Re J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers - Western Australian Branch and Building Trades Association of Unions of Western Australia (Association of Workers) [1993] FCA 42 (19 February 1993)

FEDERAL COURT OF AUSTRALIA

Re: J-CORP PTY LTD
And: AUSTRALIAN BUILDERS LABOURERS FEDERATED UNION OF WORKERS - WESTERN
AUSTRALIAN BRANCH and BUILDING TRADES ASSOCIATION OF UNIONS OF WESTERN
AUSTRALIA (ASSOCIATION OF WORKERS)
No. WA G102 of 1992
FED No. 70
Number of pages - 5
Costs

COURT

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
French J.(1)

CATCHWORDS

Costs - apportionment of costs - party unsuccessful on some issues - principles governing apportionment - case management considerations - Bullock or Sanderson orders - indemnity costs.

Federal Court of Australia Act 1976 s.43(2)

Hughes v. Western Australian Cricket Association (Inc.) [1986] HCA 72; (1986) ATPR 48,143

Cretazzo v. Lombardi (1975) 13 SASR 4

Trade Practices Commission v. Nicholas Enterprises Pty Ltd (1979) 42 FLR 213

Inn Leisure Industries Pty Ltd v. D.F. McCoy Pty Ltd (No. 2) (1991) 28 FCR 172

Commissioner of Australian Federal Police v. Razzi [1991] FCA 267; (1991) 101 ALR 425

Tetijo Holdings Pty Ltd v. Keeprite Australia Pty Ltd (unrep Fed Ct 3 May 1991 No. WA G55 of 1988)

Fountain Selected Meats (Sales) Pty Ltd v. International Produce Merchants Pty Ltd [1988] FCA 202; (1988) 81 ALR 397.

HEARING

PERTH, 9 February 1993
19:2:1993

Counsel for the Applicant: Mr M. Hotchkin

Solicitors for the Applicant: Corrs Chambers Westgarth

Counsel for the First Respondent: Mr R. Le Miere

Solicitors for the First Respondent: Dwyer Durack

Counsel for the Second Respondent: Mr. W. Matin

Solicitors for the Second Respondent: Dwyer Durack

ORDER

The Court orders that:
1. The first respondent pay half the applicant's costs of the

action.
2. The applicant pay the second respondent's costs of the
application to be taxed to include all costs incurred by the
second respondent except insofar as they are of an unreasonable
amount or have been unreasonably incurred so that, subject to
the above exceptions, the second respondent be completely
indemnified by the applicant for its costs.

Note: Settlement and entry of Orders is dealt with in Order 36 of the Federal Court Rules.
REASONS FOR JUDGMENT
ON RULING AS TO COSTS

DECISION

FRENCH J. On 9 December 1992 a declaration was made in these proceedings, brought by J-Corp Pty Ltd ("J-Corp"), that the Australian Builders Labourers Federated Union of Workers - Western Australian Branch ("BLF") had, on and from 27 July 1992 until 5 August 1992, engaged in conduct in concert with its members and others which hindered or prevented the supply of goods and services by third parties to J-Corp in contravention of s.45D(1)(b) of the Trade Practices Act 1974. Claims for relief against the Building Trades Association of Unions of Western Australia ("BTA") which was also a respondent in the proceedings were dismissed. The question of further relief, including damages, has been stood over for the time being. An appeal is pending on the part of the BLF. J-Corp and the BTA were given liberty to apply by motion for orders as to the costs of the proceedings to date. Motions were filed and argument heard on 9 February 1993.

2. J-Corp seeks an order that the BLF pay its costs of the application to date and that it pay the BTA's costs also. The BLF contends that there should be no order as to costs. It does this on the basis that there were a number of issues on which J-Corp was unsuccessful and that the hearing of evidence in relation to those issues took up a significant proportion of the trial time. The principal finding adverse to the BLF was that the conduct of the picket line established outside the J-Corp premises from 27 July involved a contravention of s.45D of the Act. J-Corp's case, so far as it relied upon events which occurred on 24 July to establish a contravention on that date, failed. The evidence in relation to those events occupied a significant proportion of the hearing time. J-Corp also failed to establish that certain express threats or directions were given to its suppliers in circumstances which could have constituted contraventions of the section.

3. Section 43(2) of the Federal Court of Australia Act 1976 confers upon the Court a general discretion to award costs. It is governed by general principles which were enunciated by Toohey J. in Hughes v. Western Australian Cricket Association (Inc.) [1986] HCA 72; (1986) ATPR 48,143 at 48,136:

1. Ordinarily, costs follow the event and a
successful litigant receives its costs in
the absence of special circumstances
justifying some other order.
2. Where a litigant has succeeded only upon a
portion of its claim, the circumstances
may make it reasonable that it bear the
expense of litigating that portion upon
which it has failed.
3. 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. Issue, in this context, does not
mean a precise issue in the technical
pleading sense, but any disputed question
of fact or law.

Those principles are subject to the qualification that the ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues however doubtful which might be material to the decision of the case - Cretazzo v. Lombardi (1975) 13 SASR 4 at 12. In Trade Practices Commission v. Nicholas Enterprises Pty Ltd (1979) 42 FLR 213, Fisher J. saw the discretion to apportion costs as one to be exercised only in the most exceptional circumstances. On the other hand, his Honour accepted that if a considerable portion of the trial is taken up in determining issues upon which a defendant fails, it is a proper exercise of discretion to reduce the costs allowed to that defendant. In Inn Leisure Industries Pty Ltd v. D.F. McCoy Pty Ltd (No. 2) (1991) 28 FCR 172, I allowed a minor apportionment of costs recoverable by the successful applicant in respect of certain distinct and severable factual issues on which the respondent succeeded. Notwithstanding the principles adverted to by Toohey J. and reinforced by the other authorities to which I have referred, the demands of the community for greater economy and efficiency in the conduct of litigation may have to be reflected in a softening of the presumption that a successful party is entitled to all its costs. I agree with the observation of Wilcox J. in Commissioner of Australian Federal Police v. Razzi [1991] FCA 267; (1991) 101 ALR 425 at 430 where his Honour said, after referring to the importance of the general principle:

"But I do not think that courts should be reluctant to
recognise the existence of exceptional cases. In
these days of extensive court delays and high legal
costs the courts should use all proper means to
encourage parties to consider carefully what matters
they will put in issue in their litigation. If
parties come to realise that they will not necessarily
recover the whole of their costs, even though they
have unsuccessfully raised a discrete issue, they are
likely better to consider whether the raising of that
issue is a justifiable course to take"

4. In this case, the question whether there was a contravention of the section on 24 July is severable from the balance of the case. There were aspects of the evidence in relation to that day that formed part of a necessary background to understanding the events of the following week. Overall however I think that the trial was unnecessarily lengthened by issues on which J-Corp failed and to some degree by its unsuccessful attempt to involve the BTA. Applying the approach adopted by Wilcox J. in Razzi, I think I should make some allowance on that account. Mathematical precision is illusory and any apportionment must be a matter of a impression and discretion. In my opinion, I should proceed on the notional basis that J-Corp's costs should be reduced by one quarter and that it should be obliged to pay one quarter of the BLF's costs. An appropriate order, having regard to that notional apportionment is that the BLF should pay one half of J-Corp's costs of the action. So far as the claim against the BLF in respect of the BTA's costs is concerned, there is, in my opinion, no justification shown for such an order being made.

5. The BTA has moved for indemnity costs. It is not necessary for me now to recite the principles upon which such costs are ordered in the Federal Court. I had occasion to consider them in some detail in Tetijo Holdings Pty Ltd v. Keeprite Australia Pty Ltd (unrep Fed Ct 3 May 1991 No. WA G55 of 1988). In substance such costs may be ordered whenever it appears that an action has been commenced in circumstances where the applicant properly advised should have known it had no chance of success - Fountain Selected Meats (Sales) Pty Ltd v. International Produce Merchants Pty Ltd [1988] FCA 202; (1988) 81 ALR 397. Although there is said to be a presumption in such cases that the action was commenced or continued for some ulterior motive or in wilful disregard of known facts or clearly established law, it is not a necessary condition of the power to award such costs that a collateral purpose or some species of fraud be established. It is sufficient, in my opinion, to enliven the discretion to award such costs that, for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case. The case against the BTA was paper thin. The BTA's name was invoked on a sign associated with the picket and appeared in a newspaper advertisement referred to in the evidence. Two of the union officials involved in the picket had BTA authorisations to inspect premises under the relevant award. But much more than that was necessary to justify proceedings for a contravention of s.45D. In my opinion the order sought by the BTA should be made.