Bartholomew v Mercer (Australia) Pty Ltd and Anor (No.2) - [2011] FMCA 474

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BARTHOLOMEW v MERCER (AUSTRALIA) PTY LTD & ANOR (No.2)

[2011] FMCA 474

PRACTICE & PROCEDURE – Costs – interlocutory application – each party partially successful.

Applicant:

PETER JAMES BARTHOLOMEW

First Respondent:

MERCER (AUSTRALIA) PTY LTD

Second Respondent:

MERCER INVESTMENT NOMINEES LTD

File Number:

SYG 2346 of 2010

Judgment of:

Cameron FM

Hearing date:

On the papers

Date of Last Submission:

3 June 2011

Delivered at:

Sydney

Delivered on:

28 June 2011

REPRESENTATION

Solicitors for the Applicant:

Surry Hills Legal Centre

Solicitors for the Respondents:

Turks Legal

ORDERS

The applicant pay the respondents’ costs of and incidental to the respondents’ application in a case dated 29 April 2011 up to and including 9 May 2011.
Subject to order 4, the respondents pay the applicant’s costs of and incidental to the respondents’ application in a case dated 29 April 2011 from 9 May 2011.
The costs ordered in orders 1 and 2 be set off against each other.
The parties bear their own costs of this application for costs.
The parties have liberty to apply.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 2346 of 2010

PETER JAMES BARTHOLOMEW

Applicant

And

MERCER (AUSTRALIA) PTY LTD

First Respondent

MERCER INVESTMENT NOMINEES LTD

Second Respondent

REASONS FOR JUDGMENT

On 29 April 2011 the respondents filed an application in a case seeking orders that this proceeding be transferred to the Federal Court or, in the alternative, that it be stayed until a particular proceeding in the Victorian District Registry of the Federal Court was determined.

I concluded that it was not appropriate that the proceeding be transferred to the Federal Court and ordered, with the agreement of the parties, that the proceeding be stayed pending the determination of the Federal Court matter. The parties have sought costs.
The relevantly chronology is as follows:
a)on 22 March 2011 the respondents’ solicitors wrote to the applicant’s solicitors inviting the applicant to consent to an order staying this proceeding pending the outcome of the Federal Court proceeding. They requested a response by 24 March 2011, failing which they foreshadowed seeking the respondents’ instructions to apply to the Court for a stay. It appears that the applicant’s solicitors did not respond to that letter;
b)
on 29 March 2011 the respondents’ solicitors wrote to the applicant’s solicitors repeating their request for a stay of this proceeding pending the outcome of the Federal Court matter and also seeking an adjournment of the mediation in this proceeding which had originally been ordered on 2 March 2011 to take place no later than 15 April 2011. The respondents’ solicitors also asked for a response from the applicant’s solicitors by 5pm on

30 March 2011 failing which they foreshadowed that an application in a case might be filed without further notice;
c)on 15 April 2011 the respondents’ solicitors wrote to the applicant’s solicitors advising that their clients intended to apply to transfer this proceeding to the Federal Court or, in the alternative, for an order that it be stayed pending the outcome of the Federal Court proceeding;
d)on 20 April 2011 the applicant’s solicitors wrote to the respondents’ solicitors consenting to a stay of this proceeding on condition that the stay not take effect until the matter had been mediated;
e)on 29 April 2011 the respondents’ solicitors filed their application in a case seeking orders that the proceeding be transferred to the Federal Court or, in the alternative, stayed pending the outcome of the Federal Court proceeding;
f)on 4 May 2011 the respondents’ solicitors wrote to the applicant’s solicitors rejecting the offer made in the latter’s letter of
20 April 2011 and giving reasons for not agreeing to that proposal;
g)on 9 May 2011 the applicant’s solicitors wrote to the respondents’ solicitors consenting to a stay of the proceeding and dropping their request that the matter be mediated regardless of the stay; and
h)argument on the application in a case was heard on 11 May 2011 and judgment was delivered on 18 May 2011.
The applicant seeks indemnity costs of the application in a case or, in the alternative, party and party costs until 9 May 2011 and indemnity costs thereafter. The respondents seek the costs of the application in a case on a party and party basis or, in the alternative, party and party costs up to 9 May 2011 and no order as to costs in respect of the period thereafter.
The general rule is that costs follow the event. However, on this occasion each party has enjoyed some success. In such circumstances, regard may be had to the degree of success which each party has enjoyed. Also relevant to the current consideration are the letters and emails passing between the parties’ representatives which led to the filing of the application in a case and to its partial settlement.
The costs of this application in a case can be divided into two distinct periods. The first is the period to 9 May 2011 when the applicant agreed to the proceeding being stayed without there first being a mediation. At that point the respondents had effectively obtained the order they sought from the outset of the relevant correspondence.

The second period concerns the pursuit by the respondents of the remainder of the relief sought in the application in a case, i.e. the transfer of the proceeding to the Federal Court. They were not successful in obtaining such an order.
The applicant has submitted that if the respondents had indicated earlier than their letter of 4 May 2011 that they were unwilling to agree to a stay taking effect after the proposed mediation and why they were unwilling to agree, then the matter could have been resolved without an application in a case at all.
The respondents have submitted that they were successful in obtaining the stay which they sought and that the application in a case was necessary in order to achieve this. They submitted that they had, on four occasions, invited the applicant to consent to a stay, namely on 22 March 2011, 29 March 2011, 15 April 2011 and 4 May 2011; and that it was only on 9 May 2011, one clear day before the hearing of the application in a case, that the applicant consented to this. It was submitted that as the applicant had not unconditionally accepted the proposal for a stay the respondents had no alternative but to file and press their application in a case and that had the applicant consented to the stay when first invited to do so on 22 March 2011 the costs associated with the application in a case would have been avoided.
Although it appears that the respondents may have acted precipitately by filing their application in a case before responding to the applicant’s offer of 20 April 2011, it cannot be overlooked that the applicant did not consent to the proposal for an unconditional stay until almost the last moment. Until that point, the respondents were justified in pursuing their application for a stay and the applicant’s submission, that there would have been no argument if only the respondents had made clear earlier than they did why they wanted the stay without first having a mediation, provides no basis for thinking otherwise. That submission does not address the fact that the applicant had been placed on notice, by the respondents’ solicitors’ letter of 29 March 2011, that if he did not consent to the orders sought by the respondents then an application in a case might be filed without further notice. The applicant failed at an early point to consent to the stay which had been sought by the respondents, and thus led to the filing of the application, but then conceded the point once the application had been filed.
The fact that the applicant apparently took some time to be convinced of the merits of a stay in the terms sought or that the respondents were intent on obtaining such a stay does not suggest, contrary to the applicant’s submissions, that he is entitled to his costs prior to that point. In the circumstances the respondents should have their costs of the stay issue.
The remaining aspect of the matter is the respondents’ persistence in their application in a case once the applicant had consented to the stay, which was based on their desire to have the proceeding transferred to the Federal Court regardless of whether a stay was available.
When addressing the costs of the application for transfer of the proceeding, the parties have treated the applicant’s solicitors’ letter of 9 May 2011 as if it were a Calderbank letter. However, although that letter offered settlement of the stay aspect of the respondents’ application in a case, it said nothing about the application for the transfer. That is to say, it did not propose settlement of the entire application, merely one aspect of it. For this reason, it cannot be said that it was unreasonable for the respondents to have continued to press for so much of the relief sought in the application as had not been agreed between the parties.
Although it was not unreasonable of the respondents to have sought an order transferring the proceeding, and thus it is inappropriate to award indemnity costs as sought by the applicant, nevertheless they were unsuccessful in this aspect of the application in a case. The applicant should have his costs of this issue.
The practical task of separating for costing purposes the issues presented by the application in a case is likely to be uneconomic.

In the circumstances, I consider it appropriate that the applicant pay the respondents’ costs of and incidental to the application in a case up to and including 9 May 2011 but that the respondents pay the applicant’s costs of and incidental to the application in a case from that point. Those costs should be set off against each other.
I further find that as they have both been partially successful in obtaining costs of the application in a case, the parties should pay their own costs of and incidental to this costs application.
The parties will have liberty to apply in the event that they are unable to agree on the quantification of the costs ordered.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Cameron FM

Associate:

Date: 28 June 2011