Jurg Bollag & Anor v The Attorney-General of the Commonwealth & Ors (No. 2) [1997] FCA 1259 (30 October 1997)

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG446 of 1997

BETWEEN:	JURG BOLLAG First Applicant ALAN BOND Second Applicant
AND:	THE ATTORNEY-GENERAL OF THE COMMONWEALTH OF AUSTRALIA First Respondent THE DIRECTOR OF PUBLIC PROSECUTIONS FOR THE COMMONWEALTH OF AUSTRALIA Second Respondent THE COMMISSIONER, AUSTRALIAN FEDERAL POLICE Third Respondent
JUDGE:	MERKEL j
DATE OF ORDER:	30 OCTOBER 1997
WHERE MADE:	MELBOURNE

REASONS FOR JUDGMENT

I delivered my reasons for judgment on the substantive issues in this matter this morning. The orders that I made were that the application be dismissed and that the applicants pay the respondents' costs of and incidental to the application. At the time I delivered my judgment, no application was made on behalf of the respondents for any special order as to costs. The reason given by senior counsel for no such application having been made was that the respondents had not had an opportunity to consider the findings that I made in my judgment. Having had that opportunity, senior counsel for the respondents has now applied to me for an order for indemnity costs on the ground that I have made a finding that, in substance, the proceeding, and in particular the timing and circumstances in which it was brought, amounted to a misuse and abuse of the litigation process. No point is taken by counsel for the applicants that it is not open to me to vacate my costs order and consider this application. In the special circumstances I have outlined, I therefore do so.

The principles relevant to the disposition of the application for indemnity costs are those set out in Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 141 ALR 727 at 732-733. The relevant principles were stated as follows:

"1. Section 43 of the Federal Court Act confers an absolute and unfettered discretion on the court to make orders as to costs but the discretion must be exercised judicially.

2. In order to exercise the discretion judicially the following principles have been accepted by the court as applicable:

(a) the court ought not to depart from the rule that costs be ordered on a party and party basis unless the circumstances of the case warrant the court in departing from the usual course;

(b) the circumstances which may warrant departure from the usual course arise as and when the justice of the case so requires or where there may be some special or unusual feature in the case to justify the court in departing from the usual course;

(c) while the circumstances in cases in which indemnity costs have been ordered offer a guide, the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for costs other than on a party and party basis."

In the present matter, in concluding that it was appropriate for the Court to refuse to exercise its discretion in favour of the applicants, I made the following findings (at 27) in respect of the question of delay:

"Delay of itself has the propensity to cause prejudice to the investigation. However there is another harm caused by the applicants' conduct in the present case. It is harmful to the administration of justice for applicants to challenge the criminal investigation process in a manner that both fragments and dislocates it by raising grounds as and when it suits them without offering any explanation as to why the grounds were not raised in earlier proceedings for substantially the same relief. The special circumstances of the present case are such that some explanation was obviously called for as to why this proceeding and the claims in it were not brought earlier, but none was forthcoming.

Absent any explanation to the contrary, I infer that the applicants elected not to raise these grounds in their earlier proceedings. In such circumstances it is a serious misuse and abuse of the litigation process to contest proceedings in that manner."

In Re Wilcox the Court ordered indemnity costs. Two grounds were put forward for that order in that case. The first was that the proceedings were misconceived. The Court did not act on that ground. In the present case, I also would decline to act on that ground.

The second ground in Re Wilcox related to the timing of the application and the circumstances in which it was made. In Re Wilcox it was submitted by the Australian Competition and Consumer Commission that those matters constituted an abuse of process which had, in other cases, been accepted as a circumstance warranting an order for indemnity costs. In my reasons for judgment, I set out the facts and circumstances which led me to the conclusion that the applicants have misused and abused the litigation process by contesting the proceedings in the manner that they have; not because the proceeding was brought, but by reason of when it was brought.

The reasons for judgment on discretionary issues which I set out in my decision, and in particular the passage quoted above, demonstrate that this is a case where there are special or unusual features, which justify a departure from the usual course and that the justice of the case requires that departure by an order for indemnity costs. I will therefore make the following orders:

1. Paragraph 2 of the orders made by me this morning is vacated.

2. In substitution for that order the following order is made: The applicants pay the respondents' costs on the basis that such costs are to include all costs excepting insofar as they are of an unreasonable amount or were unreasonably incurred, so that, subject to such exceptions, the respondents will be completely indemnified by the applicants for their costs.

I certify that this and the preceding three (3) pages are a true copy of the revised Reasons for Judgment herein of the Honourable Justice Merkel

Associate:

Dated: 30 October 1997

Counsel for the Applicants:	Mr A J Howard QC with Mr O P Holdenson
Solicitor for the Applicants:	Galbally, Fraser & Rolfe
Counsel for the Respondents:	Mr M S Weinberg QC with Mr P Hanks
Solicitor for the Respondents:	Australian Government Solicitor
Date of Hearing:	20 October 1997
Date of Judgment:	20 October 1997