Gough & Gilmour Holdings Pty Ltd and Ors v Caterpillar of Australia Ltd and Anor (No. 16) [2005] NSWIRComm 8 (4 February 2005)

Last Updated: 16 February 2005

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Gough & Gilmour Holdings Pty Ltd and Ors v Caterpillar of Australia Ltd and Anor (No. 16) [2005] NSWIRComm 8

FILE NUMBER(S): IRC 5227

HEARING DATE(S): 01/12/2004

DECISION DATE: 04/02/2005

PARTIES:

FIRST APPLICANT

Gough & Gilmour Holdings Pty Ltd

SECOND APPLICANT

Harcourt David Gough

THIRD APPLICANT

Anthony Lansley Gilmour

FIRST RESPONDENT

Caterpillar of Australia Limited

SECOND RESPONDENT

Caterpillar Inc.

THIRD RESPONDENT

Caterpillar SARL

FOURTH RESPONDENT

Caterpillar Overseas Credit Corporation SA

JUDGMENT OF: Boland J

LEGAL REPRESENTATIVES

APPLICANTS

Mr M J Kimber SC with Mr A B Gotting of counsel

Solicitor: Mr D Stewart

Harmers Workplace Lawyers

RESPONDENTS

Mr P M Hall QC of counsel

Solicitor: Mr T Gooch

Mallesons Stephen Jaques

CASES CITED: Allstate Life Insurance Co v Australian and New Zealand Banking Group Limited (unreported, Federal Court of Australia (Lockhart, Lindgren and Tamberlin JJ), 11 July 1995)

Aussie Airlines Pty Limited v Australian Airlines Limited (unreported, Federal Court of Australia (Sundberg J), 5 June 1997) (BC9702375)

Australian Flight Test Services Pty Limited v Minister for Industry, Science and Technology (unreported, Federal Court of Australia (O'Loughlin J), 26 April 1996) (BC9601453)

Baramon Sales Pty Limited v Goodman Fielder Mills Limited [2001] FCA 1819

Bowman v Ricegrowers' Cooperative Limited (No 2) [2004] NSWIRComm 158

Brasington v Overton Investments Pty Ltd [2001] FCA 571

Charlie Brown Pty Limited v Green (unreported, Supreme Court of New South Wales (McLelland CJ in Eq), 3 July 1995) (BC9505032)

Fiduciary Limited v Morningstar Research Pty Limited (2001) 55 NSWLR 1

Foyster v Foyster Holdings Pty Limited [2003] NSWSC 135

Gough & Gilmour Holdings Pty Limited & Ors v Caterpillar of Australia Limited & Anor (No. 11) [2002] NSWIRComm 354

Gough & Gilmour Holdings Pty Ltd and ors v Caterpillar of Australia Ltd and anor (No. 15) [2003] NSWIRComm 173.

Horrobin v Australia and New Zealand Banking Group Limited (unreported, Court of Appeal of New South Wales, 6 June 1997) (BC9702258)

IGA Distribution Pty Limited v King & Taylor Pty Limited [2003] VSC 412

Prebble v Australian Broadcasting Corporation (unreported, Supreme Court of New South Wales (Levine J), 11 July 1997) (BC9703240)

Telstra Corporation Limited v First Netcom Pty Limited (unreported, Federal Court of Australia (Einfeld J), 7 May 1998) (BC9802430)

Thunderdome Racetiming and Scoring Pty Limited v Dorian Industries Pty Limited (1992) 36 FCR 297

UnitedGlobalCom Inc v McRann (No. 2) (2004) 133 IR 21

Vasyli v AOL International [1996] 804 FCA 1

LEGISLATION CITED: Industrial Relations Act 1996

Industrial Relations Commission Rules 1996

JUDGMENT:

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

IN COURT SESSION

CORAM: Boland J

Date: Friday 4 February 2005

Matter No IRC 5227 of 2000

GOU`GH & GILMOUR HOLDINGS PTY LIMITED & ORS v CATERPILLAR AUSTRALIA LIMITED & ORS

Application under s 106 of the Industrial Relations Act 1996

Interlocutory Judgment No. 16

[2005] NSWIRComm 8

1 This judgment concerns an application by the applicants that the Court hear and determine an application for the costs of the first phase of the proceedings prior to the commencement of the second phase of the proceedings.

2 The first phase of the proceedings, which commenced in October 2000 following an application for relief by the applicants under s 106 of the Industrial Relations Act 1996, is constituted by 15 judgments of the Court. The extensive factual background and the progress of these proceedings to date is set out in the two key judgments, namely, Gough & Gilmour Holdings Pty Limited & Ors v Caterpillar of Australia Limited & Anor (No. 11) [2002] NSWIRComm 354 and Gough & Gilmour Holdings Pty Ltd and ors v Caterpillar of Australia Ltd and anor (No. 15) [2003] NSWIRComm 173.

3 It is unnecessary for the purpose of the present application to deal in any detail with the background except to say that the Court has made findings as to the existence of an unfair contract and has made orders varying that contract (identified as an "overall arrangement" in Judgment No 11). The variation orders are not without some complexity involving as they do arrangements and a timetable to end the dealership agreement between the applicants and the first respondent. Now that process is complete the applicants are considering and formulating their claims for compensation in connection with the findings of unfairness and consequent variations to the overall arrangement between them and the respondents. In the meantime, the applicants are seeking an opportunity to be heard as to the costs of the first part of the proceedings - Part A and for that matter to be determined prior to the commencement of Part B, which will involve issues relating to compensation.

4 Both parties helpfully summarised the issues determined in each of those judgments in Part A of the proceedings in their written submissions. The applicants' summary was as follows:

(a) On 27 October 2000, the Applicants commenced these proceedings.

(b) On 23 November 2000, the Court determined to grant an application to split the hearing of these proceedings into two parts:

(i) the “primary issue” of whether there was unfairness in the contracts or arrangements between the parties and whether the primary variation relief should be granted; and

(ii) the second issue of whether and to what extent compensation should be payable to the Applicants or any one of them,

(see reasons for decision dated 23 November 2000 (“Interlocutory Judgment No 1”) and reasons for decision dated 29 November 2000 (“Interlocutory Judgment No 2”) at [1]);

(c) On 9 April 2001, the Court published its reasons for decision on an application for access to legally privileged documents on the basis of imputed waiver. The Court “reserved” costs of that application (see [2001] NSWIRC 73 (“Interlocutory Judgment No 3”) at [54]);

(d) On 1 May 2001, the Court determined an application to join Caterpillar Inc to the proceedings. The Court “reserved” costs of that application (see [2001] NSWIRC 92 (“Interlocutory Judgment No 4”) at [125]);

(e) On 23 May 2001, the Court determined an application seeking leave for the Applicants to proceed against Caterpillar Inc, given that Caterpillar Inc had not at that stage appeared in the proceedings. The Court “reserved” costs of that application (see [2001] NSWIRC 112; 109 IR 1 (“Interlocutory Judgment No 5”) at [31]);

(f) On 28 May 2001, Caterpillar Inc entered an appearance in the matter (see transcript of 28 May 2001, page 38.38–38.54);

(g) On 8 June 2001, the Court determined a further application for access to bills of costs and legally privileged documents. The Court made no order as to costs (see [2001] NSWIRC 135 (“Interlocutory Judgment No 6”));

(h) On 9 July 2001, the Court determined a further application for access to legally privileged documents on the basis of implied waiver. The Court made no order as to costs (see [2001] NSWIRC 147 (“Interlocutory Judgment No 7”));

(i) On 6 September 2001, the Court determined a further application for the inspection of legally privileged documents. The Court made no order as to costs (see [2001] NSWIRC 208 (“Interlocutory Judgment No 8”));

(j) On 23 October 2001, the Court determined an application for an interlocutory injunction to restrain the Respondents from terminating the contracts or arrangements the subject of the proceedings. The Court “reserved” the costs of the application (see [2001] NSWIRC 260 (“Interlocutory Judgment No 9”) at [83]);

(k) On 19 February 2002, the Court determined an application for the discovery by the Respondent of further documents. The Court “reserved” the costs of the application (see [2002] NSWIRC 22 (“Interlocutory Judgment No 10”) at [14]);

(l) On 19 December 2002, the Court determined the primary issue of unfairness and the primary relief sought by the Applicants. The Court “reserved” costs (see [2002] NSWIRC 354 (“Judgment No 11”) at [805]);

(m) On 27 December 2002, the Court determined an application for the joinder of two additional respondents and an application to dissolve the interlocutory injunction. The Court made no order as to costs (see [2002] NSWIRC 379 (“Interlocutory Judgment No 12”) at [26]);

(n) On 13 February 2003, the Court determined a further application to dissolve the interlocutory injunction. The Court made no order as to costs (see [2003] NSWIRC 26 (“Interlocutory Judgment No 13”) at [39]);

(o) On 27 February 2003, the Court determined the continued application of the interlocutory injunction in light of the lack of agreement between the parties. The Court made no order as to costs (see [2003] NSWIRC 44 (“Interlocutory Judgment No 14”)); and

(p) On 4 June 2003, the Court determined the application for alternative relief (other than compensation), including leave to proceed on the Fourth Further Amended Summons for Relief. The Court “reserved” the costs of the application (see [2003] NSWIRC 173 (“Judgment No 15”), par 287(14)).

5 It may be seen that at no stage has the Court made any determination as to costs, which the applicants say are in the millions of dollars. This is not surprising. As the applicants pointed out:

... the matter involved 106 days of hearing, nearly 7,000 pages of transcript, 381 exhibits and 20 witnesses (seven of whom travelled from overseas to give evidence) (see Judgment No 11 at [12]). Since Judgment No 11, the matter has involved a further 10 days of hearing. Throughout the matter, the parties have been represented by at least seven counsel and two firms of solicitors (see Judgment No 11 at [12]).

6 The main points of the applicants' case were as follows:

(a) The Court may exercise its power as to costs “at any stage of the proceedings or after the conclusion of the proceedings” (see rule 203(1) of the Industrial Relations Commission Rules 1996 (NSW) (the “Rules”)) and may require that the costs the subject of an order for costs be “paid forthwith notwithstanding that the proceedings are not concluded” (see rule 203(2) of the Rules).

(b) The approach in previous decisions of courts and tribunals provide some guidance on the circumstances in which a cost order may be made prior to the final order for costs. Those circumstances include:

(i) A question in the proceedings has been separately determined, no issue in the trial of the balance of the proceedings overlaps with the question in the separate determination and no issue in the trial of the balance of the proceedings can cast doubt on the correctness of an order for costs (see Baramon Sales Pty Limited v Goodman Fielder Mills Limited [2001] FCA 1819 at [6]–[7]; compare Baulderstone Hornibrook at [6]; compare also Aussie Airlines Pty Limited v Australian Airlines Limited (unreported, Federal Court of Australia (Sundberg J), 5 June 1997) (BC9702375) at p2);

(ii) A question in the proceedings has been separately determined and the question was discrete from any other relief sought in the proceedings (see Charlie Brown Pty Limited v Green (unreported, Supreme Court of New South Wales (McLelland CJ in Eq), 3 July 1995) (BC9505032) at p1);

(iii) An aspect of the proceedings which has been determined is sufficiently self-contained and detached or detachable from the remainder of the proceedings yet to be heard (see Horrobin v Australia and New Zealand Banking Group Limited (unreported, Court of Appeal of New South Wales, 6 June 1997) (BC9702258) (“Horrobin”) at p9 (application for summary judgment distinct from main issues); Australian Flight Test Services Pty Limited v Minister for Industry, Science and Technology (unreported, Federal Court of Australia (O’Loughlin J), 26 April 1996) (BC9601453) at p8 (application for interlocutory relief distinct from main issues); Prebble v Australian Broadcasting Corporation (unreported, Supreme Court of New South Wales (Levine J), 11 July 1997) (BC9703240) at p3 (application concerning abuse of process distinct from main issues); Telstra Corporation Limited v First Netcom Pty Limited (unreported, Federal Court of Australia (Einfeld J), 7 May 1998) (BC9802430) at p7 (application for setting aside of subpoena and security distinct from main issues) Fiduciary Limited v Morningstar Research Pty Limited (2001) 55 NSWLR 1 (“Fiduciary”) at 4 [10]; Go Exports at [14]–[15] (application concerning payment from shipment of goods distinct from other claims in the proceedings); IGA Distribution Pty Limited v King & Taylor Pty Limited [2003] VSC 412 at [3]–[4] (application to recall witness distinct from other issues); Foyster v Foyster Holdings Pty Limited [2003] NSWSC 135 at [26] (application by members of company to represent the company distinct from other issues));

(iv) The proceedings were instituted some time previously and there is a considerable time before the proceedings will be disposed of finally (see Horrobin at p9; Allstate Life Insurance Co v Australian and New Zealand Banking Group Limited (unreported, Federal Court of Australia (Lockhart, Lindgren and Tamberlin JJ), 11 July 1995), at p2; Fiduciary at 5 [13]; Go Exports at [14]; see also UnitedGlobalCom Inc v McRann [2004] NSWIRC 16 (“UnitedGlobalCom”) at [24];

(v) The proceedings are the subject of directions that render them, in a sense, the subject of a new beginning (see Fiduciary at 6 [18]);

(vi) A guiding factor is whether the “demands of justice” (or the “interests of justice”) support the making of costs order prior to the final order for costs (see Fiduciary at 4 [7]–[8], 6 [18]; UnitedGlobalCom at [16], [24]).

(c) The “demands of justice” support the making of a costs order prior to the final order for costs:

(i) The questions of jurisdiction, power, unfairness, primary relief and alternative relief (other than compensation) have been determined pursuant to the split hearing (see Judgments No 11 and 15), those questions are discrete from the issue in the second part of the matter (the question of compensation), no issue to be determined in the second part of the matter will overlap with those questions and no issue to be determined in the second part of the matter can cast doubt on the correctness of a cost order in relation to such questions;

(ii) The issues of waiver of privilege (see Interlocutory Judgments No 3, No 6, No 7 and No 8), of joinder of Caterpillar Inc (see Interlocutory Judgment No 4), of leave to proceed against Caterpillar Inc (see Interlocutory Judgment No 5), of the joinder of the Third and Fourth Respondents (see Interlocutory Judgment No 12), of the interlocutory injunction (see Interlocutory Judgment No 9), of the dissolution of the interlocutory injunction (see Interlocutory Judgments No 12, No 13 and No 14), of further discovery (see Interlocutory Judgment No 10) and of amendments to the summons for relief (see Judgment No 15) are sufficiently self-contained and detached or detachable from the remainder of the proceedings yet to be heard;

(iii) The matter was instituted some time previously (27 October 2000) and there is a considerable time before the proceedings will be disposed of finally (perhaps December 2006 at the earliest;

(iv) The proceedings are to be the subject of directions that render them, in a sense, the subject of a new beginning; and

(v) the Applicants will be unable to re-argue in the second part of the matter the issues determined in the first part of the matter (compare the factual circumstances in UnitedGlobalCom at [5]–[6] (ability to re-agitate jurisdictional objections at final hearing) and in Bowman v Ricegrowers’ Cooperative Limited (No 2) [2004] NSWIRComm 158 (“Bowman”) at [17]–[18] (ability to re-agitate jurisdiction objections at final hearing)).

(d) Were the Court to decline to address the question of costs at this point and to decline to order that costs be payable forthwith, the question of costs of the first part of the matter would be deferred until the conclusion of the second part of the matter which, on current estimates in terms of preparation, Court availability and resources, hearing and reservation of the decision, is likely to be no earlier than December 2006. As a consequence, the Applicants — despite their success in the proceedings — would be:

(i) unable to recover a significant sum of money from the Respondents in respect of costs for a considerable period of time;

(ii) unable to use such money for that considerable period of time (in addition to the period of time already which the Applicants have been out of the use of such money);

(iii) unable to recover interest on such money, despite being out of the use of such money;

(iv) unable to use such money in the development of their new business following the termination of the Overall Arrangement.

(e) In deciding whether to depart from the general rule that the costs of an interlocutory application are deemed to be costs of the cause and to “otherwise order” that the costs be payable forthwith, the Court should be guided by the “demands of justice” (see Thunderdome Racetiming and Scoring Pty Limited v Dorian Industries Pty Limited (1992) 36 FCR 297 at 312; Horrobin at p9). Although the Court did not make an order as to costs in Interlocutory Judgments No 6, No 7, No 12, No 13 and No 14, the Court should otherwise order that the costs associated with those steps be “payable forthwith”.

(f) Additionally, and although the Court “reserved” the costs of the applications in Judgments No 11 and No 15, the Court should otherwise order that the costs associated with the determination of issues in those decisions be “payable forthwith”.

7 The main points of the respondents' case in opposition to the applicants' application were as follows:

(a) The principles established by and consistently applied in the case law and reflected in the rules of the Commission are:

(i) Costs are at the discretion of the Court;

(ii) Courts have been reluctant to enunciate inflexible principles upon which such a discretion should be exercised; but

(iii) Costs normally follow the event; and

(iv) The event which costs follow is the event of the litigation.

(b) In these proceedings, the event of the litigation is the final determination of all issues in the proceedings including, but not limited to, compensation. The position is that:

(i) The proceedings have been split into two phases, the second phase of which has yet even to be formally programmed but which the applicants estimate will involve another four to six weeks of hearing time; and

(ii) Accordingly, the final determination of all issues in the proceedings has not yet taken place.

(c) Any Court should be reluctant to exercise its discretion in respect of a costs order without paying due regard to all the relevant circumstances – including, in these proceedings, the determination of the substantive remaining issues (including but not limited to compensation). It is difficult to see how it would not be relevant to a determination of costs in the proceedings if the applicants were completely unsuccessful in persuading the Court to award them compensation or if the Court awarded only nominal compensation.

(d) The applicants’ current application – that the Court hear and determine an application for the costs of the first phase of the proceedings prior to the commencement (let alone conclusion) of the second phase of the proceedings – is made at a time when the nature and extent of the applicants’ claims in the second phase of the proceedings are entirely unclear because:

(i) The question of leave to amend the Third Further Amended Summons concerning compensation has been deferred for consideration to the second phase of the proceedings;

(ii) The applicants have foreshadowed a likely need for further amendments to the pleadings in light of events since June 2003 but have at the same time refused to file a Further Amended Summons until “matters crystallise”; and

(iii) Although subject to a direction to provide a document detailing issues said by them to be outstanding in the proceedings, the applicants have consistently maintained that such a document is not to be seen as a further pleading.

(e) A review of the 15 judgments demonstrates that:

(i) The Court has on no occasion made a costs order in favour of any party in respect of the proceedings to date.

(ii) It cannot be said that the outcome of each Judgment was that the applicants were the “successful” party.

(iii) Even where the applicants succeeded in obtaining some of the orders sought by them in some of the earlier hearings, they were in many cases unsuccessful in respect of a substantial number of their contentions, issues and claims, such that an apportionment of costs is likely to be appropriate.

(iv) The question of compensation and monetary orders is inextricably linked with the subject matter of most, if not all, of the earlier parts of the proceedings.

(v) The question of the applicants’ undertakings as to damages in respect of the interlocutory restraints placed upon the respondents is yet to be dealt with.

(f) As to the issue of whether the Court should at this time hear and determine an application that the applicants be awarded the costs of the proceedings to date, the respondents submitted that:

(i) The normal rule is that such an application ought not be entertained;

(ii) The present case is distinguishable from those cases in which costs of interlocutory hearings have already been awarded in favour of one party;

(iii) The normal rule will not be departed from where the already heard and as yet unheard parts of the proceedings are interrelated;

(iv) The first and second phases of the present proceedings are interrelated rather than discrete;

(v) Delay is not a factor militating in the applicants’ favour;

(vi) Other factors which have been held to justify a departure from the normal rule are absent from the present case.

8 The applicants put a comprehensive case in reply.

Consideration

9 There was no issue about the Court's power to award costs. The existence of that power is clear from s 181 of the Industrial Relations Act 1996. There was also no issue the Court may exercise its power as to costs “at any stage of the proceedings or after the conclusion of the proceedings” (r 203(1) of the Industrial Relations Commission Rules 1996) and may require that the costs the subject of an order for costs be “paid forthwith notwithstanding that the proceedings are not concluded”: r 203(2) of the Rules.

10 The Rules also provide that the costs of a motion that are “reserved” by the Court are to be included in the final order for costs unless the Court “otherwise orders”: r 210. Further, the costs of any application or other steps in the proceedings are, unless the Court “otherwise orders”, deemed to be part of the “costs of the cause of the party in whose favour the application or other step is determined and shall be paid and otherwise dealt with” in accordance with Part 27 of the Rules: r 211.

11 The issue in these proceedings is whether at this stage the Court should hear and determine an application for costs by the applicants in respect of Part A of the proceedings notwithstanding the whole of the proceedings are not concluded. The applicants submitted no issue in the trial of the balance of the proceedings relating to compensation overlaps with the issues determined in Part A and no issue in the trial of the balance of the proceedings can cast doubt on the correctness of an order for costs in relation to Part A. Further, it was submitted, the issues determined in Part A were "sufficiently self-contained and detached or detachable" from the issues in Part B.

12 To a significant degree the applicants rely for these propositions on, firstly, Judgment No. 1 where the Court determined to grant an application to split the hearing of these proceedings into two parts:

(a) the “primary issue” of whether there was unfairness in the contracts or arrangements between the parties and whether the primary variation relief should be granted; and

(b) the second issue of whether and to what extent compensation should be payable to the applicants or any one of them.

13 Secondly, the applicants relied on what the Court said in Judgment No. 15 at [75] and [76]:

As far as the Court is concerned it has made a final judgment about the applicants’ primary relief claim and about the issues of unfairness. The Court has refused the claim for primary relief for the reasons expressed in the primary judgment [Judgment No. 11] and it has found that the conduct of the respondents was unfair. Those findings cannot be re-visited other than by way of appeal and it would seem the time for that has passed.

Other than in relation to compensation issues the door is closed on further evidence and the Court declines to amend the pleadings reserving the rights of the applicants to amend the summons to reflect any further findings of the Court.

14 The applicants further submitted they have had relevant success in these proceedings already in that the Court has made findings of relevant unfairness and granted the applicants’ discretionary relief by way of valuable variations to the overall arrangement. The only residual question, it was submitted, was whether the applicants should have the benefit of additional relief by way of monetary order, and the outcome of the Court’s consideration of that matter would not bear upon the appropriate costs order with respect to the outcome of Part A.

15 In other words, the applicants were submitting that they have had a measure of success - a valuable measure - and given the time it will take for Part B to be determined it would be wrong to "keep them out of their money" in relation to those discrete matters in respect of which they have been successful and which do not overlap with issues that will be the subject of proceedings in Part B. Moreover, the degree to which the applicants were successful in any one or all of the 15 judgments given in Part A was not a relevant consideration in determining whether an application for costs should be heard. That was a question to be determined when it came to apportioning costs and in that respect the applicants proposed that the Court could be assisted by expert evidence.

16 As the Full Bench observed in UnitedGlobalCom Inc v McRann (No.2) (2004) 133 IR 21 at [8], r 203 of the Commission's Rules "provides the Commission with a wide discretion to order that costs be paid forthwith notwithstanding that the proceedings are not concluded." The wide discretion may equally mean the Court will decline to make such an order. Indeed, unless the interests of justice (see McRann at [24]) or some other compelling reason requires a costs order to be made before proceedings are concluded, the normal rule is, as the respondents contended:

(a) Taxation and payment of costs of interlocutory proceedings is to await the conclusion of the principal proceedings: Pegasus Gold Inc v Bateman Project Engineering Pty Ltd [2000] FCA 201 at [14] per Mathews J; Nelmac Pty Ltd v CFMEU [1999] FCA 929 at [6] per Madgwick J; Preston v M D Nikolaidis & Co [2003] NSWSC 72 at [13] per Campbell J; and

(b) Where an interlocutory decision has not dealt with the question of costs at all, the question of costs is addressed at the conclusion of the overall proceeding: Selman v Sweet (No 2) [2003] NSWIRComm 53 at [8] per Boland J; Bowman v Ricegrowers’ Co-Operative Limited (No 2) [2004] NSWIRComm 158 at [27]-[28] per Staff J.

17 The respondents referred to Brasington v Overton Investments Pty Ltd [2001] FCA 571 at [13] where Emmett J explained the rationale for the normal rule as follows:

...since an interlocutory proceeding does not resolve the final issues between the parties, it would, in ordinary circumstances, be inappropriate that an unsuccessful party in an interlocutory proceeding be required to pay costs immediately, since that party might ultimately be entitled to an order for costs in the substantive proceeding. The general principle appears to be that costs ought to be resolved when the proceeding has been concluded, and the rights of the parties have been finally determined.

18 In Thunderdome Racetiming and Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297 at 312 Olney J expressed the following opinion about the Federal Court's "forthwith" rule:

The rule does not suggest any particular criteria by which the Court should be guided in approaching the exercise of the power, and accordingly I take the view that the discretion should be exercised in favour of a party who establishes that the demands of justice require that there be a departure from what appears to be the general practice envisaged by the rule ...

19 In Vasyli v AOL International [1996] 804 FCA 1 Lehane J referred at 3 to "a clear practice on the part of the [Federal] Court to make use of the power in Order 62 rule 3 of the [Federal Court] Rules in very special circumstances". Order 62, Rule 3 of the Federal Court Rules provides:

3 Time for dealing with costs

(1) The Court may in any proceeding exercise its powers and discretions as to costs at any stage of the proceeding or after the conclusion of the proceeding.

(2) Where the Court makes an order in any proceeding for the payment of costs the Court may require that the costs be paid forthwith notwithstanding that the proceeding is not concluded.

(3) An order for costs of an interlocutory proceeding shall not, unless the Court otherwise orders, entitle a party to have a bill of costs taxed until the principal proceeding in which the interlocutory order was made is concluded or further order.

20 In deciding in 2000 to grant the applicants' application to split the hearing into two parts - not without some reservations because the ordinary position is that all issues should be tried together - the Court was considering the savings in time and costs that might be achieved in the event the applicants were not successful in establishing unfairness and consequently thereby avoid the need to hear lengthy evidence and submissions in respect of the question of relief by way of money orders pursuant to s 106(5) of the Act. Splitting the case into two parts was more a matter related to case management than establishing, in effect, two causes of action, one discrete from the other. The Court did not contemplate two effectively discrete proceedings, including for the purpose of determining costs, when it decided to split the proceedings. If that was in the applicants' contemplation at the time it should have been stated.

21 Although the applicants might be correct that there would be no overlapping of issues between Part A and Part B, I have reservations about whether that would necessarily be the case. That is, I am not satisfied that nothing that happens in Part B, or any consideration that might arise, will affect the question of costs in Part A. There is by virtue of s 106(5) of the Act an undeniable interconnection between what has been determined in Part A and the issues likely to arise for determination in Part B. The potential for there to be some overlap or connection relevant to the question of costs is stronger than the likelihood of that not being the case.

22 More importantly, however, I consider there is little utility in proceeding to hear and determine an application for costs to be paid forthwith at this stage because in the context of a consideration of costs I regard the proceedings as one proceeding contrary to what, in effect, the applicants contended. I want to retain the discretion to determine costs having regard to the final outcome of the whole of the proceeding and not compromise that discretion by making costs orders in relation to only part of the proceeding. In other words, in ultimately considering the question of costs I want to be in a position to weigh up all aspects of the case and, in the absence of agreement and with or without the assistance of experts, exercise the Court's discretion in relation to costs according to what I consider, overall, is an appropriate and just apportionment.

23 The Full Bench in UnitedGlobalCom granted the respondent's application for costs to be paid forthwith on the basis that it was in the interests of justice for the reasons given in [24]. The applicants in the present proceeding contended that because the Part A proceeding has been finalised and there will be a substantial delay before Part B is concluded, possibly not until 2006, they will be prejudiced by not having their costs for Part A where they were substantially successful. Accordingly, it was submitted, it was in the interests of justice that the costs application in relation to Part A be heard now.

24 I have already indicated my view about the indivisibility of the proceeding for the purpose of determining costs. Moreover, none of the considerations of the nature that led the Full Bench in UnitedGlobalCom to grant the costs application are present in these proceedings except perhaps "the fact it will be a considerable period of time before the proceedings are finally disposed of". As to that issue, I accept the applicant's contention that they have not been “dilatory in seeking to prosecute the proceedings to their conclusion after the delivery of Judgment No. 15” and that they should be accorded sufficient time to assess compensation, if any, that they consider justifiable as a consequence of the unfairness found in Judgment No 11 and arising post-Judgment No 15 that they may wish to press the Court to consider.

25 However, the time it will now take to complete the proceeding is a natural consequence of how it has developed, including how the parties have chosen to present their respective cases thus far and how the Court has determined the issues. There is no "delay"; it is simply a matter of how long the parties will take to prepare and put the remainder of the respective cases. As I understand it, the applicants themselves are not yet ready to proceed. It is true that the Court's list is full and extends out many months. But counsel for the applicants has acknowledged the applicants were aware of this fact and it has always been a matter for them (and the respondents) to advise the Court as early as practicable as to how much time they will need to complete the matter and the Court will, in turn, advise the parties of available dates.

26 I do not consider that the time it will take to complete Part B of the proceeding is a reason to grant the applicants' application regarding costs, especially given my view that the proceeding were not split for the purpose of making separate determinations in relation to the costs for Part A and Part B.

27 The application by the applicants that the Court hear and determine an application for the costs of the first phase of the proceedings prior to the commencement of the second phase of the proceedings is refused. Costs are reserved.

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LAST UPDATED: 04/02/2005