Viewsail Pty Ltd v Javel Holdings Pty Ltd

[1996] FCA 241

C A T C H W O R D S

PRACTICE AND PROCEDURE - costs - respondents successful in resisting applicants' claim and also successful in cross-claim - whether costs should follow the events - whether respondents' conduct of matter warranted an order depriving them of some of their costs - discretionary judgment - matter of impression and evaluation.

VIEWSAIL PTY LTD, VINCENT KENNETH HYDE and JEFFERSON FRANCIS HYDE v. JAVEL HOLDINGS PTY LTD & ORS

No. WAG 32 of 1994

CARR J.
PERTH
12 APRIL 1996

IN THE FEDERAL COURT )
OF AUSTRALIA  )
WESTERN AUSTRALIA                )          No. WAG 32 of 1994
DISTRICT REGISTRY  )
GENERAL DIVISION  )

B E T W E E N :  VIEWSAIL PTY LTD, VINCENT KENNETH HYDE and JEFFERSON FRANCIS HYDE

Applicants
  - and -

JAVEL HOLDINGS PTY LTD

First Respondent
  - and -

ROBERT ANGELO ARRIGONI, SIN JEN HWANG, ABDULLAH MOHAMED NOOR, WAYNE V. TANG, ABANG NOORDIN ZAINUDDIN and ANTHONY SAY

Second Respondents
  - and -

JAVEL HOLDINGS PTY LTD

Cross Claimant
  - and -

VIEWSAIL PTY LTD

First Cross-Respondent
  - and -

VINCENT KENNETH HYDE

Second Cross-Respondent
  - and -

JEFFERSON FRANCIS HYDE

Third Cross-Respondent

CORAM:      CARR J.
PLACE:        PERTH
DATE:           12 APRIL 1996

MINUTE OF ORDER

THE COURT ORDERS THAT:

A.       The Application

1.The second and third-named applicants pay 80% of the respondents' costs to be taxed.

B.       The Cross-Claim

1.The second and third cross-respondents pay 80% of the cross-claimant's costs to be taxed.

NOTE:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT )
OF AUSTRALIA  )
WESTERN AUSTRALIA                )          No. WAG 32 of 1994
DISTRICT REGISTRY  )
GENERAL DIVISION  )

B E T W E E N :  VIEWSAIL PTY LTD, VINCENT KENNETH HYDE and JEFFERSON FRANCIS HYDE

Applicants
  - and -

JAVEL HOLDINGS PTY LTD

First Respondent
  - and -

ROBERT ANGELO ARRIGONI, SIN JEN HWANG, ABDULLAH MOHAMED NOOR, WAYNE V. TANG, ABANG NOORDIN ZAINUDDIN and ANTHONY SAY

Second Respondents
  - and -

JAVEL HOLDINGS PTY LTD

Cross Claimant
  - and -

VIEWSAIL PTY LTD

First Cross-Respondent
  - and -

VINCENT KENNETH HYDE

Second Cross-Respondent
  - and -

JEFFERSON FRANCIS HYDE

Third Cross-Respondent

CORAM:      CARR J.
PLACE:        PERTH
DATE:           12 APRIL 1996

SUPPLEMENTARY JUDGMENT

In this matter judgment was given on 29 February 1996.  For reasons which I then published, I made orders dismissing the application.  In respect of the first respondent's cross-claim, I ordered that the second and third cross-respondents (the second and third named applicants) pay to the cross-claimant (the first respondent) the sum of $233,625.71 together with interest calculated from 28 February 1994.  At the request of the parties I reserved the question of costs of the application and cross-claim and gave directions for the filing of submissions.  Those submissions have now been filed. 

In respect of the claim, the second and third named applicants (to whom I shall refer as "the applicants") submit that the respondents' conduct in relation to the matters of giving discovery and inspection of documents should be reflected in any award of costs.  The applicants say that the respondents' conduct with respect to discovery lengthened the course of the trial and made it significantly more expensive for the applicants to conduct their case.  I was referred to attempts on the applicants' part to obtain discovery from the respondents and interlocutory orders which I made in that regard.  The Court record shows that the hearing of this matter was listed for 10 April 1995.  As late as 31 March 1995 I heard a motion on behalf of the applicants for further and better discovery of a considerable number of documents.  The respondents do not deny the applicants' complaint that the respondents did not provide discovery, until about five days before the trial, of some 120 boxes of documents.  Nor was there any dispute that inspection of those documents was given from 5 April 1995 onwards and that there was no adequate list identifying the documents in the boxes.  I was also referred to efforts to obtain discovery which commenced as early as 22 December 1994.

I was referred further to documents which were produced by the respondents at trial but which had not been previously discovered.  In particular I was referred to what was known as "the Ferrier Hodgson Report" which became Exhibit 11 in the proceedings.

The respondents rely first on the proposition that costs should follow the event.  Secondly, they point to the fact that the matter of turnover of the Business was hotly contested by the applicants until well into the hearing of the case.  Thirdly the respondents say that the applicants themselves were remiss with regard to discovery and did not provide their expert evidence in accordance with orders made prior to trial.  Finally, the respondents refer to the time, which they say was spent unnecessarily, and arose out of amendments made by the applicants to their statement of claim on 4 April 1995 within a week of the hearing commencing.

In relation to the cross-claim, the applicants say that the cross-claimant should be ordered to pay the costs of the cross-claim or, in the alternative, there should be a reduction in any costs order made against the applicants as cross-respondents in the cross-claim.  The applicants say that in the main they did not dispute the quantum of the cross-claim as being in the vicinity of $216,000.  They say that when the cross-claimant filed its expert's statement, this showed that the cross-claim was in the order of $2,540,000.  This position was maintained until the closing stages of the trial when the claim was reduced first to $555,042.84 and then, finally, to $233,625.71 being the amount for which the cross-claimant obtained judgment.  The applicants say that they pursued documentation from the cross-claimant relating to these matters by attempting to obtain discovery and subpoenaing documentation from the bankers to both the cross-claimant and Mr Hwang, one of the second respondents. 

In Hughes v. Western Australian Cricket Association (Inc) (1986) 8 ATPR 40-748 at p.48136 Toohey J. conveniently set out three propositions as follows:

"1.Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order ...

2.Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that it bear the expense of litigating that portion upon which it has failed ...

3.The 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 of law ...".

In Dodds Family Investments Pty Ltd v. Lane Industries Pty Ltd (1993) 26 IPR 261 (at pp.271-272) the Full Court of this Court observed:

"The propositions enunciated in that case [Toohey J's decision in Hughes v. Western Australian Cricket Association (Inc)] are subject to the further consideration that justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case - [citing Cretazzo's case].  In Trade Practices Commission v. Nicholas Enterprises Pty Ltd (1979) 42 FLR 213, Fisher J. regarded the discretion to apportion costs as one to be exercised only in the most exceptional circumstances. Nevertheless he accepted that where a considerable part of the trial is taken up in determining issues upon which a party fails, it is a proper exercise of the discretion to reduce the costs allowed to that party. Generally speaking, and notwithstanding the considerations referred to by Toohey J. and the other authorities mentioned above, the demands of the community for greater economy and efficiency in the conduct of litigation may properly be reflected in a qualification of the presumption that a successful party is entitled to all its costs."

This is not a case where a considerable part of the trial was taken up in determining issues upon which the applicants failed.  However, I acknowledge that, as the applicants claim, there was a very substantial reduction in the cross-claim from the amount which was claimed when the hearing commenced to the sum claimed shortly before the hearing finished.  I take that into account.

Similarly, in relation to both the claim and the cross-claim I formed the impression that the respondents, to a far greater extent than in the case of the applicants, did not comply with their obligations to give discovery and inspection of documents in a timely manner.  On two occasions, in the context of the applicants' motions for discovery I made orders that the respondents pay the applicants' costs of those motions.  As Wilcox J. observed in Lewis v. Cummings (unreported, 29 May 1992, No. 334/1992 - appeal dismissed: Cummings v. Lewis (1993) 113 ALR 285) it may be a mistake to dissect too much and one needs to make a broad judgment as to what is reasonable in the whole of the circumstances.

In my view, it would be reasonable to reflect the respondents' conduct with regard to discovery and inspection by making a reduction in the costs which they will recover in the claim.  Insofar as the matters of default on the applicants' part, of which the respondents complain, resulted in increased costs for the respondents, those will be recoverable on taxation in any event.  Rather than make an order in favour of the applicants for costs unnecessarily incurred and a proportionate reduction in the costs to be recovered by the respondents, I consider that it would be appropriate to reduce the costs to be recovered by the respondents by ordering that the applicants pay 80% of those costs.
In relation to the cross-claim, the cross-claimant says that no evidence was led by the cross-respondents in respect of the cross-claim whether in its original amount or as reduced.  The cross-claimant also says that its expert was not examined in respect of the cross-claim and no expert's report was prepared by the applicants in respect of the cross-claim. 

Nevertheless, I must take into account the very significant reduction which was made, very late in the piece, in the cross-claim.  In my view, it would also be appropriate to make an order that the second and third cross-respondents pay 80% of the cross-claimant's costs in respect of the cross-claim.  There will be orders accordingly.

I certify that this and the preceding six
  (6) pages are a true copy of the Reasons for
  Judgment of Justice Carr.

Associate:

Date:   12 April 1996

Counsel for the Applicant:                 Mr G.E.Taylor
Solicitors for the Applicant:               Messrs Taylor Smart

Counsel for the Respondent:             Mr D.R. Clyne
Solicitors for the Respondent:           Messrs Mallal & Co

Dates of Hearing:                   April 10, 11, 12, 19, 20, October 3, 4, 30, 31,
  November 17, 23, December 12, 13, 14, 1995
Date of Judgment:                 29 February 1996