FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Esanda Finance Corporation Ltd (ACN 004 346 043) [2004] FCA 685

PRACTICE AND PROCEDURE – costs – respondent did not make application for costs of interlocutory hearing – subsequently parties reached accord that proceeding be compromised – whether respondent may now seek order for costs under “slip rule”

Trade Practices Act 1974 (Cth)

Federal Court Rules O 35 r 7(3)

Australian Competition & Consumer Commission v Esanda Finance Corporation Ltd (ACN 004 346 043) [2003] FCA 1225 referred to

Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 cited

Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 cited

L Shaddock & Associates Pty Ltd v Parramatta City Council [No 2] (1982) 151 CLR 590 cited

AUSTRALIAN COMPETITION & CONSUMER COMMISSION v ESANDA FINANCE CORPORATION LTD (ACN 004 346 043)

W111 OF 2001

LEE J

28 MAY 2004

PERTH

THE COURT ORDERS THAT:

The first respondent’s application to vary the orders made on 17 December 2002 be refused.

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

REASONS FOR JUDGMENT

LEE J:

1                     On 7 November 2003 final orders were made which disposed of this proceeding, including an order that the first respondent (“Esanda”) pay the costs of the proceeding of the applicant (“the ACCC”), to be taxed if not agreed. (See: Australian Competition and Consumer Commission v Esanda Finance Corporation Ltd (ACN 004 346 043)  [2003] FCA 1225).

2                     Earlier, at an interlocutory hearing held on 17 December 2002, which included a directions hearing and an application by the ACCC for leave to further amend the application and statement of claim, orders had been made, inter alia, granting leave to the ACCC to file a further amended application and further amended statement of claim by 20 January 2003 and making the costs of the directions hearing costs in the cause.  No order was made that the ACCC pay costs thrown away by any respondent required to file an amended defence in response to the further amended statement of claim.

3                     Esanda now applies for an order that the orders made on 17 December 2002 be varied by the inclusion of a further order that the ACCC pay to Esanda any costs thrown away by Esanda by reason of further amendment of the statement of claim.

4                     The ground relied upon for that application is that Esanda and the ACCC, by a minute of consent dated and submitted to the Court on 12 November 2002, had agreed that such an order be made if the Court gave leave to the ACCC to file a further amended statement of claim.  However, the terms of the foregoing consent were limited in that it applied only if Esanda raised no objection to the minute of proposed amended pleading filed by the ACCC.  Esanda filed submissions objecting to the proposed amendments.

5                     Accordingly, on 26 November 2002 the Court made orders which adopted only part of the consent minute filed by the parties, in particular, deleting irrelevant provisions predicated upon no objection being filed to the pleading amendments proposed by the ACCC.  The orders made on 26 November 2002 provided that the ACCC’s application for leave to amend its pleading would be decided after consideration of the respective written submissions filed by Esanda and the ACCC.

6                     On 17 December 2002, after consideration of the foregoing submissions, it was ordered, as noted above, that the ACCC be granted leave to amend, albeit in terms that differed from those set out in the minute of proposed amendments.  Esanda’s objection to the application for leave, therefore, did not succeed although the grant of leave was subject to qualification.  If the parties had addressed the issue on 17 December 2002 as to whether a separate order for costs should be made for the costs of the application for leave to amend or for costs thrown away by reason of leave to amend being granted, a range of interlocutory orders for costs may have been contended for by the parties.  No submissions were made for any separate order for costs and the matter was left to be dealt with as part of the costs of the proceeding.

7                     The ultimate order in respect of the costs of the proceeding was an order made by consent as part of an accord reached in about July 2003 under which Esanda conceded that the ACCC was to succeed in the proceedings in significant respects and was entitled to move for orders against Esanda by way of declarations that Esanda had contravened the Trade Practices Act 1974 (Cth) and for injunctions and remedial orders.  One of the declaratory orders made related to a contravention of the Act defined in an amendment to the statement of claim effected pursuant to the leave granted on 17 December 2002.

8                     It can be seen that as at July 2003 the parties took account of any interlocutory orders for costs that had been made before they reached their accord that Esanda pay the costs of the proceeding.   On the face of the matter it would appear to be inappropriate to vary any orders in respect of costs that were taken into account in reaching that accord. 

9                     In any event I am not persuaded that the circumstances of this case warrant the exercise of the Court’s power under the so called “slip rule”, whether that power is an implied power or a power conferred expressly, (eg: O 35 r 7(3) of the Rules of the Federal Court), to correct an error or mistake occasioned by an accidental slip or omission, including inadvertence of a party’s legal representative.  (See: Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300).  Although commonly it will be the case that a party granted leave to amend a pleading will be ordered to pay the costs of another party thereby thrown away, the decision to make such an order will be governed by the circumstances of the particular case.  The “slip rule” becomes available for exercise where there is no real difference of opinion that a further order is required to correct or rectify a patent error in existing orders. (See: Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 per Lockhart J at 390-391).  The failure of the Court to make an order on 17 December 2002 in the terms now sought by Esanda was not a “clerical error” or “mistake” in the orders pronounced by the Court on that day.  It is not obvious that only one order, namely, the order now sought, could have been made if an order for costs had been sought at the relevant time.  The ACCC opposes Esanda’s application and there is a clear difference of opinion between the parties on that issue.  Furthermore, it will be inappropriate to make an order under the rule where an event has intervened that would make it inexpedient or inequitable to do so, or where application for the order has been delayed. (See: L Shaddock & Associates Pty Ltd v Parramatta City Council [No 2] (1982) 151 CLR 590 per Mason ACJ, Wilson, Deane JJ at 597).  The circumstances of this case fall within that qualification. 

10                  The application by Esanda for the orders made on 17 December 2002 to be varied by adding an order that the ACCC pay Esanda’s costs thrown away by reason of the further amendment of the statement of claim will be refused.

Associate:

Dated:              28 May 2004