Nixon v Philip Morris (Australia) Ltd [1999] FCA 1429 (20 October 1999)

Last Updated: 21 October 1999

CATEGORY: NO QUESTION OF PRINCIPLE

FEDERAL COURT OF AUSTRALIA

Nixon v Philip Morris (Australia) Ltd [1999] FCA 1429

PRACTICE AND PROCEDURE - Costs of applications for summary dismissal of proceeding -Numerous issues - Mixed fortunes of parties - Apportionment of costs.

MICHAEL CHRISTOPHER NIXON, ALEX TALAY, ROBERT MILNE, VICTOR BRUCE WILLIAMS, SANDRA SHEPARD and GREGORY DURKIN (for themselves and as representing the persons referred to in paragraph 1 of the Statement of Claim)

v

PHILIP MORRIS (AUSTRALIA) LTD and PHILIP MORRIS LTD, W D & H O WILLS HOLDINGS LTD and W D & H O WILLS (AUSTRALIA) LTD and ROTHMANS HOLDINGS LTD and ROTHMANS OF PALL MALL (AUSTRALIA) LTD

N326 of 1999

WILCOX J

SYDNEY

20 OCTOBER 1999

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N326 of 1999

BETWEEN:	MICHAEL CHRISTOPHER NIXON, ALEX TALAY, ROBERT MILNE, VICTOR BRUCE WILLIAMS, SANDRA SHEPHARD and GREGORY DURKIN (for themselves and as representing the persons referred to in paragraph 1 of the Statement of Claim) Applicants
AND:	PHILIP MORRIS (AUSTRALIA) LTD and PHILIP MORRIS LTD First Respondent W D & H O WILLS HOLDINGS LTD and W D & H O WILLS (AUSTRALIA) LTD Second Respondent And ROTHMANS HOLDINGS LTD and ROTHMANS OF PALL MALL (AUSTRALIA) LTD Third Respondent
JUDGE:	WILCOX J
DATE OF ORDER:	20 OCTOBER 1999
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The respondents, Philip Morris (Australia) Ltd, Philip Morris Ltd, W D & H O Wills Holdings Ltd, W D & H O Wills (Australia) Ltd, Rothmans Holdings Ltd and Rothmans of Pall Mall (Australia) Ltd, pay to the applicants, Michael Christopher Nixon, Alex Taley, Robert Milne, Victor Bruce Williams, Sandra Shephard and Gregory Durkin, one half of the costs incurred by the applicants in connection with the Notices of Motion filed by the respondents on 2 July 1999.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N326 of 1999
BETWEEN:	MICHAEL CHRISTOPHER NIXON, ALEX TALAY, ROBERT MILNE, VICTOR BRUCE WILLIAMS, SANDRA SHEPHARD and GREGORY DURKIN (for themselves and as representing the persons referred to in paragraph 1 of the Statement of Claim) Applicants
AND:	PHILIP MORRIS (AUSTRALIA) LTD and PHILIP MORRIS LTD First Respondent W D & H O WILLS HOLDINGS LTD and W D & H O WILLS (AUSTRALIA) LTD Second Respondent And ROTHMANS HOLDINGS LTD and ROTHMANS OF PALL MALL (AUSTRALIA) LTD Third Respondent

JUDGE:	WILCOX J
DATE:	20 OCTOBER 1999
PLACE:	SYDNEY

REASONS FOR JUDGMENT ON COSTS

1 WILCOX J: On 13 August 1999 I made orders in response to Notices of Motion filed on 2 July 1999 by each of the respondents to this proceeding. Those orders included an order striking out the Amended Application and Amended Statement of Claim filed on 1 July 1999. On 13 August I reserved the matter of costs of the motions and invited the parties to indicate whether they sought costs and, if so, to make written submissions in support of their application. Perhaps predictably, all groups of parties applied for the costs of the motions. They all submitted written submissions, which I have read and considered.

2 The respondents' submissions emphasise the form of the orders made on 13 August 1999. They also point out that the major reason for the brevity of the oral argument (on 26 July 1999, the first day of the hearing of the motions) concerning the second negligence claim and the deficiencies of the existing pleadings was that their arguments on these matters had been developed in written submissions considered by me before the oral argument began. At the commencement of the hearing on 26 July, I put the substance of these criticisms to counsel for the applicants. After only brief discussion, counsel accepted the validity of the criticisms and sought an opportunity to reformulate the pleadings. The respondents submit, in effect, that notwithstanding the economy in time, they had a major success in relation to these issues. I accept that submission.

3 The submission of the applicants, on the other hand, focuses on the events of the second day of the hearing. The applicants' submission identifies seven issues unsuccessfully raised by the respondents. Each of these were substantial issues, extensively debated in the parties' written submissions. The oral argument on these issues occupied virtually the whole of the second day of the hearing, 27 July. The only issue argued on that day on which the applicants were unsuccessful was the question whether exemplary damages are available for a contravention of s52 of the Trade Practices Act 1974. Argument on that point was quite brief.

4 It seems to me clearly inappropriate that any group of parties receive the whole of the costs they incurred in relation to the motions; fortunes were mixed. On the one hand, the respondents succeeded in obtaining orders striking out the Further Amended Application and Further Amended Statement of Claim; on the other hand, they were unsuccessful in relation to many arguments, most of which went beyond the form of the current pleadings and to the validity of the proceeding itself.

5 A simplistic approach might be to score the motions like a boxing match; to say the respondents won round one (26 July), the applicants won round two (27 July), to offset one round against the other and to make no order as to costs. The difficulty with that approach, however, is that it ignores the work put into the preparation of affidavits and written submissions. That work was considerable. The aggregated costs incurred by the parties, in connection with the motions, before the commencement of the hearing on 26 July must have been at least as great as those incurred on 26 and 27 July. The proportion of costs incurred in relation to a particular issue, in preparing the affidavits and written submissions, is not necessarily reflected in the hearing time devoted to that issue. It was possible to deal in one day with all the matters debated on 27 July only because of their extensive treatment in the written submissions. Also, in considering the break up of hearing time, I have to remember that the Court adjourned for the day at 1pm on 26 July.

6 Where there is success and failure on each side in relation to numerous issues, determination of the appropriate costs order can only be an exercise in overall judgment. Considering the matter as a whole, bearing in mind the affidavit material, the contents of the written submissions and the course of the hearing, I am of the opinion that the work done by the parties in connection with issues on which the applicants succeeded would have amounted to about three times the work performed on issues on which the respondents succeeded. Upon this basis, after making the necessary offset, it is appropriate to order that the respondents pay to the applicants one-half of the costs incurred by them in connection with the motions. I will so order.

7 The costs of the directions hearing of 17 June 1999, mentioned in the applicants' submissions, are not to be included in the assessment of these costs. Like the costs of all directions hearings (in the absence of a contrary order), they will be costs of the successful parties in the principal proceeding.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox.

Associate:

Dated: 20 October 1999

Solicitors for the Applicant:	Slater & Gordon
Solicitors for the First Respondent:	Arthur Robinson & Hedderwicks
Solicitors for the Second Respondent:	Mallesons Stephen & Jaques
Solicitors for the Third Respondent:	Clayton Utz
Date of Judgment:	20 October 1999