Sydney X-Ray Pty Ltd v Health Insurance Commission [2005] FCA 1 (6 January 2005)

SYDNEY X-RAY PTY LIMITED V HEALTH INSURANCE COMMISSION

N 641 OF 2003

MADGWICK J
6 JANUARY 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 641 OF 2003

BETWEEN:	SYDNEY X-RAY PTY LIMITED APPLICANT
AND:	HEALTH INSURANCE COMMISSION RESPONDENT
JUDGE:	MADGWICK J
DATE OF ORDER:	6 JANUARY 2005
WHERE MADE:	SYDNEY

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	N 641 OF 2003

BETWEEN:	SYDNEY X-RAY PTY LIMITED APPLICANT
AND:	HEALTH INSURANCE COMMISSION RESPONDENT

JUDGE:	MADGWICK J
DATE:	6 JANUARY 2005
PLACE:	SYDNEY

1 A question has arisen, following the applicant’s success with its amended application (see my earlier judgment [2004] FCA 1276), as to the appropriate order for costs.

2 Two principal circumstances are said by the respondent to warrant a departure from the ordinary rule that costs should follow the event. The first is that the proceedings in their unamended form were said to give rise to jurisdictional difficulties for want of a justiciable issue.

3 The second is the applicant’s very late production of some important evidence which, says the respondent, if it had been produced earlier, would probably have resulted in a different administrative decision, favourable to the applicant, that would have obviated the need for litigation.

4 When the case first came on for hearing, after some discussion, the applicant sought an adjournment and took steps to advance its claims in an unarguably concrete way and thereby force a justiciable decision by the respondent. Thereafter, the parties litigated the legality of that decision, and the applicant succeeded. No party sought to have the earlier jurisdictional issue determined. The applicant might have taken the clarificatory steps it did much earlier and thereby have avoided the adjournment of the proceedings.

5 It seems to me that, in consequence, the applicant should pay any costs thrown away by the adjournment. However, I see insufficient reason to order the applicant to pay the respondent’s costs of the issue of jurisdiction generally. The litigation raised an issue that did not, in the end, fall to be determined, along with issues that were determined. Such a thing often happens. Indeed, after a party fails on some issues but succeeds on others such that there is an ultimate victory, it is not automatic that the ultimate case should have the costs of the particular issues lost by the ultimately successful party; there needs to be something like clear separability or dominance of those issues: see Waters v P C Henderson (Aust) Pty Ltd, NSW Court of Appeal, unreported, 6 July 1994; Ritchie’s NSW Supreme Court Procedure (52A 11.2). Here, although the jurisdictional issue was quite separate, the applicant did not lose it: it was properly treated by the parties as unnecessary to be decided. The only fault in the applicant was delay. That is to be compensated by the order I propose. Otherwise, the costs associated with the unlitigated issue should, in my opinion, be regarded as costs in the cause. There is some force in the proposition that each party should bear its own costs of the unlitigated issue but, in my opinion, it is outweighed by the overall justice of the applicant’s position in the litigation.

6 As to the late production of important evidence, I agree with the applicant that it is ‘revisionist’ to suggest that, had that evidence been earlier put on, the proceedings would have become unnecessary. First, the jurisdictional issue was raised by the respondent. Then an unmeritorious technical issue, having nothing to do with the main issue, was unsuccessfully raised.

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

Counsel for the Applicant:	Mr D J Hammerschlag SC / Mr R Bellamy

Solicitor for the Applicant:	Robinson Legal

Counsel for the Respondent:	Ms A Seward

Solicitor for the Respondent:	Phillips Fox

Date of Hearing:	Decided by way of written submissions

Date of Judgment:	6 January 2005

Federal Court of Australia

Sydney X-Ray Pty Ltd v Health Insurance Commission [2005] FCA 1 (6 January 2005)