Tekmat Investments Pty Ltd v Ward, J.A.

[1988] FCA 426

C A T C H W O R D S

COSTS - a p p l l c a t l o n u n d e r s . l l A of t h e C l t y Area Leases

O r d l n a n c e 1936 (A.C.T.) - appeal a g a i n s t o r d e r t h a t t h e

s u c c e s s f u l a p p l l c a n t p a y t h e costs o f u n s u c c e s s f u l o b ~ e c t o r s -

c o n s t r u c t l o n o f	s.llA(7)	- w l d t h of	discretion	-	appeal
d l s m l s s e d

R e Axlom P t y L t d 66 A.C.T.R. 1

Donald Campbell and Co. --- - _ - - L t d v. P o l l a k (1927) A.C. 732

Rlt te r v. G o d f r e y [l9201 2 K.B. 47

---

_- C r e t a z z o v. Lombardl (1975) 33 S.A.S.R. 4

- _ _

- K n l g h t _ _ v. - C l l f t o n - (1971) Ch. 700

Gray v . Lord Ashbur ton [l9171 A.C. 26

F . A . I . G e n e r a l I n s u r a n c e Co. L t d v . S o u t h e r n Cross E x p l o r a t l o n

- - -

N.L. (1988) 77 A.L .R . 411

City Area L e a s e s O r d l n a n c e 1936, s.llA

C a n b e r r a . 1 -

On Appeal from a s l n g l e J u d q e o f t h e S u p r e m e C o u r t

. -- - _

o f h e i r u s t r a l i a n C a p l t a l T e r r l t o r y

- .- - _ --

TEKMAT	INVESTMENTS	PTY	LIMITED
-
V.

JUDITH ANN WARD AND OTHERS

A.C.T. No. G88 of 1987

FEU

t r u ~	-ALIA
P*	L PA-

Coram:  Gal lop, D a v l e s a n d P l n c u s JJ. REG b R *

Da te :  5 Auqust 1988. a .

IN THE FEDERAL COURT OF AUSTRALIA )

\

AUSTRALIAN CAPITAL	TERRITORY	)
) No. ACT G88 of 1987

DISTRICT REGISTRY

DIVISION GENERAL )

ON APPEAL FROM A SINGLE JUDGE OF THE

SUPREME COURT OF THE AUSTRALIAN CAPITAL

TERRITORY

BETWEEN:  TEKMAT INVESTMENTS PTY LIMITED -

Appellant

AND :  JUDITH ANN WARD. JANE ~ . .~ ...-,

WATSON-BROWN~HRISTINE

ANDISON, IVAN CHERTOK, MICHELE

ANN MORGAN and EDITH CLEMENT

Respondents

O R D E R

-	Judqes Making Order : Gallop, Davles and Plncus JJ.
Date of Order -- : 5 August 1988.
Where Made : Canberra.

THE COURT ORDERS THAT:

( 1 ) The appeal be dlsmlssed wlth costs.

- Note: Settlement and entry of orders 1s dealt wlth In

Order 36 of the Federal Court Rules. --- --

IN THE FEDERAL COURT OF AUSTRALIA )

)

AUSTRALIAN CAPITAL	TERRITORY	1
1 No. ACT G88 of 1987

REGISTRY	DISTRICT	j
)
GENERAL DIVISION	)

ON APPEAL FROM A SINGLE JUDGE OF THE

THE SUPREME COURT OF THE	AUSTRALIAN
CAPITAL TERRITORY
BETWEEN:	TEKMAT INVESTMENTS PTY LIMITED

Appellant

AND :  JUDITH ANN WARD, JANE

WATSON-BROWN, CHRISTINE
ANDISON, IVAN CHERTOK, MICHELE

ANN MORGAN and EDITH CLEMENT

Respondents

--	Coram: Gallop, Davies	and Plncus JJ.
-	Date: 5 August 1988.

REASONS FOR JUDGMENT -

THE COURT:

Thls is an appeal from an order of a slnqle ~ u d q e

of the Supreme Court of	the Australlan Capltal Terrltory
that a successful appllcant in proceedlngs before hlm pay

the taxed costs of certain of hls opponents in that

litigation.	The Court has already dlsmlssed the appeal; the
reasons for that dismissal	follow.

The application was brought under the Clty Area

Leases Ordlnance 1936 (A.C.T.). The appllcant (now

appellant) sought an order from the Court under s.llA of the

Ordlnance.

Under that Ordinance, the Mlnlster 1s empowered

(s.5) to qrant leases of land in the name of the

Commonwealth and under s.8:

"A lease qranted for buslness purposes or for buslness
and resldentlal purposes may speclfy the partlcular
class or classes of buslness for whlch the land

lncluded In the lease may be used."

The Supreme Court 1s qlven power under s.9A to

direct a lessee or sub-lessee not to use land or perrnlt It

to be used for an unauthorlsed purpose, whlch 1s deflned In

s.9 as belnq "a purpose for whlch the use of the land 1s not

authorlsed by or under the lease of the land". Under

s.llA(l), the Court 1s empowered to "vary any provlslon,

covenant or conditlon of a lease In relatlon to the purpose

for whlch the land subject to the lease may be used". It has been held In a number of cases, lncludlnq the subject lltlqatlon, that In an appllcatlon under s.llA the Court may

qlve conslderatlon to town plannlnq matters: Re Axlnm Pty

Ltd 66 A.C.T.R.	1 at pp.10 et seq.	Under s.llA(fj), any
-

person who, wlthin a certaln tlme, flles and serves notlce

of hls lntentlon to oppose the appllcatlon 1s entltled to do
so w1th the leave of the Court. Obvlously, the fact that

town plannlng conslderatlons, and therefore questions of the

Interests of the cornmunlty as a whole, arlse	1s relevant In
conslderlnq the 1ur1sdlctlon to award costs.

The respondents In the present appeal are persons

who obtalned leave to oppose but who d l d so unsuccessfully.

They were nevertheless, as has been rnentloned, awarded thelr

costs. That was done under s.llA(7):

"The appllcant for variatlon shall pay h1s own costs
and, I € the Court so orders, the full costs of any
other person appearlng In pursuance of thls sectlon."

The core of the argument advanced on behalf of the

appellant was that the oblectors' costs should have been
dealt wlth under what mlqht be descrlbed as the normal

4.'

. l

3.

rules. Counsel contended that, there belnq no indication In
s.llA(7) that the dlscretlon as to the objector's costs
should be governed by any prlnclples other than those
settled and acted upon by Courts for many years, costs
should follow the event - at least to the extent that the

winner should not have to pay the losers' costs.

The hlstory of the lltlgation was that the

appellant sought, pursuant to	s.llA, to have the purposes of
a clause of a lease	varied to permit the constructlon of a

commercial building; the lease provlded at the outset for

use for residential purposes only.	A number of notlces of
intention to oppose were	flled in the Court and all but one

of the people who had flled notlces of intention to oppose

under s.llA(6) were granted leave to do so: Re Axiom Pty

- Ltd (above). The learned prlmary ~ u d g e had to consider

issues whlch Included whether the resldentlal amenlty of
nearby premises would be adversely affected, generatlon of
traffic and parklng demands by the development, and whether
having regard to development close by, refusal of the
varlatlon would impede the reasonable user of the land. Hls

Honour's reasons for allowlng the varlatlon sought

concluded: 

"Accordlngly, I am satisfled on the balance, but lust on
balance, that It 1s proper to permlt the variatlon

sought In this case."

The leadinq case as to costs followlng the event

1s the declslon of the House of Lords in Donald Campbell and

Co. Ltd v. Pollak (1927) A.C. 732. That concerned the --

construction of 0.65 r.1 of the Rules of the Supreme Court

(U.K.), whlch left the costs to the dlscretion of the Court,

*:'.

.\' 4.

In a non-jury actlon.	Viscount Cave L.C. quoted at p .809
from Ritter v. Godfrey [l9201 2 K.B. 47, In whlch It was	_ _ -

said by Lord Sterndale M.R. that:

' l . . .	there 1s such a settled practice of the Courts that In the absence of special circumstances a successful lltigant should receive hls costs, that It 1s necessary
to show some ground for exerclsing a dlscretlon by
refuslng an order whlch would qlve them to hm."

The Lord Chancellor sald that the true vlew was

substantlally that thus expressed,	but that he would express
It In somewhat dlfferent language:

"A successful defendant In a non-jury case has no doubt,
In the absence of speclal clrcumstances, a reasonable
expectatlon of obtaining an order for the payment of

hls costs by the plalntlff; but he has no rlght to

costs unless and until the Court awards them to hlm,

and the Court has and absolute an unfettered dlscretlon

to award or not to award them." (p. 81 1 )

The Lord Chancellor's was the leadlng judgment In

that Vlscount Dunedln and Lord Phllllmore agreed wlth It.
Lord Atklnson, on the other hand, accepted Lord Sterndale's

statement from - Rltter - v. Godfrey (p.814). Desplte the way

the rule was put by the Lord Chancellor, courts have tended
to requlre the party asklng for a relaxation of the ordlnary

practlce to polnt to some partlcular reason lustlfylng that

course: see, e.g. _ _ Cretazzo - v. Lombardl (1975) 33 S.A.S.R. -- 4

at pp.12, 16.

General dlscretions glven by statute or rule to

award costs are ordlnarlly construed as was that in _- Donald -

- Campbell - v. - Pollak. - _ As a corollary, ordlnarlly an

unsuccessful party does not obtaln hls costs agalnst the

successful party; Sachs L.J. sald in _-	Knlght v. Cllfton	--
(1971) Ch. 700 at p.716:

"It is lnevltable If from tlme to tlme there must arise
instances I n which the gustlce of the case demands that
a successful defendant should pay the costs, by whlch I
refer to the full costs, of the proceedinqs, desplte
his success. Obviously, this will only rarely happen,
but It would be a defect I n our system if In those rare

cases the Courts could not do what was just."

The argument for the appellant here could be

expressed, adaptlng the language of Sachs L.J., by saylng that It was contended that thls was not one of those rare cases In which Justice demanded that the successful party should pay the full costs of the proceedlngs. It would seem

clear enough that the contentlon should be accepted, If one
starts from the premlse on whlch it is based, namely that
the learned prlmary Judge was exerclslng a general
discretion to award costs to be construed I n accordance wlth
the rules lald down In authoritles such as those mentioned

above.

However, not every dlstlnct power to award costs

must be presumed to be subject to those rules. In - _ Gray v.

Lord - - Ashburton [l9171 A.C. 26, the noble respondent had

claimed a sum from a	tenant for dllapldatlons and, belng
awarded only about a tenth of hls clalm, was ordered	to pay
the tenant's costs.	The award of costs was made under the

Agrlcultural - Holdlnqs Act 1908 (U.K.), whlch gave an

arbitrator a general dlscretion to award costs and provlded
that he should take Into account Inter alia "the

reasonableness or unreasonableness of the clalm of elther

party, either I n respect of amount or otherwlse". The award

of costs was challenged in the County Court where the tenant

won, then In the Divislonal Court where he won agaln, then

# ' 3

_ I

6 .

I n the Court of Appeal which held I n favour of Lord

Ashburton " I n substance upon the qround that the arbltrator was bound as regards costs by the same prlnciples and rules

as were appllcable to a	learned judge of the Hlgh Court", as
Earl Loreburn put It when the case got to the House	of
Lords: see the report at p.30.	There, the arbltrator's
award was restored.

The case dlffered from the present In that,

although there IS, here, a speclal provlslon governlng

costs, it 1 s not applled to an extracurlal trlbunal, but to

a Court. Nevertheless, ~t seems to us of assistance I n

measurlng the strenqth of the qeneral rule. Earl Loreburn

deprecated:

' l . . . placing a gloss upon the qulte slmple language of

an Act of Parllament by reference to other Acts whlch contaln different language. There 1s the Arbltratlon _ _

-	Act, there 1s the Judlcature Act, there 1s the
Workmen's Compensatlon Act, to whlch reference has been
made, each of whlch speaks about costs I n Its own --
language and makes Its own rules. There are also rules
to be observed by learned judges whlch speak for
themselves. But thls Act also speaks for Itself and It
governs thls case."

The House re~ected the view taken In the Court of

Appeal and decllned to apply the prlnclples worked out I n

relatlon to ordlnary lltlgatlon under the Judlcature Act and

Rules of Court. Although the learned prlmary judge ln the

case before us dld not refer to - Gray v. Lord Ashburton, that _ _

declslon, prlma facle, glves support to the partlcular approach which he took. It also supports hls Honour's approach In a more general sense, as exempllfylng the

tendency to hold that broadly expressed statutory
dlscretlons are not "readlly to be llmlted by judlcial flat"

(F.A.I.	General Insurance Co. Ltd v. Southern Cross	-
- -	Exploration N . L . (1988) 77 A.L.R.	411 at 417 (Hlqh Court)).

Sectlon llA(7) plainly does not Import one aspect

of the ordlnary rule, namely that the successful clamant is

entltled to hls costs, and the questlon 1s whether It is
intended that the reclprocal aspect of the rule be applled.
It appears that the better course 1s to approach the

sub-sectlon without any predllection to hold that thls

separate grant of power to award costs, In respect of a

special jurisdiction, 1s to be lmplicitly subject to the

costs rules worked out by the courts In relation to ordlnary

lltigation governed by the Rules of Court. Readlnq

sub-s.(7) as a whole, the lmpresslon 1s created that a costs reglme is Intended dlfferent from that ordlnarily appllcable in cases ln the Supreme Court.

M r Hlgglns Q.C., senlor counsel for the appellant,

also made a narrower attack upon the reasons of the prlmary
ludge, complainlng that I f hls Honour were upheld then
oblectors would be encouraged unreasonably to oppose
applicatlons, because they would feel assured of obtalnlng
thelr costs as long as some plauslble argument on whlch to base the opposltlon could be found. It 1s true that some

expresslons used by the prlmary judge mlght encourage that

thought:

"It seems to me that, In general, where local resldents,

reasonably and properly, advance wlth some degree of
success arguments agalnst an appllcatlon for varlatlon
they ought not to be deprlved of thelr costs or at
least of a substantlal part of them unless the
arguments they advanced have already been the sublect
of authorltatlve declsion or decisions appllcable In
all the clrcumstances to the circumstances of the
objectors."

However, when formally statlng hls concluslons, hls Honour stated the matter dlfferently:

"Where an objector makes out a substantlal, even though

In the event unsuccessful, case aqainst an appllcation for varlatlon the Court 1s not bound to follow the

ordinary rule as to costs	but may in the proper
exerclse of its discretlon order that the costs of	the
ob~ector	or part of them should be pald by the
applicant. An ob~ector	1s unllkely to have an order
for costs made	in hls favour If he merely advances

arguments whlch have been dealt with by the Court

before or if he falls to adduce any sufficient evldence

whlch qoes at least some dlstance towards provlnq, even

If In the event Inadequately, a ground or the grounds upon whlch he seeks to rely."

As between the two formulations, we would prefer

the latter, whlch appears to be that whlch his Honour, in

the end, applled. We would not accept that there 1s any

general rule that a reasonable ob~ector	advanclng arguments
wlth some degree of success ought to recelve costs.	On the
vlew we take, the statute glves	the Court a wlde dlscretlon
as to costs.	The clrcumstances In whlch that dlscretlon

falls to be exerclsed may vary wldely, and In many cases It

may seem proper to refuse even a reasonable ob~ector any

costs, or to make only a partial order for costs ln favour

of such an objector.

The appellant also contended, In the alternatlve, that the learned primary ~ u d g e erred In the exerclse of hls

discretlon. Nothlng was put forward to necessltate

dlscusslon of that aspect. The essentlal polnt of the
appeal 1s the assertion that the learned prlmary ~ u d g e
mlsconstrued the statutory dlscretion to award costs, l n
actlng on the vlew that he was not bound to follow the rule
appllcable In ordlnary lltlgatlon that an unsuccessful party
may rarely obtaln an order for costs agalnst the successful

p a r t y . We are of t h e o p i n i o n t h a t h i s Honour was, as h e

i n t i m a t e d , n o t so bound.

I t s h o u l d b e a d d e d t h a t t h e o r d e r made was n o t

t h a t o r i g i n a l l y proposed. T h e p r i m a r y j u d g e i n i t i a l l y

a c c e p t e d t h e s u b m i s s i o n for t h e a p p l i c a n t , t h e p r e s e n t

a p p e l l a n t , a n d r e f u s e d t h e objectors any costs. He changed

h i s mind	before	t h e order was	p e r f e c t e d ,	b u t it w a s	n o t
a r g u e d	t h a t h i s h a v i n g d o n e	so was	i n i tself	a	l e g a l error.

The appeal is, as we h a v e a l r e a d y o r d e r e d ,

d i s m i s s e d w i t h costs.

I c e r t i f y t h a t t h i s a n d t h e p r e c e e d i n g

e i g h t p a g e s are a t rue copy of t h e

r e a s o n s	for	j u d g m e n t	h e r e i n	of	t h e
C o u r t .

Date:  5 Augus t 1988.

- J I l W X M

A s s o c i a t e

C o u n s e l f o r t h e a p p e l l a n t : M K T. H i g g i n s QC and

MK A r t h u r

S o l i c i t o r s f o r t h e a p p e l l a n t : M a l l e s o n s S t e p h e n Jacques

C o u n s e l for t h e r e s p o n d e n t : Mr B. H u l l

S o l i c i t o r s for t h e r e s p o n d e n t : A l l e n R. N e l s o n & Co.

Date of h e a r i n g : 1 4 J u l y 1988

' .

Attachment "A"

FEDERAL COURT OF AUSTRALIA

........ ... B c - ! ........ .. .DISTRICT REGISTRY

. qw.$m.k.. ... DIVISION

No. of Actionq$.gof.. l4Q ... 7-

TITLE OF ACTIONTLW.~C. .\s!E%wYES?S. 3rY . .%Y.~x@.

1 QuTl I-rtt fiuu UWxD 8 o-rdees

Date(s) of hearing. !k/i.?./.%gDate	judgment delivered..	........
A Counsel	and	(

* Solicitors for (

* Counsel and (
* Solicitors for (

.. (

* Please delete, as necessary, in Industrial Divislon matters

where a representative appears for a party pursuant to s.117A of the Conclliatlon a d Arbitration Act 1904. The

representative's name and the name of the party he 1s

representing will be inserted in lieu.