FEDERAL COURT OF AUSTRALIA

 Serventi v John Holland Group Pty Ltd (No 2) [2006] FCA 1760

ROBERT SERVENTI v JOHN HOLLAND GROUP PTY LTD, WILLIAM WILD AND GRIDCOMM PTY LTD

NSD 698 OF 2004

MADGWICK J

15 DECEMBER 2006

SYDNEY

THE COURT ORDERS THAT:

1.                  The application be dismissed but without any orders as to the costs of it.

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

REASONS FOR JUDGMENT

HIS HONOUR:

1                     The second respondent seeks payment of his costs on an indemnity basis on the ground that the applicant had no prospect of succeeding and should not have made or persisted with the claims against him.  The applicant unsuccessfully alleged unlawful termination of his employment by the first respondent.  Among other bases for the alleged unlawfulness were supposed breaches of s 52 and s 53B of the Trade Practices Act 1974 (Cth).  Mr Wild, the second respondent, was the managing director of the first respondent.  He was sued for accessorial liability under s 75B of that Act.

2                     The second respondent points out that actual knowledge of the matters essential to a contravention of the Act by the principal must be sheeted home to a putative s 75B accessory before he or she can be made liable, and that those matters include knowledge of the misleading nature of the representations relied on by the applicant.  There was no evidence of such knowledge. 

3                     Further, the second respondent’s solicitors informed the applicant’s solicitors at an early stage that:

‘… we intend to separately record the costs incurred in respect of each of the First and Second Respondents.  We note that the Second Respondent will seek costs on an indemnity basis from the Applicant from the date of this correspondence, in the event that the proceedings against the Second Respondent are dismissed at the final hearing.’

Whatever the merits of Mr Wild’s theoretical position in this matter (and they may be considerable), I am not satisfied that there is likely to have been any appreciable amount of costs both separately and, as between solicitor and client, reasonably incurred on his account.  Both respondents were represented by the same solicitors.  Mr Wild’s evidence was as relevant to the first respondent’s case as to his own.  Notwithstanding that Mr Wild’s solicitors told the applicant’s solicitors that they would ‘separately record’ such costs, in response to a question from me seeking the solicitors’ estimate of such costs and/or an explanation of how they arose, counsel for the second respondent was obliged to say: ‘[my] instructing solicitors were unable to directly assist …’  Instead, they tendered a report from their costs consultant.  This pointed out that the taxing officer would need to have a ‘general view as to the apportionment of costs as between’ the respondents and that, if a substantial portion were assigned to Mr Wild, the difference between indemnity and party party costs might very well be substantial.

4                     It is inconceivable, on the material before me, that a taxing officer could find that any appreciable costs were separately incurred in respect of Mr Wild’s joinder in the proceedings.  It is also intrinsically very unlikely that such was the fact. 

5                     It is, further, very unlikely that the arrangements between the first respondent and its managing director were such that it would leave him to bear the costs of actions undertaken in relation to the applicant for what he conceived to be the first respondent’s benefit. 

6                     In my discretion, I decline to encourage further disputation over an aspect of the matter that is either a trifle or would result in a party not entitled to an indemnity costs order getting, for no sound reason, the benefit of one. 

7                     The application will be dismissed but without any order as to the costs of it.

Associate:

Dated:         15 December 2006