Warren Mitchell Pty Ltd (ACN 009 194 638) v Australian Maritime Officers Union, the Australian Institute of Marine and Power Engineers, the Maritime Union of Australia and Ted Boronovskis
[1995] IRCA 267
•02 June 1995
COSTS - Action under s.45D of Trade Practices Act - Application dismissed - Application by successful respondent for costs orders - Court's power to order costs - Relevant principles - Improper conduct by two respondents - Whether remaining respondents misconducted themselves in connection with litigation - Order made in favour of two respondents.
Trade Practices Act 1974, s.45D
Industrial Relations Act 1988, s.347
Rules of the Industrial Relations Court Order 62
WARREN MITCHELL PTY LTD (A.C.N. 009 194 638) v. AUSTRALIAN MARITIME OFFICERS UNION, THE AUSTRALIAN INSTITUTE OF MARINE & POWER ENGINEERS, THE MARITIME UNION OF AUSTRALIA AND TED BORONOVSKIS
No. WI 101 of 1994
CORAM: WILCOX CJ
PLACE: SYDNEY (Heard in Perth)
DATE: 2 JUNE 1995
IN THE INDUSTRIAL RELATIONS COURT)
OF AUSTRALIA ) No. WI 101 of 1994
NEW SOUTH WALES DISTRICT REGISTRY)
BETWEEN: WARREN MITCHELL PTY LTD A.C.N. 009 194 638
Applicant
AND:AUSTRALIAN MARITIME OFFICERS UNION
First Respondent
THE AUSTRALIAN INSTITUTE OF MARINE AND POWER ENGINEERS
Second Respondent
THE MARITIME UNION OF AUSTRALIA
Third Respondent
and
TED BORONOVSKIS
Fourth Respondent
CORAM: WILCOX CJ
PLACE: SYDNEY (Heard in Perth)
DATE: 2 JUNE 1995
MINUTES OF ORDER
THE COURT ORDERS THAT:
The application for an order for costs in favour of the first and fourth respondents be dismissed.
The applicant, Warren Mitchell Pty Ltd, pay to each of the second and third respondents, The Australian Institute of Marine and Power Engineers and the Maritime Union of Australia, the costs incurred by them in connection with the proceeding.
Failing agreement between the applicant and the relevant respondent as to the amount of the costs ordered to be paid to that respondent pursuant to order 2, the Registrar determine that amount in accordance with the procedure set out in rule 42 of Order 62 of the Federal Court Rules.
The operation of order 2 be stayed until after determination of the appeal filed by the applicant against the order made by the Court on 6 December 1994.
Note:Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS COURT)
OF AUSTRALIA ) No. WI 101 of 1994
NEW SOUTH WALES DISTRICT REGISTRY)
BETWEEN: WARREN MITCHELL PTY LTD A.C.N. 009 194 638
Applicant
AND:AUSTRALIAN MARITIME OFFICERS UNION
First Respondent
THE AUSTRALIAN INSTITUTE OF MARINE AND POWER ENGINEERS
Second Respondent
THE MARITIME UNION OF
AUSTRALIA
Third Respondent
and
TED BORONOVSKIS
Fourth Respondent
CORAM: WILCOX CJ
PLACE: SYDNEY (Heard in Perth)
DATE: 2 JUNE 1995
SUPPLEMENTARY REASONS FOR JUDGMENT
WILCOX CJ: I delivered judgment in this matter on 8 December 1994, ordering that the application be dismissed. Subsequently, the third respondent, the Maritime Union of Australia ("MUA") applied for an order that the applicant pay its costs of the action. I directed that this application be dealt with on the basis of written submissions and that MUA's written submissions be served on all other parties. Perhaps unsurprisingly, the remaining respondents then applied for orders that their costs, also, be paid by the applicant. They advanced their reasons in written submissions. The applicant has responded to all the respondents' submissions. I have considered all the submissions received.
The Industrial Relations Court has power to make an order concerning costs: see Canceri v Taylor (1994) 123 ALR 667. The exercise of this power is limited by s.347 of the Industrial Relations Act 1988 which provides that a "party to a proceeding (including an appeal) in a matter arising under this Act" shall not be ordered to pay costs incurred by any other party to the proceeding except in certain circumstances. However, the proceeding determined on 8 December 1994 was not a proceeding in a matter arising under the Industrial Relations Act. The relevant matter arose under s.45D of the Trade Practices Act 1974. So s.347 does not apply. There is no statutory limitation on the exercise of the Court's discretion.
Although the Court has a discretion about costs, it has long been understood that the discretion is not unfettered; the exercise of discretion must be guided by principle. The classical statement of principle is that of Atkin L.J. in Ritter v Godfrey [1920] 2 KB 47 at 60:
"In the case of a wholly successful defendant, in my opinion the judge must give the defendant his costs unless there is evidence that the defendant (1.) brought about the litigation, or (2.) has done something connected with the institution or the conduct of the suit calculated to occasion unnecessary litigation and expense; or (3.) has done some wrongful act in the course of the transaction of which the plaintiff complains."
Atkin L.J. went on to explain that the first principle imported something more than conduct that the plaintiff believed gave rise to a cause of action. For the first exception to apply, the relevant conduct must be "unreasonable or improper" and "conduct other than that which constitutes the alleged cause of action".
Atkin L.J. made clear that the second exception includes "improper conduct in or connected with the litigation calculated to defeat or delay justice". In recent times in Australia, courts have applied this exception more freely than in the circumstances suggested by Atkin L.J. Courts often deprive of their costs, or at least part of their costs, successful parties who have so conducted litigation as to throw unnecessary or unreasonable burdens on the other party, whether or not this conduct could be stigmatised as "improper" and whatever its underlying motive. For example, parties are often deprived of costs, or part of their costs, where they put the opposing party to proof of facts that are not reasonably controvertible or raise issues, or put arguments, that have no substantial prospect of success. By this means, courts attempt to cause parties carefully to analyse cases and to limit themselves to essential issues and arguable points. Such a course is desirable, both in the interests of the parties themselves and for maximum court efficiencies.
Applying these principles, it is immediately apparent that no order for costs should be made in favour of the first and fourth respondents. At the relevant time, the fourth respondent, Ted Boronovskis was employed by the Maritime Services Guild, a constituent, after amalgamation, of the first respondent, Australian Maritime Officers Union ("AMOU"). He represented the Guild in the events the subject of the proceeding. His conduct was the Guild's conduct. The Guild, and therefore now AMOU, is burdened with any impropriety involved in that conduct. And there was impropriety, an impropriety that almost certainly played a major part in the applicant's decision to institute the proceeding. I refer to Mr Boronovskis' action in publishing in the "Guild Log" of December 1991 the item headed "The cowboys are coming out of the woodwork"; an item that Mr Boronovskis admitted to be "a piece of hype that is not true but reflects a perception in the industry". It was fiction written by Mr Boronovskis to advance his candidature for the post of branch secretary, with no regard for its effect on anyone else.
No similar impropriety attaches to the conduct of the second and third respondents. The solicitors for the applicant do not submit otherwise. But they complain of the way in which these respondents conducted the litigation, pointing to the comparative brevity of the witness statements filed on behalf of these respondents and their failure to refer to the "Guild Log" article. There is nothing in this complaint. Providing that statements are comprehensive, brevity is to be commended, not criticised. There was no need for either Mr Olsen or Mr Pritchard to deal with the "Guild Log" article in chief. Neither of them was concerned with the publication of the article. The publication of the article formed no part of their employers' cases. The subject was a matter to be raised with them in cross examination, if at all.
A more significant criticism made by the applicant's solicitors concerns the respondents' responses to a Notice to Admit Facts and Documents served on them by the applicant. The applicant's submissions include a summary of the replies given by each respondent to that notice. I have examined this with some care, in order to determine whether there were allegations that the second and third respondents ought to have admitted. Of course, this question has to be addressed by reference to the circumstances applying when the Notice was served, and having regard to the likely information of the particular respondent. Just because a fact is ultimately proved at the hearing, it does not follow that a particular respondent acted unreasonably in declining to admit it before the hearing. The respondent may not have had the information necessary for it to determine whether the allegation was true or false.
When I consider the answers in this way, I am left unpersuaded that either the second or third respondent unreasonably failed to make appropriate admissions. Certainly, some matters asserted in the Notice to Admit were ultimately proved; many were not. But I do not think that any of the matters ultimately proved were so clearly correct, to the relevant respondent's knowledge, as to make unreasonable its refusal to admit.
The solicitors for the applicant contend that the proceeding was instituted in the public interest and that institution was "well and truly justified". There is no doubt that s.45D proceedings have a public interest element. The public interest is relevant in determining what relief should be granted to a successful applicant. But there is no public interest in the institution of ill-founded proceedings; and whatever the truth of the events of 5 and 6 September 1991, the applicant failed to demonstrate that they involved a contravention of s.45D of the Trade Practices Act. As to whether the institution of the proceeding was justified, this can only be determined by reference to the result. If the matter of justification is to be addressed retrospectively, it must be said, on the basis of the evidence, that the institution of the process was not justified. Suspicion and hardship were not enough.
In my opinion there is no element that serves to disqualify the second and third respondents from obtaining orders for costs or to justify a reduction in the recoverable portion of their costs. I propose to make an order in favour of each of these respondents. As the rules of the Industrial Relations Court do not include a costs scale, I propose to order that, failing agreement between the parties as to the question of costs, the costs be determined by the Registrar in accordance with the procedure set out in rule 42 of Order 62 of the Federal Court Rules: see Order 62 Rule 1(c) of the Industrial Relations Court Rules.
Two other matters should be mentioned. First, the second respondent seeks a special order concerning a payment made by it to a firm of accountants, Bird Cameron, for an expert report relating to the applicant's claims. I do not think it appropriate that I deal with this claim. It is a matter that goes to the quantum of costs; it is better left to the Registrar. Second, I am aware that the applicant has filed a Notice of Appeal against my decision. There may be some delay in arranging a hearing of that appeal, not through any fault of the applicant or any other party but because of problems about the availability of Judges. I think it would be unfair to allow the applicant to be prejudiced by that delay; as, for example, by the costs orders being enforced by winding up proceedings before the appeal can be heard. Accordingly, I propose to add an order to the formal orders postponing their operation until after determination of the appeal.
I certify that this and the preceding seven (7) pages are a true copy of the reasons for judgment of his Honour Chief Justice Wilcox.
Associate:
Date: 2 June 1995
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