BHP Coal Pty Ltd v O & K Orenstein & Koppel AG (No 2)

In the case of BHP Coal Pty Ltd v O & K Orenstein & Koppel AG, the Federal Court of Australia was tasked with determining the allocation of costs between the parties involved in a dispute concerning an explosion at the Oakleigh Mine in Western Australia. The plaintiffs, including BHP Coal and other entities, sought damages from the defendants, O & K Orenstein & Koppel AG, for their alleged liability in the explosion. The defendants, in turn, raised issues of contributory negligence and sought to limit their liability.

The central legal issues before the court involved the application of the general rule that costs follow the event, and whether there were circumstances that warranted departing from this principle. The court considered whether the plaintiffs' failure on specific questions in the proceedings justified a reduction in their otherwise recoverable costs. Additionally, the court examined the conduct of the parties, particularly the plaintiffs' decision not to proceed with a pleading in the alternative and the subsequent decision of the defendants to bring witnesses from Europe to counter this pleading. The court also addressed whether the plaintiffs should be subjected to a costs order due to the substantive reports compiled by a plaintiff witness not being accepted as evidence.

The court held that the plaintiffs were entitled to 90 per cent of their costs of the proceedings, including reserved costs, against the defendants. However, there was no order for costs between the fourth plaintiff and the defendants. The court found that while the plaintiffs were successful on the main issues, their conduct and the failure on specific questions warranted a reduction in the costs they could otherwise recover. The court exercised its discretion to order costs on an indemnity basis, allowing the plaintiffs to recover costs in relation to issues raised by the defendants, including contributory negligence.

The final orders of the court were that the defendants were to pay to the first, second, third, fifth, sixth, and seventh plaintiffs 90 per cent of their costs of the proceedings, including reserved costs, while no order for costs was made between the fourth plaintiff and the defendants.