KC v Shiley Inc

[1995] FCA 491

IN THE FEDERAL COURT OF AUSTRALIA )
  )
NEW SOUTH WALES DISTRICT REGISTRY )    No.  NG 633   of  1995
  )
GENERAL DIVISION                 )

BETWEEN:"KC" and ORS

Applicants

AND:SHILEY INC & ANOR

Respondents

JUDGE MAKING ORDER:     LOCKHART J.
             WHERE ORDER MADE:      SYDNEY
             DATE ORDER MADE:       14 JULY 1995

MINUTE OF ORDER
THE COURT ORDERS THAT:

1. The costs of the applicants of the respondents' motion to strike out certain paragraphs of the statement of claim be paid on an indemnity basis.

NOTE:     Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )
  )
NEW SOUTH WALES DISTRICT REGISTRY )    No.  NG 633   of  1995
  )
GENERAL DIVISION                 )

BETWEEN:"KC" and ORS

Applicants

AND:SHILEY INC & ANOR

Respondents

14 July 1995

REASONS FOR JUDGMENT
LOCKHART J.
     On 15 June 1995 I gave judgment in this matter and dismissed the respondents' motion to strike out certain paragraphs of the statement of claim and the application.  I made other orders including an order that the respondents pay the applicants' costs of the motion; but I deferred considering the basis of assessment of those costs, whether party and party, solicitor and client or indemnity, to a later occasion.  I did this at the request of counsel for the respondents who informed me that they wished to make brief written submissions on the question. 

I have received written submissions from all parties and it is not necessary that I hear any oral argument with respect to the question of the basis of costs of the motion.

It is now clear that an order for costs on an indemnity basis is not confined to a case where the party against whom the order is made has misconducted himself in the conduct of the litigation.  The Court may award costs on an indemnity basis in appropriate circumstances.  The discretion however is obviously a judicial one and must not be exercised other than on proper grounds.  The Court will not lightly depart from the usual practice of awarding costs on a party and party basis: see Australian Federation of Consumer Organisations Inc v Tobacco Institute of Australia Limited (1991) 100 ALR 568; Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 at 228; Abigail v Davies, unreported, Court of Appeal of the Supreme Court of New South Wales, 14 December 1993.

Although, for the reasons given by me in my judgment of 15 June 1995, there is some need for further and better particulars of allegations in the statement of claim to be provided by the applicants, this is in a fairly narrow compass.  But the respondents did not seek further and better particulars from the applicants until the motion to strike out had been filed.  A great deal of the complaint of the respondents about the statement of claim, on the hearing of the motion, centred on the alleged absence of particulars.  This could have been dealt with between the parties without the necessity for the motion.

Against the making of an order for an indemnity costs there is the circumstance that (as I found in my reasons for judgment of 15 June) the argument on the motion did serve the purpose of revealing the complexity of the issues both of fact and of law in the case and of the need for the real issues between the parties to be reduced to writing as soon as possible.  This could, however, have been determined on a directions hearing.

Overall I am satisfied that the motion was unnecessary; and I do not see why the applicants' costs of the motion should be borne by them.  It is in my opinion a proper case for an order for indemnity costs.  I have already ordered that the costs of the motion be paid by the respondents, and taxed and paid before the commencement of the final hearing of the case.  The Court now orders that the costs of the applicants of the respondents' motion to strike out certain paragraphs of the statement of claim be paid on an indemnity basis.

I certify that this and the preceding two (2) pages are a true copy of the reasons for judgment herein of the Honourable Justice Lockhart.

Associate

Dated:  14 July   1995

Counsel for the Applicants   :        Mr M L Williams
Solicitors for the Applicants     :        Cashman & Partners
Counsel for the Respondents  :        Mr W H Nicholas QC
Solicitors for the Respondents:      Cutler Hughes & Harris
Date of Hearing             :        15 June 1995
Date of Judgment            :        14 July 1995