Leighton Contractors Pty Limited ABN 98 000 893 667 v Page Kirkland Management Pty Limited ABN 46 097 111 245

[2005] FCA 1508

FEDERAL COURT OF AUSTRALIA

Leighton Contractors Pty Limited ABN 98 000 893 667 v Page Kirkland Management Pty Limited ABN 46 097 111 245 [2005] FCA 1508

LEIGHTON CONTRACTORS PTY LIMITED ABN 98 000 893 667 v PAGE KIRKLAND MANAGEMENT PTY LIMITED ABN 46 097 111 245

NSD 1340 OF 2004

EMMETT J
21 OCTOBER 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD1340 OF 2004

BETWEEN:

LEIGHTON CONTRACTORS PTY LIMITED
ABN 98 000 893 667
APPLICANT

AND:

PAGE KIRKLAND MANAGEMENT PTY LIMITED
ABN 46 097 111 245
FIRST RESPONDENT

TYCO AUSTRALIA PTY LIMITED (ABN 0015 399 004) trading as WORMALD FIRE SYSTEMS
(Registration No. H 1974343)
SECOND RESPONDENT

JUDGE:

EMMETT J

DATE OF ORDER:

21 OCTOBER 2005

WHERE MADE:

SYDNEY

THE COURT NOTES:

1.The First Respondent’s agreement not to pursue further its Notice to Produce issued to the Applicant on 7 September 2005.

2.The Second Respondent’s agreement not to pursue further its Notice to Produce issued to the Applicant on 30 August 2005.

THE COURT ORDERS THAT:

1.The Applicant’s (Leighton) Notice of Motion filed 7 September 2005 be dismissed.

2.The Second Respondent (Tyco) pay the Leighton’s costs of the Motion, filed by Leighton on 11 February 2005 (excluding those costs of the motion concerned with questions of power to issue a Notice to Produce) in so far as costs were incurred on and from 16 February 2005 in relation to Tyco’s proposed Notice to Produce and its Notice to Produce dated 15 February 2005.

3.Tyco pay Leighton’s costs of Leighton’s Notice of Motion filed 7 September 2005 up to and including 17 October 2005, in so far as that Notice of Motion concerned an application to set aside Tyco’s Notice to Produce dated 30 August 2005.

4.The First Respondent pay Leighton’s costs of Leighton’s Notice of Motion filed 7 September 2005 up to and including 19 October 2005, in so far as that Notice of Motion concerned an application to set aside the First Respondent’s Notice to Produce dated 7 September 2005.

5.Otherwise, Leighton’s costs of the Notice of Motion filed on 7 September 2005 be its costs in the proceeding.

6.The First Respondent file and serve any affidavit evidence by 4 pm on 2 November 2005.

7.The Applicant file and serve any affidavit evidence in reply by 4 pm on 9 November 2005.

8.The Application be listed for directions at 9:30 am on 11 November 2005.

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	NSD1340 OF 2004

BETWEEN:

LEIGHTON CONTRACTORS PTY LIMITED
ABN 98 000 893 667
APPLICANT

AND:

PAGE KIRKLAND MANAGEMENT PTY LIMITED
ABN 46 097 111 245
FIRST RESPONDENT

TYCO AUSTRALIA PTY LIMITED (ABN 0015 399 004) trading as WORMALD FIRE SYSTEMS
(Registration No. H 1974343)
SECOND RESPONDENT

JUDGE:	EMMETT J
DATE:	21 OCTOBER 2005
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On 12 September 2004, the applicant, Leighton Contractors Pty Limited (‘Leighton’), commenced a proceeding in the Court seeking preliminary discovery under Order 15A.  The respondents were numerous.  A number of the respondents were connected with Hilton Group PLC (‘the Hilton Parties’).  The remaining two respondents have no connection with Hilton Group PLC.  They are Page Kirkland Management Pty Ltd (‘Page Kirkland’) and Tyco Australia (‘Tyco’). 

2. On 12 January 2005, an amended application was filed and served.  On 24 January 2005, the Hilton Parties served a notice to produce on Leighton requiring production of documents said to be relevant to issues raised under O 15A r 6.  Tyco initially indicated that it supported the Hilton Parties’ notice to produce.  On 11 February 2005, Leighton filed a notice of motion seeking to set aside the notice to produce.  On 15 February 2005, Tyco served its own notice to produce, which adopted a number of the paragraphs of the notice to produce served by the Hilton Parties, but was not as extensive.

3. The motion came on for hearing before Moore J on 17 February 2005.  In support of the motion, Leighton had filed and served an affidavit of Peter Thomas Pether sworn 14 February 2005.  Due to the limited time available for the hearing of the motion, Moore J decided a threshold question of principle, namely whether a respondent to a proceeding brought under Order 15A was entitled to serve a notice to produce, in effect, to obtain discovery in relation to the application for preliminary discovery. 

4. On 28 February 2005, Moore J ruled in Leighton’s favour, although his Honour indicated that he had reservations about the correctness of an earlier decision that his Honour felt constrained to follow.  On 1 April 2005, the Hilton Parties appealed from the orders of Moore J.  Tyco and Page Kirkland supported the Hilton Parties’ position in relation to the appeal.  Judgment on the appeal was delivered on 10 June 2005.  The appeal was upheld.

5. On 23 August 2005, Hill J made orders for Leighton to file a further amended application for preliminary discovery, and for Tyco and Page Kirkland to issue notices to produce or to confirm reliance on the existing notice to produce.  The matter was listed for directions again on 7 September 2005. 

6. Leighton filed an amended application and a further affidavit in support of that application on 23 August 2005.  On 30 August 2005, Tyco confirmed that it wished to rely on a new notice to produce, which was served on that day.  On 6 September 2005, Leighton’s solicitors wrote to the solicitors for Tyco and the solicitors for Page Kirkland, indicating Leighton’s objection to the entirety of the notice to produce issued by Tyco on a number of grounds.  The letter suggested that the sensible course was for Leighton to bring an application seeking orders to set aside the notice to produce and for the parties to agree a suitable timetable to enable that application to be heard as quickly as practicable.

7. On 7 September 2005, Page Kirkland served a notice to produce on Leighton.  Following Hill Js untimely death, the matter came on for directions before me as list judge.  At that time it was common ground that the notice of motion of 11 February 2005 was, in effect, spent.  In the meantime, a compromise had been reached between Leighton and the Hilton Parties, as a result of which the Hilton Parties are no longer parties to the proceeding.  Further, the earlier notice to produce by Tyco must be taken to have been abandoned, once the further notice to produce was filed and served. 

8. On 7 September 2005, in order to avoid further argument, the Court directed that the costs of Leighton’s motion of 11 February 2005 be the parties’ costs of any new motion filed by Leighton in respect of the notices to produce of 30 August and 7 September 2005.  Leighton, in fact, filed a further notice of motion on 7 September 2005, which came before me for directions on 16 September 2005.  By that motion, Leighton sought to set aside Tyco’s notice to produce of 30 August 2005 and Page Kirkland’s notice to produce of 7 September 2005.  The motion was listed for hearing today. 

9. In the course of argument today on the question of costs, it became apparent that the order for costs made on 7 September 2005 was made per incuriam, in circumstances that should be briefly explained.  In the course of the directions hearing on 7 September 2005, counsel for Tyco inquired as to the grounds upon which the notice to produce should be set aside.  The response from counsel for Leighton was that the grounds would be set out in an affidavit.  On 15 September 2005, a further affidavit of Mr Pether sworn on that day was filed and served.  Relevantly, that affidavit asserted, in terms virtually identical to the terms of Mr Pether’s affidavit of 14 February 2005, that all of the documents sought by the notices to produce were the subject of legal professional privilege. 

10. On 17 October 2005, Tyco’s solicitors wrote to Leighton’s solicitors saying that, in light of the information contained in Mr Pether’s affidavit of 15 September 2005, it appeared that the appropriate order to be made in relation to the notice of motion was for the notice to produce not to be pursued, for the notice of motion to be dismissed and for both parties to bear their own costs.  Leighton’s solicitors were asked to indicate by 18 October 2005 whether it was willing to consent to orders in those terms.  Leighton’s solicitors responded on 18 October 2005, indicating that Leighton was willing to consent to the first two propositions, but not to the proposition concerning costs.  Leighton’s solicitors invited Tyco’s solicitors to consent to an order for costs against Leighton. 

11. On 19 October 2005, Page Kirkland’s solicitors wrote to Leighton’s solicitors saying that, given the further information contained in Mr Pether’s affidavit of 15 September 2005, Page Kirkland did not intend to pursue its notice to produce.  Page Kirkland sought similar orders to those proposed by Tyco’s solicitors.  Leighton’s solicitors responded on the same day, indicating that Leighton’s position, so far as Page Kirkland was concerned, was the same as that intimated to the solicitors for Tyco.

12. It is in that context that orders are sought as to the costs of the motions of 11 February 2005 and 7 September 2005.  As I have said, the material in the affidavit of 15 September 2005, which was the justification for the abandonment of reliance upon the notices to produce, was in almost identical terms to the information contained in Mr Pether’s affidavit of 14 February 2005.  It has not been suggested that the notices to produce of 13 August 2005 and 7 September 2005 go beyond Tyco’s earlier notice to produce of 15 February 2005. 

13. In the circumstances, one might express some puzzlement as to why it took until the middle of October for Tyco and Page Kirkland, and those advising them, to realise that the pursuit of the notices to produce would be futile.  That comment is not intended to be critical of any of the parties.  There have been changes in the legal advisers, and it may be that the affidavit of 14 February 2005 was overlooked.  On the other hand, it certainly would have been possible for Leighton, instead of filing a further affidavit of 15 September 2005, simply to have pointed out that the grounds upon which it sought to set aside Tyco’s and Page Kirkland’s notices to produce were those set out in the earlier affidavit. 

14. In complex litigation of the nature of that presently before the Court, so long as the parties have behaved reasonably in relation to genuine disputes concerning matters such as discovery, it is appropriate that the costs of resolving such a dispute, when it does not proceed to final resolution by the Court, be treated as costs of the parties in the proceeding.  For that reason, Leighton’s costs of its motion of 11 February 2005, up until a reasonable time after filing and service of the affidavit of 14 February 2005, should be treated as costs in the proceeding.  Similarly, Tyco’s and Page Kirkland’s costs up to that time should be treated as their costs in the proceeding. 

15. However, within a day or two after 14 February 2005, in circumstances where the motion was listed for hearing on 17 February 2005, it ought to have been apparent to Tyco and Page Kirkland, as it was in mid-October, that it would be futile to pursue Tyco’s notice to produce, since the documents would not be available for inspection by reason of legal professional privilege.  Accordingly, Leighton is entitled to its costs of that motion after 15 February.  That would include any costs of the motion up to the time of its dismissal on 7 September 2005.  Further, Leighton is entitled to its costs of the motion of 7 September 2005, up to the time when it was informed unequivocally that the notices to produce would not be pressed.  However, its costs thereafter were costs that were necessarily incurred and should be treated as its costs of the proceeding.

I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated:            25 October 2005

Counsel for the Applicant:	Mr S. Kerr
Solicitor for the Applicant:	Mallesons Stephen Jaques
Counsel for the First and Second Respondents:	Mr A. Leopold
Solicitor for the First Respondent:	Henry Davis York
Solicitor for the Second Respondent:	Phillips Fox
Date of Hearing:	21 October 2005
Date of Judgment:	21 October 2005