Australian Agricultural Company Limited v AMP Life Limited (No 2)

[2006] FCA 841

FEDERAL COURT OF AUSTRALIA

Australian Agricultural Company Limited v AMP Life Limited (No 2) [2006] FCA 841

AUSTRALIAN AGRICULTURAL COMPANY LIMITED v AMP LIFE LIMITED and AMP CAPITAL INVESTORS LIMITED
NSD 1444 of 2003

COWDROY J
3 JULY 2006
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1444 OF 2003

BETWEEN:

AUSTRALIAN AGRICULTURAL COMPANY LIMITED
Applicant

AND:

AMP LIFE LIMITED
First Respondent

AMP CAPITAL INVESTORS LIMITED
Second Respondent

JUDGE:

COWDROY J

DATE OF ORDER:

3 JULY 2006

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.   The costs of the notice of motion dated 27 September 2005 be costs in the cause.

2.   The costs of the subpoenas issued by the respondents to Futuris Corporation Ltd, Ernst & Young and Ernst & Young Transaction Advisory Services Pty Ltd be costs in the cause.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1444 OF 2003

BETWEEN:

AUSTRALIAN AGRICULTURAL COMPANY LIMITED
Applicant

AND:

AMP LIFE LIMITED
First Respondent

AMP CAPITAL INVESTORS LIMITED
Second Respondent

JUDGE:	COWDROY J
DATE:	3 JULY 2006
PLACE:	SYDNEY

JUDGMENT

1. On 6 April 2006 the Court delivered judgment in respect of Australian Agricultural’s notice of motion dated 27 September 2006. The motion had been filed following a direction given by his Honour Justice Emmett on 16 September 2005.

2. Australian Agricultural sought several orders in the motion. The first paragraph of the motion sought leave to amend its statement of claim. The second paragraph sought inspection of documents over which the respondents claimed privilege. The third paragraph sought an affidavit from a representative of each respondent verifying that the respondents had disclosed all their privileged documents in relation to legal advice dated 9 September 2003. The fourth paragraph sought further discovery of documents. The fifth paragraph sought an affidavit from each of the respondents verifying that the respondents had discovered all of the documents in their possession in relation to categories of discovery agreed by the parties.

3. The motion came on for hearing before Emmett J on 11 November 2005, and his Honour determined the motion on that day, with the exception of the second paragraph, which was adjourned until 17 March 2006. The orders made by Emmett J on 11 November 2005 relevantly provided:

   ‘1.Leave be granted for the Applicant to file and serve a Second Further Amended Statement of Claim by 5 pm on 14 November 2005, in the form supplied by the Applicant to the Respondent on 9 November 2005, with the Applicant to pay the Respondents’ costs occasioned by that amendment.

   …

   6.The Respondents to file and serve by 28 November 2005 a further affidavit from Ms Moodley verifying the Respondents’ discovery, with such affidavit to identify:

   6.1the persons of whom Ms Moodley has made enquiries in relation to the existence and location of documents discoverable in these proceedings;

   6.2the nature of those enquiries; and

   6.3the searches undertaken by the Respondents to locate documents discoverable in these proceedings.

   …’

4. In respect of the first paragraph of the motion, the respondents initially opposed leave for Australian Agricultural to amend its statement of claim. To meet the objection, Australian Agricultural filed an affidavit of Timothy Peter Kentish which attaches correspondence relating to the proposed amendment. On the morning of the hearing before Emmett J, the respondents abandoned their objection, and leave was granted. Australian Agricultural was ordered to pay the costs occasioned by the amendment, although no order was made for costs of the motion.

5. In respect of the second paragraph of the motion, the respondents opposed the order. As mentioned above, the hearing was adjourned until 17 March 2006. Emmett J directed that Australian Agricultural file and serve interrogatories upon the respondents to identify whether they had relied upon legal advice in determining which tender to accept. I heard this issue on 17 March 2006 and delivered judgment on 6 April 2006, finding in favour of the respondents.

6. In respect of the third paragraph, the respondents opposed this order and no order was made in the terms sought by the motion. However, before the hearing, the respondents provided Australian Agricultural with one additional document which related to the advice of 9 September 2003 (in respect of which privilege had been waived). Before the hearing, Australian Agricultural identified ten additional documents which it considered might relate to the advice of 9 September 2003. At the hearing, Emmett J inspected those documents and found that they did not relate to 9 September 2003 and accordingly that privilege was not waived. Australian Agricultural says that the production of the one additional document satisfied in substance the outcome sought by Australian Agricultural and justified it seeking the order. It says costs should be costs in the cause. The respondents say that no order in the terms sought was made, and that no submissions were made in support of this order. It says that the costs should be awarded to the respondents.

7. In respect of the fourth paragraph of the motion, the respondents consented to give further discovery before the hearing but after filing of the notice of motion. Both parties agree that costs in respect of this paragraph should be costs in the cause.

8. In respect of the fifth paragraph of the motion, an order was made that ‘Ms Moodley’ provide an affidavit explaining the process by which discovery had been provided. The respondents say they were substantially successful as Emmett J’s order fell short of the order sought by Australian Agricultural. The respondents claim costs in respect of this paragraph. Australian Agricultural submits that such an order represented a ‘substantial success’ for it, and seeks an order that costs be costs in the cause.

9. The respondents raise a further issue in respect of which costs are claimed. The respondents sought the leave to issue subpoenas to several companies, which was opposed by Australian Agricultural. Emmett J also heard argument on this issue on 11 November 2005 and granted leave to issue the subpoenas, on condition that Australian Agricultural have first access to the documents produced in order to identify material that was not relevant, which would not be provided to the respondents. Australian Agricultural says that it objected to leave being granted because the subpoenas were framed so broadly as to be tantamount to seeking general discovery.  It says that its offer to consent to the issue of subpoenas in narrower terms was rejected.  Australian Agricultural claims that it was substantially successful on this issue and that costs should be costs in the cause.

   FINDINGS

10. The Court’s power to award costs is contained in s 43 of the Federal Court of Australia Act1976 (Cth). The power is broad and unfettered, save that it is to be exercised judicially: Latoudis v Casey (1990) 170 CLR 534; Oshlack v Richmond River Council (1998) 193 CLR 72 per Gaudron and Gummow JJ at 81.

11. Australian Agricultural seeks an order that the costs of four of the five paragraphs be costs in the cause, and that the costs of the hearing before me on 17 March 2006 be reserved. The respondents submit that they should be awarded the costs of paragraphs 2, 3 and 5 as well as the costs relating to the subpoenas, and that the costs associated with paragraphs 1 and 4 should be costs in the cause.

12. It is the usual rule that the party which has been successful is entitled to be indemnified by the unsuccessful party for its costs (see Oshlack at 75). However, in the present case, neither party has been wholly successful or unsuccessful.

13. Australian Agricultural clearly succeeded in respect of the first paragraph of the motion, to which the respondents did not consent until the day of the hearing, although on condition that it pay the costs occasioned by the amendment. The respondents clearly succeeded on the second paragraph of the motion. Both parties agree that costs in respect of paragraph 4 should be costs in the cause.

14. In respect of the third paragraph, no order was made and Emmett J determined that the privilege had not been waived in respect of the additional ten documents identified by Australian Agricultural. Nonetheless, the respondents produced a further document to the Australian Agricultural before the hearing. It is unlikely that this document would have been produced had it not been for the motion.

15. In respect of the fifth ground, I am satisfied that Australian Agricultural was substantially successful. Although the order made was not precisely that sought in the motion, the order made achieved the outcome sought of providing assurance to Australian Agricultural that all searches and enquires had been made to ensure discovery was complete.

16. In respect of the subpoenas, the orders made by Emmett J appear to me to present a compromise between Australian Agricultural and the respondents. Accordingly, I do not consider that either party was entirely successful in respect of this issue.

17. I do not consider it appropriate to make a costs order which attempts to identify the degree of success of each party with respect to each part of the motion. To do so would only further complicate the award of costs and may lead to further disputes between the parties with respect to the quantum involved with each paragraph of the motion. Considering all of the above, it appears to me that each of the parties have had an approximately equal level of success on the motion as a whole. In these circumstances, I consider the appropriate order is that the costs of the motion and subpoenas be costs in the cause.

I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy.

Associate:

Dated:        3 July 2006

Counsel for the Applicant:	M Hoffman QC
Solicitor for the Applicant:	Lipman Karas
Counsel for the Respondents:	T F Bathurst QC
Solicitor for the Respondents:	Clayton Utz
Date of Final Submissions:	15 May 2006
Date of Judgment:	3 July 2006