FEDERAL COURT OF AUSTRALIA

TBHF Pty Ltd v Moves Travel Group Pty Ltd [2011] FCA 1201

THE COURT ORDERS THAT:

1.    The respondents’ solicitors be at liberty to access the $40,000 held in the form of a bank guarantee, and currently in their possession, to apply towards an award of costs of $58,628.60 in favour of the respondents.

2.    The applicants pay the respondents $18,628.60, being the balance of the award of costs of $58,628.60, within 21 days of the date of this order.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

REASONS FOR JUDGMENT

1    On 18 August 2011 the Court dismissed this proceeding for want of prosecution. The parties were ordered to file and serve written submissions on the question of costs by 23 August 2011, with any such matter to be determined on the papers. On 31 August 2011 that timetable was extended with the parties being required to “file and exchange any written submissions on the question of costs on or before 14 October 2011”. The respondents complied with that order. The applicants failed to file any written submissions by the due date.

2    The respondents seek an order that the applicants pay their costs on an indemnity basis. They also seek the award of a lump sum for their costs.

3    The submissions made on behalf of the respondents outline the numerous failures of the applicants to comply with orders of the Court concerning the filing of particulars of their claims and relating to discovery issues. When particulars were filed they were incomplete, difficult to understand, and did not disclose any basis for the central allegations in the proceeding raised against the respondents.

4    At no stage did the applicants’ case for the relief they sought in the proceeding rise beyond mere unsupported assertions. The conduct of the applicants and their representatives in failing to attend several directions hearings and in ignoring orders of the Court was very unhelpful to the efficient conduct of the proceeding which they initiated.

5    The only proper inference for the Court to draw is that the applicants’ claim was hopeless and should not have been progressed. That was certainly evident, at least as at 12 July 2010 (in context of a case commenced on 22 March 2010) when the respondents served a Calderbank offer on the applicants. In that offer the respondents set out the inadequacies in the case of the applicants and offered to accept withdrawal of the proceeding without any costs penalty to the applicants. The applicants rejected that offer.

6    Having regard to the manner in which the applicants have conducted the proceeding, and their failure to come to grips with the inadequacies in their case, the Court considers that this is a proper case for the award of indemnity costs; see Cirillo v Consolidated Press Property Ltd (formerly known as Citicorp Australia Limited) (No 2) [2007] FCA 179 and Lowe v Mack Trucks Australia Pty Limited (No 2) [2008] FCA 711.

7    The respondents have provided evidence that they have spent $58,628.60 in their defence of the proceeding. On 28 February 2011 the applicants were ordered to give security for the costs of the respondents. The security was paid and is held by the respondents’ solicitors. Rather than have the respondents incur extra costs involved in a taxation proceeding it is appropriate to order as follows:

1.    The respondents’ solicitors be at liberty to access the $40,000 held in the form of a bank guarantee, and currently in their possession, to apply towards an award of costs of $58,628.60 in favour of the respondents.

2.    The applicants pay the respondents $18,628.60, being the balance of the award of costs of $58,628.60, within 21 days of the date of this order.

Associate:

Dated:    24 October 2011