ALLEN v Integrated Property Investments (No.2)
[2003] FMCA 563
•9 December 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ALLEN v INTEGRATED PROPERTY INVESTMENTS (No.2) | [2003] FMCA 563 |
| COSTS – Applicant successful against one respondent only – applicant successful on one cause of action only – small amount awarded – costs fixed as lump sum. |
Federal Magistrates Act 1999, s.79(3)
Federal Magistrates Court Rules 2001
Trade Practices Act 1974
Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97
Dr Martens Australia Pty Ltd (no 2) [2000] FCA 602
Balderstone Hornibrook Pty Ltd v Qantas Airways Ltd [2003] FCA 325
Nexus Minerals NL v Bridges Constructions Pty Ltd [1997] 926 FCA (10 September 1997)
| Applicant: | TERESA ALLEN |
| Respondent: | INTEGRATED PROPERTY INVESTMENTS |
| File No: | MZ 411 of 2002 |
| Delivered on: | 9 December 2003 |
| Delivered at: | Melbourne |
| Hearing date: | 28 May 2003 |
| Judgment of: | Phipps FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Lethlean |
| Solicitors for the Applicant: | Kelly & Chapman |
| Counsel for the Respondent: | Mr Burns |
| Solicitors for the Respondent: | Christopher Bunnett |
ORDERS
That the First Respondent pay the Applicant's costs fixed at $6,000.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MZ 411 of 2002
| TERESA ALLEN |
Applicant
And
| INTEGRATED PROPERTY INVESTMENTS |
Respondent
REASONS FOR JUDGMENT
In this application an order was made that the first respondent pay the applicant $3619.08. The claim against the second respondent was dismissed. This judgement deals with the question of costs.
The applicant made a claim under the Trade Practices Act 1974 against both respondents. She claimed in contract against the first respondent. Her claim was for two years’ loss of the salary at $50,000 per year less three months she had been paid, a claim of approximately $86,000. Her claim under the Trade Practices Act against both respondents failed. She succeeded only in her claim in contract against the first respondent.
On 15 November 2002 the respondents made an offer of settlement by way of letter in the amount of $9,900 inclusive of costs. It was submitted that that was by way of Calderbank letter. It was then submitted that on any view, the applicant had not achieved a better result than that offered. Interest and costs would not take the total amount she would have recovered on 15 November 2002 to $9,900.
I was referred to two decisions of Federal Court judges where an offer inclusive of costs was not taken into account when finally determining the question of costs. They are Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97, a decision by Spender J and Dr Martens Australia Pty Ltd (no 2) [2000] FCA 602, a decision by Goldberg J. Both considered taking into account such an offer inappropriate because as Goldberg J said, at paragraph 24, it should be couched in such terms as to enable the offeree to make a carefully considered comparison between the offer made and the ultimate relief it is seeking in all its aspects.
I consider that I should follow those decisions and apply them in this case. That means that I do not take into account the offer made by way of letter on 15 November 2002.
The next question is of costs as against the second respondent. Both respondents had common representation. There was no issue in this case which meant that evidence was being called against the second respondent alone. It may be that some additional costs were incurred which related to the second respondent alone. They could only be identified by way of taxation. Given the small amount of the judgement, taxation is undesirable.
The second respondent is a director of the first respondent and one of the proprietors. The nature of the business is such that for the purpose of determining costs it is unrealistic to treat the incorporated respondent and the personal respondent separately. Insofar as the second respondent seeks costs I consider it would be an incorrect exercise of my discretion to order the applicant to pay those costs. The failure of the application against the second respondent is a matter to be taken into account in considering the applicant's costs.
Pursuant to section 79(3) of the Federal Magistrates Act 1999 the award of costs is in the discretion of the Federal Magistrate. Schedule 1 of the Federal Magistrates Court Rules 2001 contains a schedule of costs. A calculation of costs in accordance with that schedule would award the applicant about $18,000.
In Balderstone Hornibrook Pty Ltd v Qantas Airways Ltd [2003] FCA 325 Finkelstein J said at paragraph 4:
In my opinion, in deciding what order to make about costs, courts should consider, among other things, whether a party has succeeded on part of his case even if he has not been wholly successful. The days when a plaintiff could, with impunity, mount an attack on several fronts, some with little prospect of victory, in the hope of a direct hit and the recovery of all costs must be put behind us. Litigation is too expensive for courts to sanction this approach. Indeed it should be discouraged. The English courts have taken the initiative. There the judges have adopted a rule requiring a judge to have regard to, among other things, "whether a party has succeeded on part of his case, even if he has not been wholly successful": see O 44.3(4)(b) of the Civil Procedure Rules 1998 (UK).
An award of nominal damages often will not entitle a successful party to costs. See Nexus Minerals NL v Bridges Constructions Pty Ltd [1997] 926 FCA (10 September 1997). The award here is not nominal damages but it is small in itself and a small proportion of the amount claimed.
Rule 21.02(2)(a) permits the court to set the amount of costs.
I consider that I should fix a lump sum amount of costs taking into account the fact that the applicant has been successful and that that success has been for a small amount both in actual amount and in proportion to the amount claimed. That she has been successful against one respondent only and has been successful in only one of her claims. I take into account that costs fixed under schedule one of the Rules would be approximately $18,000. I fix the amount of costs at $6,000.
I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Phipps FM
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