McKellar v Container Terminal Management Services Ltd

Case [1999] FCA 1639


FEDERAL COURT OF AUSTRALIA

McKellar v Container Terminal Management Services Limited

[1999] FCA 1639

COSTS - application by respondents for costs of interlocutory applications to be made payable forthwith – Federal Court Rules O 62 r 3 – applicants filed and served defective statement of claim – some causes of action untenable – subsequent abandonment of other causes of action – lengthy delay in final determination of proceeding – costs thrown away – appropriate that costs be payable forthwith.

Federal Court Rules O 62 r 3

McKellar v Container Terminal Management Services Ltd (1999) 165 ALR 409 referred to

Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 referred to
Life Airbag Company of Australia Pty Ltd v Life Airbag Company (New Zealand) Ltd (unreported, 22 May 1998, Federal Court of Australia, Branson J) applied
Harris v Cigna Insurance Australia Ltd (1995) ATPR ¶41-445 referred to
Mitanis v Pioneer Concrete (Vic) Pty Ltd & Ors (1998) ATPR ¶41,623 applied
Vasyli v AOL International Pty Ltd & Anor (unreported, 2 September 1996, Federal Court of Australia, Lehane J) referred to
Batten v CTMS Ltd [1999] FCA 1576 applied
Marshall v Sheahan [1999] FCA 1249 referred to
Real Tech Systems Integration Pty Ltd v Meuross (1998) 82 FCR 150 referred to
Nelmac Pty Ltd v Construction, Forestry, Mining & Energy Union [1999] FCA 929 referred to

ANDREW McKELLAR and ANOR v CONTAINER TERMINAL MANAGEMENT SERVICES LIMITED and ORS

VG 555 of 1998

WEINBERG J

26 NOVEMBER 1999

MELBOURNE


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VG 555 OF 1998

BETWEEN:

ANDREW McKELLAR
First Applicant

CHRISTOPHER MURRAY
Second Applicant

AND:

CONTAINER TERMINAL MANAGEMENT SERVICES LIMITED
First Respondent

FYNWEST PTY LTD (ACN 080 502 343)
Second Respondent

MICHAEL WELLS
Third Respondent

PETER KILFOYLE
Fourth Respondent

ALAN WILSON
Fifth Respondent

PCS TRAINING SERVICES PTY LTD (ACN 081 231 021)
Sixth Respondent

PATRICK STEVEDORES HOLDINGS PTY LTD
Seventh Respondent

LANG CORPORATION LIMITED
Eighth Respondent

CHRISTOPHER CORRIGAN
Ninth Respondent

THE COMMONWEALTH OF AUSTRALIA
Tenth Respondent

THE HONOURABLE PETER  KEASTON REITH MP, MINISTER FOR INDUSTRIAL RELATIONS
Eleventh Respondent

JUDGE:

WEINBERG J

DATE OF ORDER:

26 NOVEMBER 1999

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.To the extent that the applicants may have required leave to file their further amended application dated 8 November 1999 such leave be granted nunc pro tunc.

2.The time within which the applicants were required to file and serve a further statement of claim be extended to 9 November 1999.

3.The costs of the motions dated 22 February 1999 and 8 November 1999 brought by the fifth, sixth and twenty-eighth to thirty-third respondents, as named in the amended statement of claim dated 24 December 1998, be taxed and paid forthwith.

4.The costs of the motions dated 22 February 1999 and 5 November 1999 brought by the seventh to ninth and twelfth to twenty-seventh respondents, as named in the amended statement of claim dated 24 December 1998, be taxed and paid forthwith.

5.The costs of…

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AGLC
McKellar v Container Terminal Management Services Ltd [1999] FCA 1639
Case
[1999] FCA 1639
Decision Date

CaseChat Overview and Summary

In the case of McKellar v Container Terminal Management Services Ltd, the court addressed the issue of costs taxation and payment following the filing of a defective amended statement of claim. The respondents, Lang, argued that the applicants had wasted court time and incurred unnecessary costs due to the defective pleadings, which had led to multiple wasted directions hearings and additional court time. The applicants had withdrawn significant parts of their claims and named new parties who had not yet been served, further complicating the proceedings. Despite the remaining claims in negligence and under the Trade Practices Act, the factual basis for these claims had changed significantly between the amended and further amended statements of claim.

The court was required to decide whether the circumstances warranted an order for costs to be paid forthwith, departing from the usual practice under the Rules of Court. The decision hinged on whether the significant costs incurred by the respondents and the wasted time were sufficient to justify such an order. The court considered the analogous cases of Batten and Life Airbag, where similar circumstances led to orders for immediate costs payment. The court found that the respondents' costs were effectively wasted due to the applicants' defective pleadings and that it would be unjust to require them to wait for up to two years to recover these costs.

In light of the significant costs and wasted time, the court exercised its discretion to order that certain costs be taxed and paid forthwith. This decision was aimed at compensating the respondents for the unnecessary burden they had faced due to the applicants' defective pleadings. The court granted leave to the applicants to file their further amended application, extended the time for filing a further statement of claim, and ordered the immediate taxation and payment of costs for various motions brought by the respondents. This approach was intended to ensure that the respondents could recover their costs without undue delay, reflecting the court's view that the power to order immediate costs payment should be used more liberally in cases where substantial costs have been wasted due to poorly considered pleadings.

Orders

Orders of the court

1. To the extent that the applicants may have required leave to file their further amended application dated 8 November 1999 such leave be granted nunc pro tunc.

2. The time within which the applicants were required to file and serve a further statement of claim be extended to 9 November 1999.

3. The costs of the motions dated 22 February 1999 and 8 November 1999 brought by the fifth, sixth and twenty-eighth to thirty-third respondents, as named in the amended statement of claim dated 24 December 1998, be taxed and paid forthwith.

4. The costs of the motions dated 22 February 1999 and 5 November 1999 brought by the seventh to ninth and twelfth to twenty-seventh respondents, as named in the amended statement of claim dated 24 December 1998, be taxed and paid forthwith.

5. The costs of the motions dated 22 February 1999 and 5 November 1999 brought by the tenth and eleventh respondents be taxed and paid forthwith.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The Lang respondents took issue with paragraph 20 of the applicants’ submissions, claiming that it was inaccurate in the following ways:·That the applicants have not failed to answer particulars is true, but only because the proceeding has not advanced to a position where a statement of claim has survived a strike out motion.·The wasted directions hearings and the hearings in March 1999 have exposed the Lang respondents to unnecessary costs.·The intentional tort claims, which occupied the larger part of the hearings in March 1999, have now been withdrawn.·New parties have been named in the further amended statement of claim but have not been served (e.g. the 34th respondent).·Whilst claims in negligence and under the Trade Practices Act remain, a comparison of the amended statement of claim with the further amended statement of claim shows that the factual basis for such claims is materially different.Conclusion The discretion which is vested in the Court to order that a party’s costs be taxed and paid forthwith should be exercised only where the interests of justice in the particular case require that there be a departure from the general practice. It may be, as Lehane J observed in Vasyli, that such orders will only rarely be made. Each case must, however, be considered on its own facts. In my view, the decision of Kiefel J in Batten and the decision of Branson J in Life Airbag arose out of situations which are, in certain respects analogous to the case before me. Significant costs have been incurred in this litigation. Almost a year has been wasted principally because the applicants’ amended statement of claim was so seriously defective. I have come to the conclusion that the circumstances in the present case warrant a departure from the general practice envisaged by O 62 r 3 of the Rules. Almost a year after the amended statement of claim was filed, a significant part of the case has been removed, both factually and legally, from the area of dispute between the parties – Mitanis (supra). I can see no reason why the respondents should be required to wait for a period of up to two years before they are able to recover the fruits of the orders for costs which I made in August of this year. Those orders were designed to compensate the respondents, at least partially, by way of party and party costs, for having been unnecessarily burdened with having to take the costly and time consuming steps needed to ensure that a pleading which ought never to have been filed was struck out, as it ultimately was. The costs incurred by the respondents were, in truth, thrown away. I should say that I agree entirely with the observation of Lindgren J in Allstate (to which reference was made by Branson J in Life Airbag) that the power to order that costs be paid forthwith should perhaps be used less sparingly than it has been in the past. That is particularly so in lengthy and complex cases where substantial costs have been thrown away as a result of ill-considered pleadings being drawn. Such costs should be capable of being recovered without the innocent party having to wait, possibly for years, for that to occur.

Ratio Decidendi

Legal Principle Established

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