Glen King Marine and Trading Services v The Owners of the Ship "Armada Ternak" Quality Livestock Australia Pty Ltd v The Owners of the Ship "Armada Ternak"
[1998] FCA 748
•17 JUNE 1998
IN THE FEDERAL COURT OF AUSTRALIA
IN ADMIRALTY
QG 82 of 1997
BETWEEN:
GLEN KING MARINE & TRADING SERVICES
PlaintiffAND:
THE OWNERS OF THE SHIP "ARMADA TERNAK"
DefendantAND:
THE OWNERS OF THE SHIP "ARMADA TERNAK"
Cross-ClaimantAND:
GLEN KING MARINE & TRADING SERVICES
Cross-Respondent
QG 152 of 1997
BETWEEN:
QUALITY LIVESTOCK AUSTRALIA PTY LTD (ACN 005 508 243)
PlaintiffAND:
THE OWNERS OF THE SHIP "ARMADA TERNAK"
DefendantAND:
THE OWNERS OF THE SHIP "ARMADA TERNAK"
Cross-ClaimantAND:
GLEN KING MARINE & TRADING SERVICES
Cross-RespondentJUDGE:
SPENDER J
DATE OF ORDER:
17 JUNE 1998
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
The defendant in proceedings QG 82/97 (The Owners of the Ship ‘Armada Ternak’- P T Pelayaran Nasional Kalla Lines) pay three-quarters of the plaintiff’s (Glen King Marine & Trading Services) costs, including reserved costs, to be taxed if not agreed.
The defendant in proceedings QG 152/97 (The Owners of the Ship “Armada Ternak’ - P T Pelayaran Nasional Kalla Lines) pay two-thirds of the plaintiff’s (Quality Livestock Australia Pty Ltd) costs, including reserved costs, to be taxed if not agreed.
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The cross-claimant in proceedings QG 82/97 and QG 152/97 (The Owners of the Ship “Armada Ternak” - P T Pelayaran Nasional Kalla Lines) pay the costs of the cross-respondent (Glen King Marine & Trading Services) in QG 82/97 and QG 152/97, including reserved costs, to be taxed if not agreed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
IN ADMIRALTY
QG 82 of 1997
BETWEEN:
GLEN KING MARINE & TRADING SERVICES
PlaintiffAND:
THE OWNERS OF THE SHIP "ARMADA TERNAK"
DefendantAND:
THE OWNERS OF THE SHIP "ARMADA TERNAK"
Cross-ClaimantAND:
GLEN KING MARINE & TRADING SERVICES
Cross-Respondent
QG 152 of 1997
BETWEEN:
QUALITY LIVESTOCK AUSTRALIA PTY LTD (ACN 005 508 243)
PlaintiffAND:
THE OWNERS OF THE SHIP "ARMADA TERNAK"
DefendantAND:
THE OWNERS OF THE SHIP "ARMADA TERNAK"
Cross-ClaimantAND:
GLEN KING MARINE & TRADING SERVICES
Cross-Respondent
JUDGE:
SPENDER J
DATE:
17 JUNE 1998
PLACE:
BRISBANE
REASONS FOR JUDGMENT
Yesterday, I did not think there was going to be much prospect of success for Mr Logan's foreshadowed application. But, on reflection, I think that I will, in each case, permit a reduction in the costs or a reduction in the costs, notwithstanding the success of the plaintiff in each proceeding. I will give short reasons.
In these two proceedings, the plaintiff has been successful. Notwithstanding that success, it is submitted by the defendant that the court ought, as a matter of discretion and judgment, grant to the successful plaintiff less than its full costs. Pursuant to s 43 of Federal Court of Australia Act 1976, the court has an unfettered discretion to award costs. Where a party, whether a plaintiff or defendant, is successful but fails on some issues, the court may make a reduction to account for the costs taken up by the issue on which the ultimately successful party failed.
In Hughes v Western Australian Cricket Association (Inc) (1986) ATPR ¶40-748 at 48,136, Toohey J gave this summary of decisions which throw light on the way in which the discretion might be exercised:
“1. Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order. Ritter v Godfrey (1920) 2 KB 47.
2. Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed. Forster v Farquhar (1893) 1 QB 564.
3. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party’s costs of them. In this sense, ‘issue’ does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law. Cretazzo v Lombardi (1975) 13 SASR 4 at p 12.”
Toohey J continued:
“There is no difficulty in stating the principles; their application to the facts of a particular case is not always easy. Also it is necessary to keep in mind the caveat by Jacobs J in Cretazzo v Lombardi at p 16. His Honour sounded what he described as ‘a note of cautious disapproval’ of applications to apportion costs according to the success or failure of one party or the other on the various issues of fact or law which arise in the course of a trial. His Honour commented:
‘But trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues.”
The statement of principle by Toohey J has been approved in subsequent cases, including Queensland Wire Industries Pty Ltd v Broken HillProprietary Co Ltd (1987) 17 FCR 211 at 222. There have been instances where the discretion as to costs has resulted in orders where costs have been ordered in favour of a party in respect of an issue on which he succeeds, although he may lose the action.
I think it is useful to bear in mind Jacobs J’s caveat that it is only in exceptional cases that there ought to be anything other than the usual orders as to costs. Wilcox J, in perhaps a different emphasis, has observed in Commissioner of the Australian Federal Police v Razzi (No 2) (1991) 30 FCR 64 at 69 as follows:
“But I do not think that courts should be reluctant to recognise the existence of exceptional cases. In these days of extensive court delays and high legal costs the courts should use all proper means to encourage parties to consider carefully what matters they will put in issue in their litigation. If parties come to realise that they will not necessarily recover the whole of their costs, even though they have unsuccessfully raised a discrete issue, they are likely better to consider whether the raising of that issue is a justifiable course to take.”
There are many cases, of which this is one, where in the exercise of a discretion conferred by s 43 of the Federal Court of Australia Act, a successful plaintiff has been awarded less than full costs. Heerey J in Henderson v Armadio (22 March 1996, unreported) observed at pp 8-9 of his reasons:
“I would observe that the use of the word 'may' by Toohey J makes it clear that he is not suggesting an encroachment on the essentially discretionary nature of a costs order, a conclusion made all the clearer by his Honour’s reference to the remarks of Jacobs J in Cretazzo (1975) 13 SASR 4.
In Australian Conservation Foundation v ForestryCommission (1988) 81 ALR 166 at 169 Burchett J had to consider the case of a successful defendant who had failed in respect of some issues. His Honour said:
‘It does not necessarily follow that the costs orders otherwise appropriate should be affected. A party against whom an unsustainable claim is prosecuted is not to be forced, at his peril in respect of costs, to abandon every defence he is not sure of maintaining, and oppose to his adversary only the barrier of one hopeful argument: he is entitled to raise his earthworks at every reasonable point along the path of assault. At the same time, if he multiplies issues unreasonably, he may suffer in costs. Ultimately, the question is one of discretion and judgment.’
Heerey J in Henderson v Amadio (supra) at p 9, offered the view:
“In my respectful opinion the same reasoning applies to a successful plaintiff who fails on some issues. To extend Burchett J’s military metaphor, the plaintiff is not to be regarded as culpable because he attacked at points of the defendant’s fortifications other than the place where success came. He is not to be forced, at his peril in respect of costs, to abandon every flank attack.”
In this particular case, it seems to me that I ought, as a matter of discretion and judgment, give less than full costs to the successful plaintiff. This is particularly so, it seems to me, in the Quality Livestock matter. The plaintiff failed entirely in relation to its claim in respect of the first charterparty. That was a substantial claim, being more than half of its original claim. I accept what Mr Turner has urged that it would have been necessary for some reference to what occurred concerning the first charterparty to have been given, but there were questions of evidence directed solely to the claim made by the plaintiff in that action in relation to the first charterparty.
It is not a case where the plaintiff should pay the defendant's costs in relation to that claim, it seems to me, but that I ought to take account of the extent of the claim and the time that it occupied, it being a quite discrete aspect of the plaintiff's claim. I think that a fair order in the circumstances is to order that the plaintiff in the Quality Livestock matter have two-thirds of its costs, including reserved costs, to be taxed, if not agreed.
The matter is not so clear in relation to the Glen King Marine matter. These were two issues, each of which were, in a sense, discrete, in which the plaintiff failed, namely, its claim in relation to the preparation of the livestock capacity plan and its claim for commission in respect of the first charterparty. It is true, on a relative basis, that there was little time and evidence directed to the plaintiff's claim in the Glen King Marine matter to commission in respect of the first charterparty. But that is not the case in relation to the claim concerning the livestock capacity plan.
I have, in the course of the judgment which I gave yesterday, referred to features of the evidence concerning the LCP. For present purposes, I think what has to be considered is the weighting to be given to that issue amongst the issues in the trial and to the time, in a relative sense, that that issue occupied. I think, again, I ought, as a matter of discretion and judgment, give some recognition to the failure by the plaintiff in respect of those two discrete issues.
I order that the plaintiff in the Glen King Marine matter, QG 82 of 1997, have three-quarters of its costs, including reserved costs, to be taxed if not agreed.
It has not been submitted that anything other than the usual order as to costs should be made in relation to the failure of the cross-claim in each matter, and I order that the cross-respondent have its costs of the cross-claim in QG 82 of 1997, including reserved costs, to be taxed if not agreed, and I order that the cross-respondent in QG 152 of 1997 have its costs, including reserved costs, of the cross-claim, those costs to be taxed if not agreed.
I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender.
Associate:
Dated: 16 June 1998
QG 82 of 1997
Counsel for the Plaintiff Mr Martin Daubney Solicitor for the Plaintiff Redchip Lawyers Counsel for the Defendant: Mr D M Logan Solicitor for the Defendant: Cridlands QG 152 of 1997
Solicitor for the Plaintiff Thynne & Macartney Counsel for the Cross-Claimant Mr D M Logan Solicitor for the Cross-Claimant Cridlands Counsel for the Cross-Respondent Mr Martin Daubney Solicitor for the Cross-Respondent Redchip Lawyers Dates of Hearing: 17 June 1998 Date of Judgment: 17 June 1998
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