Tu v Pakway Australia Pty Ltd - [2006] FCA 34

FEDERAL COURT OF AUSTRALIA
Tu v Pakway Australia Pty Ltd (ACN 093872738) (T/AS Pakway Plastics) [2006] FCA 34
PRACTICE AND PROCEDURE – costs – whether costs should follow the event – reserved costs – questionable success of motion – where applicants did not pursue application for interlocutory relief in favour of early trial – where affidavits contained unnecessary detail and inaccuracies and were given low weight – costs of senior and junior counsel contested – Order 62 Rule 36A(1), Federal Court Rules
Federal Court of Australia Act 1976 (Cth), s 43
Federal Court Rules O 62, r 15, O 62 r 36A(1)
Willis Tu v Pakway Australia Pty Ltd [2004] FCA 1151 referred to
Oshlack v Richmond River Council (1998) 193 CLR 72 referred to
Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 cited
Hughes v Western Australian Cricket Association (Inc) (1986) 8 ATPR 40-748 cited
Latoudis v Casey (1990) 170 CLR 534 cited
Cummings v Lewis (1993) 41 FCR 599 cited
Dr Martens Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 cited
Re Elgindata Ltd (No 2) [1993] All ER 232 cited
Hayle Holdings Pty Ltd v Australian Technology Group Ltd (No 2) [2000] FCA 1699 cited
Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 cited
Mok v Minister for Immigration, Local Government and Ethnic Affairs (No 2) (1993) 47 FCR 81 cited
Cretazzo v Lombardi (1975) 13 SASR 4 cited
Castlemaine Tooheys Ltd v The State of South Australia (1986) 161 CLR 148 cited
Hexal Australia Pty Ltd v Roche Therapeutics Inc [2005] FCA 1218 referred to
Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 cited
Smith v Grigg Ltd [1924] 1 KB 655 cited
Tefex Pty Ltd v Bowler (1982) 60 FLR 314 cited
Obsa Pty Ltd v TF Thomas & Sons Pty Ltd (1990) 20 IPR 155 cited
Reidy’s Lures Pty Ltd v Basser Millyard Pty Ltd [2003] FCA 1242 referred to
Australasian Performing Right Association Limited v Metro on George Pty Limited [2004] FCA 1371 referred to
Australian Performing Right Association Ltd v Pashalidis [2000] FCA 1815 referred to
WILLIS TU AND GENFAC PLASTICS PTY LTD (ACN 006 205 876) v PAKWAY AUSTRALIA PTY LTD (ACN 093 872 738) (T/AS PAKWAY PLASTICS) AND CHINH PHI TO AND HAI SO TRUONG
VID 892 OF 2001
KENNY J
7 FEBRUARY 2006
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 892 OF 2001

BETWEEN:

WILLIS TU
FIRST APPLICANT

GENFAC PLASTICS PTY LTD (ACN 006 205 876)
SECOND APPLICANT

AND:

PAKWAY AUSTRALIA PTY LTD (ACN 093 872 738) (T/AS PAKWAY PLASTICS)
FIRST RESPONDENT

CHINH PHI TO
SECOND RESPONDENT

HAI SO TRUONG
THIRD RESPONDENT

JUDGE:

KENNY J

DATE OF ORDER:

7 FEBRUARY 2006

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.The first and second respondents pay the applicants’ costs of and incidental to the proceedings, including all reserved costs except the costs reserved on the application for an interlocutory injunction,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2006] FCA 34
Decision Date: 7 FEBRUARY 2006

CaseChat Overview and Summary

In the case of Tu v Pakway Australia Pty Ltd, the applicants sought an order for costs following a successful application for an interlocutory injunction. The applicants argued that the general rule of costs following the event should apply and that their costs should not be reduced by one-third under O 62 r 36A(1) of the Federal Court Rules 1979 (Cth). The central legal issues before the court were whether the general rule that costs follow the event should be applied, and if the costs should be reduced under the specified rule. The applicants contended that there were no special circumstances justifying a departure from the general rule, and that the reduction of costs by one-third was not warranted.

The court considered the discretionary nature of the power to make orders for costs, derived from s 43 of the Federal Court of Australia Act 1976 (Cth). It acknowledged that a successful litigant is ordinarily entitled to an award of costs, but this entitlement can be subject to the court’s discretion. The court referenced previous cases such as Ruddock v Vadarlis (No 2) to establish that costs may be refused or apportioned according to the conduct of the parties in the proceedings. It was noted that costs are typically not awarded if the successful party's conduct would render it unjust or unreasonable to do so. The court also highlighted that where a party has succeeded on only a portion of their claim, they may be required to bear the expense of litigating the unsuccessful portion. However, in this case, the applicants successfully argued that there were no grounds to depart from the general rule of costs following the event.

The court concluded that the applicants were entitled to an order for costs, and that there were no special circumstances justifying a reduction under O 62 r 36A(1) of the Federal Court Rules. Therefore, the applicants were awarded their costs of and incidental to the proceedings, except for the costs related to the interlocutory injunction application, which were to be borne by each party. The court also ordered that the costs should not be reduced by one-third as per the specified rule.

ORDERS:
1. The first and second respondents pay the applicants’ costs of and incidental to the proceedings, including all reserved costs except the costs reserved on the application for an interlocutory injunction, on a party and party basis to be taxed in default of agreement.
2. Each party bear his or its own costs of the application for an interlocutory injunction.
3. Costs not be reduced pursuant to O 62 r 36A(1) of the Federal Court Rules.

Orders

Orders of the court

1. The first and second respondents pay the applicants’ costs of and incidental to the proceedings, including all reserved costs except the costs reserved on the application for an interlocutory injunction, on a party and party basis to be taxed in default of agreement.

2. Each party bear his or its own costs of the application for an interlocutory injunction.

3. Costs not be reduced pursuant to O 62 r 36A(1) of the Federal Court Rules.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

KENNY J (dissent)

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by:

The applicants submit that there is no reason to depart from, or modify, the application of the general rule that costs follow the event. Moreover, they submit that the Court should order that costs not be reduced by one-third pursuant to O 62 r 36A(1) of the Federal Court Rules 1979 (Cth) (“the Rules”). CONSIDERATION The power of the Court to make orders for costs derives from s 43 of the Federal Court of Australia Act 1976 (Cth). A successful litigant is ordinarily entitled to an award of costs: see, e.g., Oshlack v Richmond River Council (1998) 193 CLR 72 at 97 per McHugh J (dissenting in result) and 120-1 per Kirby J. The power to make orders for costs is, however, discretionary, although it “must be exercised judicially and not against the successful party except for some reason connected with the case”: see Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 (“Ruddock v Vadarlis (No 2)”) at 234 per Black CJ and French JJ. As their Honours said in that case, at 234–235:“Within the general discretion of the courts to award costs it is accepted by decisions in both Australian and English jurisdictions that: ·Ordinarily costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order.·Where a litigant has succeeded only upon a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which he or she has failed. ·A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party’s costs of them. In this sense ‘issue’ does not mean a precise issue in the technical pleading sense but any disputed question of fact or law. See Hughes v Western Australian Cricket Association (Inc) and Ors (1986) ATPR 40–748 at 48,136; approved by the Full Court in Queensland Wire Industries Pty Ltd v Broken Hill Co Ltd (1987) 17 FCR 211 at 222.” Ordinarily, if a successful party is denied an order for costs in whole or part, it is because of its conduct of the proceeding in some respect or respects. In Ruddock v Vadarlis (No 2) at 236, Black CJ and French J said:“Within the general discretion to award costs, costs may be refused where, for example, the applicant has made an exaggerated claim which has occupied a significant proportion of the proceedings and has succeeded only on a minor aspect of its original claim. Costs may be apportioned according to success or failure on particular distinct or severable issues … . And a trial judge may award only a proportion of the successful party’s costs if the conduct of that party at trial was such as to unreasonably prolong the proceedings ….” (Citations omitted)The ordinary costs order in favour of a successful party is not made where, by reason of the successful party’s conduct, it would not be just and reasonable to do so: see, e.g., Latoudis v Casey (1990) 170 CLR 534 at 544 per Mason CJ and Cummings v Lewis (1993) 41 FCR 599 at 603 per Cooper J (with whom Sheppard and Neaves JJ generally agreed).

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 892 OF 2001

BETWEEN:	WILLIS TU FIRST APPLICANT GENFAC PLASTICS PTY LTD (ACN 006 205 876) SECOND APPLICANT
AND:	PAKWAY AUSTRALIA PTY LTD (ACN 093 872 738) (T/AS PAKWAY PLASTICS) FIRST RESPONDENT CHINH PHI TO SECOND RESPONDENT HAI SO TRUONG THIRD RESPONDENT
JUDGE:	KENNY J
DATE OF ORDER:	7 FEBRUARY 2006
WHERE MADE:	MELBOURNE