Tighe Newton Trucking Pty Ltd v NT Hauliers Pty Ltd - [2018] FCCA 684

FEDERAL CIRCUIT COURT OF AUSTRALIA

TIGHE NEWTON TRUCKING PTY LTD v NT HAULIERS PTY LTD & ANOR

[2018] FCCA 684

Catchwords:
PRACTICE & PROCEDURE – COSTS – Costs application by discontinuing applicant – consideration of the principles in relation to costs claimed by a discontinuing party and the circumstances of the case – costs order made.

Legislation:

Competition and Consumer Act 2010 (Cth)

Federal Circuit Court of Australia Act 1999 (Cth), s.79

Federal Circuit Court Rules 2001 (Cth)

Cases cited:

Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32

G R Vaughan (Holdings) Pty Ltd v Vogt [2006] NSWCA 263

Ralph Lauren 57 Pty Ltd v Byron Shire Council [2014] NSWCA 107

Applicant:

TIGHE PTY LTD

First Respondent:

NT HAULIERS PTY LTD

Second Respondent:

BRUCE MEIKLEJOHN

File Number:

SYG 3417 of 2017

Judgment of:

Judge Driver

Hearing date:

Decided without oral hearing

Date of Last Submission:

1 March 2018

Delivered at:

Sydney

Delivered on:

29 March 2018

REPRESENTATION

Counsel for the Applicant:

Mr G Boyce

Solicitors for the Applicant:

Solve Legal Pty Ltd

ORDERS

Order 6 made on 9 November 2017 is varied as follows:
The respondents shall pay the applicant’s costs of the proceedings up to and including 9 November 2017, fixed in the sum of $8,000.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 3417 of 2017

TIGHE NEWTON TRUCKING PTY LTD

Applicant

And

NT HAULIERS PTY LTD

First Respondent

BRUCE MEIKLEJOHN

Second Respondent

REASONS FOR JUDGMENT

Introduction and background

These proceedings were commenced by way of application filed on 8 November 2017.
In the application, the applicant, Tighe Newton Trucking Pty Ltd (Tighe), sought final relief in the form of declarations and orders concerning alleged unconscionable conduct by the respondents in contravention of s.21(1) of the Australian Consumer Law (contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth)).
As part of the application, Tighe also sought interlocutory orders requiring the respondents to deliver up, or give unobstructed access to Tighe to permit it to collect and/or uplift goods (forklifts) to which Tighe claimed title as bailee for its customer, Crown Equipment Pty Ltd (Crown).
Having been successful in obtaining its interlocutory orders, Tighe filed a Notice of Discontinuance as an annexure to the affidavit of Mr Shaun Newton (Mr Newton) made on 25 January 2018. By Application in a Case filed on 25 January 2018, Tighe sought leave to discontinue as well as costs of the principal application. Leave to discontinue was not required. However, notwithstanding that Tighe has discontinued the application, it asks the Court to make an order under rule 21.02 of the Federal Circuit Court Rules 2001 (Cth) (Federal Circuit Court Rules) that the respondents pay Tighe’s costs of the proceedings to date. In this regard, Tighe applies for an indemnity costs order against the respondents, or in the alternative, a fixed lump sum costs order against the respondents.
The Application in a Case is supported by the following affidavits:
a)Kyle Kutasi made on 25 January 2018;
b)Mr Newton made on 25 January 2018;
c)Mr Kutasi made on 14 November 2017;
d)Mr Kutasi made on 4 November 2017; and
e)Mr Newton made on 4 November 2017
as well as by Tighe’s Genuine Steps Statement filed on 8 November 2017.
The respondents have not appeared in the proceedings, or otherwise given any indication to the Court that they contest the evidence or the proceedings.

Background

Tighe operates an interstate freight forwarding business. It was first established in 1998.[1] Its Managing Director, Mr Newton has made two affidavits in these proceedings.
[1] affidavit to Mr Newton (4/11/17) (“Newton”), [4]
Crown, which is a long-standing customer of Tighe, is in the business of supplying forklifts and lift trucks to its customers’ businesses. Tighe transfers (picks up and delivers) equipment (forklifts) to Crown customers, or between Crown branch depots.[2]
[2] Newton (4/11/17), [5]
In making such deliveries, Tighe will sometimes subcontract (on consignment) such transfers to other freight hauling or trucking transportation businesses.[3] The first respondent, NT Hauliers Pty Ltd (NT Hauliers), is one such business. Its Managing Director is Mr Bruce Meiklejohn, the second respondent (Mr Meiklejohn).
[3] Newton (4/11/17), [6]
In July 2017 Crown requested Tighe to take on three consignments (deliveries).[4]
[4] Newton (4/11/17), [9]
Tighe contracted Mr Meiklejohn to make those deliveries.[5] NT Hauliers issued Tighe three invoices in respect of each consignment made.[6]
[5] Newton (4/11/17), [10]
[6] Invoice #NT4885 (issued 12/7/17) ($2,541.00 (including GST)); #NT4889 (issued 12/7/17) ($583.00 (including GST)); #NT4899 (issued 12/7/17) ($583.00 (including GST)).[6] Each of these invoices had due dates of 26 July 2017 (ie 14 days)
Invoice #NT4885 ($2,541.00 (including GST)) was paid by Tighe in August 2017.[7] Given Invoices #NT4889 and #NT4899 were for the same amounts, ie $583.00 (including GST), Tighe wrongly thought that these invoices were duplicates (when they in fact related to two separate consignments).[8] Tighe did not pay these two invoices until 9 October 2017.[9]
[7] Newton (4/11/17), [16]
[8] Newton (4/11/17), [17]-[21]
[9] Newton (4/11/17), Exhibit SN-1, Tab 20, page 110
Three further consignments were made by Tighe to NT Hauliers in July, August and September 2017, all of which were paid for by Tighe.[10]
[10] Newton (4/11/17), [22]
Tighe had assumed that it had a credit account with NT Hauliers.[11] However, NT Hauliers advised that as Tighe had not agreed to NT Hauliers’ credit terms and conditions (Credit Terms) to qualify for a credit account with it, Tighe had no credit account with NT Hauliers and was instead on 14-day terms.[12] Tighe never applied for a credit account with NT Hauliers.[13]
[11] Newton (4/11/17), [17]
[12] Newton (4/11/17), [17]
[13] Newton (4/11/17), [18]
On 24 September 2017 Tighe requested a consignment of three forklifts be delivered by NT Hauliers from Adelaide to Alice Springs (i.e. for Tighe on behalf of Crown) (the Forklift Consignment).[14] NT Hauliers agreed to undertake the Forklift Consignment on 24 September 2017, and to pick up the Forklift Consignment from Adelaide on 27 September 2017.[15] On this basis, Tighe arranged for another contractor, Outback Recovery Service, to receive the Forklift Consignment from NT Hauliers on 2 October 2017.[16]
[14] Newton (4/11/17), Exhibit SN-1, Tab 8, pages 50-51
[15] Newton (4/11/17), [24]-[25]
[16] Newton (4/11/17), [24]-[25], [32]
The forklifts are valued at around $25,000 each (i.e. $75,000 in total).[17]
[17] Affidavit of Mr Kutasi (4/11/17) (“Kutasi”), [6]
On 28 September 2017, NT Hauliers emailed Tighe stating: “Please find attached email provided to you (10/7/17) with attached Credit Application as acceptance of rates provided”.[18]
[18] Newton (4/11/17), Exhibit SN-1, Tab 14, pages 72-73
It appears that on the basis of this email, NT Hauliers asserted that Tighe had always been subject to the Credit Terms.[19] This is despite NT Hauliers previously advising Tighe that it had not signed or agreed to the Credit Terms and thus did not have a credit account with NT Hauliers, but was on 14-day terms.[20]
[19] for a copy of the Credit Terms, see Newton (4/11/17), Exhibit SN-1, Tab 7, pages 42-46
[20] see [14] above
The Forklift Consignment was ultimately picked up by NT Hauliers from Adelaide on 3 October 2017.[21]
[21] Newton (4/11/17), [36]
On 3 October 2017, NT Hauliers sent Tighe a “Statement” of account in respect of outstanding Invoices #NT4889 and #NT4899, being a total of $1,166.00 (ie $583.00 x 2).[22] No mention was made in that statement of interest owing to NT Hauliers pursuant to the Credit Terms.
[22] Newton (4/11/17), Exhibit SN-1, Tab 15 (pages 86-87)
Two separate consignment notes were issued by NT Hauliers in respect of the Forklift Consignment. Consignment Note SA10303 contained one forklift,[23] and Consignment Note SA10302 contained the other two forklifts[24] (presumably the three forklifts were too big to be transported together on the same truck). The two consignment notes were then replicated in Invoices #SA10302 ($814 (including GST) and #SA10303 ($627 (including GST)).[25]
[23] Newton (4/11/17), Exhibit SN-1, Tab 17 (page 94)
[24] Newton (4/11/17), Exhibit SN-1, Tab 17 (page 99)
[25] Newton (4/11/17), Exhibit SN-1, Tab 17 (pages 93 and 98)
On 5 October 2017, Tighe was advised by NT Hauliers (through Mr Jason Murphy) that the Forklift Consignment had been picked up by the NT Hauliers, but the goods under consignment (the three forklifts) would be “warehoused [by NT Hauliers] due to an account problem” and that Mr Newton should contact Mr Meiklejohn about the matter.[26]
[26] Newton (4/11/17), [42]
Upon calling Mr Meiklejohn, he was advised by Mr Meiklejohn to refer to his email of 5 October 2017 and that all communication was to occur via email. Mr Meiklejohn then ended the call.[27]
[27] Newton (4/11/17), [43]
NT Hauliers sent Mr Newton two further emails on 6 October 2017.[28] The second email on 6 October 2017 attached an Invoice #10251 for $16,804.29 in respect of outstanding interest, charged at 19.75 percent daily “as per T’s & C’s” (clause 1.10 of the Credit Terms).[29] The interest included interest on Invoices #SA10302 and #SA10303 (which had been issued only two days prior).
[28] The email of 5 October 2017, and the emails of 6 October 2017, are found at Newton (4/11/17), Exhibit SN-1 Tab 16 (page 89), Tab 18 (page 103) and Tab 19 (page 106)
[29] Newton (4/11/17), Exhibit SN-1 Tab 19 (page 107)
It appears the respondents were now asserting to Tighe that:
a)its payment arrangements with NT Hauliers were now on a “Cash Sales” basis;
b)if an invoice is not paid on the day the invoice is issued, interest is immediately applied to the outstanding amount as per the Credit Terms (i.e. at 19.75 percent per day);[30]
c)all invoices need to be paid in full prior to any delivery occurring; and
d)the respondents are entitled to hold (warehouse) any goods consigned to them by Tighe (in the respondents’ possession), and not transfer or transport such goods as instructed, until such time as Tighe agrees to the above arrangement and pays the outstanding invoices and interest.
[30] Newton (4/11/17), Exhibit SN-1 Tab 21 (pages 112-113), Tab 19 (page 107)
Although there is a lack of consistency in the respondents’ various formulations of the type of payment arrangement applicable to Tighe (i.e. cash sales, 14-day payment, 30-day account), what is clear is that the respondents were of the view that the interest and lien clauses of the Credit Terms applied to Tighe.
On 9 October 2017 Tighe paid the two outstanding Invoices #NT4889 and #NT4899.[31] On this date Tighe also paid Invoices #SA10302 and #SA10303 (issued 3 October 2017) despite the delivery on the Forklift Consignment not having been made.[32]
[31] Newton (4/11/17), Exhibit SN-1 Tab 20 (pages 109-110)
[32] Newton (4/11/17), Exhibit SN-1 Tab 20 (pages 109-110)
Despite the payments being made, Mr Meiklejohn advised that the payments were “not accepted” and that all purported outstanding interest would need to be paid otherwise the goods would not be released from NT Hauliers’ custody.[33]
[33] Newton (4/11/17), Exhibit SN-1 Tab 21 (page 112)
On 15 October 2017, with the goods undelivered to Crown, and still being held by the respondents, Tighe’s lawyer wrote to the respondents articulating the facts and issues, and demanding immediately delivery of the Forklift Consignment.[34]
[34] Newton (4/11/17), Exhibit SN-1 Tab 22 (pages 115-117)
Having received no reply, Tighe’s lawyer again wrote to the respondents on 17 October 2017, threatening legal action if the goods were not delivered by NT Hauliers as instructed by 18 October 2017.[35]
[35] Newton (4/11/17), Exhibit SN-1 Tab 23 (page 119)
On 18 October 2017 Mr Meiklejohn responded to Tighe’s legal representative, refusing to deliver the goods until Invoice #10251 (relating to interest charges of over $16,000) was paid.[36]
[36] Newton (4/11/17), Exhibit SN-1 Tab 24 (page 121)
Attached to this email was a copy of a blank consignment note used by NT Hauliers. It contains its own set of terms and conditions.[37]
[37] Newton (4/11/17), Exhibit SN-1 Tab 24 (page 125); Kutasi (4/11/17) Exhibit KK-1 (blown up view of NT Hauliers’ consignment note terms and conditions, ie as found at Exhibit SN-1 Tab 24, page 125)
These terms and conditions contain no reference to the payment of interest on unpaid invoices. Although they do refer to a right of lien over goods, the lien is said to only apply to unpaid amounts, i.e. not additional interest charges. The consignment terms and conditions are not the same as the Credit Terms.
Tighe’s legal representative responded to Mr Meiklejohn on 18 October 2017 about half an hour later, again requiring immediate delivery of the goods, and again threatening legal action in the event of non-compliance.[38]
[38] Newton (4/11/17), Exhibit SN-1 Tab 25 (page 127)
Tighe’s legal representative wrote to the respondents again on 3 November 2017, referring to his previous correspondence on 15 and 18 October 2017, again requiring immediate delivery of the goods, and again threatening legal action in the event of non-compliance.[39]
[39] Kutasi (4/11/17), Annexure ‘KK-3’
Importantly, the letter attached a draft application to this Court setting out the relief sought by Tighe should it be necessary to commence proceedings against the respondents.[40]
[40] Kutasi (4/11/17), Annexure ‘KK-3’
On 8 November 2017 Tighe filed its application in this Court. The interlocutory relief sought by Tighe was listed for hearing before Judge Nicholls on 9 November 2017.
Tighe’s legal representative wrote to the respondents on 8 November 2017 attaching a copy of the application and supporting affidavits of Mr Newton and Mr Kutasi, advising the respondents that the matter had been listed for hearing at 1.00pm (Sydney time) before Judge Nicholls, and advising them that they could make arrangements to participate via telephone.[41]
[41] Exhibit AE1 email from Mr Kutasi to Mr Meiklejohn on 8 November 2017 at 3.52pm
Mr Meiklejohn responded to Tighe’s legal representative via email on 8 November 2017. The email became part of Exhibit AE1 in the proceedings before Judge Nicholls. In order to convey the tone of the email it is necessary to reproduce it as follows:
suit urself
I don’t have time for yours and ur idiot clients continued stupidity
ur continued threats are a load of hogswallop
I repeat and I make point that you need to understand – we dont have nor have had possession of crowns junk for weeks
It is our policy to wipe our hands of retards which I thought was done when we dumped the freight now let me give you some advice cocko – in effort to appease the retards at crown – NOT you or your penniless twat mate newton, one of our staff will advise crown Darwin where they can find their junk tomorrow at a time suitable to ME
Understand …!
now don’t bother contacting me or our staff again with ur constant ill informed dribble
The info regards fork whereabouts was advised to adelaide service manager weeks ago
swine like you really ought to look in the mirror and slap urself at ur fkn stupidity
Now run along boyo
Upon making enquiries, Tighe was unable to verify any advice received by its own employees, or Crown, that the respondents had informed them as to whereabouts, weeks ago, or otherwise, of the forklifts. It appears that upon being confronted with the filed application, instead of simply returning the Forklift Consignment or delivering it, Mr Meiklejohn embarked upon a path of misinformation.
The respondents did not appear at the hearing on 9 November 2017, nor did they advise the Court or the applicants of their inability to attend. Judge Nicholls granted the relief sought by Tighe, making orders on 9 November 2017.[42] The matter was subsequently transferred into my docket.
[42] Kutasi (14/11/17), Annexure ‘KK 2-1’
At around 12.30pm (CST) on 9 November 2017 Crown was advised by an anonymous caller that the Forklift Consignment was in a carpark for collection at 3 Verrinder Road, Berrimah.[43]
[43] Kutasi (14/11/17), Annexure ‘KK 2-2’
In summary, having regard to the facts and circumstances, I find that Tighe has established a strong prima facie case for the final relief sought in its originating application (including as to findings of “unconscionable conduct” by NT Hauliers, to which Mr Meiklejohn was “involved in”). Whilst that is not the decisive factor in the application for costs now being made by Tighe, it is nonetheless a relevant factor that weighs in Tighe’s favour.

Consideration

For costs to be payable, an order of the Court must be made.
Costs orders are made separately from substantive relief, and may be sought during, as well as at the end of, court proceedings. They are not meant to be punitive and play an important part in case management.[44]
[44] Federal Circuit Court Rules, rules 1.03 and 10.01
In determining whether to make a costs order, the Court’s primary task is to determine whether the facts of the case or specific costs provisions impact upon the Court’s jurisdiction or discretion to make the costs order. Unless there are statutory provisions to the contrary, the Court’s discretion to determine such issues is unfettered.[45]
[45] Federal Circuit Court of Australia Act 1999 (Cth), ss.79(2) and (3)
Rule 13.02 of the Federal Circuit Court Rules in respect of costs on discontinuance does not apply, as the respondents are not making an application for costs against Tighe upon discontinuance.
The most frequent costs order is for costs to be payable by the unsuccessful party (based on the principle that costs “follow the event” (the Basic Costs Principle), both for interlocutory applications and hearings.
The Basic Costs Principle is not as much a presumption as a default position. However, it is accepted by Tighe that it carries the onus (as the discontinuing party) to make an application for the respondents to pay its costs. The exercise of the discretion to “order otherwise” than the Basic Costs Principle requires some sound positive ground, or good reason, for departing from the ordinary course.[46]
[46] see, for example: Ralph Lauren 57 Pty Ltd v Byron Shire Council [2014] NSWCA 107 (at [21]–[29]); Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32 (at [53]–[54] and [69]–[74])
Although the costs orders sought by Tighe against the respondents are unusual or exceptional, there is no question that the Court has the power, as a matter of its discretion (exercised judicially), to make such a costs order. Indeed, terms such as “unusual” or “exceptional” should not be viewed as matters that would alter the discretionary character of a costs determination.[47]
[47] G R Vaughan (Holdings) Pty Ltd v Vogt [2006] NSWCA 263 (at [20])
Tighe submits that the Court ought to exercise its discretion in favour of making the costs orders sought for the following reasons:
a)Tighe made every effort, and used every endeavour, to avoid commencing proceedings. The respondents were aware of and on notice of these endeavours from the very beginning;
b)given the conduct of the respondents, absent simply acceding to the payment of the respondents’ demands for interest (which Tighe says were unlawful demands) in the amount of $16,804.29, Tighe had no choice but to commence proceedings against the respondents to obtain orders from the Court requiring the respondents to return the forklifts;
c)the conduct of the respondents from at least 6 October 2017 has been wholly unreasonable, vengeful and reckless, conducive to undue pressure and/or the unwarranted commencement of litigation, i.e. as opposed to the resolution of the dispute between the parties without having to go to Court. That conduct of the respondents remains completely unexplained by them. The respondents have refused to engage with, or participate at all in these proceedings, or otherwise return the forklifts when requested by Tighe and its lawyer;
d)the fact that the respondents have chosen not to participate in these proceedings is not a factor weighing against the exercise of the Court’s discretion to make a costs order as sought by Tighe. On the evidence, in relation to the email communications and other correspondence sent to, and by or from, Mr Meiklejohn, there can be no doubt that the respondents were aware of the nature of the issues in dispute; and
e)to the extent that there has been an event in these proceedings, that event is the interlocutory relief obtained by Tighe on 9 November 2017 before Judge Nicholls.

I accept those submissions. The Court’s order as to costs ought extend to the conclusion of the proceedings. In this regard, these proceedings would have never been commenced but for the conduct of the respondents.
Further, Tighe’s Genuine Steps Statement (filed 8 November 2017), the affidavits of Mr Newton dated 4 November 2017 and 25 January 2018, and the affidavits of Mr Kutasi dated 4 and 14 November 2017 identify the various attempts by Tighe to resolve this matter, both before it commenced, and after the orders of 9 November 2017 were made (i.e. prior to this Application in a Case being filed). The conduct of the respondents identified in the evidence highlights the basis for the Court to make an order for costs.
I accept that the Court can comfortably make an order for costs to the conclusion of the interlocutory hearing before Judge Nicholls on 9 November 2017. In this respect, as the orders made on 9 November 2017 were interlocutory, they can be varied under rule 16.05 of the Federal Circuit Court Rules. Tighe submits that order 6 of the 9 November 2017 orders be varied to the following:
The Respondents to pay the Applicant’s costs in respect of the preparation for, and attendance at, the interlocutory hearing before Judge Nicholls on 9 November 2017 [on an indemnity basis] (or) [as agreed or assessed].
In my opinion, the Court should be guided by its scale of costs in Schedule 1 to the Federal Circuit Court Rules. An indemnity costs order cannot be justified and the parties should not be put to the trouble and expense of a taxation. Mr Kutasi’s affidavit of 25 January 2018 sets out the position in respect of scale costs. He calculates those costs at $8,539.96 including the advocacy loading and disbursements. With one exception,[48] the calculations in the affidavit do not extend to the costs of this Application in a Case, which has been determined on the papers.
[48] the filing fee for the Application in a Case paid on 25 January 2018
I accept the general accuracy of Mr Kutasi’s calculations but have chosen to round down the figure.
I will fix costs in the sum of $8,000.

I certify that the preceding fifty-seven (57) paragraphs are a true copy of the reasons for judgment of Judge Driver

Date: 29 March 2018