Tycoon Holdings Pty Ltd v Trencor Jetco Inc

[1995] FCA 1110

IN THE FEDERAL COURT OF AUSTRALIA    )
WESTERN AUSTRALIA                   )
DISTRICT REGISTRY                  )        No. WAG 41 of 1991
GENERAL DIVISION                    )

Between:       TYCOON HOLDINGS PTY LTD
  First Applicant

KANGARILLA PTY LTD

Second Applicant

And:       TRENCOR JETCO INC
  First Respondent

And:MOLE ENGINEERING

Second Respondent

REASONS FOR JUDGMENT

EINFELD J   SYDNEY              22 DECEMBER 1995

(heard in Perth)
The first applicant (Tycoon) purchased from the second respondent (Mole) a large earthmoving machine known as a trencher.  Mole is the Australian distributor of the machines for the first respondent, an American corporation (Jetco).  Tycoon hired the trencher to the second applicant (Kangarilla) for use in forging drainage channels on agricultural properties in Western Australia.  The proceedings for damages which arose from this transaction were commenced in April 1991, but delays and several interlocutory hearings have meant that the case has still not been substantively heard.

On 21 July 1992, the applicants filed a motion for leave to amend the statement of claim.  Due among other things to a lengthy attempt to mediate their differences, the motion did not come before the Court for hearing until 15 and 16 August 1994.  The reasons for my decision on the motion were published on 5 April 1995.  As well as allowing the applicant's motion to amend, I ordered the respondents to pay the costs of the motion, but allowed seven days for written submissions for a contrary or alternative order.  Submissions for alternative orders as to costs were duly presented and these form the subject of this judgment.

Jetco, with Mole in agreement, submitted that the costs of the motion for leave to amend, except for time spent by unsuccessful objections to the motion by the respondents, should be borne by the applicants including costs thrown away due to the applicants' conduct.  In support of this submission, they highlighted that prior to the latest amendment, there were other lengthy and complicated amendments that were ultimately abandoned with the adoption of each new version of the statement of claim, all of which put the respondents to unnecessary and great expense.  Additionally, it was clear at the hearing of the motion, as the applicants' counsel conceded, that further refinement and a few corrections would be necessary to the latest amendments and provision of particulars would be required.

In answer to these submissions the applicants said, with respect to Mole, that no new causes of action were raised in the proposed
amended statement of claim and that Mole's objections were technical and trivial.  Further, Mole had not objected to the first two amendments and another amendment was pursuant to orders of Justice Lee.  The applicants accepted that the respondents are entitled to any costs thrown away.

As regards Jetco, the applicants emphasised that the amendments were prepared in order to address Jetco's objections and to comply with court orders.  They said that court time was taken up by objections of the respondents to the motion which ultimately failed.  Jetco submitted that court time was also concerned with the applicants' obligation under previous court orders that verified prima facie evidence be provided of the causes of action and material facts relied on against Jetco.  I consider that no significant court time was consumed by the verification of prima facie evidence, though I must say that it certainly did consume judgment writing time.

My attention was directed to two authorities on the topic.  The first was Andromeda Handelsaktieselskab v Holme [1923] 130 LT 329 which is authority for the proposition that terms will usually be imposed on the amending party to pay the costs thrown away by and in consequence of amendments. The second, was Public Trustee v Nash [1921] 38 WN(NSW) 142, which advances the proposition that if the application for leave to amend is unreasonably opposed, costs may be awarded to the opponent. I add to these cases the decision of Justice Toohey in Hughes v Western Australian Cricket Association (Inc) & Ors [1986] ATPR 40-748 as adopted by the New South Wales Court of Appeal in X & Y (by her Tutor X) v Pal & Ors (Mahoney, Clarke, Meagher JJA, unreported 7 June 1991) where the applicable principles were encapsulated at page 3 in the following terms:

Costs are in the discretion of the court.  This discretion must be exercised judicially.  The principles which bear on its exercise are generally: (1)  Ordinarily, costs follow the event;  (2)  In particular circumstances it may be reasonable to require that a litigant who has succeeded only upon a portion of his claim should bear the expense of litigating the other portion or portions; and  (3)  Circumstances may dictate that a successful party who has failed on certain issues may not only be deprived of the costs in those issues but may be ordered as well to pay the other party's costs of them.

The applicants do not dispute the respondents' entitlement to the costs thrown away by reason of the amendments now allowed, but otherwise nothing raised in the submissions has altered my original view of this matter.  My original order that the respondents pay the costs of the applicants' successful motion will stand, but I also order the applicants to pay the respondents' costs incurred and thrown away in consequence of the amendments and the costs of any further amendments made in consequence of the motion.