FEDERAL COURT OF AUSTRALIA

Freehills, in the matter of New Tel Limited (in liq) ACN 009 068 955 (No 3)
[2008] FCA 1030

COSTS – application for leave to appear opposed and refused – application adjourned to enable further evidence to be provided – whether any special circumstances why successful opponent to application for leave should not have costs – no reason

Held:  costs ordered.

Federal Court of Australia Act 1976 (Cth) s 43

Cirillo v Consolidated Press Property Ltd (No 2) [2007] FCA 179

Freehills, in the matter of New Tel Limited (in liq) ACN 009 068 955 [2008] FCA 762

Freehills, in the matter of New Tel Limited (in liq) ACN 009 068 955 (No 2) [2008] FCA 1006

Jamal v Secretary, Department of Health (1988) 14 NSWLR 252

Onefone Australia Pty Ltd v One.Tel Ltd [2007] NSWSC 1320

Ricegrowers Co-operative Ltd and Another v ABC Containerline NV and Others (1996) 138 ALR 480

Ritter v Godfrey [1920] 2 KB 47

IN THE MATTER OF NEW TEL LIMITED (IN LIQUIDATION) ACN 009 068 955

THE APPLICATION OF FREEHILLS

WAD 188 of 2007

MCKERRACHER J

8 JULY 2008

PERTH

IN THE MATTER OF NEW TEL LIMITED (IN LIQUIDATION) ACN 009 068 955

THE COURT ORDERS THAT:

1.                  Mr Barry Waller and Wainter Pty Ltd are to pay the plaintiff’s costs of and incidental to their application to be heard on 8 May 2008 including costs of the plaintiff’s submissions in relation to this order. 

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

IN THE MATTER OF NEW TEL LIMITED (IN LIQUIDATION) ACN 009 068 955

REASONS FOR JUDGMENT

1                     On 28 April 2008, the plaintiff filed an ex parte application for leave to serve an examination summons outside of Australia.  Substituted service was also sought.  The matter was listed for and heard on 8 May 2008.   On the day before the hearing, solicitors for Mr Barry Waller, the examinee’s father and for Wainter Pty Ltd (Wainter) sent the plaintiff an outline of submissions in support of a foreshadowed application for ‘leave to appear in opposition to’ the application. 

2                     Counsel for Mr Waller and Wainter duly applied for leave to be heard.  The application was opposed by the plaintiff.  I provisionally heard the application and submissions in opposition but expressly reserved the right to decline the application for leave to appear. 

3                     My decision on the application was reserved.  On 26 May 2008 reasons were delivered in support of orders adjourning the plaintiff’s application and dismissing the application by counsel for Mr Waller and Wainter for leave to be heard (Freehills, in the matter of New Tel Limited (in liq) ACN 009 068 955 [2008] FCA 762). 

4                     On receipt of additional evidence, on 19 June 2008 I allowed the plaintiff’s application.  Although there has been a further application by the examinee to set aside the order for service out of Australia and substituted service, that application has been dismissed.  Argument in that application was heard on 1 July 2008.  I delivered a judgment dismissing that application and declining to reserve that issue to the Full Court on 2 July 2008 (Freehills, in the matter of New Tel Limited (in liq) ACN 009 068 955 (No 2) [2008] FCA 1006)). 

5                     The plaintiff’s opposition to Mr Waller and Wainter having leave to appear was successful, even though (on a provisional basis) I heard the application and the opposition on 8 May 2008.  There is no doubt that the duration of the hearing was increased by virtue of the unsuccessful application.  Some research prior to the application and the presentation of argument at the hearing was both necessary and effective in opposition to the application for leave to be heard.  The question is whether in the circumstances raised by Mr Waller and Wainter, the plaintiff should be compensated by a costs order only in relation to that additional work over and above its ex parte application.

6                     There is a discretion at large to order costs under s 43 of the Federal Court of Australia Act 1976 (Cth).  The section provides a ‘broad and ample power’ which ought not be read down otherwise than in accordance with accepted principle:  Cirillo v Consolidated Press Property Ltd (No 2) [2007] FCA 179 per Finn J at [3].  

7                     It is ‘accepted principle’ that costs ordinarily follow the event and a successful litigant receives his costs unless there are special circumstances which would justify any other order:  Ritter v Godfrey [1920] 2 KB 47.  The plaintiff asserts that there are no special circumstances (see Jamal v Secretary, Department of Health (1988) 14 NSWLR 252 at 271).

8                     In response, it is argued that a costs order should not be made against Mr Waller and Wainter on the basis that there are special circumstances.  Those special circumstances are said to include the fact that submissions made for Mr Waller and Wainter led to a conclusion that the plaintiff had failed to satisfy the requirement of providing evidence as to the law of the foreign country. 

9                     It is true that I did not immediately grant the plaintiff’s application to make an application for service out of the jurisdiction on 8 May 2008 but rather adjourned the application on the basis that additional evidence should be supplied.  However, having adjourned the application and the additional evidence being supplied, the application succeeded.  I did not, as Mr Waller and Wainter suggested I should do when it first came on for hearing on 8 May 2008, dismiss the application at that stage or any stage. 

10                  Despite the fact that Mr Waller and Wainter raised the foreign law point, it does not necessarily follow, especially with leave to appear being refused, that the plaintiff should not receive the usual costs order.  That submission rather assumes that the Court will robotically rubber stamp an ex parte application.  As I made clear in my reserved reasons at [24], the application raised some serious questions concerning service in a foreign jurisdiction.

11                  Mr Waller and Wainter also contend that the other special circumstances which warrant a departure from the normal rule is that there was a failure to make full and fair disclosure on the part of the plaintiff.  A conclusion to that effect would be quite inconsistent with the conclusion I expressed in my reasons.  It cannot be sustained.  The justification for the submission is that the plaintiff changed the order in which it pursued its application having been influenced by the written submissions of Mr Waller and Wainter provided the previous day.  A change in the order of address, even a change in the order of relief which is sought is not a failure to make full and fair disclosure. 

12                  The plaintiff has also drawn my attention to the decision in Onefone Australia Pty Ltd v One.Tel Ltd [2007] NSWSC 1320 where Barrett J in similar circumstances made a costs order of the nature it seeks.  The circumstances were similar as contended but there were differences.  The obvious difference is that Mr Waller and Wainter did raise the foreign law evidence point.  That point whether raised by them or the Court was the cause of the adjournment.

13                  In contrast Mr Waller and Wainter have sought to cast their position as being more comparable to the invited ‘contradictor’ in Ricegrowers Co-operative Ltd and Another v ABC Containerline NV and Others (1996) 138 ALR 480.  Again there are some similarities with that case but more important differences.  The contradictor in that case was invited to be heard (no doubt for good reason) but was a proposed party to that litigation.  Further, its submissions fully succeeded, not only on the service point but also on a pre-action discovery point and possibly on a joinder point which, in contrast to the present situation, were all determined in favour of the ‘contradictor’.

14                  Finally Mr Waller and Wainter contend that it is inappropriate that they should be subjected to an adverse costs order when they have not had been permitted to view the additional affidavit filed by the plaintiff setting out the foreign law evidence.  I do not accept that submission.  The costs order sought and which I propose ordering is confined to costs referable to the application for leave to be heard on 8 May 2008 and to this debate.  Having refused the application for leave to be heard on 26 May 2008, the subsequent evolution of the ex parte matter has no bearing on the costs determination for the earlier application. 

15                  In all the circumstances, I consider that the appropriate disposition is that Mr Waller and Wainter pay the plaintiff’s costs of and incidental to their application to be heard on 8 May 2008 including costs of their submissions in relation to this costs order.  I will so order.

Associate:

Dated:         8 July 2008