Field Camp Services Pty Ltd v Green (No.2)
[2012] FMCA 299
•27 April 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FIELD CAMP SERVICES PTY LTD v GREEN (No.2) | [2012] FMCA 299 |
| CONSUMER PROTECTION – Alleged misleading and deceptive conduct – hire of transportable accommodation and camp units. |
| COSTS – the costs of the earlier proceedings in this Court – security for costs for proceedings in this Court. |
| Competition and Consumer Act 2010 (Cth) Corporations Act 2001 (Cth) s.1335(1) Fair Trading Act 1987 (WA) Federal Magistrates Act 1999 (Cth) ss.21, 22, 23, 79(2) and (3), 86(b) Federal Magistrates Court Rules 2001 (Cth), rr.21.01(1), 21.02, 21.10, 21.11, 21.14(1), 21.16, Schedule 1 Rules of the Supreme Court 1971 (WA), O66 r.1(1) |
| Broad Spectrum Training Pty Ltd & Ors v Bidding Buzz Ltd & Ors (2010) 244 FLR 335; [2010] FMCA 932 Brundza v Robbie & Co (No. 2) (1952) 88 CLR 171 Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd & Ors (1987) 16 FCR 497 Colan Products Pty Ltd v Luxon Pty Ltd (No. 2) [2002] FMCA 90 Effem Foods Pty Limited v Trawl Industries of Australia Pty Limited (Receivers and Managers Appointed – In Liquidation) & Ors (1993) 43 FCR 510 Equity Access Pty Ltd v Westpac Banking Corporation & Anor (1989) ATPR 40-972 Field Camp Services Pty Ltd v Green [2012] FMCA 85 Field Camp ServicesPty Ltd v Site Accommodation Pty Ltd [No.2] [2012] WASCA 27 Fubilan Catering Serviced Limited v Compass Group (Australia) Pty Ltd (No.3) [2005] FCA 1009 Harpur v Ariadne Australia Limited [1984] 2 Qd R 523 Irrewarra Estate Pty Ltd v A & S Arnott Pty Ltd & Anor [2011] FMCA 188 Jarraman Arts Aboriginal Corporation v Tourism Australia (No. 2) [2005] FCA 30 Pacific Acceptance Corp. Ltd v Forsyth [1967] 2 NSWR 402 Phoenix Middle East Company WLL v Exhibition Studios Pty Ltd [2011] FMCA 842 Reynolds v The Minister for Health & Anor. (No. 2) [2010] FMCA 910 Site Accommodation Pty Ltd v Field Camp Services Pty Ltd & Anor (Unreported, District Court of Western Australia, CIV 346 of 2010, O’Neal DCJ, 10 September 2010) |
| Applicant: | FIELD CAMP SERVICES PTY LTD |
| Respondent: | PETER JAMES GREEN |
| File Number: | PEG 145 of 2011 |
| Judgment of: | Lucev FM |
| Hearing date: | 26 March 2012 |
| Date of Last Submission: | 26 March 2012 |
| Delivered at: | Perth |
| Delivered on: | 27 April 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr A Rumsley |
| Solicitors for the Applicant: | Alan Rumsley |
| Counsel for the Respondent: | Mr B Wheatley |
| Solicitors for the Respondent: | Mossensons |
ORDERS
The applicant pay the respondent’s costs of the respondent’s application in a case filed on 8 July 2011 in the sum of $1497 by 18 May 2012.
The applicant provide security for the respondent’s costs of the proceedings in the sum of $5378 to be paid into the trust account of the respondent’s solicitors by 8 June 2012.
That in the event that order (2) of these orders is not complied with the respondent has liberty to file and serve by 15 June 2012:
(a)a further application in a case to dismiss or permanently stay the application; and
(b)affidavits and written submissions in support of the further application in a case.
That in the event that a further application in a case is filed pursuant to order (3) above:
(a)the applicant file and serve affidavits and written submissions in opposition to the further application in a case by 22 June 2012; and
(b)the further application in case be listed for hearing at 2.15pm on 25 June 2012.
That the matter otherwise be adjourned to a further directions hearing at 2.15pm on 25 June 2012.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 145 of 2011
| FIELD CAMP SERVICES PTY LTD |
Applicant
And
| PETER JAMES GREEN |
Respondent
REASONS FOR JUDGMENT
Earlier judgment
In Field Camp Services Pty Ltd v Green[1] this Court determined that:
a)these proceedings ought to be stayed pending the determination of an appeal by Field Camp Services before the Supreme Court of Western Australia, Court of Appeal, against a judgment of the District Court of Western Australia;[2]
b)Mr Green’s application for security for costs ought to be adjourned sine die;
c)the costs of the application in a case ought to be reserved; and
d)the matter be adjourned to a directions hearing on 26 March 2012.
[1] [2012] FMCA 85 (“Field Camp Services (FMC No. 1)”).
[2] Site Accommodation Pty Ltd v Field Camp Services Pty Ltd & Anor (Unreported, District Court of Western Australia, CIV 346 of 2010, O’Neal DCJ, 10 September 2010) (“Site Accommodation”).
Directions hearing – issues arising
When the matter came on for directions on 26 March 2012 the parties advised the Court that Field Camp Services’ appeal against the judgment in Site Accommodation had been dismissed,[3] and proceeded to argue the following issues:
a)the costs of Mr Green’s earlier application in a case in this Court seeking a stay of these proceedings; and
b)security for costs of the proceedings in this Court.
[3] See Field Camp ServicesPty Ltd v Site Accommodation Pty Ltd [No. 2] [2012] WASCA 27 (“Field Camp Services Appeal”).
Costs – generally
The Court's power to award costs in proceedings of this type is set out in s.79(2) and (3) of the Federal Magistrates Act 1999 (Cth),[4] as follows:
(2)The Federal Magistrates Court or a Federal Magistrate has jurisdiction to award costs in all proceedings before the Federal Magistrates Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs must not be awarded.
(3)Except as provided by the Rules of Court or any other Act, the award of costs is in the discretion of the Federal Magistrates Court or Federal Magistrate.
[4] “FM Act”.
Rule 21.02 of the Federal Magistrates Court Rules 2001 (Cth)[5] provides as follows:
[5] “FMC Rules”.
(1) …
(2) In making an order for costs in a proceeding, the Court may:
(a) set the amount of the costs; or
(b) set the method by which the costs are to be calculated; or
(c) refer the costs for taxation under Order 62 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
(d) set a time for payment of the costs, which may be before the proceeding is concluded.
Rule 21.10 of the FMC Rules provides as follows:
Unless the Court otherwise orders, a party entitled to costs in a proceeding (other than a proceeding to which the Bankruptcy Act applies) is entitled to:
(a) costs in accordance with Part 1 of Schedule 1; and
(b) disbursements properly incurred.
Part 1 of Schedule 1 of the FMC Rules,[6] referred to in r.21.10(a) of the FMC Rules, provides for an event based assessment of costs, with the costs for each event fixed by the FMC Costs Schedule.
[6] “FMC Costs Schedule”.
Costs – consideration of the application in a case
At the directions hearing on 26 March 2012 both parties sought the costs of Mr Green’s application in a case, on the basis of varying degrees of success in obtaining or opposing the orders sought.
Mr Green was successful in the application in a case in obtaining a stay of these proceedings. It was, however, a qualified success. The application was not permanently stayed as sought, but only stayed pending the outcome of the appeal against the District Court Judgment in Site Accommodation. Now that the outcome of the appeal is known to the Court, there is no impediment to the application proceeding. The application is, however, one which is more limited than it was before the application in a case was determined, because, consistent with the Reasons for Judgment in Field Camp Services (FMC No. 1),[7] Field Camp Services’ allegations of intentional interference with contractual relations were struck out of the Statement of Claim, by order of the Court on 26 March 2011. That part of the Statement of Claim was struck out rather than being permanently stayed in accordance with authority which says that it is preferable to strike out a claim, or part thereof, rather than permanently stay the claim.[8]
[7] At paras.107-110 per Lucev FM.
[8] Effem Foods Pty Limited v Trawl Industries of Australia Pty Limited (Receivers and Managers Appointed – In Liquidation) & Ors (1993) 43 FCR 510 at 532 per Burchett J.
The appeal against the District Court Judgment in Site Accommodation having been dismissed, there is, subject to the application for security for costs, no impediment to this Court hearing those parts of this application that allege misleading and deceptive conduct under the Competition and Consumer Act 2010 (Cth)[9] and the Fair Trading Act 1987 (WA).[10] In this regard, the application for a stay of the proceedings in respect of the CC Act and FT Act claim was, essentially, unsuccessful. However, as the Court observed in Field Camp Services (FMC No. 1):
In relation to the CC Act and FT Act claims, … those issues appear to be quite limited in compass, and capable of being dealt with expeditiously and discretely from the issues raised in the District Court Action.[11]
[9] “CC Act”.
[10] “FT Act”.
[11] Field Camp Services (FMC No. 1) at para.111 per Lucev FM.
Overall, Mr Green had a reasonable degree of success in the application in a case, by having the intentional interference with contractual relations allegations stayed, and then struck out of the Statement of Claim. Those allegations were significant, and the allegations which remained in relation to the CC Act and FT Act claims are, as indicated above, more limited. Therefore, in the exercise of the broad discretion in relation to costs, the Court determines that Field Camp Services ought to pay 60% of Mr Green’s costs of the application in a case. Those costs are to be assessed and fixed under the FMC Costs Schedule. The total costs under the FMC Costs Schedule for an interim hearing, such as the application in a case, are $1559 plus the daily hearing fee. In this case the relevant daily hearing fee is for a half day hearing which is $936, as the hearing was not a short mention, nor did it last all day. The total costs for the application in a case are therefore $2495. Sixty percent of that equals $1497. Field Camp Services must therefore pay Mr Green’s costs of the application in a case in the sum of $1497, by 18 May 2012.
Security for costs
Mr Green seeks an order for security for costs in this matter. Field Camp Services does not dispute that an order for security for costs is appropriate. The only dispute is about the quantum of that security.
Mr Green’s submissions
Mr Green submits that:
a)Field Camp Services has not paid:
i)the sum of $100,523.83 (exclusive of interest) pursuant to orders made in Site Accommodation; and
ii)an amount of $12,205.41, taxed, in relation to the costs of the Site Accommodation proceedings in the District Court, the non-payment of which was not disputed by Field Camp Services;[12]
[12] Transcript, 26 March 2012, page 5.
b)there was a balance of approximately $20,000 outstanding in relation to the costs in Field Camp Services Appeal;
c)the merits of Field Camp Services’ application are questionable;
d)the following are the estimated costs of the application:
(a)Stage 1 – Opposing Application up to Completion of First Court Day
(i)Lump Sum $2,350.00
(ii)Full day daily hearing fee $1,760.00
(iii)Advocacy loading $880.00
(b)Stage 5 – Preparation for Final Hearing
(i)Lump Sum $5,285.00
(c)Stage 2 – Summary Hearing as a Discrete Event
(i)Lump Sum $1,465.00
(ii)Half day daily hearing fee $880.00
(iii)Advocacy loading $440.00
(d)Stage 6 – Final Hearing Costs for Solicitor
(i)To take judgment and explain orders $240.00
Total$13,300.00
e)Field Camp Services ought to provide $10,000 as security for costs of the application.
Field Camp Services’ submissions
Field Camp Services submits that:
a)on the basis that Field Camp Services has its registered office in Adelaide, which can give rise to a discretion in this Court to make an order for security for costs, Field Camp Services is prepared to pay security for costs;
b)an order for security for costs, if made, is not a complete indemnity for costs;[13]
[13] Brundza v Robbie & Co (No. 2) (1952) 88 CLR 171.
c)an example of the incomplete indemnity is set out in Fubilan Catering Serviced Limited v Compass Group (Australia) Pty Ltd (No. 3),[14] where the Court accepted that the “likely costs could well exceed $300,000” and ordered security in the sum of $50,000,[15] which was in addition to a previous order for $50,000;[16]
[14] [2005] FCA 1009 (“Fubilan”).
[15] Fubilan at para.7 per French J.
[16] Fubilan at para.1 per French J.
d)the costs in this Court are fixed under the FMC Costs Schedule. Materially the costs are $8,875, as set out below:
Stage 1 opposing an application $2,350
Stage 2 interim hearing $2,940
Daily hearing fee
1 July 2011 $240
9 August 2011 $880
Stage 4 PDR intervention $2,465;
e)the amount of approximately $20,000 said to be outstanding in relation to the costs in Field Camp Services Appeal has not been taxed; and
f)in the circumstances of this case an order for $5,000 would be an appropriate amount, and can be reconsidered if the matter is not resolved at mediation.
Consideration – security for costs
The Court has power to order that Field Camp Services give security for costs in an amount that the Court considers appropriate or sufficient.[17]
[17] FM Act, s.86(b); FMC Rules, r.21.01(1); Corporations Act 2001 (Cth), s.1335(1).
The quantum of costs in this case must, unless the Court otherwise orders, be determined under the FMC Costs Schedule. In this case there is no reason to determine otherwise.[18]
[18] Irrewarra Estate Pty Ltd v A & S Arnott Pty Ltd & Anor [2011] FMCA 188 at para.60 per Cameron FM; Phoenix Middle East Company WLL v Exhibition Studios Pty Ltd [2011] FMCA 842 at para.12 per Jarrett FM (“Phoenix Middle East”).
Security for costs generally looks to future costs.[19] In this case security for costs were however sought by Mr Green at the first available opportunity at the directions hearing on 1 July 2011. The Court made orders on 1 July 2011 for the serving of an application in a case supported by an affidavit in respect of security for costs by 8 July 2011. The application for security for costs was adjourned because of the order for a stay made in Field Camp Services (FMC No. 1).[20] In those circumstances, even though security for costs looks generally at future costs, it can extend to costs already incurred, especially where the applicant (in the substantive proceedings) is on notice of an application for security for costs from an early stage of the proceedings.[21] It is appropriate to assess the quantum of security on the basis that the application was made at the outset of these proceedings in this Court. It is therefore necessary to properly ascertain Mr Green’s likely costs in relation to this matter, by reference to the FMC Costs Schedule.
[19] Phoenix Middle East at para.13 per Jarrett FM.
[20] At para.117 per Lucev FM.
[21] Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd & Ors (1987) 16 FCR 497 at 514-515 per French J (“Bryan E Fencott”).
The costs that Mr Green is likely to incur in relation to this matter are as follows:
Stage Description Quantum
Stage 1 Lump sum $2,500
Daily hearing fee $255
Stage 4 Alternative dispute resolution
(mediation) $2,623
Stage 5 Preparation for final hearing for a
one day matter $5,623
Stage 6 Final hearing costs for solicitor:
Attendance at hearing (daily hearing fee) $1,873
Taking judgment and explaining orders $255
The total estimate of costs is therefore $13,129, if the matter proceeds to hearing and judgment.
The daily hearing fee for Stage 1 is based on a short mention for the first court date (that is 1 July 2011), which was a short directions hearing.
Stage 4, relating to mediation, has been included because the Court is obliged to endeavour to resolve matters before it by means of alternative dispute resolution, and it almost inevitable that there will be a referral to mediation before a Registrar of this Court, if the matter proceeds.[22]
[22] FM Act, ss.21-23; Broad Spectrum Training Pty Ltd & Ors v Bidding Buzz Ltd & Ors (2010) 244 FLR 335 at 348 per Lucev FM; [2010] FMCA 932 at paras.43-44 per Lucev FM.
No advocacy loading has been included in Stage 6 as it is not apparent that independent Counsel will be engaged to conduct the hearing. As used in r.21.16 of the FMC Rules, “Counsel” does not include a sole solicitor advocate from the firm who are instructing solicitors.[23]
[23] FMC Rules, r.21.14(1); Colan Products Pty Ltd v Luxon Pty Ltd (No. 2) [2002] FMCA 90 at para.13 per Raphael FM; Reynolds v The Minister for Health & Anor (No. 2) [2010] FMCA 910 at para.15 per Lucev FM (where r.21.10 of the FMC Rules is erroneously referred to).
No amount has been included for a Stage 2 interim hearing as those costs are covered by the costs order to be made in respect of the application in a case, as set out above.[24]
[24] See para.10 above.
Based on the submissions of the parties it is apparent, as both parties acknowledge and the Court accepts, having regard to the authorities cited by Field Camp Services,[25] that security for costs is not intended to operate as a complete indemnity for costs. Consideration must also be given to the possibility that a case will settle at mediation, or collapse without coming to hearing.[26] Mr Green seeks security for costs in an amount equivalent to 75% of his estimate of total costs, whilst Field Camp Services has offered security for costs in an amount of 56% of its estimate of costs, up to mediation.
[25] See para. 13(b) and (c) above.
[26] Bryan E Fencott at 515 per French J.
The usual factors in assessing the necessity for, and quantum of, security for costs are as follows:
a)the chances of success of the applicant;
b)whether the applicant’s claim is bona fide or a sham;
c)the quantum of risk that the applicant cannot satisfy a costs order;
d)whether use of the power would shut out a small company from making a genuine claim against a large company, i.e. is the power being used
e)oppressively;
f)whether the impecuniosity arises out of the act in respect to which relief is sought;
g)whether there are aspects of public interest which weigh in the balance against the making of an order; and
h)whether there are any particular discretionary matters peculiar to the circumstances of the case.[27]
[27] Equity Access Pty Ltd v Westpac Banking Corporation & Anor (1989) ATPR 40-972 at 50,635 per Hill J.
As to whether to order security for costs the Court’s exercises, judicially, a wide discretion having regard to all the circumstances of the particular case.[28]
[28] Bryan E Fencott at 509-511 per French J, and authorities there cited; Jarraman Arts Aboriginal Corporation v Tourism Australia (No. 2) [2005] FCA 30 at para.5 per Mansfield J; Harpur v Ariadne Australia Limited [1984] 2 Qd R 523 at 529-530 per Connolly J (with whom Campbell CJ at 524 and Demack J at 533 agreed) (“Harpur”).
Mr Green’s argument that Field Camp Services case is of questionable merit and cannot succeed in relation to the CC Act and FT Act claims, which still stand following the striking out of the claims of intentional interference with contractual relations and are independently arguable for reasons set out in Field Camp Services (FMC No. 1).[29]
[29] At paras.96-99, 111 and 115 per Lucev FM.
The real issue in this case is the risk of Field Camp Services being unable to meet an award of costs in the event that its application is unsuccessful. Impecuniosity alone is no reason to order security for costs,[30] but is a factor of some, and sometimes determinative, weight.[31] The Court is however cognizant of the need:
a)to consider whether an order for security for costs might be oppressive, in the sense that it precludes Field Camp Services from continuing with the proceedings, and stifles a genuine claim;[32] and
b)not to disadvantage Mr Green in the event that he successfully defends the application by putting him in a position where he is unable to recover his costs if Field Camp Services is financially insecure.[33]
[30] Bryan E Fencott at 505 per French J, and authorities there cited.
[31] Harpur at 529 per Connolly J (with whom Campbell CJ at 524 and Demack J at 533 agreed).
[32] Bryan E Fencott at 505 per French J.
[33] Pacific Acceptance Corp. Ltd v Forsyth [1967] 2 NSWR 402 at 407 per Moffitt P.
In this case there are some factual matters which must be considered in the assessment of security for costs by the Court. Those matters include:
a)that Field Camp Services has not paid:
i)the sum of $100,523.83 (exclusive of interest) pursuant to orders made in Site Accommodation; and
ii)costs of $12,205.41 in relation to the Site Accommodation proceedings in the District Court;
b)that it is evident that, at some point, Field Camp Services managed to raise $12,000 as security for costs in relation to the proceedings in Field Camp Services Appeal, that sum having been ordered to be paid by the Court of Appeal on 10 June 2011 as security for costs of that appeal;[34] and
c)that there is now a further order for payment of $1497 in relation to the costs of the application in a case in these proceedings.
[34] Field Camp Services (FMC No. 1) at para.10 per Lucev FM.
The Court has, in considering this matter, had no regard for the as yet untaxed bill of costs in relation to the proceedings in Field Camp Services Appeal tendered by Mr Green in these proceedings. The Court does, however, recognise and takes cognizance of the fact that based on the usual principles with respect to costs, the Supreme Court of Western Australia, Court of Appeal, will “order that the successful party … recover his costs”.[35] Therefore, Field Camp Services will be liable for some costs in relation to the proceedings in Field Camp Services Appeal.
[35] Rules of the Supreme Court 1971 (WA), O66 r.1(1).
There is no direct evidence in these proceedings of the financial standing of Field Camp Services, or of any person standing behind them. From the failure to pay the judgment debt and costs referred to above, and with the addition of a further, albeit small, costs order in these proceedings, and the likelihood of a further costs order arising in relation to the proceedings in Field Camp Services Appeal, the Court is prepared to infer that there might be some frailty in Field Camp Services’ financial position. However, having regard to the overall lack of evidence, but also to Field Camp Services capacity to raise a moderate sum of $12,000 for security for costs in relation to the proceedings in Field Camp Services Appeal, the Court cannot infer that Field Camp Services is impecunious, but rather that it may have the capacity to raise a further moderate sum as security for costs in relation to its genuine, and probably arguable, claims in these proceedings.
In determining an appropriate quantum for security for costs the Court considers that the amount should at least cover costs through to the completion of mediation. That would be an amount of $5378, or roughly 40% of the total estimated costs if the matter were to be heard and proceed to judgment. Bearing in mind all of the relevant considerations and factors referred to above, that amount ($5378) is, in the Court’s view, sufficient as security for costs, at this stage of the proceedings. It may be revisited if the proceedings go beyond mediation.
In all the circumstances, the Court is of the view that an amount of $5378 ought to be provided by Field Camp Services as security for costs by 8 June 2012.
The amount of the security for costs should be paid into the trust account of Mr Green’s solicitors by 8 June 2012. In the event that the amount of the security for costs is not so paid, the Court will make provision for the filing of a further application in case by Mr Green, and orders for the filing and service of affidavits and submissions by both parties, with the further application in a case (if filed) to be heard on 25 June 2012. If payment of the security for costs is made, or a further application in a case is not filed, then there will be a further directions hearing on 25 June 2012.
Conclusion and order
The Court has concluded that:
a)Field Camp Services must pay Mr Green’s costs of the application in a case filed on 8 July 2011 in the sum of $1497 by 18 May 2012;
b)Field Camp Services must provide security for Mr Green’s costs of the proceedings in the sum of $5378 to be paid into the trust account of Mr Green’s solicitors by 8 June 2012;
c)in the event that Field Camp Services does not provide security for Mr Green’s costs of the proceedings in the sum of $5378 paid into the trust account of Mr Green’s solicitors by 8 June 2012, Mr Green will have liberty to file and serve by 15 June 2012:
i)a further application in a case to dismiss or permanently stay the application; and
ii)affidavits and written submissions in support of the further application in a case;
d)in the event that a further application in a case is filed by Mr Green:
i)Field Camp Services must file and serve affidavits and written submissions in opposition to the further application in a case by 22 June 2012; and
ii)the further application in case will be listed for hearing at 2.15pm on 25 June 2012; and
e)otherwise, the matter will be adjourned to a further directions hearing at 2.15pm on 25 June 2012.
The Court will make orders accordingly.
I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of Lucev FM
Date: 27 April 2012
2
12
0