Trade Practices Commission v TNT Management Pty Ltd

-	CATCHWORDS

133

COSTS - successful defendants - abatenent of successful defendants' costs - fallure of defendants on c?rtaln issues In actlon f o r a penalty - cunduct of defendants.

Federal Court. of Australla &L,

1976 - 5.43.

TRADE PRACTICES COMMISSION V. T.N.T. MANAGEMmT PTY. LIMITED &.	ORS.
NO. G.44 of 1978
W: Frank1 J.
1 March 1985
Sydney.

IN THE FEDERAL COURT OF AUSTRALIA

)

NEW SOUTH WALES DISTRICT REGISTRY

1	No. G.44 of 1978

)

GENERAL DIVISION

)

:	-	B
TRADE PRACTICES COMMISSION

Plaintiff

AND:

T.N.T. MANAGEMENT PTY. LIMITED

First Defendant

AND:

BRAMBLES HOLDINGS LIMITED

Second Defendant

AND:

MAYNE NICKLESS LIMITED

Third Defendant

AND:

YOUNGS TRANSPORT PTY. LIMITED

Fourth Defendant

AND:

ANSETT TRANSPORT INDUSTRIES

(OPERATIONS) PTY.

LIMITED

Fifth Defendant

AND :

EXPRESS FREIGHT PTY. LIMITED

Sixth Defendant

AND:

ASSOCIATE!D STEAMSHIPS

FTY. LIMITED

Seventh Defendant

AND:

ESLEA HOLDINGS LIMITED, formerly

Ipec Holdings Limited

Eighth Defendant

AND:

ROADSWIFT TRANSPORT PTY. LIMITED, formerly Interstate Parcel Express

Co. Pty. Limited

Ninth Defendant

O R D E R

JUDGE: Franki J.

DATE OF ORDER: 1 March 1985

WHERE MADE: Sydney

THE COURT ORDERS THAT:

The Trade Practices Commission pay eighty-five percent of the costs, including any reserved costs, of each defendant except the fourth defendant which shall be paid its costs.

IN THE FEDERAL COURT OF AUSTRALIA

)

NEW SOUTH W E S DISTRICT REGISTRY

)	No. G.44 of 1978

)

GENERAL DIVISION

Between:

TRADE PRACTICES COMMISSION

Plaintiff

-and-

T.N.T. MANAGEMENT PTY. LIMITED	First Defendant
BRAMBLES HOLDINGS LIMITED	Second Defendant

MAYNE NICKLESS

LIMITED

Third Defendant

YOUNGS TRANSPORT PTY. LIMITED	Fourth Defendant
ANSETT TRANSPORT INDUSTRIES	Fifth Defendant
(OPERATIONS) PTY. LIMITED
EXPRESS FREIGHT PTY. LIMITED	Sixth Defendant
ASSOCIATED STEAMSHIPS PTY. LIMITED	Seventh Defendant
ESLEA HOLDINGS LIMITED	Eighth Defendant
Formerly Ipec Holdings Limited
ROADSWIFf TRANSPORT PTY. LIMITED	Ninth Defendant

Formerlv Interstate Parcel	Exmess
Co. Pty: Limited
M: Franki J.
-	DATE: 1 March 1985

amsms FCR JUCGMENT

FRANK1 J.

Submissions have now been made on behalf of the parties

this matter on the question of costs.

This

question was

reserved when I delivered	my reasons for judgment on	12 February
1985,

.- . . .

Senior Counsel for the Trade Practices Commission

("the

Commission") asked me to exercise my discretion by abating the costs to which successful defendants are normally entitled. He

suggested that those costs should be abated between

hird and a

half but

he did not deal with

the question of any possible

distinction

between

the

defendants.

identified

certain

matters upon which he sought to rely and submitted that they were

"significant and disparate" issues. He said that the defendants

had chosen

to fight those issues, that the Commission had been

successful on them and that it would be appropriate to allow an

abatement in respect of them.

He put into this category the issues of the membership

of the National Freight Forwarders' Association, the identity and

authority of the representatives of the defendants at the three

meetings of the National Freight Forwarders' Association, the

proof of the minutes of those meetings,

the evidence of the

making of the arrangements

or entering Into the understandings

and finally the nature of the arrangements or understandings. He

then

looked

the

question

the allegations

that the

arrangements

understandings

were

given

effect

and

particularised a number of issues of fact upon which

he said the

Commission was successful

including the various

telephone

conversations (see part

of my reasons for judgment) and the

letters to

various defendants from Tradestock (see part

8 of my

reasons

for

judgment).

also

identified

other

matters

respect of which he submitted the case was unduly prolonged by

the conduct of the defendants. These were only two, namely the

cross-examination of

Mr.

Wise about the yellow pages in the

telephone books and the amended defences of

1983.

Senior counsel for the Commission also relied upon the

time taken in argument concerning the admissibility of a great deal of the evidence which was ultimately admitted. I would not like to encourage such argument to the extent to which it took place-in this case but I must bear in mind the power of a Judge to limit argument upon the question of admissibility of evidence.

There are a number of features which

I feel are of

particular significance in deciding the matter before me. They

are :

(a) The proceedings were proceedings for

substantial

penalty.

Indeed,

would

appear that the monetary penalties which

could

have

been

imposed

all

the

defendants, when added together, would

have amounted to several million dollars.

--I consider that corporations,

private

citizens,

have

the

right o

resist exposing themselves to the risk of

a pecuniary penalty being imposed. They

are not required to make any admissions.

(b)

The Commission decided to proceed against

the	nine defendants in the one action.

I have no doubt that this was

a perfectly

appropriate

course

least

provided

there was sufficient evidence in relation

to each defendant who was joined.

(c)

The Commission relied on what was called

the Tripodi principle (see Part 10E of my

reasons for judgment) and it argued that

certain conduct by any defendant could be

reflected in the strength of the case

against other defendants.

(d)

The Commission argued that each defendant

had

the

benefit

each

other

defendant's

conduct

the

case

and

therefore, in effect, it was relevant to

permit

the

conduct

of one

defendant

during

the

case

reflected

considering

the

position

ther

defendants.

(e) As

I said in my reasons for judgment,

many of the issues which have arisen in this case under the Trade Practices Act

1974 ("the Act") involve questions which,

at least at this stage of the development

the

relevant

law,

are

xtremely

complex and it is very difficult to decide just what is and what is not

relevant to many

of the issues.

(f)

The Commission, although it was open for

it so to do, chose not to issue

a notice

under s.155 of the Act before

a stage

when, by so

doing, it committed contempt

of the Court.

(g)

Notwithstanding my mentioning the matter on several occasions before the case came

to	trial, no attempt was made by any

party to take advantage of the provision

in the High Court Rules for

a summons for

directions.

(h) The question is not one

of a successful

defendant

paying

the

costs

unsuccessful

p aintiff

but

the

abatement of the costs of

defendant

successful in civil proceedings against

it for a substantial penalty.

6 .

(l)	The fourth defendant was not represented

at the hearing.

(j)

Generally,

although

not

always,

each

defendant supported objections by other

defendants or did

not

seek

disassociate

tho

itself

from

objections.

I pass now to consider the law in relation to the

award of costs to

successful defendant. The jurisdiction of

the Court to award costs stems from

5.43

of the Federal Court of

Australia Act 1976 which provides:

"43. (1)

The

Court

or a Judge

has

jurisdiction

award

costs

all

proceedings before the Court (including

proceedings

dismissed

for

want

jurisdiction) other than proceedings in

respect of which any other Act provides

that costs shall not be awarded.

(2) Except as provided by any other Act, the award of costs is in the discretion of

the Court

or Judge.

The leading case on the question

is Donald Campbell &

Co. v. Pollak C19273 A.C. 732. The main judgment in that case on

costs is that of Viscount Cave L.C. at

pp. 804-813.

Viscount

Dunedin, at p.813, and Lord Phillimore and Lord Carson, at p.825, agreed with Viscount Cave L.C. The section of the Judicature Act

there under consideration did not differ from

5.43 of the Federal

Court of Australia Act 1976 in any material respect.

The Lord Chancellor set out

what he regarded to be

the true

view which he said was substantially the view taken by

Lord Sterndale M.R. at pp. 52-53 in Ritter v.

Godfrev C19203 2

K . B . 47.

Viscount Cave L.C. at pp.811-812, said that

he would

express his view as follows:

"A successful defendant in a non-jury case

has	no doubt, in the absence of special

circumstances, a reasonable expectation of obtaining an order for the payment of his

costs by the plaintiff; but

he has

right to costs unless and until the Court

awards them to him, and the Court has an

absolute

and

unfettered

discretion

award or not

award

them.

This

discretion,

any

other

discretion,

must of course be exercised judicially,

and the judge ought not to exercise it

against the successful party except for

some reason connected with the case.

Thus, if - to put a hypothesis which in

our Courts would never in fact be realized

- a judge were to refuse to give a party his costs on the ground of some misconduct

wholly

unconnected

with

the

cause

action

or of

some prejudice due to his

race or religion or (to quote a familiar illustration) to the colour of his hair,

then	a Court of Appeal might well feel

itself compelled to intervene. But when a judge, deliberately intending to exercise his discretionary powers, has acted on

facts connected with or leading up to the litigation which have been proved before

him or which he

has himself observed

during the progress of the case, then it

insufficient and may disagree with his

conclusion, is prohibited by the statute

from entertaining an appeal from it."

seems

that

a Court

Appeal,

although

may

deem

his

reasons

At p.

812 the Lord Chancellor rejected the views of Atkin L.J.

and Eve

J in Ritter v. Godfrev, supra.

Lord Atkinson,

p.814, also accepted that the

judgment of Lord Sterndale in Ritter

v. Godfrev which

he said

"...contains a clear, condensed and accurate statement of the law

and of the prevailing practice on the points with which it

deals.

Donald Campbell

& Co. v. Pollak, supra, has been

considered

in a number

of cases. I particularly

refer

Cretazzo v. Lombardi (1975) 13

S.A.S.R.

4 at pp.11-12 (Bray

C.J.).

There his Honour referred to Foster v.Farsuhar C18931

Q.B.

564

at p.14, as an authority for the proposition

that the

fact that

there is only one lis in the technical pleading sense

is no barrier to the splitting of costs in accordance with the

success of the parties on various disputed questions of fact

law.

His

Honour

also

noted

the

desirability

avoiding

complicated and expensive taxations.

Fisher J., dealt with the question of costs in Trade

Practices Commission v. Nicholas Enterprises Ptv.

Ltd. (1979) 2

A.T.P.R.

40-141, a case referred

to by the Full Court of this

Court in Gladstone Park Shoppins Centre Ptv. Ltd. v. Wills,

December

1984,

(unreported).

His

Honour

referred

Donald

Campbell &

Co. v. Pollak, supra, and Ritter v. Godfrev, supra.

At pp.18,529-18,530 his Honour cited Forbes

Samuel C19133

K.B. 706, especially

p.739,

and

Gold

Patman

and

Fotherinsham Ltd. (1958) 2 All

E.R.

497 as authorities for the

proposition that, if a considerable portion of a trial is taken

up in determining issues upon which

the defendant fails, it is

proper exercise of discretion to reduce

the

costs allowed a

defendant in whose favour the proceedings have been determined.

Reference was also made to Jenninqs	v. Zilahi-Kiss C19723 2
S.A.S.R. 493.

Fisher J. only allowed a successful defendant shortly

known as

“Old..Lion‘! one-third of its taxed costs

on the basis,

inter alia, (a) that an employee had made an untruthful statement

in answering a notice under s.155 and

(b) that it had argued that

there was no case to answer, the question of the effectiveness of

the service of the original s.155 notice and whether

I was bound

by a response to that notice. His Honour said at p.18,530:

“These

issues,

although

perfectly

properly

raised, were

issues upon which the Old Lion

\	failed and they did protract the hearing.“

It is important to note that the proceedings before Fisher

J., as

are those before me, were proceedings for a penalty in respect of

alleged

contraventions

s.45

the

Act.

Cretazzo

Lombardi, supra, the Full Court

the Supreme Court of South

Australia varied an order for costs and ordered that a successful

plaintiff

should

only

receive

part

his

costs

from

unsuccessful defendant on

the ground of the plaintiff’s conduct.

It is somewhat easier to refuse a successful plaintiff

the whole of its costs than to refuse a successful defendant

10.

which, after all, is meeting

a charge

brought and formu .ted

.la

the plaintiff. (See, for example, Xniqht

Clifton C19713 C h

700 at p.713, an action for contempt and Ottwav

v. Jones C19553 1

W.L.R.

706 at pp.714, 715.)

Senior counsel for the Commission also referred to the

practice in relation to patents actions where invalidity is set

up by a defendant. I consider it would be unwise to rely on the

procedure in relation to costs in patents actions in considering

the question of costs in proceedings for a penalty under the Act.

Indeed, special provision has been made in s.168 of the Patents

Act 1952 in relation to costs where

a patent is invalid in part.

Other examples of

a successful defendant being refused

part of its costs

are Jenninss

Zilahi-Kiss, supra, (Bray

C.J.); Forbes v. Samuel, supra, and Gold

v. Patman & Fotherinsham

Ltd., supra.

In the last mentioned case the Court of Appeal

allowed only half the costs of

the trial in the Court below on

the basis that the issues could have been determined had an

application been made to have

a preliminary point of law ruled

upon. This case appears to me

to have been perhaps the high

water mark of a Court refusing to award	a successful defendant
the whole of its costs.

The	Full Court of the Supreme Court of Victoria in

Keddie v. Foxhall C19551 V.L.R.

320 considered the

question of

the defendant's costs in an action before

a jury. At p.325 in a

11.

joint judgment the Court pointed out that in considering the

question of costs the conduct of

a party need not be misconduct

at all, but only such as can be seen by the Judge to have brought

about or substantially contributed to the costs which	he is
considering.

In Forbes

v. Samuel, supra, Scrutton J. at p.739 said:

"As,	however, considerable portions of the

four days which the case occupied were taken

up by objections on which the defendant

failed,

I direct the taxing Master only to

give the costs appropriate to an action lasting two days. This direction on balance will, in my view, do justice between the

parties.

This was an action in which the plaintiff sought penalties

against a member of the House of Commons in relation to certain

conduct whilst a member. At p.729 Scrutton J. said:

"The case took four days to hear, owing

t the

innumerable objections to evidence and

to the

plaintiff's

claim

which

the

ingenuity

counsel raised.

The successful defendant was only allowed costs appropriate to an action lasting two days.

It is clear that Sefore a Court should deny a successful

defendant part of its costs some conduct on behalf of the

defendant must be identified.

12.

The Commission claimed an equal percentage abatement in

respect of the costs of each defendant.

is difficult to

identify any particular relevant conduct of the third, fifth,

sixth,

seventh

and

eighth

defendants

relation

the

cross-examination of

Mr.

Wise about the yellow pages in the

telephone

books

and

the

amended

defences

1983. I have

considerable difficulty with the position of the second defendant

and to

somewhat lesser extent that of the first, fifth and

seventh defendants on the question of cross-examination

on the

telephone

books.

These

books

were

produced

and

ultimately

admitted into evidence pursuant

to agreement which was reached by

all of the parties. After the conclusion of the plaintiff's case and during the cross-examination of the second witness called by the first defendant, Mr. Wise, a subpoena for the production of

a great number of "yellow page telephone directories" from

various parts of Australia was issued

at short notice to Telecom.

All the books were ultimately produced after some days' delay and

Counsel for the second defendant explored the nature of the

market

extensive

cross-examination

that

witness.

consider that this was a very unsatisfactory method of obtaining

evidence concerning the market. However, very little evidence

was given

on this issue by any witness called by the plaintiff.

I am not prepared to accept the Commission's submission in relation to the cross-examination of Mr. Wise.

The amended defences were raised at a very late stage

and dealt with

in Part 10A of my reasons for judgment. It is

13.

true that

did not find it necessary to reach any firm

conclusion but

I regard at least one or two of them

as being

quite extraordinary. However not much time was devoted to the

issues they raised and

will not accept the Commission's

submission in relation to them.

am now

left with the matters which the Commission

identified as issues upon which it said the Commission had been

successful. It is certainly true that the Commission succeeded

in relation to proof of each of the three arrangements

understandings pleaded

in respect of all the defendants except

the eighth and ninth in relation to the meeting of

4 Au ust 1976.

It is also true that an arrangement was not alleged against all the defendants in respect of certain of the meetings.

The argument

on this aspect presented by the Commission

depended

the

isolation

certain

questions

and

the

consideration of who was successful or unsuccessful on that

particular question, for example the admissibility

of the minutes

of the meetings. I note the comments

of Jacobs J. in Cretazzo v.

Lombardi, supra, at p.16

that

he wished to sound "...a note of

cautious

disapproval

applications

... to apportion costs

according only to the success or failure of one party or the

other on the various issues of fact or law, which arise in the

course of the trial."

The passage continues: "The ultimate ends

of justice may not be served if

a party is dissuaded by the risk

of costs from canvassing

all issues, however doubtful, which

might be material to the decision of the case".

14.

I have no doubt that this case has taken far too long

and the words of Scrutton

J. in Forbes

v. Samuel, supra, at p.729

that the conduct of the defendant had lengthened the case before

him "...owing to the innumerable objections to the evidence and

to the plaintiff's claim which the ingenuity of counsel raised"

are very relevant. The critical issues in the case before me

were whether an arrangement

or understanding prohibited by the

relevant sections of the Act had been established and whether

effect was given to any such arrangement

understanding.

Although the defendants were successful upon these issues, they were unsuccessful in relation to the question of whether any

arrangement or understanding had been made

or entered into at the

three meetings. The only exception to this was the eighth and

ninth defendants in relation to the meeting of August 1976. A

considerable amount of time was spent in relation to the proof of

the minutes of these meetings including efforts to prevent the

minutes coming before the Court at all. In my opinion all the

defendants with the exception of the fourth defendant were

involved at least in most of the various unsuccessful objections

which occupied

considerable amount of the Court's time in

relation to the minutes. Whether any arrangement had been made

or understanding entered into was a basic issue upon which the

whole case depended. Whether it had the proscribed effect on

competition was really a separate issue. I

have noted, but not

accepted,

Commission's

the

submissions

regarding

the

15.

determination of the issue whether effect was given to any

arrangement or understanding.

Certain

costs

were

reserved

relation

the

interlocutory proceedings. Senior counsel for the Commission

submitted that reserved costs should be costs in the proceedings

and I consider this is

a reasonable way to deal with them.

I am satisfied that the Cbmmission's claim for abatement

is justified in part. Costs are to be taxed if they cannot be

agreed.

Doing the best

I can to exercise my discretion in

judicial and practical way

I propose to order that the plaintiff

pay eighty-five percent of the costs, including any reserved

costs, of each defendant except the fourth defendant which shall

be paid its costs.

[1985] FCA 133

1 Mar 1985