Yamaji, T. v Westpac Banking Corporation

[1993] FCA 622

IN THE FEDERAL COURT OF AUSTRALIA ) No. QG 136 of 1992

QUEENSLAND DISTRICT REGISTRY	1	No. QG 88 of 1993
GENERAL DIVISION	1

BETWEEN: TSUTOMO YAMAJI

First Applicant

AND:  CAYSAND NO. 137 PTY. LTD.

Second Applicant

AND:  WESTPAC BANKING CORPORATION

First Respondent

AND:  CAYSAND NO. 138 PTY. LTD.

Second Respondent

AND:  I S M YUTANI

Third Respondent

MINUTES OF ORDERS

1 3 SEP 19%

JUDGE MAKING ORDER:	Drummond J	FEDERAL COURT OF
DATE OF ORDER:	18 August,	AUSTRALIA
WHERE MADE:	Brisbane	PRINCIPAL
HEGISTAY
THE COURT ORDERS THAT:

ordered under Orders 1 and 2.

The applicants pay the costs of the second and third respondents thrown away as a result of the amendments which the applicants have made to the statement of claim in action QG 136 of 1992 and in action QG 88 of 1993 as a result of leave given on 23 June, 1993 and as a result of the consolidation of action QG 88 of 1993 with QG 136 of 1992, but excluding the costs of today on the motion for consolidation, to be taxed on a party and party basis.

The second and third respondents pay the applicants' costs of today in relation to the motion for consolidation to be taxed on a party and party basis.

The applicants pay the first respondent's costs of today insofar as those costs relate to an argument as to the appropriate basis of taxation of costs thrown away by the amendments and consolidation to be taxed on a party and party basis.

The costs of today insofar as those costs relate to directions are costs in the proceedings.

1.        The applicants pay the costs of the first respondent thrown away as a result of the amendments which the applicants have made to the statement of claim in action QG 136 of 1992 and in action QG 88 of 1993 as a result of leave given on 23 June, 1993 to be taxed on an indemnity basis.

The applicants pay the costs of the first respondent thrown away as a result of the consolidation of action QG 88 of 1993 with QG 136 of 1992 to be taxed on an indemnity basis.

The first respondent has leave to tax the costs

THE COURT DIRECTS THAT:

Action QG 88 of 1993 be consolidated with action QG
136 of 1992.

2.        The applicants have leave to amend the statement of claim in action QG 88 of 1993 by substituting the date 4 June, 1993 for the date 22 December, 1992 in paragraph 3(a) of that statement of claim.

All respondents file and serve their defences and cross-claims, if any, by Wednesday, 15 September,

1993.

The applicants file and serve their reply and defence to the cross-claim, if any, by Friday, 1 October, 1993.

All parties file and serve their verified list of documents by Friday, 22 October, 1993.

Inspection as between all parties be complete by
Friday, 5 November, 1993.

The matter is adjourned for further directions to
9.15 a.m. on Wednesday, 10 November, 1993.

THE COURT. BY CONSENT. DIRECTS THAT:

1. Mr. Yamaji and a representative of the first

   respondent with authority to settle the matter are to attend, with their legal representatives if required, at a mediation conference to be convened by District Registrar Ramsey on a date to be fixed by the District Registrar in consultation with the parties.

   Mr. Yamaji and Mr. Yutani, together with their legal

   representatives if required, are to attend at a separate mediation conference to be convened by District Registrar Ramsey on a date to be fixed by the District Registrar in consultation with the parties to the intent that the two conferences shall be held as close in time as is possible.

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

IN THE FEDERAL COURT OF AUSTRALIA ) No. QG 136 of 1992

9UEENSLAND DISTRICT REGISTRY	1	No. QG 88 of 1993
GENERAL DIVISION	1

BETWEEN: TSUTOMO YAMAJI

First Applicant

AND :  CAYSAND NO. 137 PTY. LTD.

Second Applicant

AND :  WESTPAC BANKING CORPORATION

First Respondent

AND :  CAYSAND NO. 138 PTY. LTD.

Second Respondent

AND :  I S M WTANI

Third Respondent

Coram:	Drummond J
Date
-.	18 August, 1993

Place: Brisbane

EX TEMPORE REASONS FOR JUDGMENT

I have before me an application for consolidation of action QG 88 of 1993 with action QG 136 of 1992.

A preliminary point has been raised by the second and third respondents as to the entitlement 'of the applicants to maintain action QG 88 of 1993 for want of the necessary ministerial consent under ss. 5(3) and (4) of the Trade Practices Act 1974 1CthL. The consents obtained from the Attorney-General are dated 4 June, 1993 and were foxwarded to

the solicitors for the applicants under cover of the
Minister's undated letter of June 1993.

The only consent that is required is consent to relying on conduct at a hearing, in a case in which a claim under S. 82 of the Act is made; where an application is made under S. 87(1) or (lA), it is consent to making an application to the Court in respect of certain conduct that is required.

The conduct in question is identified by reference to the pleadings in QG 136 of 1992. It is, however, exactly

the same conduct that it relied on in QG 88 of 1993. In my view, the Minister has given his consent, sufficient for the purposes of S. 5(3) and ( 4 ) , to the applicants relying on that conduct in both actions and to the applicants making an application to the Court in both actions in respect of the conduct in question. I therefore overrule the preliminary point.

It has been next submitted on behalf of the second and third respondents that the consents of 4 June, 1993 obtained from the Minister are, in effect, not sufficient to authorise the applicants to maintain the case set out in the amended statement of claim delivered on 30 June in action QG

136 of 1992. The argument is founded on two bases: firstly,

that the Minister was not provided with the defence and counter-claim of the second and third respondents in the action, nor was he provided with the defence in the Cairns

District Court action filed there by the persons who are the second and third respondents in action QG 136 of 1992. A separate foundation for the argument is said to be that the Minister has not exercised an independent judgment but has simply accepted the assertions of the solicitor for the applicants as to what is the relevant conduct for which consent is sought.

It seems to me that the objections are misconceived. The Minister's duty under S. 5(3) and (4) is not to conduct an investigation designed to ascertain the true position. What the Minister is required to do, insofar as S. 5(3) is concerned, is to consider the conduct upon which the applicant in an action or intended action proposes to rely or, in circumstances in which S. 5(4) is relevant, the conduct in respect of which an applicant or intending applicant proposes to make an application. This, in my view, involves the Minister considering what is the relevant conduct alleged by the applicant or intending applicant to have occurred and to make his decision on that basis. It does not seem to me to be

a section which requires the Minister to go beyond that.

On the material before me, I am. satisfied that the Minister was concerned to have adequately identified the precise conduct that the applicants proposed to make the subject of their complaint. The inquiries made were to that end. I do not think there is any substance in the notion that because the Minister received information in the form that came in from the solicitor for the applicants, he somehow or

other abdicated his role under the section. I think that all that occurred was that he took steps to ensure that he adequately understood the nature of the allegations that were being made and which required him to decide whether or not to give his consent under S. 5(3) and (4).

I will order that action QG 88 of 1993 be consolidated with action QG 136 of 1993.

Westpac Banking Corporation ("Westpac"), the first respondent in both actions that are before me, QG 136 of 1992 and QG 88 of 1993, seeks an order for costs thrown away by the amendments made by the applicants to the statement of claim in action QG 136 of 1992 and thrown away by consolidation of the two actions, such costs to be taxed on an indemnity basis.

The history of this litigation, which is quite

tortuous due to the approach taken by the applicants, is set

out, to some extent, in my reasons of 4 June, 1993 and, more	fully perhaps, in paragraph 4 of the outline of argument
handed up to me by counsel appearing for the first respondent
this morning. In accordance with directions given by me on 23 June last, the applicants filed an amended statement of claim in action QG 136 of 1992 that covers all the allegations which the applicants wish to run in both QG 136 of 1992 and QG 88 of

The jurisdiction to award costs on other than a party and party basis is well-established and the principles are conveniently collected in Fountain Selected Meats Sales Ptv. Ltd. v International Produce Merchants Ptv. Ltd. (1988) 81 A.L.R. 397, a judgment by Woodward J. The passage that, in my view, is of direct application to the circumstances of this case appears at page 401, where his Honour said:

"1 believe that it is appropriate to consider

awarding solicitor and client or indemnity costs whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success."

On 20 October, 1992, soon after the first action was commenced, the solicitors for Westpac wrote to the solicitors for the applicant setting out, in considerable detail, their reasons for asserting on behalf of their client that there was no substance in the attack contained in the statement of claim delivered in the action on the loan 2 agreement and that the basis upon which the loan 1 agreement was attacked was also

without substance. Particulars were sought by Westpac on 20

October and they were supplied on 4 December, 1992. Far from making clear that the applicants did not persist with an attack upon the loan 2 agreement and far from making clear the basis now relied upon for the attack upon the loan 1 agreement, the particulars, in my view, served only to obfuscate the applicantsr position rather than clarify it. It was not until the amended pleading, the subject of my recent direction, was delivered that the true position which the

applicants wish to adopt has been made clear. That position is one in which there is no longer any attack made on the loan 2 agreement, and one in which the attack initially mounted on the loan 1 agreement has been abandoned and the attack now made on the loan 1 agreement is formulated on an entirely different basis.

This seems to me to be a clear case in which, if the matter had been properly examined prior to commencement of the action or, indeed, after the first respondent's solicitors sent their letter of 20 October, 1992, the very considerable build up of legal costs that has occurred since that time would have been avoided. In my view, the present situation falls directly within the statement of principle from the Fountain Selected Meats case to which I have referred.

I do not think there is any basis for reserving the
costs question that is now before me to the trial judge. It

seems to me to be a wholly pointless exercise to do that since

the trial judge will not be concerned with the history of the	litigation that is the foundation for the claim now made in
respect of costs. I therefore propose to order that the applicants pay the costs of the first respqndent thrown away as a result of the amendments that have been made to the statement of claim in action QG 136 of 1992 and action QG 88 of 1993.

I do not consider that an order for the taxation of costs on an indemnity basis necessarily requires an element of penalty or punishment. I think that the passage I have quoted from Woodward J, which does not in my view involve any notion that an indemnity costs order should only be made if a penalty is appropriate, is sufficient to indicate that an indemnity basis of taxation is appropriate here. I therefore propose to order that the taxation be on an indemnity basis in accordance with the form of the order made by Woodward J in the Fountain Selected Meats case. I make similar orders in favour of the first respondent in respect of costs thrown away as a result of consolidation.

I do not think that the fact that there is an area of factual contention which was from the outset, and will remain, a live one justifies denying the application for an immediate order for taxation. It seems to me that what I am dealing with is a discrete episode in the litigation which has involved an examination of the way the applicants have chosen to conduct the litigation up to the time of delivery of the

most recent amended statement of claim. That episode is now	closed. I therefore think it is appropriate to give leave to
the first respondent to tax the costs which I have ordered to be paid.
The second and third respondents seek costs on an indemnity basis in respect of costs thrown away as a result of the leave to amend which I gave on 23 June and the order for

consolidation that has now been made. It is only the basis for taxation of those costs which is opposed. The second and third respondents seek taxation on an indemnity basis similar to the order I have made in relation to the first respondent, while the applicants concede no more than taxation on a party and party basis as appropriate. The grounds upon which the wider taxation is sought by these respondents is set out in paragraph 4B of the outline of counsel for those respondents, which I will mark exhibit "C".

It seems to me that the way the action has proceeded on the applicant's side is less than impressive. The various firms of solicitors who have acted for the applicants have in some respects not given the attention that should have been given to the expeditious progress of the litigation. However, the fact remains that as between the applicants and these respondents, the applicants have always run essentially the same case, in sharp contrast to the position that has obtained as between the applicants and the first respondents.

I do not think the circumstances are sufficient to justify my making a direction that the second and third respondents should have their costs thrown away as a result of the amendment and as a result of the consolidation of the two actions on anything other than a party and party basis. I will make an order in those terms but will exempt from that order the costs of today insofar as they arise out of the

opposition by the second and third respondents to the

application for consolidation.

I certify that the preceding eight

pages are a true copy of the
reasons for judgment herein of the

Honourable Mr. Justice Drummond.

Associate: 1	L///--
Date:	18 August, 1993