FEDERAL COURT OF AUSTRALIA
Spence v Rigging Rentals WA Pty Ltd [2016] FCA 154
ORDERS
Applicant | ||
AND: | RIGGING RENTALS WA PTY LTD (ACN 105 556 563) First Respondent CLIFFORD MCGILLVRAY Second Respondent CRAIG SWEETAPPLE Third Respondent | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The Second and third Defendants jointly and severally pay the Plaintiff’s costs of the action to be taxed if not agreed.
2. The First Defendant pay the Plaintiff’s costs of the cross-claim to be taxed if not agreed.
3. The First, Second and Third Defendants jointly and severally pay the Plaintiff’s costs of this application to be taxed if not agreed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Introduction
1 Judgment was entered for the plaintiff on its claim on 29 October 2015. Each of the second and third defendants was ordered to purchase one half of the plaintiff’s shares from the third defendant. The first defendant was ordered to pay the plaintiff $36,740.
2 The plaintiff, on the cross-claim, was ordered to pay the first defendant $11,927.18.
3 The plaintiff seeks the costs of both the action and the cross-claim. The defendants seek orders apportioning costs as follows:
(a) The second and third defendants pay 50% of the plaintiff’s costs of the action to be taxed if not agreed.
(b) The first defendant pay 90% of the plaintiff's cost of the cross-claim, to be taxed if not agreed.
Apportionment of costs
4 The principles generally applicable to the award of costs are not controversial as between the parties. Section 43(2) of the Federal Court of Australia Act 1976 ("the Act") confers a wide discretion as to the award of costs. That discretion may be broadened, providing the Judge or Court with the discretion to award costs in relation to different parts of the proceeding (s 43(3)(b)); order the parties to bear costs in specified portions (s (3)(c)); and award costs in favour of or against a party whether or not the party is successful in the proceeding (s 43(3)(e)).
5 The defendants accept the general rule that costs should follow the event and that the usual exercise of the discretion of the Court is to award costs to the successful party. However, they submit that other factors may be considered, and in this case should be, which have significant weight on the exercise of the Court's discretion: Stewart v Atco Controls Pty Ltd (in liq) (No 2) (2014) 252 CLR 331.
6 The success or failure of a party is only the starting point when considering the costs of the action. The following three distinct situations can arise where a successful party can be deprived of costs, or alternatively ordered to pay the costs of the other side: Queensland North Australia Pty Ltd v Takeovers Panel (No 2) [2015] FCAFC 128 ("Queensland North") at [11]:
(1) The applicant was only partially successful and has not obtained all of the relief sought.
(1) A party has succeeded in obtaining the relief sought, but not on all of the factual and legal bases.
(2) Consideration of the successful party's conduct of the case suggests that they should not be awarded the full amount of costs, even when successful.
7 Costs may also be refused or altered in instances where a successful party has exaggerated their claim and succeeds only on a small aspect of their claim: Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at [15].
The primary claim
8 Whilst the plaintiff was not entirely successful in his claim, he was nonetheless substantially successful. The plaintiff claimed purchase of his shares by the defendants for the price of $1.317 million. However, at trial, it was agreed that the value of his shares was $600,000. Accordingly the quantum issue was not the subject of evidence and the length of the trial was undoubtedly shortened. The plaintiff was entirely successful as to liability on the main issue of oppressive conduct. The plaintiff claimed lost income on termination of his employment in the sum of $97,000 and unpaid dividends of $88,878.33. The claim for loss of income was rejected. $36,740 was awarded for the unpaid dividend claim. Both these claims were consequential upon the plaintiff’s success in his oppression claim. The loss of income claim took very little time at trial and was disposed of in the reasons for judgement in three short paragraphs. Such was the case also in relation to the dividend claim. To the extent that the plaintiff was unsuccessful, in that respect, it was because this claim was in effect covered in the share purchase judgment figures. The main forensic contest at trial on this issue was occupied by the first defendant’s unsuccessful challenge to a table of dividends relied upon by the plaintiff.
9 The defendants submit that, had the plaintiff quantified his claim at $600,000 at an earlier stage, it is questionable whether the expense of a trial would have been necessary. I reject this submission. Had this been so then I would have expected that the matter would have settled at trial when this figure was agreed. It was not.
10 I am not prepared to apportion costs. This was a very substantial success by the plaintiff and he should have his costs of the claim.
The cross-claim
11 The cross claim substantially failed. It was itemised at a total of $419,990. An award of only $11,927.18 was made. Of that sum $3,427.18 was admitted by the plaintiff at the commencement of the trial.
12 Most of the cross-claim was predicated upon a number of factual issues which emerged in the trial of the claim itself. The plaintiff successfully answered those allegations.
13 The one item where the first defendant was successful related to the expenses of one overseas trip to Europe in April 2013. It succeeded as the result of a concession by the plaintiff during his evidence. It does not warrant any apportionment of costs. The first defendant should pay the plaintiff’s costs and the cross-claim.
Interest
14 As the defendants submit the practice in the Federal Court is that interest on taxed costs runs from the date of the Certificate of Taxation: Federal Court Rules 2011, Rule 40.32. Accordingly, any interest on costs should run from the date of the Certificate of Taxation.
Post judgment interest
15 The applicant sought interest on the amount of this judgment in his favour in the net sum of $24,812.82 from 29 October 2015 to 25 November 2015. No order in this respect is necessary. Interest applies to a judgment debt pursuant to s 52 of the Act which operates of its own force. General Manager of the Fair Work Commission v Thomson (No 4) [2015] FCA 1433 at [51].
Costs of this application
16 The defendants should, jointly and severally, pay the plaintiff costs of this costs application.
I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. |
