FEDERAL COURT OF AUSTRALIA

Sanda v PTTEP Australasia (Ashmore Cartier) Pty Ltd (No 4) [2018] FCA 74

ORDERS

THE COURT ORDERS THAT:

1.    The applicant pay the respondent’s costs of the applicant’s interlocutory application dated 23 February 2017.

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

REASONS FOR JUDGMENT

YATES J:

1    On 15 November 2017, I made orders pursuant to s 44 of the Limitation Act 1981 (NT) extending the limitation period applicable to the applicant’s claim in this proceeding: Sanda v PTTEP Australasia (Ashmore Cartier) Pty Ltd (No 3) [2017] FCA 1272 (Reasons 3). The question of costs remains.

2    The respondent submits that the applicant should pay its costs of the interlocutory application seeking the extension because, in applying for the extension, the applicant was seeking an indulgence. The applicant submits that, as he was successful over the respondent’s opposition, the “usual rule” should apply so that costs follow the event (the “event” being the application to extend the limitation period), with the consequence that the respondent should pay his costs of the application.

3    In support of its position, the respondent submits that the applicant was seeking an indulgence and that, in opposing the application, the respondent did not act unreasonably because:

    the application depended on when the applicant ascertained certain facts said to be material to his claim, being facts peculiarly within his knowledge;

    the applicant had no presumptive entitlement to an extension even on satisfying the Court of the existence of his lack of knowledge of material facts;

    it was reasonable for the respondent to test the applicant’s evidence, particularly when discrepancies between his affidavit evidence and certain documentary records were evident;

    it was reasonable for the respondent to contradict the applicant’s submissions as to whether facts were material to his claim and whether the discretion should be exercised favourably to him, especially in an unusual case, such as the present, where the applicant is resident outside Australia and is seeking to bring a claim for alleged damage suffered outside Australia; and

    the judgment given in favour of the applicant will provide useful guidance in relation to further applications for extension of the limitation period that will be required for group members.

4    In support of his position, the applicant submits:

    the respondent was not justified in opposing, and should not have opposed, the application in the present case, which has only occasioned delay and expense;

    even though the threshold for seeking an extension of the limitation period is not high (indeed, the respondent accepted that it is set very low), the respondent sought to put in issue whether the applicant was aware of material facts within the limitation period;

    the applicant’s case on the reasons for commencement outside the limitation period was clear and cogent, particularly having regard to his personal circumstances;

    the respondent failed to articulate any real prejudice that would arise as a result of an extension of the limitation period;

    the respondent’s opposition to the application was speculative and dependent on evidence that lacked any persuasive force;

    aspects of the respondent’s conduct of the application caused additional delay and expense in determining the application, such as issuing numerous subpoenas in respect of material said to be relevant to the application, challenging claims to privilege which required the vacation of the initial hearing date for the application, filing lengthy written submissions in relation to the application, and conducting significant cross-examination and making further oral submissions at the hearing of the application; and

    it was open to the respondent to take a neutral stance.

5    Section 43(2) of the Federal Court of Australia Act 1976 (Cth) (the Act) confers a broad discretion when exercising the power to award costs. That said, applications for extension of a limitation period, like other applications to extend time, generally have been viewed as cases in which, in the ordinary course, the successful applicant should pay the costs of the application save where the opposition is wholly unreasonable: Commonwealth of Australia v Lewis [2007] NSWCA 127 at [94]-[97]; Holt v Wynter [2000] NSWCA 143; (2009) 49 NSWLR 128 at [121] (Holt); Dibley v Sydney West Area Health Service [2009] NSWSC 856 at [70]-[76] (Dibley). This approach is an expression of the more general principle that a party seeking an indulgence, whether as to time or otherwise, should pay the costs of the indulgence being granted, save in respect of costs unnecessarily incurred: see, for example, Stanley v Layne Christensen Company [2006] WASCA 56 at [52]; Bowen Energy Limited v 2KD Drilling Pty Ltd [2012] FCA 275 at [22]; Yang v L&H Group [2015] FCA 932 at [48]; Finch v The Heat Group Pty Ltd (No 3) [2015] FCA 1084 at [18]-[21]; GAIN Capital UK Limited v Citigroup Inc (No 3) [2016] FCA 582 at [14]-[15]. Other decisions have doubted whether a successful applicant for the extension of a limitation period should be ordered, routinely, to pay the respondent’s costs of the application: Salvation Army (South Australia Property Trust) v Rundle [2008] NSWCA 347 at [148]; Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346; (2001) 53 NSWLR 116 at [37]. However, my reading of these cases suggests to me that the way in which the relevant principles were framed and discussed was informed by the facts under consideration.

6    I think it would be an error for me to proceed as if a particular category of application before the Court necessarily entails a particular outcome on costs. I would accept, however, that the inescapable starting point in the present case is the fact that the applicant was out of time to bring his claim and that, to that extent, he was seeking an indulgence. This is a significant consideration to be weighed in the balance.

7    The applicant submits that no indulgence was involved because he was not responsible for commencing the proceeding out of time. This submission seeks to take advantage of the way in which the principle was expressed by Sheller JA at [121] in Holt who said:

In relation to costs ordinarily a successful applicant, who has allowed him or herself to get out of time, should pay the costs of the application unless the respondent’s opposition was wholly unreasonable.

(Emphasis added)

8    The applicant relied on this passage to suggest that a successful applicant for an extension of the limitation period would only be liable for costs where he or she was at fault in allowing the limitation period to pass. This interpretation has been adopted (Williams v Commonwealth of Australia [2007] NSWSC 1342) but not followed (Galea v Commonwealth of Australia [2008] NSWSC 260 at [11]; Dibley at [76]).

9    The applicant developed this submission by relying on my finding at [98] in Reasons 3 that the applicant was “entirely blameless”. This finding was made in the context of a submission by the respondent that the limitation period should not be extended on discretionary grounds because of the knowledge and conduct of the applicant’s (now) lawyers who, according to the respondent, must themselves have known before the expiration of the limitation period of the material facts giving rise to the applicant’s present claim. I do not see how that finding, when viewed in the context in which it was made, assists the applicant. In any event, the fact remains that the need to extend the limitation period was a necessary hurdle for the applicant to overcome as recognised in the prayers for relief in his originating application, regardless of whether he, personally, was at fault. That hurdle existed solely by reason of the applicant’s lateness in bringing the claim.

10    I do not accept the submission that the respondent was not justified in opposing, and should not have opposed, the application in the present case. The respondent was unsuccessful in its opposition, but this is not to say that its opposition was so devoid of merit that its conduct in opposing the application was ipso facto unreasonable. It was, of course, open to the respondent to take a neutral stance, as it would be for any party in its position. But circumstances did not effectively oblige the respondent to adopt that stance and the applicant was not entitled to any such indulgence from the respondent itself. There were inconsistencies and discrepancies in the evidence which it was appropriate for the respondent to test, even though, ultimately, I was satisfied that the applicant was a witness of truth whose evidence, on the whole, was reliable on key points. Further, the respondent cannot be criticised for making submissions on the evidence or advancing reasons why the discretion to extend the limitation should not be exercised in the circumstances of the case even though, ultimately, I did not find those submissions persuasive. I am not persuaded that the respondent’s conduct of its opposition was, in other respects, unreasonable in the ways suggested in the applicant’s submissions.

11    I am persuaded that, on this occasion, I should follow the general principle and order the applicant to pay the respondent’s costs of the application to extend the limitation period. Having come to that conclusion, I would hope that the respondent’s consideration of any future applications to extend the limitation period in respect of group members will take account of the matters discussed in Reasons 3 and that Reasons 3 will provide the “useful guidance” which the respondent’s submissions foreshadowed so that unnecessary disputation is eliminated consistently with the obligations imposed on parties by s 37N(1) of the Act: see also in that regard s 37N(4).

Associate:

Dated:    13 February 2018