FEDERAL COURT OF AUSTRALIA

Alliance Craton Explorer Pty Ltd v Quasar Resources Pty Ltd (No 3)

[2012] FCA 812

THE COURT ORDERS THAT:

1.    The costs of the two notices of motion of Alliance Craton Explorer Pty Ltd of 4 February 2011 and 11 February 2011 to date be costs in the cause.

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

REASONS FOR JUDGMENT

1    I made orders in this matter on 26 March 2012 (the Orders). I gave reasons for the Orders on 4 April 2012, requiring the respondents Quasar Resources Pty Ltd (Quasar) and Heathgate Resources Pty Ltd (Heathgate) to provide certain further discovery to the applicant Alliance Craton Explorer Pty Ltd (Alliance), but declining to require Quasar and Heathgate to answer interrogatories administered by Alliance: Alliance Craton Explorer Pty Ltd v Quasar Resources Pty Ltd [2012] FCA 291. I reserved the question of costs. The parties have now completed their respective submissions on costs. These reasons address the costs related to those Orders.

2    The orders were made on separate motions of Alliance. They are:

IN RELATION TO THE APPLICATION FOR THE RESPONDENT TO ANSWER INTERROGATORIES, THE COURT ORDERS THAT:

(1)    No order is made in respect of the proposed interrogatories.

(2)    The application is stood over to a date to be fixed, with the applicant to have liberty to re-apply for an order that the respondents answer further particular interrogatories. Such application is to be made on 14 days notice.

(3)    Costs of the application are reserved with liberty to any party to apply for costs of the application to date, by filing and serving within 21 days of publication of reasons for Order 1 hereof a written submission specifying the orders sought and the submissions in support of it and any other party may then within a further period of 21 days file and serve written submissions in response and the party or parties applying for costs may within a further 14 days file and serve written submissions strictly in reply, to the intent that the costs of the application to date will then be determined on the papers.

(4)    The time within which any application for leave to appeal from Orders 1 to 3 hereof shall run until 2 May 2012.

IN RELATION TO APPLICATION FOR PARTICULAR DISCOVERY, THE COURT ORDERS THAT:

(5)    The respondents and each of them within 49 days from the making of this order on such further claim as the Court may allow, do make particular further discovery of any documents which they or either of them have not yet discovered which concern the prospectivity of the Paralana Plains area, including in relation to tenements adjacent to the Tenement (EL 2874), and which comprise:

5.1    documents which came into existence between 30 August 2002 and 30 August 2004 recording data which the first respondent considered in determining the nature and extent of its exploratory drilling program to search for sedimentary-hosted uranium mineralisation in the Paralana Plains area including but not limited to ground based surveys;

5.2    documents recording the information obtained by the first respondent as a result of the drilling program conducted by it or the second respondent in the Paralana Plains area in the period of about August 2004;

5.3    documents passing between the first respondent and the second respondent in the period between May 2004 and 13 October 2004 in which one respondent conveyed to the other respondent views about the prospectivity of the Tenement.

(6)    The respondents have liberty to apply for orders confining the extent in which the documents may be inspected by the applicant or its legal advisors or representatives, provided such application is made by notice given at the time of the provision of the further discovery.

(7)    Cost of the application for further discovery are reserved with liberty to any party to apply for costs of the application to date, by filing and serving within 21 days of publication of reasons for Order 5 hereof a written submission specifying the orders sought and the submissions in support of it and any other party may then within a further period of 21 days file and serve written submissions in response and the party or parties applying for costs may within a further 14 days file and serve written submissions strictly in reply, to the intent that the costs of the application to date will then be determined on the papers.

(8)    The time within which any application for leave to appeal from Orders 5 to 7 hereof shall run until 2 May 2012.

(9)    Liberty to any party to apply to determine whether the particular documents specified by the applicant in its submissions in reply fall within the documents referred to in Order 5 hereof, such liberty to be exercised on reasonable notice to the other party.

3    Alliance seeks costs in respect of its application for further discovery, and that the question of costs in respect of its application for leave to administer interrogatories be reserved pending its decision as to whether it wishes to re-apply for an order for interrogatories pursuant to Order 2 of the Orders made on that motion.

4    Quasar and Heathgate submit that the applications should be considered together for the purposes of costs, as the applications were both means by which Alliance sought to obtain the same general class of information from them. They seek a “global” order that costs of both applications be in the cause. In the alternative to a “global” order, they seek costs of the motion seeking leave to administer interrogatories to be paid by Alliance. In respect of the motion seeking further or particular discovery, Quasar seeks an order that Alliance receive no more than 50% of its costs of its motion subject to the claim that in any event, Alliance should pay Quasar’s costs thrown away by reason of its conduct that occasioned the aborting of the hearing on 12 May 2011 and there be no order with respect to Alliance’s costs of and incidental to the affidavit of Evan Stents filed on 11 February 2011. In respect of the motion seeking further or particular discovery, Heathgate seeks an order that the respondents pay a proportion in the range of 25-50% of Alliance’s costs having regard to the Orders, compared to the extent of the particular discovery sought on the motion.

5    The Court has power to make such orders as to the costs of the two motions as it may consider appropriate: s 43, Federal Court of Australia Act 1976 (Cth), Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3) (1979) 42 FLR 213 at 219. Although the arguments relating to each of them was separate from the other they were listed to be heard together, and to a significant degree the material relevant to them – particularly the background material – was common.

6    As a starting point, it may be observed that Alliance to the present stage has failed in obtaining an order for Quasar and Heathgate to answer the interrogatories proposed to be administered, but on the other hand has succeeded in obtaining an order that they provide further discovery. Although Alliance’s success in obtaining an order for further discovery was not in relation to the considerably more extensive range of documents which it sought, the underlying contested proposition for it seeking both the answering of interrogatories and for it seeking further discovery was made out: that in the material period Quasar and Heathgate may have material which was relevant to the prospectivity of the subject tenement although it related directly only to tenements adjacent to the subject tenement.

7    Alliance proposed an extensive range of interrogatories and only some of which were found to be relevant, having regard to the pleadings. It was unable to demonstrate that, at the present time, answers to them were necessary in the interests of justice. It proposed, as noted, a considerably more extensive range of categories of documents to be further discovered than was ordered; some categories were not pursued in its ultimate submissions, and only some were the subject of the Orders made, and then only in respect of a more confined period than that identified by Alliance. On the further discovery motion, it is also appropriate to take into account the adjournment of the hearing prompted by the extensive further material which Alliance produced and sought to rely on at the hearing on 12 May 2011, even though Alliance contends the time set aside (and more) would have been required in any event.

8     In the circumstances, I consider it appropriate to deal with the costs of both the motions together, rather than to make separate orders for costs in relation to each of them. Their common background, their shared underlying issue, and the difficulty of isolating clearly the legal work attributable to each leads me to that view. Necessarily, to take that step will involve a somewhat broad brush.

9    One option would be that there be no order for the costs of either motion. However, I do not take that step as – depending on which party or parties are successful in the ultimate proceeding – it may result in an injustice to that party or those parties by being unable to recover costs to which that party or those parties might otherwise have been entitled. As noted above, both Quasar and Heathgate have submitted that the costs of both motions should be costs in the cause. If they successfully resist the principal claim, they will thereby be able to recover the costs of the discovery motion which they disputed. If Alliance is successful in the claim, it will be able to recover the costs of its unsuccessful interrogatories motion.

10    On balance, I think that is, however, the fairest way to deal with the costs of the two motions. It balances the success of Alliance’s underlying contention – that information about the prospectivity of adjoining tenements is capable of informing the prospectivity of the tenement – against its limited success measured against that which it sought by the two motions. It has regard to the nature of the claim, and potentially the very large amounts in issue. It avoids the need for a separate taxation of costs of part of a proceeding, irrespective of the overall outcome of the proceeding. True it is that the party or parties who succeed in the action will thereby recover a little more in the way of costs than would have been the case if costs of the two motions were addressed separately because the full costs of each motion to date will be recoverable when strictly speaking each party has failed to some degree on each motion, I do not think that would be substantial as the work identifying the background, the data relating to the prospectivity of the adjoining tenements and the discovery of that material, would have largely been necessary in any event. On the other hand, as I have said, the costs of selectively isolating those items of legal work which can be confined only to one or other or both of the two motions would in my view be such as to make such a taxation of costs (or a taxation of overall costs excluding some percentage of those costs) unduly onerous and expensive.

11     Accordingly, I order that the costs of the two notices of motion to date be costs in the cause. If Alliance pursues an order that certain interrogatories be answered, or if any party exercises the reserved liberty to apply in respect of the orders for further discovery, the costs of any such further processes will need to be separately considered.

Associate:

Dated:    3 August 2012