FEDERAL COURT OF AUSTRALIA

Australian Pesticides and Veterinary Medicines Authority v Administrative Appeals Tribunal (No 2) [2008] FCA 1672

COSTS – parties had divided success – whether costs should be ordered on an “issues” basis or upon the basis of the commercial result achieved – distinct issues – no evidentiary overlap – costs ordered on an issues basis utilising a percentage

Agricultural and Veterinary Chemicals (Administration) Act 1992 (Cth) s 69B

Administrative Decisions (Judicial Review) Act 1977 s 16(1)(a)

Judiciary Act 1903 (Cth) s 39B(1)

Federal Court of Australia Act 1976 (Cth)s 21(1)   

Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (No 2) [2003] FCAFC 163 cited

Australian Pesticides and Veterinary Medicines Authority v Administrative Appeals Tribunal [2008] FCA 1393 referred to

Cultivaust Pty Ltd v Grain Pool Pty Ltd [2004] FCA 1568 cited

Hughes v Western Australian Cricket Association (Inc) [1986] FCA 511; (1986) 8 ATPR ¶40‑748 referred to

New South Wales Dairy Corporation v Murray-Goulburn Co-operative Co Ltd (1989) 14 IPR 75 discussed

O’Keefe Nominees Pty Ltd v BP Australia Ltd, Trade Practices Commission (Intervener) (1991) 128 ALR 718 cited

Queensland Wire Industries Pty Ltd v Broken Hill Pty Co Ltd (1987) 17 FCR 211 cited

Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 cited

Spotwire Pty Ltd v Visa International Service Association [2004] FCA 1481 cited

AUSTRALIAN PESTICIDES AND VETERINARY MEDICINES AUTHORITY v ADMINISTRATIVE APPEALS TRIBUNAL and IMTRADE AUSTRALIA PTY LTD (ACN 090 151 134)

WAD 118 of 2008

GILMOUR J

13 NOVEMBER 2008

PERTH

THE COURT ORDERS THAT:

1.                  The applicant pay 75% of the second respondent’s costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

REASONS FOR JUDGMENT

1                     On 13 October 2008 I made final orders, except as to costs, which gave effect to reasons for judgment dated 12 September 2008: Australian Pesticides and Veterinary Medicines Authority v Administrative Appeals Tribunal [2008] FCA 1393.  There was divided success in the proceedings.

2                     These reasons concern the question of costs, as to which it was agreed that the Court should resolve this upon written submissions without the need for a further appearance. 

3                     In Hughes v Western Australian Cricket Association (Inc) [1986] FCA 511; (1986) 8 ATPR ¶40-748at 48,136, Toohey J said the following upon the question of the apportionment of costs in circumstances such as the present:

(a)        ordinarily, costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order;

(b)        where a litigant has succeeded only on a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which it has failed;

(c)        a successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs. "Issue" in that sense, does not mean a precise issue in the technical pleading sense, but any disputed question of fact or law.

            (citations omitted)

4                     This approach has been approved by the Full Court: Queensland Wire Industries Pty Ltd v Broken Hill Pty Co Ltd (1987) 17 FCR 211; Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (No 2) [2003] FCAFC 163; and in Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at [11].

The Application

5                     The applicant (Authority) sought relief against the first respondent (the AAT)and second respondent (Imtrade)under s 16(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 and also pursuant to s 39B(1) of the Judiciary Act 1903 and s 21(1) of the Federal Court of Australia Act 1976. In substance, the Authority sought, in relation to the proceedings brought by Imtrade in the AAT:

(a)        to quash interlocutory orders made on the application of Imtrade under s 43 of the AAT Act, and

(b)        to prohibit further proceedings in the AAT as it had no jurisdiction.

6                     The applicant also sought relief against Imtrade by way of declarations that,
because they were affected, procured or induced by the fraud of Imtrade:

(a)        the specified approvals of active constituents in the Record of Active Constituents were of no legal effect; and

(b)        the specified registrations of chemical products in the Register of Chemical Products were of no legal effect.

The Cross Application

7                     In its cross-application Imtrade sought:

(a)        an order of review under the ADJR Act in respect of what it asserted to be decisions of the Authority under the Agricultural and Veterinary Chemicals Code made on 21 May 2008; and

(b)        an injunction.

8                     Imtrade also sought orders directing the Authority to withdraw a notice given to the Comptroller General of Customs under s 69B of the Agricultural and Veterinary Chemicals (Administration) Act 1992 (Cth), and an order requiring the Authority to issue a press release.  Neither of these matters was pressed at the hearing.  It was unnecessary to deal with the application for injunctive relief as the applicant proffered appropriate undertakings.

9                     The primary contest was whether the approvals and registrations were invalid because they were affected, procured or induced by fraud.  The Authority also argued that only the Court could decide authoritatively whether or not the approvals and registrations were legally valid or effective. It sought relief, including constitutional writs, to reflect the want of jurisdiction in the AAT to determine the dispute between the parties.  Imtrade contended that the AAT had jurisdiction and was the appropriate Tribunal to deal with these matters. 

The Hearing

10                  The hearing proceeded on affidavit evidence, with no cross examination.  Imtrade had, prior to trial, served two notices to produce documents.  The Authority complied with each notice, producing to Imtrade seven lever arch folders of documents ahead of the hearing as requested by the respondent.  There were a further two lever arch folders to which objection was to be taken and, argued at the hearing.  At trial, Imtrade did not press any further production, and tendered, by consent, one email from the documents produced.

11                  The Court concluded that:

(a)        it was not satisfied that the misrepresentation by Imtrade about the identity of Evergreen induced the decisions to approve or register. It followed from this finding that the approvals and registrations were valid and the Authority had unlawfully removed them from the Record and Register;

(b)       the 47 variations to the Register to include the name and address of Evergreen were induced by misrepresentations so as to be invalid, but not so as to vitiate the underlying registrations;

(c)        the AAT did not have jurisdiction to review the actions of the Authority in the proceedings instituted before it by Imtrade.

12                  Accordingly the Authority has not succeeded in its primary contention that the approvals and registrations were invalid.  Imtrade too failed in its contention that the AAT has jurisdiction and is the appropriate tribunal to deal with these matters.  

13                  The Authority does not seek an order for costs against the AAT, which did not participate in the proceedings.

14                  The Authority submits that it should have its costs to the extent that it has been successful on the issue going to the jurisdiction of the AAT, and the issue with respect to the validity of the 47 applications to vary registrations.  It submits that there should be an apportionment of costs on an issues basis or alternatively upon a percentage basis. 

15                  Imtrade submits that costs should follow the event.  The “event” it says can be considered as the commercial result, so that a successful litigant may recover all its costs where the objective sought by the litigation is achieved, even though the litigant does not succeed on every issue in the litigation: O’Keefe Nominees Pty Ltd v BP Australia Ltd, Trade Practices Commission (Intervener) (1991) 128 ALR 718 per Spender J at 720, citing New South Wales Dairy Corporation v Murray-Goulburn Co-operative Co Ltd (1989) 14 IPR 75. 

16                  Imtrade contends that the Authority’s principal objective in the litigation was to have its actions in removing Imtrade’s active constituents and chemical products from the Record and the Register upheld by the Court.  Imtrade’s objective was to have the active constituents and chemical products restored to those registers so that those products could continue to be imported, supplied and used.

17                  As the Authority failed in its objective, and Imtrade succeeded, the costs of the proceedings should, Imtrade submits, follow the “event”, characterised in that way.

18                  By its cross-claim, Imtrade also sought an order directing the Authority to withdraw a notice given to the Comptroller General of Customs, in effect, prohibiting the importation of Imtrade’s active constituents and chemical products.  A formal order in this regard, I am informed, was not pressed because the Authority gave an undertaking to Imtrade, after the Reasons for Decision had been delivered, that it would withdraw the notice.

19                  The Authority provided an interim undertaking in response to the injunctive relief sought by Imtrade on the day of the trial.  After the Reasons for Decision were delivered, I am further informed that the Authority did issue a press release which stated the effect of the Court’s decision and published it on its website.

20                  The removal of the approvals and registrations from the Record and Register by the Authority was unlawful.  Imtrade submitted that it would not have incurred any legal costs at all but for the unlawful actions of the Authority.

21                  I held that the Authority should not have resorted to “self-help” remedies but rather should have sought appropriate relief from the Court: [48] and [53].  If the Authority had adopted that course, Imtrade submits that the questions concerning the jurisdiction of the Administrative Appeals Tribunal would not have arisen.

22                  I do not accept Imtrade’s submissions.  It could have sought appropriate relief from this Court in the first instance. Imtrade elected to institute proceedings in the AAT.  The Authority at the outset challenged the jurisdiction of the AAT.  It was a quite distinct issue, unrelated to the merits of the substantive case.  Imtrade chose to litigate that issue in this Court.  Its failure on that issue ought be reflected in the costs order.  I do not consider the approach taken by Gummow J in NSW Dairy Corporation to be apt in this case.  There, although there were a range of issues, much of the evidence was common to a number of them.  This is not such a case at least as far as concerns the jurisdiction issue. 

23                  The question as to the lawfulness of the removal by the Authority of the 9 active constituents consumed most of the applicant’s written submissions as well as most of the time at the hearing.  Although there is no inevitable correspondence between these facts and the make-up of the reasons, I think that they do reflect that this was, in every sense, the largest issue in the proceeding.  Indeed I described it in the reasons as the “core legal contention”: [89].  The question of the jurisdiction of the AAT, on the other hand, is the subject of but 12 out of 90 paragraphs. 

24                  It has been recognised that ordering costs on an “issues” basis can lead to difficulties in assessment: Spotwire Pty Ltd v Visa International Service Association [2004] FCA 1481 at [13].  Indeed the Court is reluctant generally to proceed on this basis: Cultivaust Pty Ltd v Grain Pool Pty Ltd [2004] FCA 1568 at [40]. 

25                  I consider that a just result would be to order the Authority to pay 75% of the costs of Imtrade in the proceedings as a whole.  I have taken into account the fact that notices to produce were served and complied with.  The Authority made the assertion that the notices to produce were unnecessary and burdensome, in the circumstances of this case and further, that the categories of documents were largely directed to matters where the facts were not in dispute.  There were no detailed submissions made in support of this assertion.  I am unable to conclude that it was unreasonable for Imtrade to have taken these steps in aid of its case.

Associate:

Dated:         13 November 2008