JUDGMENT NO. san 66cm 6 CATCHWORDS PRACTICE AND PROCEDURE .-- costs - review of decision of taxing officer pursuant to Federal Court Rules 062 144(1) - rules providing for payment into court - consent orders for payment out - whether constitute an "awarded judgment" - copyright action - whether proceedings could have been more suitably brought in another jurisdiction - "one-third off" rule : O62 136A - costs of counsel attending mediation. Federal Court Rules 062 rr44(1), 36A; O23 rr6, 10, 11 Newall v Tunstall [1970] 3All E.R. 465 Waite v Redpath Dorman Long Ltd [1971] 1 All E.R. 513 Magenta Nominees Pty Ltd v Richard Ellis (Western Australia) Pty Ltd & Ors (unreported, Carr J., 12 May 1994). LED BUILDERS PTY LTD (ACN 002 351 957) TRADING AS BEECHWOOD HOMES V GAYLE MARILYN HOPE (NOW GAYLE MARILYN FRANKS) No NG 287 of 1992 Tamberlin J Sydney 20 September 1994 20 SEP 1994 RECEIVED IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. NG 287 of 1992 GENERAL DIVISION wee ee ee ee BETWEEN : LED BUILDERS PTY LTD (A.CN. 002 351 957) TRADING AS BEECHWOOD HOMES Applicant AND : GAYLE MARILYN HOPE (NOW GAYLE MARILYN FRANKS) Respondent CORAM : TAMBERLIN J PLACE : SYDNEY DATED : 20 SEPTEMBER 1994 MINUTES OF ORDER THE COURT ORDERS THAT : 1. Decision of the taxing officer on reconsideration affirmed, subject to Order 2. 2. The costs items incurred after the date of the notice of deposit be remitted to the taxing officer for further consideration. 3. The respondent to pay the costs of this application. 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 No. NG 287 of 1992 Nee ee ae ee ee GENERAL DIVISION BETWEEN : LED BUILDERS PTY LTD : (A-CN. 002 351 957) TRADING AS BEECHWOOD HOMES Applicant AND: GAYLE MARILYN HOPE (NOW GAYLE MARILYN FRANKS) Respondent CORAM : TAMBERLIN J PLACE : SYDNEY DATED : 20 SEPTEMBER 1994 REASONS FOR JUDGMENT This is an application to review a decision of a taxing officer who has given a Certificate of Taxation in accordance with her decision on a reconsideration. The application for review is made pursuant to 062 144(1) of the Federal Court Rules. The motion for review is filed by the respondent to the proceedings. The amount of the Certificate of Taxation is $5950.70. On 5 February 1993, by consent, the Court ordered that : "1. The sum of $5000 brought into Court by the respondent to be paid out to the applicant. 2. The respondent to pay the applicant's costs as assessed or taxed. 3. The application be otherwise dismissed." There are two matters in dispute. The first is that the respondent claims that the taxing officer erred in holding that the respondent was not entitled to the benefit of what is described as the "one-third off" rule in relation to the apphicant's costs. This is a reference to 062 136A of the Federal Court Rules. The relevant parts of 136A are as follows : "(1) When a party is awarded judgment for less than $100,000 on a claim (not including a cross-claim) for a money sum or damages any costs ordered to be paid, including disbursements, will be reduced by one-third of the amount othermse allowable under this Order unless the Court or a Judge otherwise orders. (2) If the Court or a Judge is of the opinion that a proceeding (including a cross-claim for a money sum or damages) brought in this Court could more suitably have been brought mm another court or in a tnbunal and so declares, then any costs to be paid, including disbursements, will be reduced by one-third of the amount otherwise allowable under this Order." The second claim by the respondent is that the officer erred in allowing costs of Counsel in respect of an attendance at a mediation conference. In order to understand the arguments it is necessary to have regard to the background of the matter. On 20 May 1992 the applicant, Led Builders Pty Ltd, filed an application in the Federal Court seeking damages for infringement of copynght, interest and costs. By an amended statement of claim filed on 17 August 1992 the applicant claimed that the respondent mfringed the applicant's copyright by authorising the reproduction of certain house plans and claimed damages of $15,589 plus interest. There were subsequently pleadings and discovery. On 14 October 1992 the respondent paid mto court $5,000 in answer to all the causes of action on which the applicant claimed. This was deposited with the court pursuant to 023 ré6. Order 23 r10(2) provides that an applicant may accept money paid 1m, in satisfaction of the cause of action within fourteen days after service of the notice of deposit by filing a notice of acceptance in the prescribed form. By sub-rule (10) an applicant who accepts money under this rule is entitled to receive payment of the money without any order. On 16 November 1992 the applicant filed a notice of acceptance under O23 r10. However, it was common ground before me that this was outside the prescribed fourteen day period. It follows that an order was required to entitle the applicant to receive payment of the money. Where an applicant accepts money under ri0 in satisfaction of a cause of action the proceeding is stayed as against the respondent. See 023 r11(1). On 5 February 1993 a judge of the court made the consent orders referred to earlier and the monies were duly paid out on 10 February 1993. The respondent submits that the consent orders comprise an "awarded judgment for less than $100,000 on a claim (not including a cross-claim) for a money sum or damages" within the meaning of 062 136A. Therefore, it 1s said that any costs should be reduced by one-third of the amount otherwise allowable unless the court otherwise orders. It is submitted that the court should not otherwise order. Alternatively, it is said that the proceedings could have been more suitably brought in another court and that this court ought to so determine and upon such determination any costs to be paid will be reduced by one-third of the amount otherwise allowable. See r36A(2). The taxing officer considered that the consent orders did not amount to an "awarded judgment" within r36A(1). She referred to the decision of Ashworth J. in Newall v Tunstall [1970] 3 All E.R. 465. In Tunstall's case Ashworth J. considered that an order that money could be paid out of court outside the fourteen day period for acceptance did not amount to a "judgment" for a sum of money for the purposes of enlivening a rule providing for the payment of interest. In that case an order was made that the money be paid out of court beyond the fourteen day period prescribed under the corresponding English Supreme Court Rules relating to acceptance of monies paid in. He considered that there was no judgment against the defendant and that the order made simply had the effect of granting leave so as to enable the plaintiff to accept the money deposited out of time. A similar view was taken by Fisher J. in Waite v Redpath Dorman Long Ltd [1971] 1 All E.R. 513 at p 516. It could not be said that the acceptance of money deposited within the fourteen days of the payment in of that money would constitute an "awarded judgment". The fact that the Court has made an order that the monies be paid out, in a situation where fourteen days have expired, does not in my view amount to a judgment that the defendant is to pay the monies. In substance it 1s an order that enables the payment out of the sum deposited under O23 in order to enable the applicant to take advantage of the respondent's offer of compromise. Accordingly, I do not consider that r36A(1) applies in the present case. Furthermore, I do not consider it appropnate in the present case that the taxed costs of the applicant should be reduced by one-third of the amount otherwise allowable. This is not a case where the proceedings could have been more suitably brought in a District or Local Court. The proceedings relate solely to copyright infringement and it appears to me that there is no junsdiction in those courts to deal with such questions. Moreover, the considerable experience and expertise of this Court and the complexity inherent in copynght proceedings clearly makes it more suitable that the proceedings be brought in the Federal Court. Cf. Magenta Nominees Pty Ltd v Richard Ellis (Western Australia) Pty Lid and Alexander John Corbett and Ian Holmes and Paul Winton (unreported, Carr J., 12 May 1994). In my opinion 136A, unless applied with discretion and caution can lead to harsh Tesults. Especially is this so m relation to claims for small monetary amounts in matters such as copynght. If the rule 1s allowed to apply automatically in all cases where a sum, less than $100,000, 1s recovered, this can lead to harsh results in situations where there is no other more appropriate court. This in turn could lead to situations where parties may be discouraged from entering into settlements by reason of the potential cost penalty. Accordingly, I would consider it appropriate, even if it could be said that the orders made in the present case fulfil the description in r36A of an "awarded judgment", to exercise the powers of the Court to "otherwise order" that the one-third off rule should not apply in the present circumstances. Furthermore, I do not consider, for the reasons given above, that this is a case where proceedings could more suitably have been brought in another court or tribunal. Accordingly, r36A(2) has no application in the present case. For the above reasons I am of the view that the taxing officer did not make any error in relation to reconsideration of costs in this matter m respect of O62 136A. The second matter raised by the respondent relates to the appropriateness of briefing Counsel to appear at a mediation conference designed to explore the prospects of settlement in this matter. It 1s said in effect that this was not a proper matter in which to brief Counsel and that the matter could have been more economically dealt with by the solicitors. I note that the taxing officer did reduce the amount claimed in respect of this attendance by Counsel from $650 to $500. I consider it perfectly appropriate that at a relatively early stage of proceedings prospects of settlement should be comprehensively explored. If a party sees fit to bnef Counsel to explore the prospects of settlement, I consider that such a decision 1s quite reasonable. In the circumstances I am of the view that 1t was reasonably open to the taxing officer to come to the conclusion which she did on this aspect. At the hearing the respondent raised for the first time the objection that costs incurred after the notice of deposit on 14 October 1992 should not be allowed. In my opinion there is substance in this submission. It was not raised before the taxing officer but in the circumstances I think it appropriate to direct that the respondent should be entitled to raise this ground of objection. It basically relates to claims for costs items after 14 October 1992 and I propose to remit those costs items incurred after that date to the taxing officer for reconsideration in the light of the respondent's objection. I consider, however, that the applicant is entitled to its costs m giving effect to the consent orders. I leave it to the taxing officer to decide what other costs should be allowed to the applicant after the date of deposit with the Court. Accordingly, for the reasons given above I affirm the decision of the taxing officer on reconsideration but I remit to her for further consideration the question as to the costs items incurred after the date of the notice of deposit and I make the orders set out in the Minutes of Order forming part of this judgment. I consider that the respondent should pay the costs of the application before me. I certify that this and the preceding seven (7) Pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice Tamberlin. Date : Solicitors for Applicant : Counsel for Respondent : Solicitors for Respondent : Date of Heanng : Date Judgment Delivered : . SH Ben SLY 20 September 1994 Ternes and Salier Solicitors Mr S W Chmpson Lamrocks Solicitors 13 September 1994 20 September 1994