The Citadel Group Ltd v Alexander

Case

[2017] ACTSC 308

20 October 2017


SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

The Citadel Group Ltd & anor v Alexander & anor

Citation:

[2017] ACTSC 308

Hearing Date(s):

14 September 2017

DecisionDate:

20 October 2017

Before:

McWilliam AsJ

Decision:

The plaintiffs to pay the costs of the first and fourth defendant up to and including 5 September 2017, on the ordinary basis.

Catchwords:

COSTS – discontinuance shortly before hearing – whether proceedings had no reasonable prospect of success or were unreasonably continued – circumstances for indemnity costs not made out

Legislation Cited:

Court Procedures Act 2004 (ACT) s 5A

Court Procedures Rules 2006 (ACT) rr 1163, 1721

Cases Cited:

Becker v Queensland Investment Corp (No 2) [2009] ACTSC 147
Calderbank v Calderbank [1976] Fam 93
Construction Occupations Registrar v Minotaur Constructions (ACT) Pty Ltd [2015] ACTSC 275
Gupta v Australia Capital Territory [2011] ACTSC 39
James Hardie International Finance BV v CSR Limited [2007] FCA 366
Ohn v Walton (1995) 36 NSWLR 77
Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72
Perisher Blue Pty Limited v Chubb Fire Safety Limited [2014] ACTCA 43
Perisher Blue Pty Limited v Chubb Fire Safety Limited [2014] ACTCA 43
Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin (1997) 186 CLR 622
Redmond v Masterton Canberra Pty Limited [2016] ACTSC 24
Rural & General Insurance Broking Pty Ltd v Australian Prudential Regulation Authority [2009] ACTSC 67; 231 FLR 199
South Melbourne City Council v Hallam (No 2) (1994) 83 LGERA 307
State of Tasmania v Anti-Discrimination Tribunal [2008] TASSC 23; 17 Tas R 227

Parties:

The Citadel Group Limited (ACN 127 151 026) (First Plaintiff)

Servicepoint Australia Pty Ltd (ACN 081 707 673) (Second Plaintiff)

Aaron Alexander (First Defendant)

Kevin Keane (Fourth Defendant)

Representation:

Counsel

G McGowan QC (Plaintiffs)

C Burgess (Defendants)

Solicitors

Gadens Lawyers (Plaintiffs)

MinterEllison (Defendants)

File Number(s):

SC 220 of 2016

McWilliam AsJ:

  1. By originating claim filed 25 May 2016, the plaintiffs commenced proceedings against the first and fourth defendants (defendants), among others.  The first defendant was formerly employed by the first plaintiff and the fourth defendant was formerly employed by the second plaintiff.

  1. A broad summary of the nature of the case alleged is that since 2013, the plaintiffs had been contracted by a third party to provide to the Commonwealth Department of Defence secure video, telephony and data conferencing and communication services. Prior to the change in commercial arrangements in 2013, the second plaintiff was the sole supplier of secure video conferencing to the Department of Defence for a period of approximately five years.

  1. The defendants had obligations of confidentiality arising from their respective employments with the plaintiffs, which were said to have been breached after their employment with the plaintiffs ended, when they engaged in commercial relationships with a different company, Generation-E Pty Ltd (Generation-E).

  1. The plaintiffs sought declaratory and injunctive relief, and damages or an account of profits, interest and costs.

  1. On 8 September 2017, the plaintiffs filed an application seeking leave to discontinue the proceedings. On 11 September 2017 and by consent, the plaintiffs discontinued the proceedings, which had been listed for final hearing on that day. 

  1. The discontinuance was on the basis of an undertaking inter-partes not to commence another proceeding making the same or substantially the same allegations as those made in these proceedings.

Issue

  1. The question of costs remains.  The issue was fully argued on 14 September 2017, with written and oral submissions and affidavit evidence regarding a number of letters exchanged between the parties concerning settlement and what are commonly described as Calderbank offers.

  1. The plaintiffs’ position is that there should be no order for costs.  The first and fourth defendants argue that they should receive the entirety of their costs on an indemnity basis.

Power to make orders for costs

  1. The power to award costs is in the discretion of the Court: r 1721 of the Court Procedures Rules 2006 (ACT) (Rules).

  1. If it becomes unnecessary to continue a proceeding other than for deciding who is to pay the costs of the proceeding, any party to the proceeding may apply to the Court for an order as to costs, and the Court may make the order it considers just: r 1706 of the Rules.

  1. Rule 1163 provides:

Costs of discontinuance or withdrawal

(1)A party who discontinues or withdraws is liable to pay—

(a) the costs of the party to whom the discontinuance or withdrawal relates up to when the notice of discontinuance or withdrawal is served on the party; and

(b) the costs of another party or parties caused by the discontinuance or withdrawal up to when the notice of discontinuance or withdrawal is served on the party.

(2) If a party discontinues or withdraws with the court's leave, the court may
make the order for costs it considers appropriate.

Applicable Principles

  1. In Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin (1997) 186 CLR 622 (Lai Qin) at 624-625, McHugh J said (citations omitted, emphasis added):

In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.

In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd, the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans.

Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in The South East Queensland Electricity Board v Australian Telecommunications Commission where his Honour ordered the respondent to pay 80 per cent of the applicant's taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare.

If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases.

  1. In Rural & General Insurance Broking Pty Ltd v Australian Prudential Regulation Authority [2009] ACTSC 67; 231 FLR 199 (Rural & General), Penfold J surveyed the applicable authorities, including Lai Qin, and summarised the principles to the general exercise of the discretion at [82]. The relevant extract of her Honour’s reasons is as follows:

(a) The costs discretion to be exercised under r 1163(2) where a party is given leave to discontinue is at large, but must be exercised judicially.

(b) There is no presumption that under r 1163(2) costs will be awarded to one or other party. There is no entitlement to costs against the discontinuing party arising simply because in some cases it may be preferable in the interests of finality to enter judgment against the party rather than giving leave to discontinue.

(c) In the exercise of the costs discretion, it is appropriate to have regard to:

(i) whether the behaviour of each party was reasonable until the point when discontinuance was sought; and

(ii) whether seeking to discontinue reflects a surrender by the discontinuing party in a hopeless case or a supervening event or other change in external circumstances that has rendered the action “futile” or pointless.

(d) In relation to the reasonableness of a party’s behaviour, the matters that may be relevant include (but are not limited to), those set out in the following list …:

(i) whether a party has “by its lax conduct effectively invite[d] the litigation”;

(ii) whether either party has unnecessarily protracted the proceedings;

(iii) …

(iv) whether a party has prosecuted the matter solely to increase the costs recoverable;

(v) whether a party has obtained only the relief previously offered by another party in settlement offers;

(vi) whether a discontinuing plaintiff had “an arguable case” against the other party;

(vii) …

(e) In relation to the reason for seeking to discontinue:

(i) a surrender will usually leave the surrendering party to pay the other party’s costs; and

(ii) discontinuance for futility will sometimes mean that no costs order is made.

  1. These principles were cited by Mossop AsJ (as his Honour then was) in Redmond v Masterton Canberra Pty Limited [2016] ACTSC 242 at [32]-[33] and by Refshauge J in Construction Occupations Registrar v Minotaur Constructions (ACT) Pty Ltd [2015] ACTSC 275 (Minotaur) at [48] and in Gupta v Australia Capital Territory[2011] ACTSC 39 at [76]-[80].

  1. To this may be added Perisher Blue Pty Limited v Chubb Fire Safety Limited [2014] ACTCA 43 (Perisher Blue) at [41], where the Court of Appeal stated that a starting point for any consideration of the award of costs in the case of a discontinuance is likely to be that the party who discontinues proceedings should pay the costs of the other parties.

Submissions of the parties

  1. The plaintiffs essentially rely on Lai Qin.  They submit that changes since the proceeding began have the result that the proceeding ‘has become substantially futile’.  Those changes include knowledge in November 2016 that the defendants were no longer engaged or employed by Generation-E, that the loss of a business opportunity that was of concern to the plaintiffs may yet become available in the future, and that following the filing of evidence, the completion of discovery processes, including the review of subpoenaed material, the plaintiffs were able to judge that the proper course was to terminate the proceedings.

  1. They further submit there should be no hypothetical trial. They wrote to the defendants on 1 April 2016 (Exhibit 1 in the hearing) declaring an intention to commence proceedings unless certain undertakings were given and received no response to the communication.  Accordingly, the proceedings were reasonably commenced and reasonably continued, with the plaintiffs only able to make a judgment call following the completion of discovery processes (including the review of material produced under subpoena).

  1. The parties engaged in attempts to settle the proceedings on a number of occasions (see the affidavit of Mr Ian Dixon sworn 11 September 2017, who was cross-examined by counsel for the defendants).  Each time, the costs sought by the defendants were of such quantum, in the plaintiffs’ view, having regard to their own expenditure on legal costs, as to be excessive or unreasonable.  This prevented the earlier settlement of the matter.

  1. The defendants submit that the plaintiffs’ claim has always been manifestly deficient, with no reasonable prospect of obtaining any substantive relief, that this was repeatedly communicated to the plaintiffs, with no satisfactory explanation being provided for the plaintiffs’ decision ultimately to discontinue the proceedings three days before trial.  The defendants contend this amounts effectively to a surrender and deny that the proceedings were reasonably commenced or continued. 

The plaintiffs’ case for no order as to costs

  1. Dealing with the plaintiffs’ submissions first, I accept that the proceedings were reasonably commenced.  There was a period of almost two months after the letters of demand were sent to the defendants before proceedings were filed.  If there was no substance whatsoever to the issues of concern to the plaintiffs, then it would have been a fairly straightforward matter to communicate that fact to the plaintiffs, or even to give the undertakings that were sought.  The complete lack of any response appears to me to bring the case into the category of the defendants effectively inviting the proceedings.

  1. The plaintiffs contend that they were hampered in their efforts to assess the case because of the insufficiency of the discovery process and the reluctance to issue subpoenas to third parties who were also clients.  The plaintiffs’ explanation as to the delay in discontinuing to the extent that it is based on the assessment of the evidence is reasonable from a forensic perspective.  While I expressed concern during the hearing as to the time taken to approach the Court to discontinue, I accept that the proceedings were reasonably carried on in terms of forensic merit.

  1. The difficulty for the plaintiffs is that the case was not discontinued because of a settlement or by reason of a subsequent independent event which made the proceedings futile.  The plaintiffs appear to have misconceived the concept of futility in further prosecution, to which McHugh J referred in the extract above. 

  1. This is not a case where the proceedings are now futile, in the sense that no remedy could now be granted by the Court.  As appears from the submissions above, and the more recent correspondence sent by the plaintiffs’ legal representatives which was in evidence, the plaintiffs simply re-evaluated the merit (legal and/or commercial) of the proceedings.  In doing so, they had regard to the material produced in the proceedings and the fact that, as events transpired, the threatened loss they feared did not occur.  I note, however, the plaintiffs did not retreat from their position that through the defendants’ conduct, their commercial relations with third parties have in fact been affected by the introduction of a potential competitor in the niche market in which the plaintiffs operate.

  1. Although circumstances may have changed since the proceeding was begun, and in some cases, changed circumstances may amount to a ‘supervening event’ (see Rural & General at [80]), the plaintiffs’ discontinuance does not arise from changed circumstances rendering the proceedings futile.

  1. It is unnecessary to examine further the initial or continuing merit of the proceedings or any developments since the proceedings were commenced.  The way the commercial landscape has developed in the past year may in part be due to the fact of these proceedings, so that they served a commercial purpose simply by remaining extant.  The critical point is that the plaintiffs’ change in position is not due to an event of the kind where I consider Lai Qin would have application (such as achieving the relief sought through other means, or a change in legislation, or settlement of the dispute, or the commercial interest requiring protection dissipating through third parties no longer operating).  Rather, the case falls into the category where the discontinuance is tantamount to a surrender and accordingly, the starting point referred to in Perisher Blue at [41] appears to me to also be the finishing point.

  1. Added to this is the very late discontinuance of the proceedings, at a time when it can be expected that the matter was fully prepared for trial.  To the extent that the plaintiffs’ late discontinuance was in part based on what the plaintiffs considered to be costs unreasonably incurred by the defendants, that matter does not assist the plaintiffs.  A costs assessor may readily disallow costs that were unreasonably incurred, or in limited circumstances the Court may be in a position to fix costs. 

  1. Appreciating that the costs of litigation are often a significant consideration in settlement negotiations, the costs of an opponent should not prevent the discontinuance of proceedings. If a party delays discontinuing proceedings in the hope that they may be able to secure a better costs compromise or outcome at a later stage, then that is the party’s risk and the delay may itself have costs consequences. Section 5A of the Court Procedures Act 2004 (ACT) obliges the parties to assist the Court in the timely disposal of the real issues in dispute. If the costs of the litigation remains the only real issue in dispute, it is incumbent on both parties to have that matter resolved, either by consent or by seeking leave to discontinue the proceedings and bringing the question before the Court. I wish to lend no encouragement to litigants who determine to continue litigation on the basis that disproportionate costs have been incurred.

  1. In any event, the first time that the plaintiffs made any offer that the parties bear their own costs was on 10 August 2017 and in circumstances where the plaintiffs were still seeking undertakings from the defendants. The only other offer made by the plaintiffs was in October 2016 and at that stage, the plaintiffs were seeking monetary contributions from the defendants for loss of profits and costs. I do not see the asserted unreasonable costs demands of the defendants as warranting a departure from the conclusion reached at [25] above.

The defendants’ claim for indemnity costs

  1. Turning to the defendants’ submissions, as I have determined that the plaintiffs ought pay the costs of the proceedings, the only outstanding argument is the claim for indemnity costs.  The argument for indemnity costs was rolled up with the defendants’ submissions on costs generally so that it was difficult to discern what conduct was said to justify costs on an indemnity basis.  The submissions were put in a number of ways:

(a)The plaintiffs acted unreasonably in commencing the proceedings.

(b)The plaintiffs acted unreasonably in continuing the proceedings from November 2016 onwards by reason of Calderbank offers issued by it, and by reason of delay in discontinuing.

(c)There is no satisfactory explanation for the very late discontinuance.

  1. I have found that the plaintiffs acted reasonably in commencing the proceedings.  The absence of any response by the defendants to genuine concerns set out in detail by legal representatives for the plaintiffs necessitates such a finding.

  1. I have also dealt with the late discontinuance and the explanations for it above.  While it weighs strongly in the balance of the costs of the proceedings being paid by the plaintiffs, I do not consider it amounts to conduct that of itself is so unreasonable as to justify indemnity costs, including from any particular date, for the reasons given above as well as those that follow in relation to whether the plaintiff has an arguable case.  If I had found that the plaintiffs ought to have known the case was hopeless from the beginning, the position may have been different.

  1. As to whether the plaintiffs acted unreasonably in continuing the proceedings, I will deal in turn with each of the defendants’ submissions broadly under the umbrella argument that the plaintiffs’ case has always been manifestly deficient. 

  1. First, the defendants submitted that there was never any identification of relevant conduct on the part of the fourth defendant that could provide a basis for the Court granting relief.  The foundation for that submission was that the fourth defendant did not commence working for Generation-E until after a quotation had been provided by Generation-E to a company with whom the plaintiffs conducted business in providing services to the Department of Defence.

  1. The submission is misconceived for the following reasons:

(a)The case for breach of confidential information did not depend on the Fourth Defendant being employed by the entity alleged to benefit;  and

(b)The plaintiffs expressly pleaded at [40] of the statement of claim filed with the originating claim that each of the defendants was either employed or engaged via other commercial arrangements; and

(c)The loss pleaded was not limited to the provision of a quotation. 

  1. Second, the defendants contend that it is an essential requirement of any claim for breach of confidence that the plaintiff identify with precision the information alleged to be confidential and the specific conduct that amount to its misuse.  Paragraph [29] of the statement of claim specifically defines the confidential information.  It includes inter alia client lists, contact details of clients, supplier lists, tests results, secure data and telephony communication protocols, design parameters suitable for certain clients, and marketing and business plans.  The pleading thus identifies the confidential information with sufficient precision.

  1. Paragraph [30] of the statement of claim also identifies the conduct amounting to the misuse of the alleged confidential information.  It is of precision sufficient for the purposes of considering whether any reasonable cause of action was disclosed in the context of a costs application.  Contrary to the submissions put by the defendants, the Court does not determine whether the plaintiffs had an arguable case by reference to opening submissions made by the plaintiffs in advance of the substantive hearing and evidence ultimately filed.

  1. Those findings dispose of the related submission that no finding of misuse could have founded declaratory, injunctive or pecuniary belief, as that submission was also based on an asserted lack of precise identification of the confidential information.

  1. Third, the defendants submit that the plaintiffs themselves had not treated the information the subject of the claim as being confidential.  Again, this submission is misconceived.  It is effectively an argument that the information was not confidential and falls into the category of asking the Court to conduct a hypothetical trial.

  1. Fourth, the defendants submitted there was no pleaded basis for loss, damage or an account of profits, pointing to the lack of any pleaded case of lost opportunity.  This argument also falls away in light of my finding that there was an arguable case for declaratory and injunctive relief. 

  1. In any event, having reviewed the pleading, the defendants appear to have misunderstood the way that the loss was pleaded.  What the plaintiffs were concerned about was the rapid entry into the market of a competitor that would not have had the expertise to compete at all without the alleged conduct of the defendants.  I am not prepared to find that such a pleading was manifestly hopeless or deficient to a degree that would justify a special order on a costs application. 

  1. Dissecting the pleading to see whether individual claims for relief can be made out is not the task of the Court on an application for costs.  The relief about which the defendants complain was not the limit of the relief sought by the plaintiffs, which included delivery up of the confidential information and damages for loss of goodwill.  One can readily see why a company that may have lost its status, or at least the ability to claim such status, as the only company that can supply a particular service, may consequently suffer a loss in goodwill or market share.

  1. Finally on the question of whether the claim as whole was deficient, the defendants rely on a lack of evidence in admissible form.  Again, the Court will not descend into questions of admissibility of evidence in order to determine whether the plaintiffs’ case was manifestly hopeless as, contrary to the defendants’ submissions, to do so would involve speculating as to what evidentiary rulings would have been made at trial and therefore would require the Court to try a hypothetical action.

  1. For the above reasons, there is no deficiency in the plaintiffs’ case that would indicate any special order as to costs ought be made. 

  1. Even if there had been a fatal deficiency made out by the defendants, that finding would not have been decisive for the question of indemnity costs.  The authorities indicate that whether there was any arguable case is but one factor relevant to the Court’s discretion, and in this case that factor must carry very little weight where not only were defences filed, but the parties proceeded to prepare for a fully contested hearing over the course of a year with particulars, interrogatories and evidence.  The reasonableness of both parties’ conduct is open to scrutiny.  That no application was made at any earlier stage for summary strike out or dismissal makes it hard for the defendants to say now that it should have its costs now on an indemnity basis. 

The Calderbank offers in October and November 2016

  1. The defendants rely upon two Calderbank offers made on 28 October 2016 before a mediation and on 9 November 2016 after the mediation.  In the first, the defendants sought judgment in their favour and combined costs of $175,000.  In the second, the defendants again sought judgment in their favour and combined costs of $165,000. In each offer, the terms of settlement were required to be confidential.

  1. In the second offer of 9 November 2016, the defendants additionally each offered to swear an affidavit acknowledging the existence of their continuing contractual obligations and giving undertakings to comply with those obligations, including to return all confidential information belonging to the plaintiffs that was in the possession, power, custody or control of the defendants.

  1. Where informal offers are made outside the Rules, consideration is given to whether it was unreasonable to reject the offer(s) in determining whether any offer justifies an order for indemnity costs.

  1. Both offers sought judgment for the defendants.  That is a different result to the ultimate outcome of a discontinuance.  On that basis alone, I do not believe the offers were equal to or better than the end result such as to enliven the principles in Calderbank v Calderbank [1976] Fam 93 (as adopted and applied in Becker v Queensland Investment Corp (No 2) [2009] ACTSC 147 at [11]-[12]).

  1. Although on the authorities above (Rural & General at [82]), whether proceedings are discontinued or judgment is entered does not create a presumptive entitlement to costs either way under the Rules, the Court is here considering the (un)reasonableness of rejecting an offer made. The precise terms of the offer are relevant to that consideration and having a judgment entered for a party (and arguably against an opposing party) may have legal and/or commercial repercussions that a mere discontinuance does not have.

  1. Further, the first offer was only open for seven days in circumstances where the matter had not been set down for hearing.  The reasons given for making the offer were that the plaintiffs’ case did not disclose a cause of action and that no evidence existed capable of allowing a breach of confidence claim to be made out.  On the evidence before the Court, those assertions were made when discovery was still being undertaken and no substantive affidavits or interrogatories had been exchanged between the parties.  In those circumstances, the plaintiffs did not have sufficient opportunity to consider the assertions.

  1. Having rejected the defendants’ submissions as to no reasonable cause of action being disclosed above, and in light of the short time for which the offer was open, the state of the evidence to which I have referred, and the terms of the offer itself, I do not consider it was unreasonable for the plaintiffs to reject the first offer.

  1. As to the second offer, similar considerations apply, save for the timing of the offer, which was open until 22 November 2016, and appears to have provided a reasonable opportunity for consideration in the circumstances. 

  1. However, the requirement of confidentiality has a significant impact on the reasonableness of any rejection of the second offer.  By their offer, the defendants were requiring the public record to reflect judgment in their favour.  Yet the confidential terms included the defendants swearing an affidavit, which in part provided the very heart of the relief sought by the plaintiffs in the proceedings.  This can be seen from the plaintiffs’ letter of 1 April 2016 prior to commencing proceedings, which expressly sought an immediate enforceable undertaking that the defendants would abide by each and every obligation contained in their respective contracts of employment which continue post termination. 

  1. Keeping the terms confidential would thus potentially have the effect of distorting the public record.  While parties are of course free to present an agreed public position as they see fit, it was not unreasonable to decline acceptance of an offer in the above circumstances, but that reason is in addition to, and separate from, the other reasons I have stated above for not being satisfied that the offer was unreasonably rejected.

The claim for solicitor/client costs

  1. The defendants submitted that to make the costs payable on a party/party basis would prejudice the defendants by causing them to be out of pocket for a significant proportion of their actual costs.  They contended for costs on a solicitor/client basis if the Court rejected their claim for costs on an indemnity basis, relying on James Hardie International Finance BV v CSR Limited [2007] FCA 366at [8]. This appears to be based on a distinction between costs that have been necessarily incurred, as opposed to receiving all costs that were reasonably and properly incurred. 

  1. The decision relied upon by the defendants is not apposite to the present circumstances.  Gyles J there made a costs order in the nature of solicitor/client costs in that case partially on the basis of a failure to explain the conduct of the proceedings and a persistent failure to comply with the orders of the Court.  I have not made the same findings, and I do not see any other basis for any special costs order.

  1. To the extent that there was a separate submission on this issue that the defendants are ‘individual (not corporate) litigants who have been subjected to unwarranted and unnecessarily protracted proceedings by their former employers’, the submission is rejected as being of any relevance to the Court’s discretion on costs.  The law judges persons by their conduct, not their identity. In the exercise of the costs discretion, all persons are entitled to be treated equally and in accordance with traditional principle: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72, per McHugh J at [92].

  1. To similar effect is State of Tasmania v Anti-Discrimination Tribunal [2008] TASSC 23; 17 Tas R 227 Evans J stated at [25]:

…ordinarily circumstances personal to the parties, and an imbalance between the capacities and the resources of the parties, are not relevant to the exercise of the costs discretion.

  1. That decision, and the above extract, was cited with approval by Refshauge J in Minotaur at [57]. His Honour also cited (at [58]) South Melbourne City Council v Hallam (No 2) (1994) 83 LGERA 307 at 311 and Ohn v Walton (1995) 36 NSWLR 77 at 79, which support the above proposition.

Conclusion and Orders

  1. For the above reasons, the Court’s discretion on costs in the circumstances of the case ought be exercised in favour of the defendants, but on the ordinary basis.

  1. As neither party has succeeded on the orders they sought in the present application, each party should pay its own costs from the date the application to discontinue was notified, being 6 September 2017.

  1. Accordingly, the Court orders the plaintiffs to pay the costs of the first and fourth defendant up to and including 5 September 2017, on the ordinary basis.

I certify that the preceding sixty-two [62] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Associate Justice McWilliam.

Associate:

Date:

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