Ramnath and Anor v OPM Quickleen International Pty Ltd and Anor (No.2)
[2019] FCCA 1312
•17 May 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| RAMNATH & ANOR v OPM QUICKLEEN INTERNATIONAL PTY LTD & ANOR (No.2) | [2019] FCCA 1312 |
| Catchwords: CONSUMER LAW – Costs – submissions on the quantum of costs – successful applicant seeking costs thrown away – applicant seeking costs on the ordinary basis – applicant seeking indemnity costs – whether the circumstances justify making an indemnity costs order – order made. |
| Legislation: Competition and Consumer Act 2010 (Cth), Sch.2 Federal Circuit Court of Australia Act 1999 (Cth), s.79 Federal Circuit Court Rules 2001 (Cth), r.21.02 |
| Cases cited: Ramnath & Anor v OPM Quickleen International Pty Ltd & Anor [2019] FCCA 749 Burns v Media Options Group Pty Ltd & Ors (No.2) [2013] FCCA 2016 Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534; (1990) 65 ALJR 151; (1990) 97 ALR 45; (1990) 50 A Crim R 287 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72; (1998) 72 ALJR 578; (1998) 152 ALR 83; (1998) 96 LGERA 173 De Alwis v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 77 Colgate-Palmolive v Cussons [1993] FCA 536; (1993) 46 FCR 225; (1993) 118 ALR 248; (1993) 46 FLR 225; (1993) 26 IPR 561 Multicon Engineering Pty Ltd v Federal Airports Corporation [1996] NSWSC 212; (1996) 138 ALR 425 |
| First Applicant: | PRAKASH RAMNATH |
| Second Applicant: | AUSSIE CHEMICALS PTY LTD ACN 169 259 036 |
| First Respondent: | OPM QUICKLEEN INTERNATIONAL PTY LTD ACN 115 506 075 |
| Second Respondent: | RICHARD MATUSIK |
| File Number: | SYG 2842 of 2014 |
| Judgment of: | Judge Nicholls |
| Hearing date: | Quantum of costs decided on the Papers |
| Date of Last Submission: | 15 April 2019 |
| Delivered at: | Sydney |
| Delivered on: | 17 May 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr P. Rodionoff |
| Solicitors for the Applicant: | Mr A. Niles |
| Representative for the Respondents: | Mr B. Lambros |
| Solicitors for the Respondents: | Frenkel Partners |
THE COURT NOTES
Order 11 made on 12 June 2015.
Order 11 made on 17 October 2017.
THE COURT ORDERS THAT
The second respondent, Mr Matusik, pay the first applicant, Mr Ramnath, costs thrown away, set in the amount of $4,790.05.
The second respondent, Mr Matusik, pay the first applicant, Mr Ramnath, costs thrown away, set in the amount of $30,450.00.
The second respondent, Mr Matusik, pay the first applicant, Mr Ramnath, costs in the proceedings up to 13 October 2017, set in the amount of $4600.00.
The second respondent, Mr Matusik, pay the first applicant, Mr Ramnath, costs in the proceedings on an indemnity basis from 13 October 2017, set in the amount of $72,764.50.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2842 of 2014
| PRAKASH RAMNATH |
First Applicant
| AUSSIE CHEMICALS PTY LTD ACN 169 259 036 |
Second Applicant
And
| OPM QUICKLEEN INTERNATIONAL PTY LTD ACN 115 506 075 |
First Respondent
| RICHARD MATUSIK |
Second Respondent
REASONS FOR JUDGMENT
On 14 October 2014 Mr Ramnath and Aussie Chemicals Pty Ltd ACN 169 259 036 (“Aussie Chemicals”) made an application against the first and second respondents (OPM Quickleen International Pty Ltd ACN 115 506 075 (“Quickleen”) and Mr Richard Matusik pursuant to the Australian Consumer Law [Schedule 2 of the Competition and Consumer Act 2010 (Cth) (“ACL”).
Background
On 27 March 2019 the Court handed down judgment in Ramnath & Anor v OPM Quickleen International Pty Ltd & Anor [2019] FCCA 749 (“Quickleen (No 1)”). The Court made the following declaration:
“(1) The first and second applicants suffered damage as a result of the deceptive and misleading conduct of the first and second respondents which contravened s.18 of the Australian Consumer Law (Sch 2 of the Competition and Consumer Act 2010 (Cth)).”
In light of this declaration the following orders were made:
“(1) The second respondent pay the first applicant $342,338.94
(2) The second respondent pay the first applicant interest on that amount to be calculated as from 28 April 2014.
(3) The first applicant to file and serve evidence in relation to his applications for costs on or before 10 April 2019.
(4) The second respondent to file and serve any evidence in response on or before 24 April 2019.
(5) The first applicant to file and serve any further evidence in reply on or before 8 May 2019.”
Mr Ramnath’s Application For Costs
This judgment is concerned with the quantum of costs payable to Mr Ramnath by Mr Matusik.
Pursuant to the orders made on 27 March 2019 (as set out above at [3]) both parties were given the opportunity to provide documentary evidence in relation to costs. Mr Ramnath filed evidence at 4:29pm on 15 April 2019. Mr Matusik did not file any evidence. Therefore, Mr Ramnath’s evidence is unchallenged. There is no reason not to generally accept the evidence of Mr Ramnath.
Mr Ramnath seeks costs in regard to (at [1] of his written submissions):
“…(a) Costs thrown away due to the need for further directions on 12 June 2015 due in part to Mr Matusik’s failure to attend mediation.
(b) Orders for costs made on 17 October 2017 due to appointment of the litigation guardian. That costs order made on 17 October 2017 was in 2 parts. There was an order for the respondents to pay the applicants’ costs of the Application in a Case to appoint the litigation guardian and also an additional order that the respondents pay the applicants’ costs occasioned by the adjournment of the proceedings consequent upon the appointment of the litigation guardian.
(c) Mr Ramnath’s costs of the entire proceeding.”
Mr Ramnath requests costs “on the ordinary basis up until 20 November 2014” being the date on which he made an offer to settle the matter. He requests all costs following that date to be paid on an indemnity basis.
I note that at [3]-[8] of Mr Ramanth’s written submissions it is suggested that the Court make a cost order against the respondent’s solicitor. In these submissions it was not made clear if this cost order was in relation to costs thrown away in connection with the appointment of a litigation guardian or the proceedings generally. There is insufficient evidence before the Court to consider a cost order against the respondents’ representative. Nor do the circumstances before the Court provide any reasonable basis for any such consideration. I note also, that no formal application for such an order was made. I will not make this order. The following consideration applies to the quantum of costs to be paid by Mr Matusik.
Section 79(2) of the Federal Circuit Court of Australia Act 1999 (Cth) is in the following terms:
“(2) The Federal Circuit Court of Australia or a Judge has jurisdiction to award costs in all proceedings before the Federal Circuit Court of Australia (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs must not be awarded.”
Rule 21.02 of the Federal Circuit Court Rules 2001 (Cth) (“the rules”) is in the following terms:
“ (1) An application for an order for costs may be made:
(a) at any stage in a proceeding; or
(b) within 28 days after a final decree or order is made; or
(c) within any further time allowed by the Court.
(2) In making an order for costs in a proceeding, the Court may:
(a) set the amount of the costs; or
(b) set the method by which the costs are to be calculated; or
(c) refer the costs for taxation under Part 40 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
(d) set a time for payment of the costs, which may be before the proceeding is concluded.”
I note that Mr Ramnath did make his application for costs within the requisite time (r.21.02(1)) of the rules. He now seeks a costs order pursuant to r.21.02(2)(a) of the rules.
Miscalculations of Amounts Claimed
I further note that there are mathematical errors in some of Mr Ramnath’s calculations in his written submissions of 15 April 2019 relating to his costs applications.
Paragraphs [14]-[17] of the written submissions are as follows:
“14. … The solicitors fees incurred by reason of Mr Matusik’s failure to attend mediation are contained in the first 2 items of the invoice number 530 dated 7 September 2015. These entries show 4.9 hours of work connected with this issue at $350 per hour = $1,715 plus GST = $1,886.50
15. Counsels fees incurred by the respondents in relation to Mr Matuisk’s failure to attend the first mediation are set out in counsel’s invoice dated 10 June 2015 for the sum of $2,904 inclusive of GST.
17. The applicants submit all the costs and disbursements were properly incurred and seek an order that Mr Mtusik pay the total of those costs and disbursements amounting to $4,790.05.”
However, the total of the costs and disbursements set out above should be $4,790.50.
Paragraph 21 of the written submissions is as follows:
“The applicants seek the following amount for costs and disbursements under this category:
For Application to appoint Litigation Guardian
Solicitors fees $10, 895.50
Solicitor’s disbursements 459.00
Counsel’s fees 7,656.00
Total $19,010.00…”
However, the total of the solicitor’s fees, solicitor’s disbursements and counsel’s fees should in fact, given what is set out immediately above $19,010.50.
Similarly, [22] of the written submissions is as follows:
“… Disbursements paid by Mr Ramnath directly
Amount
Filing fee $1,315.00
Hearing fees 2,205.00
Setting down fee (12.10.17) 715.00
Subpoena issued 16.9.15 140.00
Total $4,195.00…”
However, the total of the filing, hearing, setting down fees and subpoena issued is $4,375.00.
Where necessary and appropriate this judgment will proceed on the “Totals” provided in the submissions. It should be noted that proceeding in such manner does not disadvantage Mr Matusik because the “Totals” provided are in fact less than what the total should be (if the correct addition had occurred).
Costs in relation to the Orders of 12 June 2015
On 29 October 2014, I referred this matter to mediation, by consent. From the Court’s file it appears that the matter was listed for mediation on 1 June 2015. However, prior to this date the respondents’ solicitor advised the applicants’ solicitor that Mr Matusik could no longer attend mediation on that date. The mediation was subsequently vacated by the Registrar. The applicants’ solicitor requested that the matter be listed for directions. The matter was listed for directions, before me on 12 June 2015.
At [129] and [132] of Quickleen (No 1) I found that Mr Ramnath should be awarded costs thrown away in relation to this issue. The reasons are set out at [128] of Quickleen (No 1).
On 12 June 2015 I made an order setting down the quantum of Mr Ramnath’s application for costs thrown away for hearing on a date to be administratively advised. Mr Ramnath seeks a set amount of $4790.05.
On the documents before the Court I accept that the costs sought by Mr Ramnath were reasonably and validly incurred, and therefore, in the circumstances explained in Quickleen No 1, thrown away. I accept Mr Ramnath’s (unchallenged) evidence as to the quantum of costs he incurred in relation to that day. I am satisfied the amount sought is reasonable in all the circumstances. I will make the order sought.
Costs related to Litigation Guardian
On 16 October 2017 Quickleen and Mr Matusik filed an Application in a Case seeking the appointment of a litigation guardian for Mr Matusik. On 17 October 2017, I ordered by consent that a litigation guardian be appointed in the proceedings. On 23 January 2018, I appointed Mr Harry Kakavas as litigation guardian for Mr Matusik to take effect from 19 October 2017. On 26 November 2018, I ordered, by consent, that the litigation guardian be removed. It appeared that the litigation guardian was not required.
At [130] and [132] of Quickleen (No 1) I found that Mr Ramnath should be awarded costs thrown away in connection with the appointment of a litigation guardian for Mr Matusik.
On 17 October 2017, I made orders that the respondents’ pay the costs of the Application in a Case (made to appoint the litigation guardian) and costs thrown away, which were incurred by Mr Ramnath on account of the further adjournment of the proceedings. These orders provided the parties with the opportunity to correspond with one another in relation to the quantum of costs. On what is before me I am satisfied that the parties did correspond with one another. However, no agreement as to costs was reached.
On the unchallenged evidence before me I am satisfied that the amount of costs sought by Mr Ramnath were relevantly and reasonably incurred.
Mr Ramnath requests a fixed amount. I accept Mr Ramnath’s (unchallenged) evidence as to the costs he incurred. I will make the order in the amount sought.
Costs of the entire proceedings
At [131] and [132] of Quickleen (No 1) I found that Mr Ramnath should be awarded costs for the entire proceedings. As is often said costs follow the event. There was nothing before the Court to argue against that proposition.
I note that the costs sought by Mr Ramnath for the entirety of the proceedings do not include the costs to be awarded in connection with the orders of 12 June 2015 and the litigation guardian (as set out above at [20]-[23] and [24]-[28] respectively).
As set out above Mr Ramnath seeks, in part, costs on an indemnity basis. I have regard to what I relevantly said in Burns v Media Options Group Pty Ltd & Ors (No.2) [2013] FCCA 2016 at [118]-[119] concerning indemnity costs:
“118. In relation to the respondents’ conduct, I comprehend the authorities referred to above, to be as follows. Costs are not to be awarded by way of punishment of the unsuccessful party (Latoudis) [Latoudis v Casey [1990] HCA 59]. That is, in the context of indemnity costs, it is where there has been some “delinquency” on the part of an unsuccessful party, the Court “sometimes” has the power to order costs at a “scale greater than party and party costs” (Oshlack) [Oshlack v Richmond River Council [1998] HCA 11]. The Court has the power to award costs on an indemnity basis “in appropriate cases in particular circumstances” (De Alwis [De Alwis v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 77] and Colgate Palmolive [Colgate-Palmolive v Cussons [1993] FCA 536]).
119. The question here is, should costs be awarded on an indemnity basis? That is, has there been “delinquency” on the part of the respondents such that there are circumstances where this is such a case where costs should be awarded on that basis?”
Mr Matusik did have the opportunity to resolve this matter on a number of occasions far earlier than the final hearing date. As is clear, variously, from Mr Ramnath’s (unchallenged) evidence, the Court’s file, and what occurred at various Court events in this matter, Mr Matusik’s conduct has contributed to the prolonging of these proceedings by the use of what can only be described as “delaying tactics” (see for example the unsatisfactorily explained failure to attend at mediation, and the questionable application for the appointment of a litigation guardian).
Ultimately, Mr Matusik has provided no satisfactory explanation as to why he failed to give instructions to his solicitor in relation to his participation at the final hearing in this matter, and the tasks necessary in preparation for that hearing. There is no reason not to accept Mr Matusik’s solicitor’s statement at the final hearing that he was unable to obtain instructions from Mr Matusik.
The date from which Mr Ramnath seeks costs on an indemnity basis is 20 November 2014. On what he has now put before the Court this is the date of the making of an offer by him to settle this matter. This offer was not accepted by Mr Matusik.
A second offer to settle was made by Mr Ramnath on 11 October 2017. Unlike the first offer, this offer provided a date to which the offer was no longer “open” (13 October 2017). Further, it provides notice to Mr Matusik that Mr Ramnath would rely on the letter of offer in any application for costs on an indemnity basis in the future. Mr Matusik did not accept that offer.
The substantive application in this case was made on 14 October 2014. The first offer to settle was made on 20 November 2014. Mr Matusik and Quickleen filed a notice of appearance by that date.
Mr Ramanth seeks indemnity costs from the date of the first offer. Implicit in his application is that it was unreasonable of Mr Matusik to refuse the offer to settle.
The award of costs, generally, is discretionary, subject to reasonableness. If Mr Ramnath seeks only to rely on the fact of making the offer this, of itself, is not sufficient in the current circumstances to award indemnity costs. It is the case that an unreasonable rejection of an offer to settle (that is an offer of compromise) in circumstances where the amount offered was not surpassed in the litigation, may be a basis on which to grant indemnity costs (Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425). However, the circumstances of this case as presented before the Court, do not support an indemnity costs order from that date, particularly in circumstances where no notice was given.
The basis for any such order must involve the delinquent or unreasonable conduct of the party against whom such an order is sought. This is not a case where it can be said that Mr Matusiks’s and Quickleens case in response to the application had no prospect of success, as at the time of refusing the first offer. Nor can it be said that Mr Matusik acted dishonestly in refusing that offer, at that time.
Importantly, the first offer does not put Mr Matusik on notice of the possibility of indemnity costs. Further, there is nothing before the Court to say that Mr Matusik’s conduct in refusing the offer, as at that time, was unreasonable. While Mr Matusik’s conduct subsequently can be described as containing some shortcomings, the circumstances of this case do not allow such a finding at that time to justify the making of an indemnity costs order.
While Mr Matusik failed to attend mediation without satisfactory explanation (as at June 2015) he continued to otherwise actively participate in these proceedings, (for example: affidavits and a notice to produce).
The quantum of costs therefore up to 13 October 2017 is calculated on a party/party basis. I have included counsel’s fees in the consideration of what is reasonable in the circumstances.
The second offer was made on 11 October 2017. It does put Mr Matusik specifically on notice of the possibility of its use in any indemnity costs application.
It is at the time of this offer that Mr Matusik’s conduct can be seen, in the circumstances presented before the Court, to take on the type of irregularity, or shortcoming, or delinquency and in particularly unreasonableness, that would justify an order for indemnity costs. Further, his conduct also provides a basis to say that the refusal at that time of that offer was unreasonable in the circumstances.
While Mr Matusik (through his solicitor) continued to file documents in relation to this matter, these documents were essentially in relation to the appointment of a litigation guardian, subsequently not required (see above), and to pursue the applicants on the question of the deregulation of Aussie Chemicals (subsequently reregistered). Neither dealt directly with responding to the application as made by the applicants.
Further, this is not a case where there is anything before the Court to support the proposition that Mr Ramnath’s conduct disentitled him to the order he seeks (Oshlack, Latoudis and De Alwis).
It is appropriate to award costs on an indemnity basis from the date by which Mr Matusik can be said to have, in the circumstances, unreasonably refused the offer to settle. That is, from 13 October 2017.
Conclusion
Given the above I propose to make the costs orders sought by Mr Ramnath, set in the following amounts:
(1)Mr Matusik to pay Mr Ramnath’s costs in connection with the orders of 12 June 2015 thrown away set in the amount of $4,790.05.
(2)In relation to costs connected to the appointment of the litigation guardian and the subsequent adjournment Mr Matusik to pay Mr Ramnath an amount of $30,450.00.
(3)Costs on a party/party basis (that is excluding solicitor/client costs) up to 13 October 2017. Following each of the items sought by Mr Ramnath up to that date, I am satisfied that it is reasonable that Mr Matusik pay Mr Ramnath costs on a party/party basis in the amount of $4600.
(4)Costs on an indemnity basis (including counsel fees) set in the amount of $72,764.50.
I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of Judge Nicholls
Date: 17 May 2019
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