Parras Holdings Pty Ltd v Commonwealth Bank of Australia
[1998] FCA 683
•12 JUNE 1998
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 478 of 1992
GENERAL DIVISION )
BETWEEN:PARRAS HOLDINGS PTY LIMITED
(A.C.N. 003 546 807)
First Applicant/First Cross-Respondent
FULANGA PTY LIMITED
(A.C.N. 001 796 354)Second Applicant/Second Cross-Respondent
PHONTOS INVESTMENTS PTY LIMITED
(A.C.N. 000 870 762)Third Applicant/Third Cross-Respondent
ILANZ PTY LIMITED
(A.C.N. 001 885 392)Fourth Applicant/Fourth Cross-Respondent
P & E PHONTOS PTY LIMITED
(A.C.N. 000 870 771)Fifth Applicant/Fifth Cross-Respondent
DOVIZO PTY LIMITED
(A.C.N. 003 932 269)Sixth Applicant/Sixth Cross-Respondent
PETER PHONTOS
Seventh Applicant/Seventh Cross-Respondent
ELLI PHONTOS
Eighth Applicant/Eighth Cross-Respondent
HARRY PHILLIP COSTAS
Ninth Applicant/Ninth Cross-Respondent
MARY COSTAS
Tenth Applicant/Tenth Cross-Respondent
MICHAEL PHONTOS
Eleventh Applicant/Eleventh Cross-Respondent
SIBARD PTY LIMITED
(A.C.N. 003 575 291)Twelfth Applicant
SHIMCOST PTY LIMITED
(A.C.N. 003 355 048)Thirteenth Applicant
SPOTEK PTY LIMITED
(A.C.N. 050 325 212)Fourteenth Applicant/Twelfth Cross-Respondent
AND:COMMONWEALTH BANK OF AUSTRALIA
(A.C.N. 123 123 124)
Respondent/Cross-Claimant
Coram: Davies J.
Date: 12 June 1998
Place: Sydney
MINUTES OF ORDER
THE COURT ORDERS THAT:
The applicants pay the costs of the respondent in the proceedings related to the applicants' application.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 478 of 1992
GENERAL DIVISION )
BETWEEN:PARRAS HOLDINGS PTY LIMITED
(A.C.N. 003 546 807)
First Applicant/First Cross-Respondent
FULANGA PTY LIMITED
(A.C.N. 001 796 354)Second Applicant/Second Cross-Respondent
PHONTOS INVESTMENTS PTY LIMITED
(A.C.N. 000 870 762)Third Applicant/Third Cross-Respondent
ILANZ PTY LIMITED
(A.C.N. 001 885 392)Fourth Applicant/Fourth Cross-Respondent
P & E PHONTOS PTY LIMITED
(A.C.N. 000 870 771)Fifth Applicant/Fifth Cross-Respondent
DOVIZO PTY LIMITED
(A.C.N. 003 932 269)Sixth Applicant/Sixth Cross-Respondent
PETER PHONTOS
Seventh Applicant/Seventh Cross-Respondent
ELLI PHONTOS
Eighth Applicant/Eighth Cross-Respondent
HARRY PHILLIP COSTAS
Ninth Applicant/Ninth Cross-Respondent
MARY COSTAS
Tenth Applicant/Tenth Cross-Respondent
MICHAEL PHONTOS
Eleventh Applicant/Eleventh Cross-Respondent
SIBARD PTY LIMITED
(A.C.N. 003 575 291)Twelfth Applicant
SHIMCOST PTY LIMITED
(A.C.N. 003 355 048)Thirteenth Applicant
SPOTEK PTY LIMITED
(A.C.N. 050 325 212)Fourteenth Applicant/Twelfth Cross-Respondent
AND:COMMONWEALTH BANK OF AUSTRALIA
(A.C.N. 123 123 124)
Respondent/Cross-Claimant
Coram: Davies J.
Date: 12 June 1998
Place: Sydney
REASONS FOR JUDGMENT
ON COSTS OF APPLICATION
On 17 December 1997, I dismissed the applicants' claims in these proceedings. Reasons for judgment had been handed down on 24 October 1997. Since then, I have received written submissions on the issue of costs.
Section 43 of the Federal Court of Australia Act 1976 (Cth) confers jurisdiction upon the Court to award costs and s 43(2) provides that the award of costs is in the discretion of the Court or Judge. Notwithstanding that an award of costs is discretionary, the discretion must be exercised judicially. Ordinarily, costs follow the event and a successful litigant receives his or her costs whether or not successful on every point raised or every argument put. However, the Court has a wide discretion and, in the particular circumstances of a case, may think it appropriate either to extinguish or reduce the costs that would otherwise be payable to the successful party or even to order that the successful party will pay the whole or a part of the costs of the other party. Particularly is this so where the successful party has raised issues which the Court considers were improper or unreasonable or where the conduct of the successful party either prior to or during the trial caused the litigation or caused the litigation to be extended.
In the present case, the successful party, the Commonwealth Bank of Australia, succeeded on all issues although not on all submissions. It has been put on behalf of the applicants that, nevertheless, there are several matters which I should take into account in the award of costs.
The applicants filed and served an affidavit and report from Mr GL Zakos as to the costs of the Wharf Road project and as to matters associated with the project and the delays which occurred. Mr Zakos was an expert in the field. The Bank obtained an affidavit and report from Mr JL Meredith, likewise an expert on construction. Mr Meredith was dissatisfied with what Mr Zakos had to say about the actual costs of construction and went on to estimate for himself what he considered the construction cost should have been. Mr Zakos' first report was 29 pages in length. Mr Meredith's response was 218 pages. It was expressed in terms that were provocative. Mr Zakos responded by a report that was 280 pages in length.
In the end, with encouragement from the Bench, counsel for the parties agreed upon a set of questions. The two experts consulted together and agreed upon the answers to be given to those questions. Their affidavits and reports were not read.
Criticism has been made of Mr Meredith's report. It seems to me, however, that all the matters to which Mr Meredith turned his attention were relevant to the issues that were or could have been debated during the hearing. For example, the question of what the development ought to have cost was one of the questions that was was later asked of the experts, was relevant as a check on what was said to be the actual cost of the development and was relevant to the reliability of the estimates of the cost of development which Michael Phontos made from time to time.
In my view, the costs of Mr Meredith's report and of the part which he played in the proceedings were properly incurred. Mr Meredith's report was expressed in unnecessarily provocative terms but, as the experts agreed on their answers to the questions put, that did not cause the proceedings to be extended.
A challenge was made to an affidavit and report of Mr MB Bryant in which Mr Bryant gave expert accounting evidence which went mainly to the issue of damages, an issue which ultimately was not reached.
The principal criticism of Mr Bryant's affidavit and report was that an affidavit and report by Victoria Bradbury had been sworn on 22 December 1995 and filed on behalf of the Bank. That had been responded to by a further affidavit of Mr MR Ronan, the applicants' expert. In late 1996, directions wsere given that the experts should meet together with a view to identifying points of agreement or difference. As Ms Bradbury was at the time on maternity leave, Mr Bryant met with Mr Ronan and discussed the issues. Ultimately, on 19 December 1996, a direction was made that the applicants file a supplementary affidavit by its accounting expert and that the Bank file and serve an affidavit in reply by the Bank's accounting expert. A further affidavit of Mr Ronan's was sworn 22 December 1996 and was served. An affidavit by Mr MB Bryant was sworn and served on 29 January 1997. This report exceeded 300 pages in length.
It has been submitted on behalf of the applicants that Mr Bryant's report was not merely a report in reply but covered every aspect of the matter including points that Ms Bradbury had already dealt with. The applicants have submitted that the costs of Mr Bryant's affidavit and report should be disallowed.
However, events had passed Ms Bradbury by as she was on maternity leave when the experts were to consult. This required the Bank to bring in a new expert, Mr Bryant, and he, understandably, wished to express his own views in his own way. In fact, he incorporated a great deal of Ms Bradbury's work but it was necessary for him to review this before he could treat it as his own and incorporate it in his overall report. In my view, the costs of Mr Bryant's report and affidavit and of his consultations with Mr Ronan were properly incurred.
It was submitted on the part of the applicants that an additional 343 documents which the Bank required to be included in the bundle of documents plus copies of bank statements up to the date of the trial unnecessarily increased costs and were excessive and failed to advance the proceedings.
It seems to me, however, that I should accept the judgment of the legal representatives for the Bank in this respect. The case was complex and the issues were numerous. The ramifications of particular issues and the way in which they might develop during the hearing was difficult to assess. I found the agreed bundle of documents to be very helpful. It did not seem to me that it was unduly lengthy. Not all the bank statements were looked at but from time to time reference was made to these records. I think that the costs of all these documents were properly incurred.
Challenge was also made to a document which was entitled "Note on PEP Cheque History - Early 1990". This was handed up during the course of closing submissions by senior counsel for the Bank to demonstrate that, during the relevant period, not all the moneys which the Bank had released for the Wharf Road project had been in fact used for that purpose. Ultimately, as counsel for both parties failed to agree upon the matters set out in a document, it was not received into evidence and I did not rely upon it.
However, the matter which was the subject of the Note on PEP Cheque History was relevant to the issues which were before the Court. I do not say that the costs of the preparation of a document which was not placed in evidence should be allowed on taxation. That is a matter for the taxing officer. I consider, however, that this is not matter on which I should make any special order. The fact that the document was ultimately not agreed and did not go into evidence does not indicate that counsel's submission was not properly made.
For these reasons, I consider that the proper order to make is the usual order, namely that the applicants pay the costs of the respondent, the Commonwealth Bank of Australia, in the proceedings related to the applicants' application.
I certify that this and the preceding five
(5) pages are a true copy of the reasons for judgment of
the Honourable Justice Davies.
Associate:
Date: 12 June 1998
Counsel for the applicants: P.L. Dodson and J.M. Hennessy
Solicitors for the applicants: Phontos & Associates
Counsel for the respondent: R.G. Forster SC with
N. Manousaridis
Solicitor for the respondent: L.E. Taylor
Commonwealth Bank of Australia
Legal Department
Date of judgment: 12 June 1998
0
0
0