (iv)]; and

(III)      Order No 16.

2.         Alternatively, that it be declared that the orders described in paragraph 1 above are not interlocutory and the Respondents do not require leave to appeal therefrom.

3.         That Order No 16 be stayed until this motion is disposed of.”

14                  When the matter came on for hearing, Mr Evatt, for the respondents, sought to have the order as to costs reconsidered and if it were reopened and the decision was against the respondents, he sought leave to appeal in accordance with the Notice of Motion.

15                  I now turn to the specific matters raised.

taxation of costs forthwith

16                  Order 62 r 3(3) of the Federal Court Rules (“FCR”) states:

“(3)     An order for costs of an interlocutory proceeding shall not, unless the Court otherwise orders, entitle a party to have a bill of costs taxed until the principal proceeding in which the interlocutory order was made is concluded or further order.”

17                  The general rule therefore is that costs should not be taxed forthwith unless there is a specific order requiring such taxation.

18                  The making of an order that costs be taxed forthwith is discretionary and the Court’s discretion is a broad one.  It should be exercised in favour of a party who establishes that the demands of justice require that there be a departure from what is the general practice envisaged by the rule, namely that an order for costs in relation to an interlocutory determination will not entitle the party to have a bill of cost taxed until the principle proceeding in which the interlocutory order was made is concluded: see McKellar v Container Terminal Management Services Ltd  [1999] FCA 1639 and Sereika v Cardinal Financial Services Ltd [2001] FCA 687, and cases there cited.  However it is also important to recognise that costs of a successful interlocutory hearing are part of the fruits of the interlocutory judgment which the party has obtained and the general principle is that parties should not, without sound reason, be kept from the benefits of a judgment.  In my opinion, the present is an unusual case, in which the defences were so lacking in substance and the hardship to the applicants so sufficient that costs should be permitted to be taxed and recovered at this stage.

19                  It was submitted for the respondents that the present case is not analogous to those decisions in which an order to pay costs forthwith were made because it is not one that involves complex litigation, nor does it involve pleadings which have been found to be without substance and which are vexatious or oppressive.  However, the proceeding was complex.  There were numerous defences raised, none of which were found to have any substance and there were substantial costs thrown away as a result of the respondents’ revised evidence in relation to the authenticity of material originally said to have emanated from Gianni Versace.

20                  As mentioned above the only evidence and basis upon which it is suggested that this order should be reconsidered and varied is that counsel for the respondents cannot recollect seeing order 16 when he looked at the draft orders presented to him.  There is no suggestion, however, that the solicitor for the respondents did not see the order and nor is there any evidence that Mr Monte did not appreciate that order 16 was sought.  The letter of 24 April 2002 expressly indicates that instructions had been taken by the solicitor in relation to the draft orders and that those instructions did not contain any reference to disputing in any way orders 15 and 16 of the draft orders which had been provided.  There is no evidence that the respondents would have pursued a different course of action or that instructions would have been different if counsel for the respondents had considered the terms of the order.  Prior to the orders being made there was no objection taken to the making of order 16.  Nor was any submission to the contrary advanced to me at the hearing when the orders were made.  At the time the orders were made by me there had been ample opportunity for the respondents to obtain considered advice from experienced legal advisers and formulate more detailed submissions.  This was not done and no satisfactory explanation has been provided.

21                  The evidence produced to me does not suggest that either the respondents or their solicitors were unaware of the provision of order 16 as to costs.  Counsel for the respondents says that he does not recall seeing order 16.  This can be accepted but he does not deny that the order was contained in the material placed before him for consideration.  The statement by counsel for the respondents as to his non-recollection is not disputed. But it is not suggested that the respondents or their solicitors did not see or appreciate the nature or effect of the orders.  The affidavit of Mr Bilinsky in support of this application simply asserts that counsel received the draft orders and did not recall seeing the order in question.

22                  In the present case, every issue of significance in the proceeding has been found against the respondents.  It was found that the first respondent had made false statements not only in his book and to the media but also to the Court in giving his evidence and asserting a relationship with Gianni Versace.  It is apparent that the applicants’ costs to date will be large and there is no reason established in my view for denying them recovery of costs incurred to date until after final determination of the proceedings.  The evidence to which I was referred by Mr Cobden on the hearing indicates that the respondents are without substantial funds, and this means that the problem of recovery and hardship to the applicants will be compounded if they are unable to recover costs in respect of the liability issue at this stage.  The hearing relating to damages is expected to take over four days and there must necessarily be incurred other substantial costs and expenses apart from the costs of the hearing on liability.

23                  In view of these circumstances, I am not satisfied that any reason has been shown which would warrant the reopening or variation of order 16 in any way and I therefore refuse the application in relation to that aspect of the mater.  I also consider that leave to appeal against order 16 should not be granted having regard to the matters referred to above.  I consider that substantial injustice would be suffered by the applicants if they had to wait a further lengthy period for resolution of the quantum of damages.

relationship with gianni versace – declarations and orders

24                  Central to the submissions of the respondents in this matter by way of defence was the contention that the respondents had numerous contacts and conversations of a commercial and professional nature which Gianni Versace during the course of which Mr Monte had been furnished information by Gianni Versace.  These communications were alleged to have taken the form of numerous meetings in person, discussions by telephone and communications by facsimile.

25                  In support of their submission that the declarations and orders the subject of this application were outside the pleadings and should therefore be set aside, the respondents referred to Maloney v Commissioner for Railways (NSW) (1978) 52 ALJR 292, particularly to the remarks of Barwick CJ at 293, where his Honour observed:

“Further, in all these essential respects the plaintiff can only be allowed to succeed according to the case which has been alleged as well as proved: the breach of duty must be specifically alleged as well as proved.  The generality of assertion accepted in the common law form of pleading ought not to be acceptable. Specific and limiting particulars of the breach of duty should be insisted upon: and the evidence kept within the confines of these particulars. I have observed elsewhere that laxity in not confining a party to the case of which notice by particulars or otherwise has been given to the opponent in sufficient time to allow of that case being fully litigated is an undesirable and unacceptable feature of a trial at law.  Injustice to one party or the other is likely to ensue.”  (Emphasis added)

26                  Remarks to a similar effect in relation to the case being “fully litigated” were made by Jacobs J at 294.

27                  That case concerned a claim in negligence against the Commissioner for Railways concerning an injury to a child.  The concern of both Barwick CJ and Jacobs J in the remarks referred to were that the question under consideration had not been fully litigated at the hearing.  In the present case, by contrast, the question whether there had ever been any contact between Gianni Versace and Frank Monte or his son, was fully and extensively litigated over the course of the hearing.  It was the basic and central issue in the case, as the existence or non-existence of a relationship with Gianni Versace bore on the falsity of the statements and the defamatory imputations under consideration.  Therefore, the respondents do not gain, in my opinion, any support from the decision in Maloney or in the observations of their Honours in that case for the present submission.

28                  On the evidence I have concluded that in fact there had been no contact whatsoever between Gianni Versace and Mr Monte or his son.  This issue was squarely raised and contested both in evidence and the course of submissions.  It was fully ventilated.  Detailed submissions were made and extensive evidence given in relation to the existence of any relationship with Gianni Versace.  The weight of the evidence was so substantial that I was satisfied to the standard described in Briginshaw v Briginshaw (1938) 60 CLR 336, of the total falsity of Mr Monte’s claims and the evidence of his son, James, and that he never had any contact whatsoever with Gianni Versace.  In view of this finding, it was appropriate to make declaratory and consequential orders as to the lack of contact.  I do not consider that the making of such an order was outside the issues raised squarely on the pleadings.

29                  Another aspect of the question is the issue of injustice to the parties if leave is not granted to appeal in relation to these matters.  There is no evidence of any undue injustice or hardship to the respondents if either the declarations made or the injunction granted, in relation to the absence of communication, remains in force to abide the result of any appeal which may eventually be pursued after the hearing as to damages has been completed.  The respondents are not deprived of a right to appeal if leave is not granted at this stage.  Generally speaking, fragmentation of the trial process by appeals on narrowly defined and specific interlocutory matters is to be avoided and there are no circumstances in this case which, in my view, outweigh the factors in favour of the application of that guideline in this proceeding.  The orders in respect of which leave is sought are two orders out of a total of more than fifty specific declarations and orders made at the conclusion of the liability hearing.  The consequences of a successful appeal on the relief granted would not be greatly significant.  On the other hand, the difficulty of isolating the precise issue for determination, considering all the relevant evidence and making a determination in relation to a single order, out of context, would be burdensome to an appellate court and this may well be unnecessary duplication if another appellate court, differently constituted, is called on to consider the other orders after the conclusion of the hearing as to damages.  The matters singled out for interlocutory appeal cannot be readily segregated out from the reasons for judgment and evidence to date.  Any relief granted will not significantly assist the respondents.  Delay and expense will unnecessarily be increased by the proposed appeal.  Ultimately the respondents can appeal the whole judgment as of right, if they wish to do so, and the matter can then proceed for determination in a comprehensive, orderly and efficient manner.  These considerations apply to both matters in respect of which leave to appeal is sought and I consider that the application made by the respondents for reconsideration of the order for recovery of costs forthwith and in relation to the question of leave to appeal from the orders in question should be dismissed with costs.

conclusion

30                  The Notice of Motion filed by the respondents on 6 May 2002 is dismissed. I do not grant the application to reconsider the orders made as to costs and I refuse leave to appeal in respect of that determination.  Leave to appeal from the other orders referred to in the Notice of Motion is also refused.

Associate:

Dated:              19 June 2002