Hansen Yuncken v T.S. Property Services - [2003] FMCA 409

FEDERAL MAGISTRATES COURT OF AUSTRALIA

HANSEN YUNCKEN v T.S. PROPERTY SERVICES & ORS

[2003] FMCA 409

TRADE PRACTICES – Consent orders.

PRACTICE AND PROCEDURE – Trade Practices claim – claim pending in Victorian Civil and Administrative Tribunal (VCAT) – whether Applicant can claim costs after order by consent similar to order in VCAT proceeding – differences between Federal Magistrates Court proceeding and VCAT – different remedies under Trade Practices Act – relevance of desirability of commercial settlement – benefit to both parties and administration of justice – discount of costs order appropriate.

Trade Practices Act 1974

Applicant:

HANSEN YUNCKEN PTY LTD (ACN 063 384 056)

First Respondent:

T.S. PROPERTY SERVICES PTY LTD (FORMERLY KNOWN AS ACN 005 162 452 PTY LTD)
(ACN 005 162 452)

Second Respondent:

JAN SIGLEY (DISMISSED)

Third Respondent:

LAWRENCE BOWTELL

File No:

MZ 965 of 2001

Delivered on:

9 September 2003

Delivered at:

Melbourne

Hearing Date:

9 September 2003

Judgment of:

McInnis FM

REPRESENTATION

Counsel for the Applicant:

Mr M.H. Whitten

Solicitors for the Applicant:

Corrs Chambers Westgarth

Counsel for the First and Third Respondents:

Mr Whittaker

Solicitors for the First and Third Respondents:

McNamaras

ORDERS

The First and Third Respondents shall pay 80 per cent of the Applicant’s costs of and incidental to the proceeding, including reserved costs, if any, pursuant to Schedule 1 of the Federal Magistrates Court Rules and in default of agreement the costs shall be taxed pursuant to Order 62 of the Federal Court Rules.

THE COURT ORDERS BY CONSENT

The sum of $190.024 presently held in the trust account of the solicitors for the First and Third Respondents be paid to the Applicant’s solicitors forthwith together with any interest which may have accrued in that account.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MZ 965 of 2001

HANSEN YUNCKEN PTY LTD (ACN 063 384 056)

Applicant

and

T.S. PROPERTY SERVICES PTY LTD
(Formerly known as ACN 005 162 452 Pty Ltd) (ACN 005 162 452)

First Respondent

and

JAN SIGLEY (Dismissed)

Second Respondent

and

LAWRENCE BOWTELL

Third Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

In this application Hansen Yuncken Pty Ltd (the applicant) made application alleging breaches of certain provisions of the Trade Practices Act 1974 against initially two respondents, “ACN 005 162 452 Pty Ltd” (the first respondent) and Jan Sigley (the second respondent).
That application was brought before this court on 17 December 2001. When the application was before the court at a first directions hearing held on 1 February 2002, certain procedural orders were made, including orders for mediation and the matter fixed for a final hearing.
It became evident during the course of further proceedings that in fact there was an application currently to be determined or pending before the Victorian Civil and Administrative Tribunal (VCAT) essentially dealing with matters, in part, similar to the subject matter of the application in these proceedings. For the sake of completeness,

I should add that orders were made in this court on 23 August 2002 involving undertakings in relation to the issue of whether or not a sum of $190,024, held in a trust account and alleged to have been wrongly accessed by the first and/or what became third respondents, should remain in a trust account pending the outcome of this hearing.
The hearing had been fixed for final hearing on 29 August 2002 and that date was vacated. There was also an order made that the proceedings against the second respondent be dismissed with no order as to costs. That order was made on 4 February 2003. A further adjourned hearing date of 10 February 2003 was then vacated and the matter fixed ultimately for hearing this day. Again, on 4 February 2003 an undertaking of a kind I described had been given.
When the matter came before the court this day the court had before it amended pleadings from the parties who are currently still parties before this court. Counsel for the applicant sought and was granted leave to rely upon two further affidavits, both sworn by Sarah Georgina Burns on 8 and 9 September 2003 respectively. In the affidavit sworn 8 September 2003 the deponent has exhibited what is now a decision of VCAT made yesterday. It is sufficient for the purposes of this judgment to simply note that in that decision a number of orders have been made. There are still a number of outstanding issues, but the common parties are the applicant in these proceedings and the first respondent in these proceedings who are in turn the applicant and first respondent in the VCAT proceedings.
The orders made include an order which relates to the sum of $190,024. That order of VCAT provides:
“4. Order the First Respondent to execute such documents and do such things as may be reasonably necessary to secure the release to the Applicant of the sum $190,024, together with any accumulated interest thereon, held in trust pursuant to the agreement made on 20 March 2000 between the applicant and the first respondent, such sum to be received by the Applicant and the First Respondent, such sum to be received by the Applicant in part satisfaction of the sum awarded in paragraph 3 of this order.”
I do no more than to indicate that paragraph 3 of the orders involves the payment of a total sum by the first respondent to the applicant of some $843,825.82.
The agreement which has been referred to in the orders made by VCAT has been exhibited to affidavit material before this court, and I shall refer to a term of that agreement in due course.
Having had the benefit of the VCAT decision, which I note was delivered just yesterday, counsel for the applicant quite properly has sought from this court an order simply that the amount of $190,024 held in trust by the first and third respondents' solicitors be paid to the applicant's solicitors forthwith.
The representative of the first and third respondents consent to that order. The consent to that order, in my view, is a most sensible and practical approach to the resolution of this claim before this court which had been scheduled for a contested hearing of some three to four days.
A further order is sought, however, by the applicant which is contested; namely, that the first and third respondents shall pay the costs of the applicant of the proceedings; that is, those costs of and incidental to the proceedings which I take to include reserved costs, if any.
The basis upon which it is claimed that a costs order should be made is that having had the benefit of a successful decision in VCAT, with that matter having been adjudicated, at the very least insofar as the proceedings relate to the applicant and first respondent in the proceedings before this court, it may be argued that res judicata applies, but in any event, at the very least issue estoppel might arise, certainly in relation to the first respondent and now the third respondent in these proceedings.
It is said, however, that the application which was commenced in this court in December 2001 was an application then necessary against the backdrop of what were described as pending claims before VCAT with no immediate prospect of those claims being resolved and in circumstances where the amount of $190,024 had been, it was alleged, wrongly accessed and accessed in a manner which would constitute in part, according to the pleadings, a breach of provisions of the Trade Practices Act, including misleading and deceptive conduct alleged against the first and third respondents and unconscionable conduct alleged against both.
It is claimed that the proceedings in this court which resulted in the undertakings of a kind that I have referred to in the orders was necessary at that time to protect the interests of the applicant. It is further claimed that, in any event, beyond that claim before this court there were at least other remedies which may be available to the applicant should the applicant have sought to pursue the claim and indeed seek remedies available under the Trade Practices Act which might not be available in the claim which was then pending before VCAT.
The application for costs is made in the circumstances that it is argued that the applicant took what was regarded as appropriate steps to protect its interests in this court and did so in circumstances where it was anticipated that this court might provide an earlier remedy or hearing than might otherwise be available in VCAT.
The application for costs is opposed. It is opposed on the basis that whilst consent has been given to the order to which I have just referred, that the proceedings here were unnecessary in circumstances where proceedings had been pursued before VCAT and ultimately, at least by yesterday, a favourable order obtained by the applicant. In the alternative, it is submitted that some discount or allowance should be given to the first and third respondents in circumstances where they have at least consented to an order which will result in the proceedings now being resolved finally and the parties thereby relieved of further costs and expense.
I should add for the sake of completeness that the second affidavit of Sarah Georgina Burns refers to correspondence by facsimile transmission dated 29 April 2003 where the applicants in the transmission to the solicitors for the first and third respondents state the following:
“Rather than waste more time and money dealing with the hearing in the Federal Magistrates’ Court, we suggest your clients consent to orders that the $190, 024 in trust be released to our client, the proceedings be struck out and your clients pay our clients party/party costs.
Please advise by 4 pm on Wednesday, 3 September 2003 whether your clients will consent to the proposed orders. If consent is not forthcoming or your clients elect not to respond our client will rely upon the contents of this letter in support of an application for indemnity costs.”
Mr Whittaker who appears instructed by the solicitors on record for the first and third respondents and who is in-house counsel for the first respondent has argued that since that date there have been further discussions and brought to the court's attention, albeit from the bar table, the progress of negotiations which did not ultimately resolve the matter in the manner requested in that facsimile transmission. It is nevertheless submitted that in the circumstances if the court were minded to make an order for costs there should still be some discount given that this day there has been consent forthcoming of the first and third respondents in relation to the substantive order sought by the applicant.
In my view, in the exercise of discretion in relation to the question of costs, the court has a very broad discretion. It should exercise that discretion judicially. The established rule in relation to costs is that costs follow the event. Beyond that, however, there is a discretion both in relation to whether or not any costs order should be made and if so whether or not that costs order should be reduced for a number of reasons. In my view, having regard to the chronology of events and the decision made by VCAT delivered yesterday, it is clear that the applicant has now had the benefit of adjudication in its favour substantially in relation to the issue which was to be agitated in a defended hearing in this court.
That does not mean, in my view, however, that it could be suggested that there is any impropriety on the part of the applicant in pursuing these proceedings until this day. Quite the contrary; where an applicant seeks to preserve rights and pursue claims under the Trade Practices Act properly before this court and seek remedies which might otherwise not be available before another court or tribunal and having regard to the ability of an applicant to do so, there is nothing, in my view, that is untoward about pursuing this application notwithstanding the fact that there are other matters pending, including what I might describe as a complex and yet to be finally determined completely dispute between the parties which could be described as a classic building dispute.
What is clear from the material is that although the agreement provides in clause 5, to which my attention has been drawn by the respondents' representative, for payment of the sum of $190,024 upon satisfactory completion of defects identified in a list to be completed and further provides in clause 6 the superintendent would certify satisfactory completion of the defects, that that issue has been determined satisfactorily in the interests of the applicant and against the interests of the respondents by VCAT. Whilst that provides some provision for payment, it does not overcome the primary issue that was before this court as to the conduct which was alleged and which I would find for the purposes only of this costs application to be conduct which might be described in neutral terms as presumptuous conduct on behalf of the first and/or third respondents in relation to access of the sum of $190,024.
Consequences may flow from that if the matter was to be formally the subject of a finding after hearing evidence and those consequences would extend beyond the order that is now sought as it may involve consequences which, as I indicated earlier, incorporates a range of remedies available for a breach of provisions of the Trade Practices Act. I am therefore satisfied in all the circumstances that it was proper for the applicant to both commence the application and continue with the application to this date. To that extent, the order now sought which is by consent is an order which is clearly in favour of the applicant and in general terms I am satisfied costs should follow the event.
The next issue is whether or not I should make any reduction in those costs or discount the costs as a result of the consent forthcoming this day. I raised with counsel for the applicant the issue of a discount.

It was submitted for and on behalf of the applicant that I should not make any discount in relation to costs in the sense that any discount that I should make would effectively discount those costs already incurred, and which I interpolate were properly incurred, up to and including yesterday when the VCAT decision was handed down.
It was submitted that in those circumstances both parties by virtue of the consent forthcoming from the first and third respondents have been saved the considerable cost and expense of conducting what might have been otherwise a three to four day hearing. It was submitted by the representative of the first and third respondents that I should in the exercise of my discretion allow some discount based upon the conduct of the first and third respondents in at least consenting to the order of a kind now sought. It was further submitted, as indicated earlier, by counsel for the applicant that I should rely upon the facsimile transmission of 29 August 2003 to which I have just referred.
In my view, there is still a discretion available to the court in considering matters of this kind. Again the discretion in relation to whether a costs order should be discounted is one that should be exercised with care and judicially. It is my view that the conduct of the parties in reaching agreement, albeit of what might be described as a late stage, in the present case can be in part explained for both parties in a sense by virtue of the recent decision delivered by VCAT. Whilst it is true that any discount that might be awarded in a case of this kind might impact upon past costs incurred, it seems to me in the circumstances that some discount should be allowed where it may have easily been the alternative view of the first and third respondents that an order was perhaps superfluous or unnecessary or that indeed other issues as alleged in the amended statement of claim should have been agitated given that there is no concession that the conduct alleged is agreed to be conduct which has in fact occurred by either the first and third respondent; that is, the concession to the order now proposed to be made is a concession made in circumstances where the principal claim is not conceded.
Having made a concession of that kind, notwithstanding the fact that neither the first or third respondents acknowledge the conduct alleged in breach of the Trade Practices Act, it does in my view provide some assistance to the court in the administration of justice. Whilst to some extent there may be some penalty suffered by an applicant who has ultimately succeeded in an order and obtained the protection of the undertakings and proceedings in this court, it seems to me that I should also balance the public interest aspect of encouraging litigants to reach a sensible, practical and commercial resolution of the outstanding claim before this court. To that extent I am prepared to discount the costs and do so as a direct consequence of the conduct of the first and third respondents in consenting to the order sought by the applicant this day.
Doing the best I can it seems to me that an appropriate discount would be achieved if I make an order that the first and third respondents shall pay 80 per cent of the applicant's costs of and incidental to the proceeding, including reserved costs, if any, pursuant to schedule 1 of the Federal Magistrates Court Rules and in default of agreement the costs shall be taxed pursuant to order 62 of the Federal Court Rules.

I otherwise make by consent the order that the sum of $190,024 presently in the trust account of the solicitors for the first and third respondents be paid to the applicant's solicitors forthwith together with any interest which may have accrued in that account.

I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of McInnis FM

Associate:

Date: 9 September 2003