Australian Competition & Consumer Commission v Global Prepaid Communications Pty Ltd

[2004] FCA 620

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Global Prepaid Communications Pty Ltd [2004] FCA 620

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v GLOBAL PREPAID COMMUNICATIONS PTY LTD (ACN 095 154 108) (In Liquidation), IN TOUCH NETWORKS PTY LTD (ACN 098 279 746) (In Liquidation), NICHOLAS YATES, FRANK YATES, NICHOLAS RHODIN, DANIEL ALBERT, RUSSELL FIELDING and JOHN RHODIN
N 328 OF 2003

GYLES J
19 APRIL 2004
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 328 OF 2003

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
APPLICANT

AND:

GLOBAL PREPAID COMMUNICATIONS PTY LTD (ACN 095 154 108) (In Liquidation)
FIRST RESPONDENT

IN TOUCH NETWORKS PTY LTD (ACN 098 279 746) (In Liquidation)
SECOND RESPONDENT

NICHOLAS YATES
THIRD RESPONDENT

FRANK YATES
FOURTH RESPONDENT

NICHOLAS RHODIN
FIFTH RESPONDENT

DANIEL ALBERT
SIXTH RESPONDENT

RUSSELL FIELDING
SEVENTH RESPONDENT

JOHN RHODIN
EIGHTH RESPONDENT

JUDGE:

GYLES J

DATE OF ORDER:

19 APRIL 2004

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

So far as the sixth respondent is concerned, the costs of the motion to strike out the statement of claim be the sixth respondent’s costs in the proceeding. 

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	N 328 OF 2003

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
APPLICANT

AND:

GLOBAL PREPAID COMMUNICATIONS PTY LTD (ACN 095 154 108) (In Liquidation)
FIRST RESPONDENT

IN TOUCH NETWORKS PTY LTD (ACN 098 279 746) (In Liquidation)
SECOND RESPONDENT

NICHOLAS YATES
THIRD RESPONDENT

FRANK YATES
FOURTH RESPONDENT

NICHOLAS RHODIN
FIFTH RESPONDENT

DANIEL ALBERT
SIXTH RESPONDENT

RUSSELL FIELDING
SEVENTH RESPONDENT

JOHN RHODIN
EIGHTH RESPONDENT

JUDGE:	GYLES J
DATE:	19 APRIL 2004
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. This is a matter in which I made an order on 31 October last that the amended statement of claim be struck out, and granting leave to file a further statement of claim within 28 days. 

2. On that occasion ultimately no order for costs was made pending the hearing of argument about the question.  There has been more than one abortive attempt to have the issue argued.  In the events that have occurred the sixth respondent has complied with the directions of the Court and has filed submissions in the matter which seek (1) costs of the application and (2) that those costs be taxed and paid immediately.  The third and fourth respondents have not filed submissions owing to the solicitor for the third and fourth respondent not having been properly instructed until late last week.

3. I have put to one side the situation of those respondents, as the sixth respondent is entitled to have his matter dealt with today.  The applicant opposes the orders sought and submits that costs in the normal way would be costs of the relevant respondent in the proceeding at the most.  I have been referred by counsel to various decisions of judges of the Court dealing with orders for costs in circumstances where strike out applications have succeeded.  There are of course myriad circumstances under which the question of costs in interlocutory proceedings has to be decided.

4. The present case is not an easy one.  The respondents enunciated a number of complaints about the statement of claim prior to the hearing of the application.  Indeed, as a result of those complaints, there had already been amendments made to the statement of claim and it is fair to say that the applicant took its stand on the pleading that it propounded and in part lost and in part won.  The result, that is the striking out of the statement of claim, was, on its face, a victory for the respondents.  This however should not be exaggerated in light of the grant of the leave to re-plead.  The course of granting such leave was taken because it was impractical for the Court to perform that task of redrafting the statement of claim in the light of the issues of principle that had been determined.  In my opinion the issues that were determined were, in substantial measure at least, determined in favour of the applicant even though some serious defects in the pleading were identified. 

5. The sixth respondent is an individual who is sued as an employee, not as a principal, and it is put forward on his behalf that he has had to incur significant expense which, because of the nature of the proceeding, is unlikely to be reimbursed for a considerable period of time, even if he is ultimately successful. 

6. The applicant contends that the significance of what has taken place to date is normally judged when the result of the case is known and that if an order for costs were made and taxed immediately, the practical effect of it might, in the end, be reversed if the sixth respondent were wholly unsuccessful in the proceeding. 

7. Whilst I have sympathy for the position of the sixth respondent in this matter, in my opinion, this is not a proper case for departure from what I regard as the normal rule, namely, that where there are genuine pleading matters to be determined and where they are determined wholly or partly in favour of respondent, then that respondent is entitled to have the costs of the application to strike out treated as part of its costs of the proceeding but the applicant is not entitled to costs in any event.  If that respondent loses the case then it may be proper to see those costs as being part of the overall preparation for it to which it would not be entitled. 

8. So far as the sixth respondent is concerned, I order that the costs of the motion to strike out the statement of claim be the sixth respondent’s costs in the proceeding. 

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Associate:

Dated:            2 June 2004

Counsel for the Applicant:	BR McClintock SC; D Godwin
Solicitor for the Applicant:	Phillips Fox
Solicitor for the Third and Fourth Respondents:	McConnell Jaffray
Counsel for the Sixth Respondent:	PL Carr
Solicitor for the Sixth Respondent:	William Stanley Whitby
Date of Hearing:	19 April 2004
Date of Judgment:	19 April 2004