Mick Skorpos Petrol Discount King Pty Ltd v Shell Company of Australia Ltd

[1997] FCA 281

IN THE FEDERAL COURT OF AUSTRALIA )
  )
SOUTH AUSTRALIA DISTRICT REGISTRY )    No SG 96 of 1995
  )
GENERAL DIVISION                 )

BETWEEN:

MICK SKORPOS PETROL
  DISCOUNT KING PTY LTD
  (ACN 008 160 996)

Applicant

- and -

THE SHELL COMPANY OF
  AUSTRALIA LIMITED

Respondent

REASONS FOR DECISION

CORAM:    Mansfield J
PLACE:    Adelaide
DATE:     21 March 1997

On 12 February 1997 I gave judgment in this matter in which I substantially acceded to submissions made on behalf of the respondent that a document entitled "Third amended statement of claim" as finally presented to the Court should, in significant respects, be struck out.  The history leading to that document being before the Court, and of earlier pleadings, is set out in my reasons for decision and I will not repeat them.

When I delivered reasons, counsel for the successful respondent on that motion, at least successful to a very large extent, applied for two orders:  firstly, an order for indemnity costs in opposing the applicant being granted leave
to file and serve the proposed third amended statement of claim as it was entitled, and secondly, an order under Order 62 rule 3 of the Federal Court Rules, that the costs awarded should be able to be taxed and paid immediately and should not await the outcome of the proceedings for that right to be activated.  That application was opposed.  I have fixed today for the hearing and decision on that matter because the applicant sought some time to consider and respond to the application so made.

Having heard submissions today from counsel for both parties, it seems to me that it is appropriate that the respondent should have its costs in opposing the applicant's application for leave to file the so-called third amended statement of claim and costs of and incidental to that application.  Although any order for costs in the event was opposed, the respondent has been successful in resisting the application in respect of that document, and the history of the matter shows that the document, or at least substantial parts of it which were struck out, had previously been the subject both of or comments or orders by the Court on earlier occasions, in particular by Branson J in an order made on 17 July 1996, and otherwise both in correspondence and in conference between solicitors for the parties and on one occasion between counsel for the parties.

As to the application for indemnity costs, my attention has been drawn to the decision of the Full Court in Re Wilcox; Ex parte Venture Industries Pty Ltd (1997) 141 ALR 727, and in particular to the principles adopted by the Full Court in the joint judgment of Cooper and Merkel JJ, with whom Black CJ agreed, at 732-733. In particular I start with the proposition that the Court ought not to depart from the rule that costs be ordered on a party and party basis, unless the circumstances of the case warrant the Court in departing from the usual course. The second principle is that circumstances which may warrant departure from the usual course arise as and when the justice of the case so requires, or where there may be some special or unusual feature in the case to justify the Court in departing from the usual course. The third principle is that, whilst the circumstances in which indemnity costs have been ordered offer a guide, the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for costs other than on a party and party basis.

In my view, accepting that I have both the power to order indemnity costs and that whether I should do so is a matter for my discretion in all the circumstances of the case, but in particular to determine whether I should depart from the ordinary rule because the justice of the case so requires it, I have had regard in particular to the history of the statement of claim in this matter in its various expressions from the time when the first statement of claim was filed on 14 December 1995 and more specifically subsequent to the decision of Branson J on 17 July 1996.

I will not repeat that history, but it shows that the matters which have been struck out in that proposed document have been the subject of expression in a number of versions of a proposed statement of claim.  Secondly, it shows that the current version to a not insignificant extent was in not dissimilar terms to the document struck out by Branson J on 17 July 1996.  Thirdly, it shows that the points made on the application by counsel for the respondent had been made previously on the respondent's behalf over a period of time, both in writing, and at least on one occasion by direction of Branson J in conference between counsel for the parties.

I will not repeat the more detailed history which appears in my reasons.  However, that history leads me to the conclusion that in this particular case I should depart from the normal rule as to costs because of those circumstances and I propose to do so.

I accordingly order that:

(1)the applicant pay the costs of the respondent incurred in opposing the applicant's application for leave to file a third statement of claim, to include all costs of and incidental to that application, except insofar firstly as such costs which do not relate to issues raised on the application for leave to file the third statement of claim.

I say in parenthesis that there may be some of the work done in the period of time relating to the pleading from July 1996 which did not relate to those matters of opposition, but related to consideration of matters which were not in issue and were legitimately contained within the document.

(2)Such costs should be awarded, except insofar as they are shown by the applicant in these proceedings to be an unreasonable amount, or to have been unreasonably incurred.

The respondent then applies for an order that the costs so awarded should be ordered to be paid forthwith, notwithstanding that the proceeding is not concluded.  I have had referred to me two decisions on the operation of Order 62 rule 3 of the Federal Court Rules, namely the decision of the Full Court in Allstate Life Insurance Company v Australia and New Zealand Banking Group Limited (17 August 1995, unreported) and the decision of Lehane J in Vasyli v AOL International Pty Limited (2 September 1996, unreported).  I have considered both of those decisions in reaching the conclusion to which I have come.  As Lehane J did, I start with the ordinary rule that, even where there is a discrete interlocutory proceeding in respect of which a costs order is made, the taxation and payment of those costs are normally deferred until the proceedings are concluded.  That ordinary rule is reflected in the provisions of Order 62 rule 3 sub-rule (3).

Counsel for the respondent submits that, in the face of that ordinary rule, I should make an order as sought under sub-rule (2) of rule 3, firstly because the subject matter of the interlocutory proceeding is discrete and will be unaffected by the course of the subsequent proceedings, a point which I accept as a correct proposition of fact, and secondly, because of the possibility that the successful party may not enjoy the benefit of an order for costs for a long time, again a proposition which as a matter of fact I accept.

The question for me is whether those two considerations in the particular circumstances are sufficient to cause me to exercise the discretion which I have to make an order under Order 62 rule 3 as sought.  The ultimate question I think is whether the demands of justice are such as to indicate that I should depart from the ordinary rule having regard to such considerations.  Ultimately I have come to the view in the exercise of my discretion that I should not make such an order.

The two considerations which have been identified are significant and relevant, but on the other side there is nothing to indicate that at the end of the day the costs so ordered by me will not be recoverable, nor is there anything to indicate that there will be any particular hardship to the respondent in not being able to enforce the order for costs which I have made until the end of the proceedings.  Unlike the circumstances in Vasyli (above) there is no question of the parties being outside the jurisdiction of the Court, which was a factor considered by Lehane J.  Every case will need to be considered on its individual circumstances.

Having regard to what I regard as the relevant considerations, but in particular the demands of justice, I am not satisfied that my discretion in this particular instance should be exercised in favour of making the orders sought and I decline to do so.

I certify that this and the preceding       pages are a true copy of the Reasons for Decision of the Honourable Justice Mansfield.

Associate:

Dated:

Counsel for the Applicant        :    Mr R A Cameron
  with him
  Mr C J Townsend

Solicitors for the Applicant     :    Townsends

Counsel for the Respondent       :    Mr Jopling QC
  with him
  Mr S Wisking

Solicitors for the Respondent        :    Finlaysons

Hearing Date  :    21 March 1997