Fox v Robinson and Ors (No.2)

[2005] FMCA 1382

FEDERAL MAGISTRATES COURT OF AUSTRALIA

FOX v ROBINSON & ORS (No.2) [2005] FMCA 1382

PRACTICE AND PROCEDURE – Costs – whether Application dismissed for want of jurisdiction – whether indemnity costs – Calderbank offer – relevance where jurisdiction challenged.

Ugly Tribe Co Pty Ltd v Sikola & Ors [2001] VSC 189

Applicant: VICTORIA JANE FOX

First Respondent: KRISTINE ANNE ROBINSON

Second Respondent: GODDARD ELLIOTT (A FIRM)

Third Respondent: AUSTRALIAN INTERNATIONAL INSURANCE LIMITED
(ACN 006 544 690)

File Number: MLG 645 of 2001

Judgment of: McInnis FM

Hearing date: 9 September 2005

Delivered at: Melbourne

Delivered on: 9 September 2005

REPRESENTATION

Counsel for the Applicant: Mr A Donald

Solicitors for the Applicant: Norris Coates

Solicitors for the First Respondent: J P Mackenzie

Solicitor for the Second Respondent: Ms J Fiske

Solicitors for the Second Respondent: Minter Ellison

Counsel for the Third Respondent: Mr M.H. Whitten

Solicitors for the Third Respondent: Melbourne Building & Construction Solicitors Pty Ltd

ORDERS

1. The application by the Applicant against the Third Respondent be dismissed.

2. The Applicant shall pay the Third Respondent's costs in accordance with Schedule 1 of the Federal Magistrates Court Rules 2001 up to and including those costs incurred by 4 pm on 2 September 2005 and thereafter shall pay the Third Respondent's costs on an indemnity basis.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 645 of 2001

VICTORIA JANE FOX

Applicant

And

KRISTINE ANNE ROBINSON

First Respondent

And

GODDARD ELLIOTT (A FIRM)

Second Respondent

And

AUSTRALIAN INTERNATIONAL INSURANCE LIMITED
(ACN 006 544 690)

Third Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

1. In this application the Court has announced that it proposed making orders that the application of the Applicant against the Third Respondent be dismissed with costs. 

2. After announcing those proposed orders counsel for the Third Respondent has submitted that the order in relation to costs be an order made on an indemnity basis.  In support of that submission the Court has been referred to a chronology of correspondence annexed to the affidavit of Shane Harley Murray, sworn 12 August 2005.  In addition, the Court has noted correspondence dated 2 September 2005 from the solicitors for the Third Respondent to the solicitors for the First Respondent, which is claimed constitutes what is described as a Calderbank offer.

3. The submission made in support of the application for indemnity costs relies upon the chronology of correspondence which without referring to each item in detail clearly provides a series of extracts in the correspondence referring to the Third Respondent's view that this application in this Court is one where this Court has no jurisdiction; that is the application by the applicants against the third respondent as pleaded is not one which falls within the jurisdiction of this Court.  That consistent theme in the correspondence is ultimately the subject of the Calderbank letter to which I referred earlier, dated 2 September 2005.  That letter responds in turn to a facsimile transmission, dated

   
   

   1 September 2005 from the solicitors for the Applicant to the Third Respondent's solicitors.  The letter from the applicant's solicitors, dated 1 September 2005, makes an offer to have the proceedings as between the applicant and the third respondent dismissed on the basis that both the clients bear their own costs in the proceedings between the parties.

4. The Calderbank letter, dated 2 September, in essence provides an offer that the third respondent is prepared to settle these proceedings on the basis of the applicant's claim against it in this Court be dismissed by consent and that the applicant consent to an order that the applicant pay the third respondent's costs in the sum of $5000.00.  It is argued in support of the application for indemnity costs that the Court in this instance can have regard to the conduct of the applicant, and indeed, can be satisfied that there are at least certain elements of the matter to be taken into account, identified by Harper J in Ugly Tribe Co Pty Ltd v Sikola & Ors [2001] VSC 189 set out in the following paragraph:

   “7.In seeking costs on an indemnity basis, the first defendant is asking the Court to depart from its usual course: Spencer v. Dowling. Special circumstances must be present to justify such a departure: Australian Electoral Commission v. Towney (No. 2). These include:

   (i) The making of an allegation, known to be false, that the opposite party is guilty of fraud: Fountain Selected Meats (Sales) Pty. Ltd. v. International Produce Merchants Pty. Ltd. (1988) 81 A.L.R. 397.

   (ii) The making of an irrelevant allegation of fraud: Thors v. Weekes (1989) 92 A.L.R. 131.

   (iii) Conduct which causes loss of time to the Court and to other parties: Tetijo Holdings Pty. Ltd. v. Keeprite Australia Pty. Ltd. (unreported, Federal Court, French, J., 3 May 1991).

   (iv) The commencement or continuation of proceedings for an ulterior motive: Ragata Developments Pty. Ltd. v. Westpac Banking Corporation (unreported, Federal Court, Davies, J., 5 March 1993).

   (v) Conduct which amounts to a contempt of court: EMI Records Ltd. v. Ian Cameron Wallace Ltd. [1983] Ch. 59.

   (vi) The commencement or continuation of proceedings in wilful disregard of known facts or clearly established law: J-Corp. Pty. Ltd. v. Australian Builders Labourers Federation Union of Workers (W.A.) Branch (No. 2) (1993) 46 I.R. 301.

   (vii) The failure until after the commencement of the trial, and without explanation, to discover documents the timely discovery of which would have considerably shortened, and very possibly avoided, the trial: National Australia Bank v. Petit-Breuilh (No. 2) (unreported, [1990] VSC 395, 18 October 1999).

   8.The categories of special circumstances are not closed: Tetijo Holdings, supra. The cases must not, therefore, be read "in an endeavour to establish a set of inflexible guidelines which should thereafter be determinative of the manner in which the Court's discretion is to be exercised [for this] would be to fetter the Court's discretion": National Australia Bank v. Petit-Breuilh, supra.”

5. It is my view that in this instance there is insufficient evidence upon which this Court could reach a conclusion that the conduct of the applicant has been conduct which might fall within any of the categories referred to by Harper J.

6. It is clear to me that in the exercise of the Court's discretion, however, there is no requirement in circumstances where there is what I take to be, and accept as a Calderbank offer, to then further consider the special circumstances which may justify a departure from the normal order, the costs be on a party/party basis.  Indeed, in this case, as I have indicated, I am not satisfied that the material before me would constitute sufficient basis upon which it could find there are such special circumstances of the kind described in the authorities.  However, where an application is made challenging the jurisdiction of the Court and where that matter is heard and determined as an interim hearing, then it is entirely appropriate, and indeed, relevant for the Court to take into account what may be referred to as a Calderbank offer. 

7. Calderbank offers provide an ideal opportunity for parties to resolve litigation between them, whether it be arising from an interim hearing considering jurisdiction or otherwise.  It is, therefore, a process to be encouraged rather than discouraged.  In my view the terms of the Calderbank offer – that is the letter of 2 September 2005 – are clear and in the circumstances were terms able to be accepted by the applicant, if the applicant chose to do so.  The reasons for decision which I have published today in relation to the jurisdiction question make clear that I have found that there is, indeed, no jurisdiction for this Court to hear and determine the claim by the applicant against the third respondent.  In my view the Calderbank offer having not been accepted, and being an offer which as I have indicated, is one clearly open to be accepted, does lead to a conclusion that in all the circumstances it would be in the interests of justice if the order made in relation to costs be made on an indemnity basis.

8. Where an applicant brings a claim against a respondent and where the issue of jurisdiction is raised as a significant issue, then it is a matter for an applicant to then, after making the application joining the third respondent in this case, to review the matter and reconsider the issues.  To then fail to respond by way of accepting an offer in a Calderbank letter is a matter which has attended to it some risk, the risk being that if, as in this case, the third respondent succeeds, then an application will be made for costs on an indemnity basis.  In the circumstances of this case it is my view that applying the normal principles that would apply in relation to a Calderbank offer, and on no other basis, I am prepared to accept the submission made by the third respondent that the orders of the Court should include an order for costs on an indemnity basis from the tine provided for acceptance of the offer.

I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of McInnis FM

Associate: 

Date:  9 September 2005