Internet Centre of Excellence 2000 PTY LTD v Computer World (Vic) PTY LTD (No.2)
[2004] FMCA 984
•13 December 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| INTERNET CENTRE OF EXCELLENCE 2000 PTY LTD v COMPUTER WORLD (VIC) PTY LTD (No.2) | [2004] FMCA 984 |
| PRACTICE AND PROCEDURE – TRADE PRACTICES – Costs – whether indemnity costs – where breach of fiduciary duty found. |
| Applicant: | INTERNET CENTRE OF EXCELLENCE 2000 PTY LTD |
| Respondent: | COMPUTER WORLD (VICTORIA) PTY LTD |
| File No: | MLG 974 of 2002 |
| Delivered on: | 13 December 2004 |
| Delivered at: | Melbourne |
| Hearing Date: | 13 December 2004 |
| Judgment of: | McInnis FM |
REPRESENTATION
| Counsel for the Applicant: | Mr A. Kirby |
| Solicitors for the Applicant: | Kenna Croxford & Co |
| Counsel for the Respondent: | Mr N Klooger |
| Solicitors for the Respondent: | Ravi James & Associates |
ORDERS
The respondent pay the applicant the sum of $48,564.10 in respect of the applicant's application.
The respondent pay the applicant interest of $13,745.52.
The respondent pay the applicant its costs, including all reserved costs, fixed in the sum of $28,000.
The respondent's cross-claim be dismissed.
This order shall take effect on 27 December 2004.
Pursuant to Rule 21.15 of the Federal Magistrates Court Rules the Court certifies that it was reasonable for the parties to employ an advocate to appear in the proceeding.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 974 of 2002
| INTERNET CENTRE OF EXCELLENCE 2000 PTY LTD |
Applicant
and
| COMPUTER WORLD (VICTORIA) PTY LTD |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
In this application the court had delivered a judgment on 5 November 2004. It was then indicated that there would be judgment for the applicant in the sum of $48,546.10. I had invited the parties to make submissions regarding the precise form of orders. It was clear from the order of the court that the respondent should pay the successful applicant's costs of and incidental to the application, and the costs claim including reserved costs, if any.
When the matter came before the court today, minutes of proposed orders were provided to the court, with the only issue in dispute being the question of whether or not the court should fix the amount of costs and, if so, whether it should be fixed on the basis of what is claimed by the applicant to be an appropriate basis, namely an indemnity basis, or whether it should be fixed on a party‑party basis.
If the court were to fix the costs on an indemnity basis then the sum claimed by the applicant, plus an amount allowed for today's attendance, would be $37,500. If it were to be fixed on a party‑party basis then the amount claimed would be $27,500. Again there would need to be an allowance made for today's attendance in addition to that sum.
The respondent has submitted that on its calculation the appropriate costs would be in the order of $24,500. Both parties have made an assessment of the costs on the basis of schedule 1 of the Federal Magistrates Court Rules. It is clear to me that there is very little difference, at least on a party‑party basis, between the assessments of both sides.
It is desirable in matters of this kind, in my view, to fix costs, particularly where there has been some delay in the hearing and delivery of judgment and where I am told there is an appeal pending which is listed for mention this coming Wednesday in the Federal Court.
In support of the application for indemnity costs the applicant has taken the court to various extracts of its judgment and in particular has relied upon, significantly, the finding by the court that there has been what is described as a breach of fiduciary duty arising out of the trust. It is primarily on that basis that counsel for the applicant has submitted that it is appropriate in this application that the court should award costs on an indemnity costs.
During the course of the exchange between counsel and the court on this issue I pointed out that the hearing of this matter involved a significant volume of documents and the task of the court in assessing liability was made more difficult by the arrangement between the parties and the extent to which both parties were unable to maintain accurate records which would otherwise assist each in pursuing their claims before this court.
Whilst I acknowledge that during the course of the judgment a significant criticism was made of the respondent's record keeping and system of operation, it must also be concluded that in part at least there is a degree of uncertainty on the part of the applicant, both in terms of the credit facility, which was the subject of a dispute, and also in terms of identifying precisely amounts owed by way of commission from time to time.
The unsatisfactory nature of the relationship between the parties, in my view, is a matter for which both parties should have some degree of responsibility. In the circumstances, whilst I have made a clear finding of a breach of fiduciary duty, I am not satisfied in the exercise of my discretion in this matter that indemnity costs would be appropriate, having regard to what I describe as the unsatisfactory nature of the material which at least in part is the responsibility of the applicant.
It follows for those reasons that I am satisfied that the appropriate order of the court is that costs should be fixed but fixed on a party‑party basis. Having regard to the amount claimed by the applicant, I am satisfied that the amount of $27,500 is a fair and reasonable amount, to which I am prepared to add for today's attendance a further sum of $500. Accordingly, in my view the appropriate amount to fix costs is $28,000.
It has also been submitted by the respondent that I should make an order that the orders I am about to announce should not take effect for a period of 30 days. I have indicated that I do not believe it is appropriate to do that, given that the matter is before the Federal Court on 15 December 2004. At that time the respondent, who is the appellant in that court, may make application for a stay and seek to persuade that court to exercise the discretion it undoubtedly has in relation to a matter of this kind. In the circumstances, the appeal having been lodged, I am prepared to order that these orders not take effect until 27 December 2004.
I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of McInnis FM
Associate:
Date: 13 December 2004
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