Telstra Corporation Ltd v First Netcom Ltd

[1997] FCA 1616

JUDGMENT No. 1k6?,.&.~ LZ~Z.

I N THE FEDERAL COURT OF AUSTRALIA	)
NEW SOUTH WALES DISTRICT REGISTRY	) No.NG 483 of 1997
GENERAL DIVISION	1

B e t w e e n :	TELSTRA	CORPORATION
LIMITED
A p p l i c a n t

2 1 SEP 2001 And: FIRST N!4T.cOM pTY

U LIBWRY LIMITED

R e s p o n d e n t

REASONS FOR JUDGMENT

EINFELD J SYDNEY 31 OCTOBER 1997

I am satisfied that there is power in the Court to order security in respect of the cross-claim and that this is an appropriate case for ordering it. I take into account that there would be some duplication of effort if this case was prepared completely independently of other litigation before the Court involving some of Telstra's pricing and billing procedures, and that therefore there will be some saving of costs that would otherwise be incurred. Nonetheless even in the cases which I am hearing, there are clear differences between this litigation and the others such that the preparation of one will certainly not obviate the need for full and detailed preparation of the other or others.

Telstra has in most of these cases instructed different lawyers and different legal teams. At first I felt that that action was

and would be productive of considerable inconvenience but having regard to the development of litigation, it is quite understandable that there would have to be different legal teams, amongst other reasons because the various cases raise different issues, the other parties are themselves not

represented by the same legal teams, and the cases are all complex. Whatever common ground there is between the cases, it is clear that there will also be quite a lot of separate ground,

and it is impossible on an interlocutory application to decide to what extent there will be common ground and to what extent there will be separate issues. It would not be a sensible use of the Court's time to try to make detailed comparisons in this regard at this time.

Accordingly, I propose to order that security of costs be supplied but not in respect of the whole of the proceedings. It is clear from the affidavit evidence brought by Telstra that

costs would be incurred, as one would anticipate from experience, on a progressive basis. Hence I believe that the matter should be reviewed from time to time, in particular when the stage has been reached of First Netcom supplying evidence to support its cross-claim. That stage has not been reached at this point so it is not possible for the Court to know to what extent this is a claim of substance and to assess its chances of success.

On the other hand, it is a claim which on its face appears bona fide and the Court should proceed upon this basis at the moment.

There is no motion to strike it out yet and the exigencies of the litigation between these parties up to date has not really permitted the Court to fix a timetable to include the evidence to support the cross-claim. I think the appropriate time to determine the fate of the overall claim for security is at the

time when the evidence is available to support the cross-claim.

What I propose to do therefore is to order that security for the costs of the cross-claim be given in the sum of $90,000 and that the matter be reviewed at a convenient date in March next year when there will have been an opportunity for directions to have been given and complied with for the supply of evidence inter

alia to support the cross-claim. At that time I will review the balance of the .application for security. The parties may reach

agreement as to how and by when that security should be supplied and there will be a stay order attached to it until it is supplied. Can I leave it to the parties to reach agreement on these matters?

RECORDED : NOT TRANSCRIBED

Failing agreement in the matter the form of supply of security may be dealt with by the Registrar. There will be liberty to apply to the Court in the event that that is necessary.

RECORDED : NOT TRANSCRIBED

I will reserve the costs of the application.

RECORDED : NOT TRANSCRIBED

Telstra seeks an order that its costs of the application for leave to appeal and of the appeal itself and in relation to

First Netcom's application for interlocutory relief as were all determined by the Full Court on 7 September be paid forthwith.

These were interlocutory proceedings which have now one way or another been substantively disposed of. The appropriate rule of court expresses a practice that has long existed that costs of interlocutory proceedings will normally not be enforceable until

the principal proceedings have been disposed of. It is argued that in this case, because the principal proceedings are unlikely to be disposed of until the end of 1998 at the earliest, failing to order their immediate payment would effectively delay Telstra in recovering of its costs until then.

That of course is the position in a large amount of interlocutory litigation. The arguments put in support of

varying that practice, in this particular case, all recorded in writing and in the transcript, do not persuade me to depart from the normal position. I therefore refuse order 3. However, in its written submissions Telstra seeks an alternative form of

this order, namely, that First Netcom provide security in

respect of those costs. As I see it at the moment, there is no evidence as to what the costs would be, either on a party/party or on an indemnity basis.

What I think I should do is permit Telstra to amend its application to either seek an alternative to orders 3, perhaps an order 3A, in the form that First Netcom provide security in respect of those costs, and adjourn that application until evidence is placed before the Court as to what the costs are. The motion can be re-listed when that has been done.