Minister for Immigration and Ethnic Affairs v Pochi
[1986] FCA 87
•25 MARCH 1986
Re: AUSTRALIAN TRANSPORT INSURANCE PTY. LTD. and RAYMOND BERTRAM BARTLETT;
GRAEME PHILLIPS ROAD TRANSPORT INSURANCES PTY. LTD. and GRAEME PHILLIPS
And: GRAEME PHILLIPS ROAD TRANSPORT INSURANCES PTY. LTD. and GRAEME PHILLIPS;
AUSTRALIAN TRANSPORT INSURANCE PTY. LTD.; RAYMOND BERTRAM BARTLETT; JSOEPH
FRANCIS McNEANY; CHRISTOPHER FRANK ALDERTON; MARY ROGERS and LES CLARKE
No. VG 273 of 1984
Practice and Procedure
COURT
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Woodward J.
CATCHWORDS
Practice and Procedure - discretion to award costs of a successful party on a solicitor and client basis - unsuccessful allegations of fraud and conspiracy - failure of cross-claimant to give evidence in support of claim.
Federal Court of Australia Act 1976 s.43(2)
Federal Court Rules O.35 r.5
HEARING
MELBOURNE
#DATE 25:3:1986
Counsel for the applicants and cross-respondents: Mr P Hayes
Counsel for the respondents and cross-claimants: Mr J.W.K. Burnside
Solicitors for the applicants and cross respondents: Gillotts
Solicitors for the respondents and cross-claimants: Cornwall Stodart & Co.
ORDER
1. The respondents and cross-claimants pay the applicants' and cross-respondents' costs, including reserved costs, to be taxed on a party and party basis.
2. The order of 20 December 1985 made in these proceedings be varied by adding the words "such fine to be paid to the District Registrar of this Court at 450 Little Bourke Street, Melbourne by 22 April 1986" to order no. 4 therein.
3. The respondent and cross- claimant, Graeme Phillips, have liberty to apply within 14 days in relation to the time for payment of the fine.
(NOTE: Settlement and entry of orders is dealt with in O.36 of
the Federal Court Rules.)
JUDGE1
In this matter I gave judgment for the applicants and cross-respondents on 20 December 1985 and reserved questions of costs. Counsel for the successful parties has now argued that his clients should have an order for costs on a "solicitor and client", rather than a "party and party", basis.
The arguments put in favour of such an order may be summarized as follows:
1. Very serious allegations of fraud and conspiracy were
made which were found to be entirely without foundation.
2. The respondents/cross-claimants, and in particular
Graeme Phillips, conducted the litigation in a high-handed and oppressive way
(a) by securing an Anton Pillar order, permitting the seizure and copying of office records held by Australian Transport Insurance Pty Ltd, based on affidavits alleging matters which were not substantiated by later evidence,
(b) by making allegations to police which instigated police inquiries at the same time the litigation was being
conducted,
(c) by making and repeating, to a wide range of people, allegations against the applicants and cross-respondents in the face of Court orders that such allegations were not to be repeated,
(d) by not pursuing at the hearing many of the allegations made in the pleadings, and
(e) by failing to go into the witness-box to support any of the allegations which had previously been made publicly and in pleadings and affidavits.
I have no doubt that I have power to make such an order. Section 43 of the Federal Court of Australia Act 1976 gives a general power to award costs and goes on to provide in sub-s.(2),
"Except as provided by any other Act, the award of costs is in the discretion of the Court or Judge".
That discretion is "absolute and unfettered", but must be exercised judicially (Trade Practices Commission v Nicolas Enterprises (1979) 28 ALR 201 at 207). Courts in both the United Kingdom and Australia have long accepted that solicitor and client costs can properly be awarded in appropriate cases where "there is some special or unusual feature in the case to justify the court exercising its discretion in that way" (Preston v Preston (1982) 1 All ER 41 at 58). It is sometimes said that such costs can be awarded where charges of fraud have been made and not sustained; but in all the cases I have considered, there has been some further factor which has influenced the exercise of the Court's discretion - for example, the allegations of fraud have been made knowing them to be false, or they have been irrelevant to the issues between the parties. See Andrews v Barnes (1888) 39 Ch D 133; Forester v Read (1870) 6 Ch App Cases 40; Christie v Christie (1873) 8 Ch App Cases 499; Degmam Pty Ltd (In Liq) v Wright (No 2) (1983) 2 NSWLR 354.
Another case cited in argument was Australian Guarantee Corporation Ltd v De Jager (1984) VR 483 where, at 502, Tadgell J allowed solicitor and client costs because he found the pursuit of the action to have been "a high-handed presumption".
In the present case I am unable to say that the making of fraud and conspiracy allegations was improper, given the facts as they must have appeared to Phillips. In short, his agency business was taken over by a company which had previously been in a position akin to a sub-agent, following direct negotiations with his principal of which he was not aware; and then most of his staff left him and joined the other company, with which they had previously had dealings as his employees. It is understandable that he should have suspected double-dealings in such circumstances, even though the evidence eventually made it clear that the applicants had done nothing unlawful and the former employees were blameless.
The fact that Phillips stayed out of the witness box, after making such serious allegations, does tell against him. But his suspicions would not have been relevant to any issue between the parties, and his reluctance to face cross-examination may well have been due to circumstances which are peripheral to any dealings between the parties.
It is true that, until his counsel failed to press a number of allegations, and he himself shunned the witness box, Phillips had pursued his action aggressively. He had also been guilty of contempt of court in carrying on his feud in the public arena. But he has lost his action and been punished for his contempt. He will have to pay costs arising from the Anton Pillar order, as well as all the other interlocutory skirmishing which occurred.
I do not think this is a case where the applicants are entitled to an order for anything other than party and party costs. They instituted the proceedings. Phillips defended and counter attacked. Although he failed in both aspects of the litigation, he did succeed in showing that the applicants had misled their clients by their failure to complete insurance policies with Phillips, though this did not result in any order against them. I am not satisfied that he had no honest belief in the genuineness of the other allegations he made. Counsel's decision not to press some of them was a tactical decision, responsibly taken, and it does not necessarily reflect on the honesty of the allegations.
Had the former employees of Phillips, who were joined as cross-respondents, been separately represented, I might have been persuaded to a different view of their cases, as they were not parties to the original proceedings and were found totally innocent of the serious charges laid. But since all the cross-respondents were jointly represented, and would have been necessary witnesses in any event, I am not satisfied that the difficult task of segregating any costs referable only to their defending the charges against them would be warranted.
In my view the respondents and cross-claimants should pay to the applicants and cross-respondents all their costs of these proceedings, including reserved costs, to be taxed on a party and party basis.
In the course of preparing these reasons for judgment, it has come to my notice that, in fining Graeme Phillips $1000 for contempt of court, I omitted to order that the fine be paid to the Registrar of the Court and to fix a time within which it is to be paid - as required by O.35 r.5 of the Federal Court Rules.
I shall therefore vary the order made by adding the requirement that the fine of $1000 be paid to the Registrar within 28 days. I shall reserve liberty to apply, within 14 days of today, if the respondent Phillips is unable, for any reason, to comply with that time limit.
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