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Tradesman Technologies Pty Ltd v Ameduri (No.2) [2011] FMCA 179 (25 March 2011)

Last Updated: 29 March 2011

FEDERAL MAGISTRATES COURT OF AUSTRALIA

TRADESMAN TECHNOLOGIES PTY LTD v AMEDURI (No.2)

PRACTICE & PROCEDURE – COSTS – Application by respondent for costs of interlocutory application – power of Court to award costs – whether inherent jurisdiction or implied incidental power or express discretionary power – whether respondent wholly successful – whether the Court should order costs to be taxed under Order 62 of the Federal Court Rules (Cth) – whether costs to be fixed according to Schedule 1 of the Federal Magistrates Court Rules 2001 (Cth) – whether costs should be assessed now or at the completion of the proceedings.

COURTS AND JURISDICTION – Federal courts – whether inherent jurisdiction or implied incidental power.

Federal Court Rules (Cth), O.62
Federal Magistrates Act 1999 (Cth), ss.15(a), 79, 81, 86, 88
Federal Magistrates Court Rules 2001 (Cth), rr.21.02, 21.10, 21.11, 21.15, Schedule 1

DJL v Central Authority (2000) 201 CLR 226; [2000] HCA 17
Hinchliffe v University of Sydney (No.2) [2004] FMCA 640
Ho v Regulator Australia Pty Ltd & Anor (No.2) [2004] FMCA 402
Jackson v Sterling Industries Ltd (1986) 69 ALR 92
Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612
Joshua Brook Pty Ltd v Outdoor Centre Holdings Pty Ltd & Anor (No.2) [2010] FMCA 446
Kanapathy v In De Braekt & Anor (No.2) [2011] FMCA 51
Matthews v Nilant [2002] FMCA 201
McBride v State of Victoria (No.2) [2003] FMCA 313
O’Keeffe Nominees Pty Ltd v BP Australia Ltd (No.2) [1995] FCA 1079; (1995) 55 FCR 591
Parsons v Martin [1984] FCA 408; (1984) 5 FCR 235
Pierson’s Pro-Health Pty Ltd & Ors v Silvex Nominees Pty Ltd & Anor (No.3) [2010] FMCA 250
Re Read (2007) 164 FCR 237; [2007] FCA 1985
Reynolds v The Minister for Health (No.2) [2010] FMCA 910
Scherer v Counting Instruments Ltd [1986] 2 All ER 529
Schueler & Anor v Smith & Ors [2010] FMCA 777
Skipworth v State of Western Australia (No.2) (2008) 218 FLR 16; [2008] FMCA 544
Swevenings Pty Ltd v Ferguson Consolidated Holdings Pty Ltd & Anor (No.6) [2010] FMCA 418
Temby & Anor v Chambers Investment Planners Pty Ltd & Anor [2010] FMCA 783
Tradesman Technologies Pty Ltd v Ameduri [2010] FMCA 1011
VTAG v Minister for Immigration & Multicultural & Indigenous Affairs (2005) 141 FCR 291; [2005] FCAFC 91

J Tarrant, Amending Final Judgments and Orders (Sydney: Federation Press, 2010)

Applicant:
TRADESMAN TECHNOLOGIES PTY LTD

Respondent:
JOHN AMEDURI

File Number:
PEG 88 of 2010

Judgment of:
Lucev FM

Hearing date:
By written submissions

Date of Last Submission:
10 February 2011

Delivered at:
Perth

Delivered on:
25 March 2011

REPRESENTATION

Solicitors for the Applicant:
De Vita & Dixon Lawyers

Solicitors for the Respondent:
McDonald Pynt Lawyers

ORDERS

(1) The applicant pay the respondent’s costs of the application in a case filed 13 July 2010 fixed in the sum of $2,785 by 27 April 2011.
FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT PERTH

PEG 88 of 2010

TRADESMAN TECHNOLOGIES PTY LTD

Applicant


And


JOHN AMEDURI

Respondent


REASONS FOR JUDGMENT

(Published in Chambers pursuant to s.13(3)(a) of the Federal Magistrates Act 1999 (Cth))

Introduction

  1. On 24 December 2010, this Court handed down Reasons for Judgment[1] allowing an application in a case,[2] filed by the respondent, to stay these proceedings[3] save as to the costs of the Stay Application. The FMCA Proceedings were stayed pending further order of the Court, and adjourned to 27 June 2011 for mention.
  2. The Court granted a stay for the following reasons:
  3. These Reasons for Judgment relate to an application in a case filed by the respondent on 25 January 2011 for costs of the Stay Application.[5] The respondent seeks costs, including any reserved costs, to be taxed under O.62 of the Federal Court Rules (Cth),[6] and to be paid forthwith. The respondent also seeks an advocacy certificate under r.21.15 of the Federal Magistrates Court Rules 2001 (Cth).[7]

Respondent’s submissions on costs

  1. The respondent relies on the following legal principles to support the Costs Application:
    1. the Court has a broad discretion to award costs, however the usual order is that costs follow the event and, accordingly, a successful party is awarded its costs;
    2. the usual order for costs to follow the event should only be departed from where there has been misconduct by the successful party amounting to disentitling behaviour; and
    1. the Court may award costs other than pursuant to Schedule 1 of the FMC Rules pursuant to the inherent jurisdiction, including on a party/party or indemnity basis.
  2. The respondent submits the following in support of the Costs Application:
    1. he was comprehensively successful in the Stay Application;
    2. none of the points raised by the applicant were upheld;
    1. there is no evidence of disentitling behaviour or misconduct on the part of the respondent;
    1. it was open to the applicant to have pleaded its cause of action in the District Court of Western Australia,[8] where related proceedings were already on foot and at a relatively advanced stage;
    2. he has been put to substantial costs in bringing the Stay Application;
    3. the total, untaxed, costs and disbursements of the action in this Court to date exceeds $25,000, with the majority of costs and disbursements being expended on the Stay Application;
    4. both parties engaged Counsel to appear on the Stay Application;
    5. there is authority for the proposition that under r.21.15 of the FMC Rules that “...the issue of a certificate under that order is a logical consequence of the involvement of counsel up to and including the obtaining of judgment...”;[9]
    6. it would be unjust for the applicant to benefit from the considerably lower scale as prescribed by Schedule 1 of the FMC Rules,[10] particularly when the respondent commenced a related cause of action first in time and the applicant has sought to effectively usurp what has been found to be the most appropriate jurisdiction;
    7. the fact that the respondent commenced proceedings first in time is a relevant factor to be weighed and is relevant to the issue of whether the respondent should now be deprived of the opportunity to recover party/party costs; and
    8. the Stay Application was a discrete matter, unrelated to the final determination of any substantive proceedings or contest between the parties or their associates and the significant costs incurred should be taxed and paid forthwith.

Applicant’s submissions on costs

  1. The applicant seeks the following costs orders:
  2. The applicant submitted the following in relation to the Costs Application:
    1. on 28 January 2011 the applicant issued a District Court Writ of Summons with an indorsed statement of claim against the respondent, by which District Court Action CIV 294 of 2011 was commenced. The statement of claim in that matter is substantially the same as the statement of claim in this Court;
    2. the respondent should not have the benefit of a costs order in respect of the Stay Application at this stage; there should be no order as to the costs of that application or the costs of the application should be reserved pending the outcome of the combined trial of CIV 3751/2009 and CIV 294/2011;[11]
    1. the general rule that costs follow the event applies to litigation in which final orders have been made, rather than to every interlocutory step in the principal proceeding;[12]
    1. often in interlocutory applications the circumstances may be such that it is not possible, immediately after disposition of the interlocutory application, for the Court to see on which side justice requires that the decision of who should bear the costs of the application should ultimately fall. For that reason, the costs of interlocutory matters are often made costs in the cause or costs reserved;[13]
    2. at no stage prior to the application being made for a stay of the proceedings did the respondent make any offer of an undertaking to allow fresh proceedings in the District Court to be tried concurrently with CIV 3751/2009, it was only offered during submissions concerning a stay;
    3. the applicant neither consents to nor opposes the respondent being granted an advocacy certificate;
    4. that if a costs order is made the respondent should be limited to the event-based scale because they have not provided a break-down of costs or any indication of the basis on which solicitor and counsel rendered fees, and also the amount spent on the application in a case seems inordinately high, whereas the applicant’s costs in relation to the Stay Application in a case were only approximately $9,000 (of which, likewise, there is no evidence); and
    5. that if a costs order is made for the respondent then the order should be stayed, pending the outcome of the District Court trial.[14]

The power to make orders for costs in the Federal Magistrates Court

  1. The Court's power to award costs in general federal law proceedings (that is, not family law or child support proceedings) is set out in s.79(2) and (3) of the FM Act as follows:
  2. Section 81 of the FM Act provides for the making of Rules of Court, and s.86 of the FM Act provides for the making of Rules of Court with respect to costs, and in particular:
  3. The FMC Rules may also prescribe matters required or permitted by another provision of the FM Act, or any other law of the Commonwealth.[15] The FMC Rules have effect “subject to any provision made by another Act, or by rules or regulations under another Act, with respect to the practice and procedure in particular matters.”[16] The FMC Rules may also prescribe matters “incidental” to matters required or permitted to be prescribed by the FMC Rules under any other provision of the FM Act or any other law of the Commonwealth.[17]
  4. Rule 21.02 of the FMC Rules provides as follows:

(1) An application for an order for costs may be made:

(a) at any stage in a proceeding; or
(b) within 28 days after a final decree or order is made; or
(c) within any further time allowed by the Court.
(2) In making an order for costs in a proceeding, the Court may:
  1. Rule 21.10 of the FMC Rules provides as follows:
  2. The event-based scale, referred to in r.21.10(a) of the FMC Rules, provides for an event-based assessment of costs, with the costs for each event fixed.
  3. Rule 21.11 of the FMC Rules provides as follows:
  4. This Court has recently observed that:
and the Court’s own experience, that it is well established and well known that the primary source used for fixing costs in general federal law proceedings (other than, arguably, in bankruptcy) in this Court is the event-based scale in Schedule 1 of the FMC Rules. Whilst there is discretion to depart from the event-based scale, that is the exception rather than the norm. The event-based scale under Schedule 1 of the FMC Rules exists to provide simplicity and certainty in determining costs, such that a lawyer attending to take final judgment ought to have been able to calculate the exact costs, in the vast majority of cases.[18]

16. Generally speaking, costs follow the event in general federal law proceedings in this Court, and a successful party is entitled to recover their costs according to the event-based scale.[19] The following observations of the Court are apt in these circumstances:

10. It follows from the foregoing analysis that the respondent should receive an order for costs on a normal party/party basis, which the applicant has already conceded. Ordinarily, in human rights proceedings, costs are assessed in accordance with the event based scale appearing in schedule 1 to the Federal Magistrates Court Rules. That scale was adopted by the Court in order to provide simplicity and certainty in determining issues of costs. In some cases, as is likely to be the case here, a successful party will incur significantly more in costs than is recoverable pursuant to the Court scale. It does not follow that that is an unjust result, where it occurs. The Court scale is publicly known and parties to litigation should be aware that the scale is likely to determine their maximum recoverable costs should they succeed. If parties wish to incur significantly more costs in litigation in this Court than they could ever recover, that is a matter for them.
11. In any event, it should not be assumed that because substantial legal costs have been incurred by a party, their money has been well and wisely spent. The scale of costs ordinarily applicable in human rights proceedings reflects the Court’s assessment of what costs can be accepted as reasonable in ordinary proceedings. If proceedings are exceptionally long or complex there is the opportunity to ask for the proceedings to be transferred to the Federal Court, where a more appropriate scale of costs for long and complex proceedings would be available. That was not done in this case.
12. ... This Court’s event based costs scale establishes a level playing field. I see no reason to depart from it in these proceedings.[20]

17. Although made in relation to human rights proceedings the above comments are equally applicable to other general federal law proceedings, subject to any contrary legislative provision.[21]

  1. Where a party has been successful in part and unsuccessful in part the Court may apportion liability for costs on a percentage basis, and in so doing set the method by which costs are to be calculated looking at the outcome in substance, rather than attempting to artificially calculate costs on a purely mathematical basis.[22]

Consideration

Power and usual order

  1. There is therefore no doubt that the Court has the power to award costs, both under the event-based scale, and also on a basis other than the event-based scale. The usual course is that costs follow the event, and in this case there is no disentitling conduct by the respondent to negate the usual course.

Inherent jurisdiction

  1. The respondent seeks costs other than under the event-based scale “pursuant to the inherent jurisdiction” of the Court. As has been observed many times by the High Court, the Federal Court and this Court, the Australian federal courts (the Federal Court, the Family Court and this Court) do not have inherent jurisdiction.
  2. In Skipworth v Western Australia (No. 2)[23] this Court, having reviewed relevant authorities,[24] concluded that:
  3. In DJL, the High Court, speaking of the Family Court said:
  4. In Parsons the Full Court of the Federal Court observed that:
  5. In Jackson v Sterling Industries Ltd[28] a single Justice of the High Court quoted with approval a statement by the Chief Justice of the Federal Court in the judgment of the Full Court of the Federal Court under appeal where it was said:
  6. The Court’s view expressed in Skipworth (No. 2) was followed in Temby & Anor v Chambers Investment Planners Pty Ltd & Anor,[30] and subsequently relied upon by the Court in Schueler & Anor v Smith & Ors.[31]
  7. The issue of costs does not therefore arise by way of inherent jurisdiction. Nor does it arise by way of an implied incidental power to make orders necessarily incidental to express powers. The FM Act and FMC Rules provisions set out above make it plain that the power to award costs is expressly within the discretion of the Court. It is therefore unnecessary to rely upon any implied incidental power to make an order for costs.

General matters

  1. The respondent sought a dismissal or alternatively a stay of the FMC Proceedings in its Stay Application. The Court considered all of the arguments put forward by both parties in determining whether to dismiss, stay or allow the FMC Proceedings to go ahead.
  2. The Court considers that the respondent was wholly successful in its Stay Application, however the FMC Proceedings were not dismissed as also sought by the respondent.
  3. The Court observes that there is no evidence as to the precise amount that has been expended by the respondent on the Stay Application. This may well be because the respondent asks for costs to be taxed. However, that is not the usual order in this Court, and parties ought to provide evidence of the costs and disbursements incurred so that the Court can properly determine whether it ought to go outside its usual method of fixing costs pursuant to the event-based scale.
  4. The Court has considered whether it ought to award costs on a basis other than under the event-based scale by reason of the application being brought in this Court rather than in the District Court, where the District Court, for reasons set out in Tradesman Technologies (No. 1), would have had jurisdiction to hear a claim brought in terms of the application to this Court.[32] Notwithstanding that the District Court would have had jurisdiction to hear this application if brought in similar terms in that court, the fact remains that the applicant was entitled to file in this Court, and that if this Court’s view as to the jurisdiction of the District Court is incorrect it is possible that there still may be matters for this Court to determine in these proceedings.[33]
  5. As ought be evident from the Reasons for Judgment in Tradesman Technologies (No.1) the jurisdictional issue was not without its complexities. In those circumstances, the mere fact that the application was brought by the applicant in this Court, and that no claim was made in the District Court, does not warrant the Court departing from the usual position with respect to costs. That is particularly so where there is actually no evidence of the costs incurred by the respondent before the Court. Further, it is not to the point that higher costs might have been awarded in another court. The costs prescribed by the event-based scale are the costs ordinarily awarded in this Court in proceedings, and the fact that they are lower than those which might be recovered elsewhere is not, especially in the context of the Stay Application which occupied half a day’s hearing time, a consideration which warrants increasing the costs to be awarded to an amount in excess of those prescribed by the event-based scale. Ultimately, there was nothing sufficiently exceptional about the Stay Application proceedings so as to warrant an award of costs other than on the event-based scale.
  6. There is no doubt that it was appropriate for Counsel to appear on the Stay Application, and there will be an advocacy certificate under r.21.15 of the FMC Rules.
  7. The Stay Application was a discrete event in this Court. The event-based scale specifically provides for the award of costs in relation to such discrete events. In circumstances where the respondent was comprehensively successful in relation to the Stay Application, and notwithstanding that the application for dismissal of the FMC Proceedings was not upheld, this was a discrete event, and there is no reason to either not award the respondent costs or to delay the award of costs. The respondent ought to therefore be entitled to its costs of the FMC Proceedings. For similar reasons, there is no merit in the suggestion that the award of costs be delayed pending the outcome of the District Court hearing.

Fixing costs

  1. The Court will therefore award costs to the respondent, as successful party, on the basis of the event-based scale. The Court certifies that it was reasonable for the respondent to employ an advocate in the proceedings, under r.21.15 of the FMC Rules. The Court assesses the costs as follows:

Stage 2: Summary hearing as a discrete event:

$1,465: lump sum

$880: half day daily hearing fee

$440: advocacy loading

Stage 6: Final hearing costs for solicitor:

$0: The respondent did not attend judgment

Total: $2,785

  1. Reserved costs for the first directions hearing on 9 July 2010 remain reserved and their disposition will have to await the final outcome of the application.

Conclusion

  1. The Court will order the applicant to pay the respondent’s costs in the sum of $2,785 by 27 April 2011.

I certify that the preceding 36Error! Style not defined.!Syntax Error, !Error! Style not defined.Error! Style not defined.!Syntax Error, !thirty-sixthirty-six (36) paragraphs are a true copy of the reasons for judgment of Lucev FM


Date: 25 March 2011


[1] Tradesman Technologies Pty Ltd v Ameduri [2010] FMCA 1011 (“Tradesman Technologies (No. 1)”).
[2] “Stay Application”.
[3] “FMC Proceedings”.
[4] Tradesman Technologies (No. 1) at paras.85-86 per Lucev FM.
[5] “Costs Application”.
[6]FC Rules”.
[7]FMC Rules”.
[8] “District Court”.
[9] Matthews v Nilant [2002] FMCA 201 at para.172 per McInnis FM.
[10] “event-based scale”.
[11] “District Court trial”.
[12] O’Keeffe Nominees Pty Ltd v BP Australia Ltd (No. 2) [1995] FCA 1079; (1995) 55 FCR 591 at 598-599 per Spender J.
[13] Scherer v Counting Instruments Ltd [1986] 2 All ER 529 at 536 per Buckley LJ.
[14] Pursuant to the Court’s power to order a stay in s.15(a) of the Federal Magistrates Act 1999 (Cth) (“FM Act”) and r.21.02(2)(d) of the FMC Rules.
[15] FM Act, s.81(1)(c).
[16] FM Act, s.81(2).
[17] FM Act, s.88.
[18] Pierson’s Pro-Health Pty Ltd & Ors v Silvex Nominees Pty Ltd & Anor (No. 3) [2010] FMCA 250 at para.43 per Lucev FM (footnotes omitted) (“Pierson’s Pro-Health (No. 3)”).
[19] For recent examples in the Perth Registry of this Court, see Pierson’s Pro Health (No. 3) at paras.41(a) and 43 per Lucev FM (trade practices and trade marks); Reynolds v The Minister for Health (No. 2) [2010] FMCA 910 at para.3 per Lucev FM, and cases there cited (“Reynolds (No. 2)”) (human rights); Joshua Brook Pty Ltd v Outdoor Centre Holdings Pty Ltd & Anor (No. 2) [2010] FMCA 446 at para.6 per Lucev FM (trade practices); Swevenings Pty Ltd v Ferguson Consolidated Holdings Pty Ltd & Anor (No. 6) [2010] FMCA 418 at paras.10-11 and 20-27 per Lucev FM (trade practices).
[20] Hinchliffe v University of Sydney (No. 2) [2004] FMCA 640 at paras.10-12 per Driver FM.
[21] FM Act, s.81(2); Kanapathy v In De Braekt & Anor (No. 2) [2011] FMCA 51 at para.12 per Lucev FM.
[22] FMC Rules, r.21.02(2)(b); Ho v Regulator Australia Pty Ltd & Anor (No. 2) [2004] FMCA 402 at para.17 per Driver FM; McBride v State of Victoria (No. 2) [2003] FMCA 313 at paras.8-9 per McInnis FM.
[23] (2008) 218 FLR 16; [2008] FMCA 544 (“Skipworth (No. 2)”).
[24] In Skipworth (No. 2) FLR at 24-27 per Lucev FM; FMCA at paras.29-33 per Lucev FM the Court cited DJL v Central Authority (2000) 201 CLR 226; [2000] HCA 17 (“DJL”); Parsons v Martin [1984] FCA 408; (1984) 5 FCR 235 (“Parsons”); VTAG v Minister for Immigration & Multicultural & Indigenous Affairs (2005) 141 FCR 291; [2005] FCAFC 91 and Re Read (2007) 164 FCR 237; [2007] FCA 1985.
[25] Skipworth (No. 2) FLR at 27 per Lucev FM; FMCA at para.34 per Lucev FM.
[26] DJL CLR at 241 per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ; HCA at para.25 per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ.
[27] Parsons at 241 per Bowen CJ, Northrop and Toohey JJ.
[28] [1987] HCA 23; (1987) 162 CLR 612 (“Sterling Industries”).
[29] Sterling Industries at 623-624 per Deane J quoting Jackson v Sterling Industries Ltd (1986) 69 ALR 92 at 97 per Bowen CJ. See also J Tarrant, Amending Final Judgments and Orders (Sydney: Federation Press, 2010) pages 6-7.
[30] [2010] FMCA 783 at para.18 per Lucev FM (“Temby”).
[31] [2010] FMCA 777 at paras.10-11 per Driver FM. In this case, the Court relied upon the views expressed in Skipworth (No. 2), as followed in Temby, in the context of considering the principles relating to restraining a practitioner from acting.
[32] Tradesman Technologies (No. 1) at paras.40-68 per Lucev FM.
[33] Tradesman Technologies (No. 1) at para.86(a) per Lucev FM.


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