FEDERAL COURT OF AUSTRALIA

Buurabalayji Thalanyji Aboriginal Corporation v Onslow Salt Pty Ltd (No 5) [2019] FCA 1437

ORDERS

THE COURT ORDERS THAT:

1.    Costs of the application for a separate hearing of the second, third and fourth cross-claims (the cross-claims) be reserved pending the hearing of the cross-claims.

2.    Costs associated with these reasons be reserved pending the hearing of the cross-claims.

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

REASONS FOR JUDGMENT

MCKERRACHER J:

INTRODUCTION

1    On 15 August 2019, I handed down judgment in Buurabalayji Thalanyji Aboriginal Corporation v Onslow Salt Pty Ltd (No 4) [2019] FCA 1275. The judgment concerned an application brought by the State of Western Australia, relevantly being the third cross-claimant in this matter, seeking an order that the second, third and fourth cross-claims (the cross-claims) be heard and determined prior to the further programming or hearing of the principal proceeding and the first cross-claim. Buurabalayji Thalanyji Aboriginal Corporation (BTAC), relevantly being the second, third and fourth cross-respondent, opposed a separate hearing of the cross-claims. I found in the favour of the State.

2    Costs of the application were reserved to be determined on the papers and I made orders allowing the filing of short written submissions on the question of costs. For the reasons which follow I consider that costs of the application should be reserved and determined following the determination of the cross-claims.

THE PRINCIPLES

3    The power to order costs under s 43 of the Federal Court of Australia Act 1976 (Cth) is a broad discretionary one: Renshaw v Queensland Mining Corp Ltd (2014) 103 ACSR 358 (at [40]). It is a power that must be exercised judicially, by reference only to considerations relevant to its exercise and upon facts connected with or leading up to the litigation: Northern Territory v Sallgare [2019] HCA 25 per Kiefel CJ, Bell, Gageler, Keane and Nettle JJ (at [24]). It is trite to observe that the usual course is that costs follow the event. It is a principle that is not in dispute between the parties.

4    The High Court recently observed in Northern Territory v Sallgare (at [25]):

A guiding principle by reference to which the discretion is to be exercised – indeed, “one of the most, if not the most, important” principle – is that the successful party is generally entitled to his or her costs by way of indemnity against the expense of litigation that should not, in justice, have been visited upon that party.

5    The dispute between the parties is whether the nature of the application decided by the Court was such that it warrants this Court exercising its discretion to depart from the usual course.

CONSIDERATION

6    The State contends there is nothing warranting a departure from the usual course. The State points to several cases in which similar orders were sought by the Court and where the Court ordered the unsuccessful party to pay costs: see Buchanan v TAL Life Limited [2015] FCA 42 and Fleming’s Nurseries Pty Ltd v Hannaford [2008] FCA 591. However, these were not cases in which the application for a separate hearing centred around a purported covenant not to sue.

7    It is this purported covenant not to sue which I accept as being sufficiently unique or special to warrant a departure from the usual course. The application was primarily determined on the basis that it is just and convenient for the cross-claims to be heard first to prevent the potential injustice of the cross-claimants being denied their asserted right to rely on a purported covenant not to be sued.

8    The scope and existence of that contractual right, as BTAC correctly identifies, is in issue in the cross-claims. While I determined that it was in the interests of justice that the construction and effect of the relevant clause be determined prior to further programming or hearing of the principal proceeding and first cross-claim, the existence and scope of those contractual rights is yet to be determined. If the cross-claims are unsuccessful, a central premise upon which the application was determined would be negated. In my view, the present situation is distinguishable from other circumstances considered by the Court. I am not presently satisfied that costs should be awarded to the cross-claimants or that costs should be in the cause. But I am satisfied at this stage that it is appropriate that costs be reserved until the determination of the cross-claims.

9    While not central to this conclusion, it is relevant that courts have declined to make orders as to the costs of a successful interlocutory application where the applicant was ultimately unsuccessful at trial. Further, I note the State raises the fact that BTAC’s consent was sought for the separate hearing (albeit the request came from the second cross-claimant not the State). That this request was refused and the State was then successful in prosecuting its application is another factor which the State contends weighs in favour of it being awarded its costs of the application. I do not consider either matter is particularly determinative in this proceeding.

10    I note that the other cross-claimants, namely Chevron Australia Pty Ltd and Onslow Salt Pty Ltd, filed short written submissions seeking to recover their costs. Despite their limited role in the proceeding, Chevron and Onslow Salt rely on Greenwood J’s decision in Mackay Sugar Limited v Wilmar Sugar Australia Limited (No 3) [2016] FCA 1456 where costs were awarded to a party which his Honour described as having taken ‘a relatively “passive” role in relation to the application’. Chevron and Onslow Salt contend it was reasonable and necessary, where their interests were affected by the application, to consider the material filed in relation to the application and make brief submissions. These points may be of significance when the Court ultimately makes an assessment of costs of the cross-claims. At this stage, I note the submissions for completeness.

CONCLUSION

11    The determination that it was appropriate to order the separate hearing of the cross-claims was substantially predicated on the nature of the rights which are sought to be asserted by those cross-claims. The existence of those rights is central to the assessment of where costs ought to appropriately fall. Any determination of costs should be determined upon the outcome of the cross-claims. Costs should remain reserved pending the outcome of the cross-claims.

Associate:

Dated: 2 September 2019