FEDERAL COURT OF AUSTRALIA

Spotwire Pty Limited v Visa International Service Association

[2004] FCA 1481

COSTS – where each party enjoyed a measure of success – whether the court should depart from the rule that costs follow the event – respondent ordered to pay a percentage of the applicant’s costs

Federal Court of Australia Act 1976 (Cth)s 43(2)

Hughes v Western Australian Cricket Association Inc (1986) ATPR 40 -748

Inn Leisure Industries Pty Ltd v DF McCloy Pty Ltd (No 2) (1991) 28 FCR 172

SPOTWIRE PTY LIMITED (ACN 091 282 647) AS TRUSTEE FOR THE SPOTWIRE HYBRID TRUST v VISA INTERNATIONAL SERVICE ASSOCIATION (ABN 70 007 507 511) AND COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124)

NSD426 OF 2003

BENNETT J

18 NOVEMBER 2004

SYDNEY

THE COURT ORDERS THAT:

The first respondent pay 30% of the applicant’s costs of the notices of motion filed on 1 October 2003 and 19 November 2003 and heard on 4 and 5 February 2004.

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

REASONS FOR JUDGMENT

1                     The first respondent (‘Visa’) applied, by notices of motion heard on 4 and 5 February 2004, for orders that the applicant’s (‘Spotwire’) amended statement of claim (‘ASC’) be struck out under Order 11 rule 16 of the Federal Court Rules (‘the Rules’) or that the proceedings be summarily dismissed under Order 20 rule 2.  Orders were also sought for security for costs and leave to tax forthwith costs of a previous notice of motion in which it had also sought orders under O 11 r 16 or O 20 r 2 (‘the previous notice of motion’).  The application for security for costs was resolved by consent after the notice of motion was filed.

2                     By a further notice of motion, Visa sought the production of documents referred to in the ASC, Spotwire having refused to produce them under a notice to produce.  Visa was held to be entitled to the documents. 

Decision on notice of motion

3                     For reasons that I gave, I declined to strike out the ASC, as the causes of action pleaded were arguable but determined that certain paragraphs should be repleaded.  Visa was also entitled to particulars that it sought of letters, emails and conversations alleged to give rise to the pleaded inducing of breach of contract.

4                     I declined to order that costs of the previous motion to strike out the statement of claim, where costs were awarded against Spotwire, be taxed forthwith.

Submissions on costs

5                     Spotwire submits that as it is the successful party, Visa should pay its costs.  It is said that Spotwire ‘won the event’.  The ASC was not struck out nor was there an order for summary dismissal.  The application for leave to tax costs forthwith was unsuccessful.  Accordingly, Spotwire submits, there were no special circumstances which would warrant an order other than the usual order that costs follow the event.  In the alternative, it is submitted that Spotwire is entitled to at least 80% of its costs of the notice of motion, the reduction reflecting the degree of its success when the individual issues are considered.

6                     Visa submits that costs should be Visa’s costs in the cause. Visa asserts that the notices of motion were necessitated by Spotwire’s unwillingness to amend the ASC and failure to provide proper particulars of its claim or to provide documents, as well as repeated defaults in provision of such documents and in responding to Visa’s requests for particulars.

7                     In detailed correspondence, Visa identified what it asserted were deficiencies in the ASC.  Spotwire rejected those criticisms.  Although some later responses were made to various requests by Visa, which responses reduced the matters in issue at the hearing of the notice of motion, they were provided after the notice of motion in relation to those matters was filed.

8                     I note also that Spotwire rejected an offer by Visa that the costs of the motions heard on 4 and 5 February be costs in the cause.

Decision

9                     Both sides have enjoyed a measure of success.  A number of paragraphs of the ASC were struck out and Spotwire was given leave to replead.  The deficiencies that led to this were largely those that had been identified by Visa and rejected by Spotwire.  In view of Spotwire’s position on the provision of particulars and documents, in circumstances where Visa had specified the defects identified, Visa was entitled to file its notices of motion to the extent to which the notices of motion sought orders with respect to these matters and security for costs. 

10                  On the other hand, Visa was not successful in its submission that the ASC did not disclose a cause of action.  Further, the submission in that regard sought to canvass my decision on a previous notice of motion seeking the striking out of the statement of claim filed by Spotwire.

11                  Visa was not successful in obtaining leave to tax forthwith the costs of the previous notice of motion filed 30 May 2003.

12                  It is not correct, in my view, to say that Spotwire has been completely successful.  While the ASC was not struck out in its entirety or the subject of summary dismissal and a finding was made that the pleaded causes of action were not unarguable, certain paragraphs were struck out, for reasons that had been identified by Visa.  Spotwire was required to provide further particulars and, in effect, the proceedings were stayed pending the provision of those particulars.

13                  The Court has a general discretion under s 43(2) of the Federal Court of Australia Act 1976 (Cth) to award costs.  I am mindful of the difficulties in apportioning time and issues and in simply counting the numbers of successes and failures on the part of each party (Hughes v Western Australian Cricket Association Inc (1986) ATPR 40-748 at 48, 136; Inn Leisure Industries Pty Ltd v DF McCloy Pty Ltd (No 2) (1991) 28 FCR 172 at 174).

14                  The issues raised were largely discrete and the subject of separate orders sought.  To that extent, it can be fairly said that, to the extent that costs should follow the event, there are separate events.  If costs were to follow the event, Spotwire would be regarded as successful as to the orders sought under Order 11 rule 16 and Order 20 rule 2 of the Rules and leave to tax forthwith.  Visa would be regarded as successful as to the orders sought for further particulars and identified deficiencies in certain paragraphs of the ASC.  Visa would be entitled to the costs of filing the motion for security for costs.  If that reflected the complexity of the arguments raised and the time expended, an appropriate order might be there be no order as to costs or that costs be costs in the cause.  However, the consideration of the causes of action identified in the ASC was not limited to matters that had not previously been considered. Visa also sought also to reargue the decision in Spotwire No 1 in terms.  In any event, the issue whether the ASC disclosed arguable causes of action took much of the time in hearing and in written submissions.

15                  Taking into account the matters identified above, I am of the view that Visa should pay 30% of Spotwire’s costs of the notices of motion.

Associate:

Dated:              18 November 2004