Federal Court of Australia

Lanzer v Australian Broadcasting Corporation (No 2) [2021] FCA 1321

ORDERS

THE COURT ORDERS THAT:

1.    The applicants pay the first respondent’s costs of and incidental to the applicants’ application for interlocutory relief as taxed or agreed.

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

REASONS FOR JUDGMENT

NICHOLAS J:

Background

1    Last week I made an order dismissing the applicants’ application for an interlocutory injunction (Lanzer v Australian Broadcasting Corporation [2021] FCA 1283). In my reasons I stated that it was my provisional view that the applicants should pay the first respondent’s costs of the interlocutory application. At the time of giving judgment the applicants indicated that they wished to be heard in relation to costs and they were given an opportunity to file a written submission which they have now done.

The Applicants’ Submissions

2    The applicants acknowledged in their written submission that the Court has a broad and unfettered discretionary power to award costs. They also stated (correctly) that the discretion must be exercised judicially, not arbitrarily or capriciously, and that it must also be exercised having regard to the relevant principles and the justice of the case in all of the circumstances.

3    The applicants then submitted that the appropriate order in this case is that the costs of and incidental to the interlocutory application be each party’s costs in the cause. In support of that submission they relied on the following matters.

4    The applicants submitted (correctly) that there is a distinction between an interlocutory order that disposes of a separate question or a discrete issue in advance of a final hearing, and an interlocutory injunction that is obtained for the purpose of preserving the status quo. In the latter case the Court has not conclusively determined any controversy between the parties and has only made a preliminary assessment of the strength of the case.

5    The applicants submitted that in contrast to the determination of a separate question, the appropriate costs order following an application for an interlocutory injunction should be an order that each party’s costs be costs in the cause. The applicants further submitted that this is the usual order as to costs that is made in such circumstances. In this context the applicants referred to what they said was the “rationale for a costs in the cause order” as explained by the New South Wales Court of Appeal in His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v the Macedonian Orthodox Community Church St Petka Incorporated & Anor (No 2) [2007] NSWCA 142 (Beazley, Giles and Hodgson JJA) where their Honours said at [21]:

The rationale for making an order that costs be costs in the cause is that, at the stage of granting an interlocutory injunction, the court is not in a position to adjudicate on the ultimate outcome of the proceedings. Rather, provided there is a reasonable case to be tried, the Court’s focus in deciding whether to grant the application for interlocutory relief is on other considerations and, in particular, on determining whether, on the balance of convenience, an injunction ought to be granted. Accordingly, if a plaintiff who applies for an interlocutory injunction is not ultimately successful in the proceedings, that plaintiff should not receive the costs of the application for an injunction which, when the matter is considered in overview cannot be sustained. However, as already explained, each case must depend upon its own facts.

(my emphasis added)

6    In support of the proposition that the usual costs order is an order that the costs be costs in the cause, the applicants referred to two first instance decisions of the New South Wales Supreme Court, Brigthen Pty Limited v Nine Network Australia Pty Limited & Ors [2009] NSWSC 319 at [22] per Johnson J and Lincoln Hunt Australia Pty Ltd v Willesee & Ors (1986) 4 NSWLR 457 at 465 per Young J (“Lincoln Hunt”).

7    The applicants submitted that if they are ultimately successful in this proceeding, it would be unjust if they were not able to recover their costs of the interlocutory application. They further submitted that by ordering that each party’s costs be costs in the cause, the possibility of any such injustice arising would be avoided. They emphasised that the first respondent’s success on the interlocutory application was based on the Court’s preliminary assessment of the merits of the case, and it is fairer and more appropriate for costs to follow the event after any final hearing.

8    The applicants also submitted that much of the evidence relied on by them at the interlocutory hearing is likely to be relied on by them at any final hearing and, in those circumstances, it would be unfair if the applicants were not able to recover their costs of preparing that evidence if they were ultimately successful.

9    Finally, the applicants submitted that they were successful in resisting the first respondent’s “wholesale objection” to the notice to produce referred to in my reasons, which ultimately resulted in the production of the documents admitted into evidence as Exhibit A, which the first respondent undertook not to publish.

CONSIDERATION

10    I do not consider it productive to enquire into what might be considered the “usual rule” in respect of costs following a contested application for an interlocutory injunction. What is clear, however, is that the New South Wales Court of Appeal’s decision in His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand is not authority for the proposition that the “usual rule” or “usual practice” is that the costs of an interlocutory application be costs in the cause. The applicants’ submissions overlook the words which I have emphasised at [5] above. Clearly, the Court of Appeal was not concerned with a situation in which the plaintiff had failed to establish a prima facie case.

11    The question of costs is a matter in the discretion of the Court. Section 43 of the Federal Court of Australia Act 1976 (Cth) gives a very broad discretion to a Judge considering the question of costs. Settled principles guide but do not necessarily determine the exercise of the discretion.

12    A distinguishing feature of the present case is that the applicants failed to establish a prima facie case. This is not a case in which the applicants demonstrated that they had a prima facie entitlement to relief but that the balance of the convenience weighed against the grant of interlocutory relief. The applicants did not obtain any of the interlocutory orders they sought nor any more modest relief that I may have been inclined to grant had the applicants demonstrated the existence of an arguable case.

13    As previously mentioned, the applicants also relied on the decision of Johnson J in Brigthen Pty Limited v Nine Network Australia Pty Limited who at [22] cited the judgment of Young J in Lincoln Hunt and suggested that, prima facie, the ordinary rule would be that the costs of both parties should be costs in the cause. In Brigthen Pty Limited v Nine Network Australia Pty Limited, the application for an interlocutory injunction was rejected by Johnson J on the basis that there was no prima facie case and that, even if there was, damages would be an adequate remedy. Curiously, the order actually made by his Honour was that costs be reserved: see [23].

14    As to the decision of Young J in Lincoln Hunt, that was a case in which his Honour was satisfied that the plaintiff had demonstrated a prima facie case but where his Honour considered damages would provide the plaintiff with an adequate remedy. His Honour said at 465 that he would hear the parties on the question of costs but that “… it seems to me prima facie that the ordinary rule in these sorts of applications should apply, that is, that the costs of both parties on the application should be costs in the cause …”. Contrary to the applicants’ submission, Lincoln Hunt is not authority as to the appropriate order for costs where an applicant’s application for an interlocutory injunction is dismissed on the basis that no prima facie case was established.

15    There are many examples in this Court where the Court has ordered an applicant to pay the respondent’s costs of an interlocutory application which has been dismissed on the basis that no prima facie case was made out. A recent example is Athavle v State of New South Wales [2021] FCA 1075, where Griffiths J ordered the unsuccessful applicant for an interlocutory injunction to pay the respondent’s costs. His Honour said at [116]:

I consider that this is an appropriate case in which to order the applicants to pay the respondents’ costs. Where the applicant is successful in an interlocutory application, the normal approach is that costs of the interlocutory process become the applicants’ costs in the cause. If, however, as is the case here, the applicant loses, the usual order is that the applicant pay the respondent’s costs of the application. As Campbell J explained in Ausino International Pty Ltd v Apex Sports Pty Ltd [2006] NSWSC 1119 at [56], the rationale for this approach relates to the way in which interlocutory proceedings are intended to advance the final hearing. If an applicant brings and loses an interlocutory application, then that interlocutory hearing is one which will, irretrievably, have cost the respondent money and justice generally requires that the respondent be indemnified for those costs, regardless of the outcome of the substantive proceedings (similarly see Mayfield Family Wines Pty Ltd v Growers Wine Group Pty Ltd (No 2) [2021] SASC 75 at [10]-[11] per Blue J).

16    In Mayfield Family Wines Pty Ltd v Growers Wine Group Pty Ltd (No 2) [2021] SASC 75, a decision cited by his Honour, Blue J said at [11] that if the applicant for an interlocutory injunction fails to establish a prima facie case and the application is dismissed, it may be an appropriate exercise of the discretion to require the applicant to pay the costs of the interlocutory application. Foster J took that approach in Boyd v Wild Hibiscus Flower Company Pty Ltd (No 2) [2012] FCA 74, in which the applicant, having failed to establish a prima facie case, was ordered to pay the respondents’ costs of the interlocutory application. Rares J took the same approach in Uren v Commonwealth of Australia (as represented by the Department of Infrastructure and Regional Development) (No 2) [2017] FCA 759.

17    It is not necessary to support or justify the costs decision in this case by reference to any “usual rule”. Every case will depend on its facts. In my view, justice requires that costs of the interlocutory application follow the event in this case.

18    As I have mentioned, the applicants also submitted that it was likely that the evidence relied upon by them at the interlocutory hearing will be relied upon by them at any final hearing. This is a remarkable submission. The two affidavits relied upon by the applicants at the hearing of the interlocutory application were made by their solicitors on information and belief (Dr Lanzer did not make an affidavit) and the possibility of those affidavits being relied upon at the final hearing and surviving objections as to their admissibility is fanciful.

19    In relation to the undertaking given by the first respondent, this was proffered and accepted on a “without admissions” basis. The fact that the undertaking had been given had no bearing on my decision to refuse the applicants’ application for interlocutory relief on the ground that they had not made out a prima facie case, though I acknowledge that it was relevant to the balance of convenience.

20    That brings me to the notice to produce. The background to the notice to produce is briefly discussed in my earlier judgment. There was no doubt that the notice to produce was cast in excessively broad terms. Rather than waste time having the parties argue about the enforceability of the notice to produce, I made an order in far more specific terms requiring the first respondent to produce documents upon which the applicants may wish to rely at the hearing. Those documents were produced and tendered by the applicants. In circumstances where the notice to produce was issued, and the order for production was made, in aid of the applicants’ interlocutory application, any costs specifically relating to the notice to produce or the production of documents should also follow the event.

21    For the avoidance of doubt, I will simply note that the order for costs I make extends to any costs incurred by the first respondent in resisting the notice to produce and complying with the order for production.

22    The order of the Court will be that the applicants pay the first respondent’s costs of and incidental to the applicants’ application for interlocutory relief.

23    Order accordingly.

Associate:

Dated:    27 October 2021