Medical Benefits Fund of Australia Limited v Cassidy [2004] FCAFC 35 (25 February 2004)

MEDICAL BENEFITS FUND OF AUSTRALIA LIMITED (ACN 000 057 590) v BRIAN CASSIDY CHIEF EXECUTIVE OFFICER OF AUSTRALIAN COMPETITION AND CONSUMER COMMISSION AND AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
N 1090 OF 2002

MOORE, MANSFIELD AND STONE JJ
25 FEBRUARY 2004
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1090 OF 2002

BETWEEN:	MEDICAL BENEFITS FUND OF AUSTRALIA LIMITED (ACN 000 057 590) APPELLANT
AND:	BRIAN CASSIDY CHIEF EXECUTIVE OFFICER AUSTRALIAN COMPETITION AND CONSUMER COMMISSION FIRST RESPONDENT
	AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION SECOND RESPONDENT
JUDGES:	MOORE, MANSFIELD AND STONE JJ
DATE OF ORDER:	25 FEBRUARY 2004
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The appellant pay half of the first respondent’s costs of the appeal.

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 1090 OF 2002

BETWEEN:	MEDICAL BENEFITS FUND OF AUSTRALIA LIMITED (ACN 000 057 590) APPELLANT
AND:	BRIAN CASSIDY CHIEF EXECUTIVE OFFICER AUSTRALIAN COMPETITION AND CONSUMER COMMISSION FIRST RESPONDENT
	AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION SECOND RESPONDENT
JUDGES:	MOORE, MANSFIELD AND STONE JJ
DATE OF ORDER:	25 FEBRUARY 2004
WHERE MADE:	SYDNEY

1 This judgment concerns the costs in this appeal following the judgment of the Full Court of 16 December 2003 and costs of the hearing before the primary judge determined, in substance, on 9 September 2002.

2 Before the primary judge, the then applicants (for convenience only the Australian Competition and Consumer Commission ‘ACCC’) had substantial but not complete success against Medical Benefits Fund of Australia Ltd (‘MBF’). Nonetheless his Honour ordered, relevantly, that MBF pay ACCC's costs. MBF has had some limited success in its appeal. It was unsuccessful in its challenge to the primary judge's findings concerning liability in relation to the contentious television advertisements as well as the billboard advertisements. It failed in its challenge to the primary judge's order requiring corrective advertisements be placed in newspapers. It did, however, succeed in its challenge to the primary judge's order requiring corrective advertisements on television.

3 MBF submits that an order should be made requiring it to pay one-third of ACCC's costs of its proceedings against MBF at first instance and on appeal. The rationale for an order to that effect was as follows. While before the primary judge ACCC succeeded in establishing liability in relation to the television advertisements and billboard advertisements, it failed to do so in relation to newspaper advertisements. ACCC failed before the primary judge in securing significant parts of the relief it sought. It was partially successful in the appeal (as just discussed). The proceedings below and on appeal were prolonged by ACCC's claims against John Bevins Pty Ltd which ultimately failed on appeal. MBF appears to suggest that, in the broad (seemingly having regard to both the proceedings at first instance and on appeal), ACCC has had two-thirds ‘success’ and MBF has had one-third ‘success’. Accordingly this should be reflected, so MBF submits, in an order requiring it to pay one-third of ACCC's costs below and in the appeal.

4 ACCC submits that because it was successful in the appeal on all but one issue (the corrective television advertisements), prima facie it should have its costs of the proceedings at first instance and the appeal. ACCC submits it succeeded in achieving the objective of the litigation. It submits that MBF should pay its costs of the appeal. It does accept however, that a modification (in effect) to the costs order of the primary judge should be made. The modification is that the parties should pay their own costs incurred as a consequence of, first, order 4 of the orders made by the primary judge on 2 October 2002 (the order requiring the publication of the corrective television advertisements) and, secondly, order 1 made by the primary judge on 15 October 2002 (an order varying order 4 just referred to).

5 In our opinion, there is an insufficient basis for varying the costs order made by the primary judge in relation to the proceedings below. His Honour was plainly in a far better position than us to assess where the costs of the proceedings before him should fall. In exercise of the broad discretionary power to order costs, his Honour concluded that ACCC should have all its costs of those proceedings and he reached that conclusion notwithstanding that ACCC did not achieve all it set out to achieve in terms of both establishing liability and securing remedies. It is true that the outcome determined by his Honour has been varied as a result of this appeal and ACCC has lost the benefit of one of the orders made by the primary judge. However, the balance struck by the primary judge has not, in our opinion, been so altered by MBF’s limited success in this appeal to warrant a variation of the costs order made by his Honour.

6 In relation to the appeal, both ACCC and MBF have had some success though the success of ACCC has been significantly greater. In our opinion this should be reflected in an order that MBF pay half of the ACCC’s costs of the appeal. We so order.

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Moore, Mansfield and Stone.

Counsel for the Appellant:	J Sackar QC and D R Sibtain

Solicitor for the Appellant:	Blake Dawson Waldron

Counsel for the Respondenst:	B McClintock SC and M Painter

Solicitor for the Respondents:	Australian Government Solicitor

Date of Hearing:	12 May 2003

Date of Judgment:	25 February 2004

Federal Court of Australia - Full Court Decisions

Medical Benefits Fund of Australia Limited v Cassidy [2004] FCAFC 35 (25 February 2004)