FEDERAL COURT OF AUSTRALIA

Macteldir Pty Limited v Dimoski [2005] FCA 1466

MACTELDIR PTY LIMITED AND ANOR v DIMOSKI AND ORS

NSD 207 of 2001

ALLSOP J

11 OCTOBER 2005

SYDNEY

THE COURT ORDERS THAT:

1. The application be dismissed.
2. The costs of the application be reserved.

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

REASONS FOR JUDGMENT

1                     I have before me an application made informally by the respondents to the application for the production of documents and the answering of interrogatories by the applicant.  The applicant seeks to recover its costs against its former legal practitioners in this matter.  The matter was called on for hearing before me on 20 July 2004 and I made certain remarks on that occasion as to the question as to whether or not reasonably competent counsel or solicitors would have appreciated that the Full Court would reach the view they did.

2                     The remarks that I made provoked and, indeed, to a degree encouraged the applicant to take its own advice as to whether or not it should seek special leave to appeal out of time to the High Court against the true respondent to the proceedings, the alleged infringer of the copyright asserted in the main action.

3                     There had been a copyright action which had been settled by agreement and then undertakings to the Court proffered by the original respondent.  It was later asserted that those undertakings had been breached.  The form of that suit was the attempt to enforce the underlying contract which had given rise to the undertakings proffered to the Court.

4                     The Full Court of this Court found that this Court had no jurisdiction to entertain the contract claim being a contract claim seeking to enforce a contract to settle proceedings in this Court which were brought to vindicate a bundle of rights in existence by force of the Copyright Act 1968 (Cth).

5                     The application for special leave was rejected.  The respondent to the application for special leave was not called upon.  It had been represented by Mr Walker of Senior Counsel.  The Chief Justice said in refusing the application:

The procedural complexities involved in and resulting from the steps taken at early stages of these proceedings produced the result the case is not a suitable vehicle for the resolution of any issue appropriate to grant a special leave to appeal.  In those circumstances we are not minded to grant the substantial extension of time necessary to allow the application to proceed and the application is dismissed with costs.

6                     The members of the Court were the Chief Justice and McHugh J.  The application was almost a year out of time. 

7                     The applicant now seeks to add the costs of the unsuccessful High Court application to its application for the solicitor and barrister to pay the costs personally.  There are some difficulties with that which need not be dealt with today.  The matter is to be dealt with next week.

8                     I ordered that a draft pleading be circulated by the applicant to clarify what was being asserted in this respect.  The applicant complied with that order and paragraphs 7 and 8 of the draft pleading are in the following form:

7. The applicant states that it was necessary and/or prudent for it to bring the said application to the High Court to bring finality to the proceedings between it and the respondent and mitigate damage and was as a consequence of the advice to the applicant and bringing of the proceedings on behalf of the applicant by the solicitors and barristers against the respondent which said advice and action is a result of the negligence and other matters claimed against the solicitor and barrister.

8. As a consequence thereof, the applicant has incurred further costs of its own and an obligation to pay further costs of the respondents.

9                     I have some difficulty with understanding the second part of paragraph 7.  I will take it to mean that as a consequence of the general advice and conduct of the proceedings that had taken place prior to and after the Full Court proceedings it was necessary in the end to bring the High Court application.

10                  Precisely how that brings into focus the advice that was given to the applicant on or about 20 July 2004 when the matter was called on before me is less than clear.  I do not propose to deal at any length today with the question of the appropriate principles to be applied.  As I have attempted to explain in DSE (Holdings) Pty Ltd  v InterTAN Inc (2003) 127 FCR 499 there appears to be a residual tension between what the High Court said in Mann v Carnell (1999) 201 CLR 1 and what the Full Court said in Telstra Corp Ltd v BT Australasia (1998) 85FCR 159.  Judges of this court have recently wrestled with the same problem, see Sundberg J in Rio Tinto [2005] FCA 1336 and Sackville J in Seven Network [2005] FCA 1092.

11                  Like myself in DSE each of those judges was able to come to a view as to the result under both Mann v Carnell and Telstra without the need to differentiate between any principles that might be found in those two cases.

12                  Mr Curtin and Mr Williams of Senior Counsel have both addressed me to the effect that the applicant has, in effect, puts its advice in issue in the way it now puts it case.  It is said that depending on what the advice of Mr Neil QC or any other practitioner was on or shortly after 20 July 2004 those matters could affect the causation analysis as to whether or not the High Court costs can be seen as, in a common sense way, caused by the conduct of the original advisers.  At the moment I am not persuaded that that is the case.

13                  Looking at the matter from the perspective of Mann v Carnell I do not see a necessary inconsistency between the present conduct of the proceedings in the way, as I understand it, they are pressed and the maintenance of the privilege nor do I see any body of unfairness of the kind referred to by the Full Court in Telstra.  It may be that on elucidation of the way the matter is put next week and on the questioning of the applicant I come to a different view.  In part that ability for the situation to change is part of the necessary analysis in terms of either inconsistency or unfairness but in particular inconsistency.

14                  It would be wise for the applicant to prepare this case on the basis that the issue may be revisited next week.  Whether or not that gives Mr Neil a difficulty in running the case might in part be only answered by understanding what any advice was and who gave it. For the moment I do not propose to order the interrogatories requested but it may be prudent to prepare on the basis that at some point in fairly short order those orders might be made.

15                  For the moment I dismiss the application for the production of documents and answering of interrogatories as requested in exhibit 2 and the interrogatories attached to Mr Curtin's submissions of 6 October.  Costs of the application will be reserved.

Associate:

Dated:              26 October 2005