FEDERAL COURT OF AUSTRALIA
Technology Leasing Ltd v Lennmar Pty Ltd (No 2) [2012] FCA 1216
Citation: Technology Leasing Ltd v Lennmar Pty Ltd (No 2)
[2012] FCA 1216Parties: TECHNOLOGY LEASING LTD ACN 071 702 264 v LENNMAR PTY LTD ACN 116 493 773, GLENN JAMES PARTON and THOMAS DAVID FORD File number: NSD 1401 of 2010 Judge: COWDROY J Date of judgment: 7 November 2012 Catchwords: COSTS – applicant and respondent each partly successful in issues raised in primary judgment – whether circumstances justify apportionment of costs
COSTS – Calderbank offers – discussion of requirements for Calderbank offers – whether reasonable for parties to reject Calderbank offers – costs awarded on usual basis
Legislation: Australian Securities and Investment Commissions Act 2001 (Cth) s 12CA
Contracts Review Act 1980 (NSW) s 7
Federal Court of Australia Act1976 (Cth) s 43
Trade Practices Act 1975 (Cth) s 3Cases cited: Alexander v Australian Community Pharmacy Authority(No 3) [2010] FCA 506
Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 874
Black v Lipovac (1998) 217 ALR 386
Calderbank v Calderbank [1975] 3 All ER 333
Colgate-Palmolive v Cussons Pty Ltd (1993) 46 FCR 225
Cretazzo v Lombardi (1975) 13 SASR 4
Cutler v Derwent Howard Media Pty Ltd (subject to Deed of Company Arrangement) (No 3) [2011] FCA 1127
Dias Aluminium Products Pty Ltd v Ullrich Aluminium Pty Ltd (No 2) (2005) 225 ALR 569
Dukemaster Pty Ltd v Bluehive Pty Ltd [2003] FCAFC 1 Forster v Farquhar [1893] 1 QB 564
GM Holden Ltd v Paine(No 3) [2011] FCA 693
Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748
Jones v Dunkel (1959) 101 CLR 298
Keays v JP Morgan Administrative Services (No 2)
[2011] FCA 547
Monie v Commonwealth (No 2) [2008] NSWCA 15
NMFM Property Pty Ltd v Citibank Ltd (No 11)
(2001) 109 FCR 77
Oshlack v Richmond River Council (1998) 193 CLR 72
Roadshow Films v iiNet Ltd(No 4) (2010) 269 ALR 606
Technology Leasing Ltd v Lennmar Pty Ltd
[2012] FCA 709Date of hearing: 26 September 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 27 Counsel for the Applicant: Mr S Goodman Counsel for the Respondents: Mr A Crossland with Ms J McDonald Solicitor for the Respondents: Attwood Marshall Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1401 of 2010
BETWEEN: TECHNOLOGY LEASING LTD ACN 071 702 264
ApplicantAND: LENNMAR PTY LTD ACN 116 493 773
First RespondentGLENN JAMES PARTON
Second RespondentTHOMAS DAVID FORD
Third Respondent
JUDGE:
COWDROY J
DATE OF ORDER:
7 NOVEMBER 2012
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The Applicant/Cross-Respondent pay the costs of the Respondents/Cross-Claimants.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1401 of 2010
BETWEEN: TECHNOLOGY LEASING LTD ACN 071 702 264
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- [2012] FCA 1216
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CaseChat Overview and Summary
The court needed to decide whether the circumstances justified an apportionment of costs and whether it was reasonable for the parties to reject the Calderbank offers. The court examined the nature of the issues raised and the extent to which each party was successful. Lennmar argued that its defences were reasonably raised and that it had conducted the proceedings as a test case due to similar pending cases. TLL, on the other hand, argued that Lennmar's unsuccessful issues were spurious and without merit. The court needed to balance these arguments with the principles of cost apportionment as established in previous cases.
The court found that both parties had been partly successful, with TLL succeeding in establishing the existence of a leasing agreement but failing on other issues such as unconscionable conduct. Lennmar also had partial success in its defences. The court noted that considering the claim and cross-claim in isolation would not provide a reliable basis for an order of costs. It decided that the costs should be awarded on the usual basis, reflecting the partial successes and failures of both parties. The court held that Lennmar's conduct of the proceedings, including its role as a test case, justified an award of costs against TLL.
In conclusion, the court ordered that the applicant/cross-respondent, Technology Leasing Ltd, pay the costs of the respondents/cross-claimants, Lennmar Pty Ltd. This order was based on the court's assessment of the parties' partial successes and the overall conduct of the proceedings.
Orders
Orders of the court
1. The Applicant/Cross-Respondent pay the costs of the Respondents/Cross-Claimants.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Additionally Lennmar submits that none of the issues raised by it in the proceedings were spurious or without merit and that its defences were reasonably raised. It submits that it conducted the proceedings as a test case in view of the fact that similar cases with similar issues involving TLL were pending. Lennmar also states that it was required to pursue its arguments regarding agency (which were unsuccessful) because TLL refused to admit the operation of s 3 of the Trade Practices Act 1975 (Cth) (‘the TPA’) in the proceedings. Finally, Lennmar submits that the issue regarding the incorporation of the terms and conditions in the agreement between it and TLL (upon which it was again unsuccessful) resulted from the poor quality of documentation supplied. As the documentation was in the custody of TLL, the need for this issue to be raised was the fault of TLL. CONSIDERATION The principles concerning the different approaches to the award of costs and the apportionment thereof are set out in Roadshow Films v iiNet Ltd(No 4) (2010) 269 ALR 606 at [28]-[37]. The usual order as to costs is that a successful party will have its costs paid on a party/party basis by the unsuccessful party: see Dias Aluminium Products Pty Ltd v Ullrich Aluminium Pty Ltd (No 2) (2005) 225 ALR 569; Colgate-Palmolive v Cussons Pty Ltd (1993) 46 FCR 225 at 232-234. This results from the established practice that costs should ordinarily follow the event: see Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 at 48,136. An award of costs may be diminished where a litigant has succeeded only in part of the claim: see Forster v Farquhar [1893] 1 QB 564. A party who is ‘successful’ may be required to pay the other party’s costs of the issue which the successful party raised, albeit unsuccessfully: see Cretazzo v Lombardi (1975) 13 SASR 4 at 12. In Oshlack at [69] McHugh J referred to an exception to the usual rule, namely that the conduct of the successful party might in some circumstances disentitle it to a court’s ‘beneficial exercise of the discretion’ to award it costs: see also the observations of Devlin J in Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873 (‘Anglo-Cyprian’), as quoted by McHugh J in Oshlack at [69]. The rule is simple to state, but its appreciation is often difficult, since it may be problematic to determine whether a party has in fact been ‘successful’. Devlin J in Anglo-Cyprian found that plaintiffs who had taken up the time of the Court, and put the defendants to considerable expense over 15 working days, yet were only awarded two pounds, could not be said to be ‘successful’.FINDINGS In the present matters, the Court is mindful of the fact that TLL succeeded in its claim of establishing that in fact there was a leasing agreement entered into between it and Lennmar. However to consider such result in isolation, and to segregate the various issues in respect of which each party succeeded or failed, would not provide a reliable assessment upon which to found an order for costs. To isolate the claim from the cross claim would bring an aspect of unreality to the proceedings. Whilst Lennmar disputed the actual contractual documents relied upon by TLL, the real dispute concerned the more technical issues whether TLL, by its servants and agents, had engaged in unconscionable conduct. This in turn gave rise to complex questions involving the application of various provisions of the TPA; whether Freshtel was TLL’s agent; whether TLL contravened s 12CA(1) of the Australian Securities and Investment Commissions Act 2001 (Cth); and whether relief could be granted under s 7 of the Contracts Review Act 1980 (NSW).