Mijac Investments Pty Ltd v Graham (No 2)
[2014] FCA 417
•2 May 2014
FEDERAL COURT OF AUSTRALIA
Mijac Investments Pty Ltd v Graham (No 2) [2014] FCA 417
Citation: Mijac Investments Pty Ltd v Graham (No 2)
[2014] FCA 417Parties: MIJAC INVESTMENTS PTY LTD (ACN 089 820 280) v WILLIAM GRAHAM, COSMICK PTY LTD and MELBOURNE GRAVITY PTY LTD (ACN 490 584 339) File number: VID 77 of 2014 Judge: JESSUP J Date of judgment: 2 May 2014 Catchwords: COSTS – whether the applicant should pay the respondents’ costs on an indemnity basis – application was self-evidently hopeless and misconceived – whether applicant’s solicitor should pay respondents’ costs – application was not filed over hand of the solicitor – solicitor should not be liable to pay costs of the application – applicant to pay respondents’ costs on indemnity basis Cases cited: Mijac Investments Pty Ltd v Graham [2014] FCA 366 Date of hearing: Heard on the papers Date of last submissions: 17 April 2014 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 5 Counsel for the Applicant: The applicant did not file any submissions Counsel for the Respondents: C G K Madder Solicitor for the Respondents: B2B Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 77 of 2014
BETWEEN: MIJAC INVESTMENTS PTY LTD (ACN 089 820 280)
ApplicantAND: WILLIAM GRAHAM
First RespondentCOSMICK PTY LTD
Second RespondentMELBOURNE GRAVITY PTY LTD (ACN 490 584 339)
Third Respondent
JUDGE:
JESSUP J
DATE OF ORDER:
2 MAY 2014
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.The applicant pay the respondents’ costs, to be taxed on an indemnity basis.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 77 of 2014
BETWEEN: MIJAC INVESTMENTS PTY LTD (ACN 089 820 280)
ApplicantAND: WILLIAM GRAHAM
First RespondentCOSMICK PTY LTD
Second RespondentMELBOURNE GRAVITY PTY LTD (ACN 490 584 339)
Third Respondent
JUDGE:
JESSUP J
DATE:
2 MAY 2014
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
In orders made in this matter on 10 April 2014, the parties were given leave to file written submissions as to costs: Mijac Investments Pty Ltd v Graham [2014] FCA 366. The respondents did so within the time limited, but no submission was received from the applicant. The reasons which follow deal with the respondents’ application for costs.
Although it was not, in my view, clearly necessary, the applicant named the respondents as parties to its application which was dismissed on 10 April 2014. The respondents were, therefore, entitled to defend their interests by participating in the normal way. There may be a question whether they are entitled to all of the costs which they incurred, particularly in relation to a hearing which, as made clear to them in correspondence sent from my chambers, they were under no obligation to attend. I express no view on that aspect, and shall leave to the taxing officer the determination of any questions as to the amount of the respondents’ entitlement. However, the application to which they were named as respondents failed, and they should have their costs in the conventional way.
The respondents made two further submissions. The first was that those costs should be taxed on an indemnity basis, both because the application was so self-evidently hopeless that it was unreasonable of the applicant to have made it and because the application involved serious allegations of dereliction of duty on the part of court staff, allegations which could never have been relevant in the kind of proceeding which this was. As to the second, I think I should say nothing further about it, since it does seem to have reflected the essence of the complaint which the applicant had and, as things eventuated, the subject was never aired in court. As to the first point, I am persuaded that it is a good one. The only thing I would add to my reasons of 10 April 2014 (from which it should be clear that the application was not only hopeless but misconceived) is that, in this long history of litigation which the applicant has maintained against the respondents, the point has surely been reached when the latter should no longer be obliged to meet the differential between the costs which they actually incurred and the costs which are allowable under a taxation as between party and party. I regard this as a clear case for costs to be taxed on an indemnity basis.
The second submission made by the respondents was that it should be the solicitor who acted for the applicant, rather than the applicant itself, who is ordered to pay the respondents’ costs. I was urged to follow the precedent set by Tracey J in his judgment of 18 March 2013. In the present case, the starting point must be the filing of the application itself which, as I pointed out in para 3 of my reasons of 10 April 2014, was not done over the hand of a solicitor. The applicant’s solicitor commenced to act only on 1 November 2013. Apart from anything else, I cannot see any basis for requiring him to pay for such costs as the respondents may have incurred before that date. From then until the solicitor served upon the applicant his notice of withdrawal shortly before the hearing on 11 March 2014, he represented the applicant in what I have held to be a hopeless case. Since (largely in the interests of avoiding the incurring of further costs and of finally cauterising the wound which this application has inflicted on the respondents’ financial position) I have not heard from the solicitor in response to this aspect of the respondents’ case on costs, I propose to say nothing adverse about the conduct of that representation. On what the respondents have put to me, I am not persuaded that the circumstances would justify the exceptional order which they seek. By contrast, I am of the strong view that the obligation to pay the respondents’ costs should lie where it naturally falls, on the applicant itself, which initiated this unsatisfactory proceeding without any professional assistance. Of all litigants, the applicant is, in my view, pre-eminently eligible to shoulder the uncomfortable costs obligation of a losing party. It would be unjust for its solicitor to have to do so on its behalf.
The order which I make will provide for the applicant to pay the respondents’ costs, to be taxed on an indemnity basis.
I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup. Associate:
Dated: 2 May 2014
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