Opal Packaging Australia Pty Ltd v Orora Ltd (No 2)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

COMMERCIAL LIST

S ECI 2023 02183

OPAL PACKAGING AUSTRALIA PTY LTD (ACN 636 682 883)	Plaintiff
v
ORORA LTD (ACN 004 275 165) (and others according to the attached Schedule)	Defendants

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JUDGE:	Waller J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers upon receipt of written submissions from the Plaintiff and Defendants both dated 7 March 2024
DATE OF RULING:	14 March 2024
CASE MAY BE CITED AS:	Opal Packaging Australia Pty Ltd v Orora Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2024] VSC 108

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PRACTICE AND PROCEDURE – Costs – General rule that costs follow event – Whether plaintiff unsuccessful if proceeding is adjourned – Whether plaintiff seeking indulgence – General rule that costs follow event not displaced – Appropriate in circumstances that defendants pay plaintiff’s costs.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	R Lancaster SC D Hume	Herbert Smith Freehills
For the Defendants	HNG Austin KC JA Findlay	Baker McKenzie

HIS HONOUR:

On 4 March 2024 I published my reasons in this matter[1] and made orders adjourning the proceeding until 4 September 2024 or further order, otherwise dismissing the Plaintiff’s summons and dismissing the Defendants’ summons.
[1]Opal Packaging Australia Pty Ltd v Orora Ltd (Ruling) [2024] VSC 81.

At [90] I said:

As Opal has succeeded on its application and Orora has been unsuccessful on their application, I am inclined to order that the Defendants pay the Plaintiff’s costs of the applications having regard to the usual rule that costs follow the event. As there may be circumstances of which I am unaware that would displace the usual rule, the parties are asked to confer and either submit a consent minute in respect of the appropriate costs order or, failing agreement, an outline of submissions of no more than 3 pages identifying the precise costs order sought and why it should be made. I propose to resolve the issue of costs on the papers.

The parties have been unable to agree on appropriate costs orders and have filed short submissions identifying the costs orders they seek.

Pursuant to s 24(1) of the Supreme Court Act 1986, the Court has a broad discretion in relation to costs.

In Thurin v Krongold Constructions (Aust) Pty Ltd (No 2) the Court of Appeal stated:

In exercising its discretion, the Court is entitled to look to the realities of the litigation and it will attempt to do ‘substantial justice’ between the parties. Accordingly, while the general position is that costs should follow the event, such an order may not be appropriate in every case. In particular, where there is a multiplicity of issues, and mixed success has been enjoyed by the parties, the Court may take a pragmatic approach in framing the order for costs, taking into consideration the success (or lack of success) of the parties on an issues basis.[2]

[2][2022] VSCA 252, [12] (McLeish, Niall and Walker JJA) (citations omitted).

The Plaintiff, Opal Packaging Australia Pty Ltd (‘Opal’), seeks an order that the Defendants, Orora Ltd and Orora Packaging Australia Pty Ltd (together ‘Orora’), pay Opal’s costs of Opal’s summons filed on 16 August 2023 and of Orora’s summons filed on 7 September 2023. It contends that these orders should be made because costs should follow the event, Opal having succeeded in obtaining the primary relief it sought in its summons and having successfully resisted Orora’s summons.

Orora accepts that it should pay Opal’s costs of Orora’s summons but submits that Opal should pay Orora’s costs of Opal’s summons. As these competing costs orders would in effect cancel each other out, Orora submits that the Court should make no order as to costs.

Orora submits that Opal should pay Orora’s costs of Opal’s summons for two reasons.

First, it contends that that Opal was largely unsuccessful in the relief Opal sought in its summons, having only succeeded in obtaining an adjournment of six months and having failed to obtain its alternative relief.

Secondly, it contends that the only relief Opal successfully obtained was by way of an indulgence. Orora submits that a general rule is that a party who seeks a dispensation, indulgence or favour of the Court is ordered to pay the opposing party’s costs of the application, whether or not it succeeds.[3]
[3]Referring to GE Dal Pont, Law of Costs (LexisNexis, 5^th ed, 2021) [14.37]; Golski v Kirk (1987) 14 FCR 143, 157; Presbyterian Church (NSW) Property Trust v Scots Church Development Ltd (No 2) [2007] NSWSC 797, [6].

I do not accept that Opal was largely unsuccessful in the relief it sought in its summons. Opal primarily sought an adjournment of no less than six months. As alternatives it sought a stay of the proceeding or a trial of separate questions. Although I did not consider that the separate questions proposed by Opal should be tried before any trial of the proceeding, that does not detract from the fact that Opal succeeded on its application.

I also do not accept that Opal obtained an indulgence. I agree with Opal’s submission that the adjournment was not an indulgence but relief sought for the purposes of ensuring the efficient deployment of the resources of the Court and the parties. Having unsuccessfully requested Orora’s agreement that it need not commence legal proceedings on claims which had not yet arisen, Opal sought in its statement of claim, by way of interlocutory relief, an order that the proceeding be stayed with liberty to relist on seven days’ notice. It therefore indicated from the very outset that it considered the proceeding should not progress in the ordinary way. As to the difference between a stay and an adjournment, Opal’s senior counsel submitted during the hearing of the applications that an adjournment was more appropriate being a more flexible case management tool for a commercial court to take with the ready ability to relist the proceedings without having to formally vacate or terminate a stay order.[4]
[4]Transcript of Proceedings (24 February 2024) 29.18–29.25.

Even if the adjournment were considered an indulgence, I note that Professor Dal Pont, having referred to the general rule concerning the costs of seeking an indulgence,[5] states that it is ‘too simplistic to invoke a general rule in this context as some universal talisman independent of the circumstances of the case’.[6]
[5]GE Dal Pont, Law of Costs (LexisNexis, 5^th ed, 2021) [14.37].
[6]Ibid [14.46].

I do not consider that there are circumstances that displace the usual rule that costs should follow the event. I will order that the Defendants pay the Plaintiff’s costs of the Plaintiff’s summons filed on 16 August 2023 and of the Defendants’ summons filed on 7 September 2023.

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SCHEDULE

OPAL PACKAGING AUSTRALIA PTY LTD (ACN 636 682 883)	Plaintiff/Defendant by Counterclaim
v
ORORA LTD (ACN 004 275 165)	First Defendant/First Plaintiff by Counterclaim
ORORA PACKAGING AUSTRALIA PTY LTD (ACN 165 443 667)	Second Defendant/Second Plaintiff by Counterclaim

In the matter of Opal Packaging Australia Pty Ltd versus Orora Ltd (No 2), the Federal Court of Australia was presented with a dispute concerning costs in the context of litigation. The plaintiff, Opal Packaging Australia, had filed a proceeding against Orora Ltd, which was subsequently adjourned. The crux of the matter revolved around the principles governing the allocation of costs in cases where proceedings are adjourned, specifically whether the plaintiff, having been unsuccessful in the sense of the case being adjourned, is entitled to seek an indulgence in the form of the defendants paying their costs.

The court was tasked with determining the application of the general rule that costs follow the event, and whether this rule is displaced when a plaintiff is unsuccessful in the sense of the proceedings being adjourned. The plaintiff argued that despite the adjournment, the case had progressed to a point where an indulgence should be granted, thus allowing for the defendants to pay the plaintiff's costs. The defendants, on the other hand, contended that the adjournment signified a failure on the part of the plaintiff to achieve a result, thereby maintaining that the plaintiff should bear their own costs.

The court deliberated on the established principles of costs in litigation and found that the general rule remains applicable, where costs follow the event. However, the court recognised the exceptional circumstances where an adjournment, particularly if it is due to the plaintiff's failure to adequately prepare or present their case, could warrant an indulgence. In this instance, the court deemed it appropriate for the defendants to pay the plaintiff's costs, considering the circumstances leading to the adjournment. The court balanced the need to adhere to the general rule with the need to ensure justice is served, and found that in this specific case, the defendants should bear the costs incurred by the plaintiff up to the point of adjournment.

The final orders of the court directed that Orora Ltd pay the costs of Opal Packaging Australia Pty Ltd up to the date of the adjournment. This decision underscores the nuanced application of the general rule regarding costs, where exceptional circumstances can lead to a departure from the norm, ensuring that justice is served in a manner that reflects the realities of the case.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established