Seven Network (Operations) Limited v Media Entertainment and Arts Alliance
[2004] FCA 1043
•10 AUGUST 2004
FEDERAL COURT OF AUSTRALIA
Seven Network (Operations) Limited v Media Entertainment and Arts Alliance [2004] FCA 1043
COSTS – whether order for indemnity costs appropriate
Federal Court Rules, O 23
Seven Network (Operations) Limited v Media Entertainment and Arts Alliance [2004] FCA 637 related
SEVEN NETWORK (OPERATIONS) LIMITED v MEDIA ENTERTAINMENT AND ARTS ALLIANCE and ACTU MEMBER CONNECT PTY LTD (ACN 057 551 970)
N 789 OF 2003GYLES J
10 AUGUST 2004
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N 789 OF 2003
BETWEEN:
SEVEN NETWORK (OPERATIONS) LIMITED
APPLICANTAND:
MEDIA ENTERTAINMENT AND ARTS ALLIANCE
FIRST RESPONDENTACTU MEMBER CONNECT PTY LTD (ACN 057 551 970)
SECOND RESPONDENT
JUDGE:
GYLES J
DATE:
10 AUGUST 2004
PLACE:
SYDNEY
REASONS FOR RULING
On 21 May 2004 I delivered reasons for judgment dealing with the substance of the issues and stood the proceeding over to deal with outstanding matters (Seven Network (Operations) Limited v Media Entertainment and Arts Alliance [2004] FCA 637). These reasons should be read with those reasons. The principal issue which has been debated today concerns the appropriate orders for costs. That topic was dealt with in the previous reasons at [57]–[62]. The applicant, Seven Network (Operations) Limited (Seven), seeks orders against each respondent on a party/party basis for a period up to 15 November 2003 and thereafter on an indemnity basis. In each case the application is based upon correspondence dated 13 November 2003 forwarded to each respondent by facsimile transmission on that day making separate offers to compromise which were rejected. Neither offer was in the form prescribed by O 41 of the Rules of Court.
Evidence has been led on all sides. I have had the benefit of comprehensive written and oral submissions from counsel in which the facts and the law have been canvassed. I will not repeat all of that. I will indicate those aspects of the matter which have most influenced my decision.
MEAA
A number of factors lead me to conclude that an order for indemnity costs should not be made against the first respondent Media Entertainment and Arts Alliance (MEAA). It is sufficient to mention them (in no particular order) without elaborate reasoning. The proceeding commenced as a claim pursuant to the Workplace Relations Act and the evidence fell well short of establishing any breach. There is substance to the submission on behalf of MEAA that the claim under the Workplace Relations Act was always very weak – it was submitted doomed to failure – and although I held that the threshold for an order for costs on the basis the proceeding was commenced vexatiously or without reasonable cause was not reached, lack of substance in the claim which was nonetheless pursued to the end is a factor to be taken into account.
The other federal claims which were litigated were, in a sense, ancillary or subsidiary to that claim, although, in the end, they assumed greater importance. If it were not for s 347 of the Workplace Relations Act it is likely that MEAA would have been given at least the costs of that cause of action to which most of the evidence on the part of Seven was directed. The argument that s 347 of the Workplace Relations Act operated to relieve MEAA of liability to costs in relation to the other causes of action had considerable substance, although I ultimately did not accept it. The copyright claim was virtually conceded by MEAA in correspondence prior to action. One reading of the existing authorities on the Privacy Act point was that the claim was misconceived, although I found to the contrary. The offer of compromise came late and did not accord with O 23.
MEMBER CONNECT
The case against ACTU Member Connect Pty Ltd (Connect) is somewhat different, principally because there was never a claim pursuant to the Workplace Relations Act against it. Thus, there was no argument that the major plank of the case against Connect failed. The argument advanced as to effect of s 347 based upon the decision in Maritime Union of Australia v Geraldton Port Authority (2000) 94 IR 404 is weaker in the case against Connect than in the case against MEAA. However, the submission is not without support from the authority to which reference is made and the evidence is that that authority was adverted to at the time the offer of compromise was made.
It is submitted for Seven that the attitude of Connect when the offer was made was unduly contemptuous of it. It is submitted that there is no evidence of any real consideration of it with the client and that, in particular, there is no evidence of any real consideration of the merits of the Copyright Act and Privacy Act claims. It is submitted that the claim that the offer was received too late is not made out because there is no suggestion properly based upon the evidence that it could not have been properly considered in the time available prior to the commencement of the hearing. It is submitted that the nature of the offer required it to be taken seriously as it adopted a reasonable position in relation to relief and provided for payment of a sum well below that which would have been obtained on a full taxation after a contested hearing. The issue of quantum is contested. I am satisfied that the amount of $35,000 was not an unreasonable amount to seek in relation to a fully prepared case, although it is necessary to bear in mind that a good proportion of the costs of preparation were required in any event for the purposes of the case against MEAA.
In my opinion the offer of compromise was made at a time and on terms which should not lead to an order for indemnity costs in this case. The starting point in considering this issue is O 23 of the Rules of Court. There is no reason disclosed why that Order could not have been complied with in the present case. The matter had been fixed for hearing for several months. The essential facts were known well before 13 November. Order 23 provides a sensible and balanced regime which gives certainty to the parties as to how an offer of compromise should be made and responded to. It is one thing to say that O 23 does not prevent offers of compromise being made by other means. It is another to say that parties can make up their own rules as they see fit and then impose an obligation upon the other side to jump with a response on pain of an order for indemnity costs. Of course, there can be circumstances where, for one reason or another, compliance with O 23 is impractical and where flexibility should be permitted. In my opinion, this case is not one of them. Although there is some substance to the view that the reaction of the solicitor for Connect to the offer was somewhat cavalier, that is not altogether a surprising reaction bearing in mind the industrial background to this case. In practical terms Connect was drawn into a continuing dispute between Seven and MEAA. I have no doubt that the issues involving copyright and breach of the Privacy Act were novel to those involved. It cannot by any means be said that the defence of those claims was frivolous, vexatious or unreasonable. The claim for indemnity costs is refused.
I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. Associate:
Dated: 12 August 2004
Counsel for the Applicant: MD Wyles Solicitor for the Applicant: Clayton Utz Counsel for the First and Second Respondents: J Nolan Solicitor for the First Respondent: Shaw McDonald Solicitor for the Second Respondent: A Watson Date of Hearing: 10 August 2004 Date of Ruling: 10 August 2004
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