Sportsbet Pty Ltd v State of New South Wales (No 17)

[2010] FCA 792

FEDERAL COURT OF AUSTRALIA

Sportsbet Pty Ltd v State of New South Wales (No 17) [2010] FCA 792

Citation:		Sportsbet Pty Ltd v State of New South Wales (No 17) [2010] FCA 792
Parties:		SPORTSBET PTY LTD v STATE OF NEW SOUTH WALES, RACING NEW SOUTH WALES and HARNESS RACING NEW SOUTH WALES
File number(s):		NSD 1821 of 2008
Judge:		PERRAM J
Date of judgment:		23 July 2010
Legislation:		Racing Administration Act1998 (NSW)
Cases cited:		Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 cited Wong v The Queen (2001) 207 CLR 584 cited
Date of hearing:	23 July 2010
Date of last submissions:	23 July 2010
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	13
Counsel for the Applicant:	Mr D M J Bennett QC with Mr A Tokley
Solicitor for the Applicant:	Fitzpatrick Legal
Counsel for the First Respondent:	Mr J Kirk
Solicitor for the First Respondents:	New South Wales Crown Solicitor's Office
Counsel for the Second and Third Respondents:	Mr J Emmett
Solicitor for the Second and Third Respondents:	Yeldham Price O'Brien Lusk

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1821 of 2008

BETWEEN:

SPORTSBET PTY LTD
Applicant

AND:

STATE OF NEW SOUTH WALES
First Respondent

RACING NEW SOUTH WALES
Second Respondent

HARNESS RACING NEW SOUTH WALES
Third Respondent

JUDGE:	PERRAM J
DATE OF ORDER:	23 JULY 2010
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The applicant pay the second and third respondents’ costs incurred by reason of the applicant’s notice of motion filed on 24 June 2010.

2.The second and third respondents pay the applicant’s costs of the proceeding.

3.Orders one and two do not prejudice any prior costs order made throughout the proceeding.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1821 of 2008

BETWEEN:

SPORTSBET PTY LTD
Applicant

AND:

STATE OF NEW SOUTH WALES
First Respondent

RACING NEW SOUTH WALES
Second Respondent

HARNESS RACING NEW SOUTH WALES
Third Respondent

JUDGE:	PERRAM J
DATE:	23 JULY 2010
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. In this matter there remains the question of costs between the applicant and the second and third respondents.  The second and third respondents seek an order that the applicant pay half of their costs and that the second and third respondents pay half of the applicant’s costs.  The applicant, on the other hand, seeks orders that the second and third respondents pay its costs and that the applicant pay the second and third respondents’ costs of the applicant’s motion of 24 June 2010.  It is convenient to deal with that second proposition first.  There is no dispute that, the notice of motion of 24 June 2010 having been dismissed, the applicant should pay the second and third respondents’ costs of that motion and I will order it.

2. As to the first proposition, Sportsbet put its entitlement to have the second and third respondents pay its costs on three bases.  The first was that it contended that a contract had come into existence on 22 July 2010 whereby the second and third respondents had bound themselves to an agreement that they would pay the applicant’s costs of the proceeding.  The second basis upon which the entitlement was asserted was related.  It was effectively a claim in estoppel; the second and third respondents had represented that they would concur in the making of such an order and that Sportsbet had, in reliance thereon, subsequently entered into an arrangement with the State of New South Wales in respect of its costs in circumstances where it might alternatively, had the true position been known, sought a Bullock order.  The third basis upon which its entitlement to costs was put was simply on an ordinary costs analysis. 

3. It is convenient to deal in the first instance with the contractual and estoppel arguments.  I assume, in Sportsbet’s favour, that as a matter of power this Court has the authority to enforce a contractual arrangement as to orders in an interlocutory context.  There is no question that the Court has the power to enforce a concluded contract to settle final proceedings, however, I am not presently aware of any authority which states that the Court has authority to enforce a contract about interlocutory orders.  I will assume that it can be done.  The contract is said to arise from two documents.  The first is a letter of 13 July 2010 from Yeldham Price O’Brien Lusk (hereafter “YPOL”) to Mr Fitzpatrick of Fitzpatrick Legal enclosing some proposed orders and the second is an email from Mr Fitzpatrick back to Mr Clark at YPOL of 22 July 2010.

4. The letter from YPOL of 13 July 2010 enclosed a short minute of order which included in its terms that the second and third respondents would pay the applicant’s costs of the proceedings.  The second paragraph of the letter provided:

   We enclose a minute of orders we will be asking his Honour to make at the further hearing of these proceedings on 23 July 2010. If you agree with the enclosed orders please let us know so that we can ask his Honour to make the orders in chambers and avoid the need for a further appearance in the proceedings.

   (emphasis added)

5. I emphasise the second sentence which seems to be not necessarily consistent with an understanding by the solicitors that they were entering into a contractually enforceable arrangement.  The responsive email of 22 July 2010 was in the following terms:

   Dear Phillip,

   We refer to your email of 13 July 2010 enclosing proposed short minutes of orders.

   We are instructed that our client agrees to your proposed orders.

   We would be pleased if you would notify his Honour’s Associate of our client’s agreement.

6. Mr Emmett, who appeared for the second and third respondents, submitted that a proper reading of the letter of 13 July 2010 revealed the absence of an animus contractandi.  I agree with this submission.  I do not think that the exchange of correspondence which occurred is one which was intended to give rise to legal relations.  What the solicitors had in mind was an ordinary administrative arrangement whereby if the other party were in agreement, short minutes of order could be provided to my chambers thereby obviating the need for the attendance of the parties before the Court. 

7. I turn then to the estoppel argument.  There the argument was that by sending the email of 22 July 2010, the second and third respondents had, in substance, caused Sportsbet to act to its detriment by not seeking to apply for a Bullock or Sanderson order.  Mr Emmett submitted that the chronology of events yesterday afternoon rather told against that.  He made a particular point that the arrangement to settle with the State of New South Wales was not reached until after the time at which the purported acceptance of the contract had occurred.  I accept that submission.  In those circumstances, it is difficult to see how there could have been reliance upon the purported acceptance.

8. In any event, I am not persuaded that the making of the decision to settle with the State would have been reliance in the sense described by Brennan J in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 429. Certainly, it is doubtful that YPOL understood that it would occur. It is therefore appropriate to determine the matter by reference to ordinary costs principles. The issue between the parties here is the ordinary one of whether and, in what circumstances, it is appropriate to carve up costs orders by reference to particular issues in proceedings.

9. There is no doubt that in an appropriate case where the issues are clearly separated the Court has jurisdiction to make separate costs orders on separate issues.  The factors which inform whether that course should be taken are several.  They include the degree of separation of the issues, the utility from a taxation point of view of dividing the costs orders up in that fashion and, to borrow an expression used by the High Court in Wong v The Queen (2001) 207 CLR 584 at 611 [75] per Gaudron, Gummow and Hayne JJ, an “instinctive synthesis” as to the manner in which the hearing was conducted. There is no doubt in my mind that there was a separation of two broad issues in the litigation which took place. There was a wholesale attack upon the constitutional validity of provisions of the Racing Administration Act1998 (NSW). There was, at the same time, an administrative challenge to the decisions which were made by the second and third respondents under that legislation.

10. To say that there were two such issues, however, is apt to suggest the existence of a distinction which may not have been as clear in practice as it now sounds during the costs argument.  There were a number of aspects of those issues which overlapped.  For example, the nature of the discretion being exercised when the second and third respondents came to make their administrative decisions was, of course, informed by the scope and ambit of the statutory provisions, which were themselves the subject of the constitutional challenge.  So too, a number of the factual matters which were relied upon as demonstrating an intent on the State of New South Wales’ part to engage in discriminatory protectionism overlapped, not entirely but in some ways, with some of the allegations which were made against the second and third respondents.

11. It would be a mistake to overstate that overlapping, but from my perspective it is difficult to disentangle the two issues in the way which is suggested.  Another difficulty which arises is the process of measuring the extent to which these issues took up hearing time.  My impression was that the bulk of the work during the hearing relating to the constitutional validity of the provisions of the Racing Administration Act 1998 were attended to by Mr Lloyd SC, who appeared for the State at that time, whereas Mr Gleeson SC and his team devoted, naturally enough, most of their energy to the administrative decisions.  There was of course an overlap, but there was a natural division of duties, and that natural division of duties was one which I think operated in the manner which I have indicated.

12. The only witness who was called in the case was Mr Tyshing, who I do not think really added very much to affairs.  The case which was conducted was largely a documentary case involving legal submissions.  Overall, it is a question of impression informed by the manner in which the trial was conducted.  My impression is that whilst there is some force in the notion that there were two matters in play, I think the issues are not able to be sufficiently disentangled to put to one side what would be the ordinary rule, which is that the party who wins the case should have their costs.  Sportsbet sought to have repaid to it the amounts of money it had paid under its approval.  It has succeeded in doing that. 

13. Mr Bennett QC, who appeared for Sportsbet, put the submission that, in litigation of this kind, it is often very difficult to know precisely where the constitutional dice are going to fall, and in those circumstances, a party ought not to be criticised for taking what Mr Emmett referred to as a scatter-gun approach in the pleading.  It is not necessary to decide the case on that basis, although one might have some sympathy with that proposition.  In those circumstances, I order the second and third respondents to pay the applicant’s costs and I order the applicant to pay the second and third respondents’ costs of the applicant’s notice of motion filed on 24 June 2010.  The orders which I have just made are without prejudice to any prior costs order which has been made.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.

Associate:

Dated:       30 July 2010