ss JUDGMENT No. on Qrnal ost Sune SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION No. SG 74 of 1994 P OM_A G J EO THE FEDERAL COURT OF AUSTRALIA ET N: DYNASTY PTY LTD, WAYNE LETGHTON THOMAS, THOMAS CHARTERS PTY LTD and THOMAS HOTELS PTY LTD. Appellants - and - Vv J Cc Respondent CORAM: Spender, O'Loughlin & Branson JJ PLACE: Brisbane DATE: 26 September 1995 RECEIVED 28 SEP 1995 MI OF _ORDE FEDERAL COURT OF AUSTRALIA PRINCIPAL REGISTRY THE COURT ORDERS THAT: the appeal be dismissed; the appellants pay the respondent's costs of the appeal, to be taxed if not agreed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. No. SG 74 of 1994 GE VIS ON_AP L_FRO ING JU OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: S P TD, WAYNE LEIGHTON HOMAS, THOMAS CHARTERS PTY LTD d OMAS HO S Y Appellants - and - KEVIN JOHN COOMBS Respondent CORAM: Spender, O'Loughlin, Branson JJ PLACE: Brisbane DATE: 26 September 1995 REASONS FOR DECISION THE COURT: In this matter the respondent has sought an order of indemnity costs in respect of the unsuccessful appeal against the decision of the Honourable Justice von Doussa. Section 43 of the Federal Court of Australia Act 1976 gives a general power to award costs and provides in subsection (2) that "f[e]xcept as provided by any other Act, the award of costs is in the discretion of the Court or Judge". The discretion has been said to be "absolute and unfettered" but it must be exercised judicially and cannot be exercised on grounds unconnected with the litigation (Cretazzo v Lombardi (1975) 13 SASR 4; Australian fransport Insurance Pty Ltd -2- & Anor v Graeme Phillips Road Transport Insurance Pty Ltd and Anor (1985) 10 FCR 177). The discretion extends to the making of an order that costs be paid on a "solicitor and client" rather than a "party and party" basis (Australian Transport Insurance Pty Ltd & Anor v Graeme Phillips Road Transport Insurance Pty Ltd and Anor) and to the making of an order that costs be paid on an indemnity basis (Australian Federation of Consumer Organisations Ine v Tobacco Institute of Australia Ltd (1991) 100 ALR 568; Thors and Ors v Weekes and Ors (1989) 92 ALR 131 at 152). Since the discretion of the Court is unfettered it is not appropriate to seek to derive rules for its exercise from previous decisions. It may be noted, however, that orders for costs to be paid on a "solicitor and client" or an indemnity basis are rarely made. When made they tend to reflect the peculiar nature of the litigation in question (e.g. Australian Federation of Consumer Organisations Inc v Tobacco Institute of Australia Ltd) or serious criticism of the conduct of a party or its legal representatives (e.g. Packer v Meagher (1984) 3 NSWLR 486; Australian Guarantee Corporation Ltd & Anor v De Jager & Anor (1984) VR 483). In this case the respondent places reliance on:- (a) the inappropriate and unhelpful form of the Notice of Appeal; (b) the fact that at directions hearing in relation to the appeal counsel for the respondent criticised, and O'Loughlin J drew attention to, the inappropriate form of the Notice of Appeal yet its -3- deficiencies were not rectified; (c) the fact that the applicants' solicitors were placed on notice approximately three weeks before the hearing of the appeal that, if successful on the appeal, the respondent would seek indemnity costs on account of the form and content of the Notice of Appeal; (d) the trouble and expense to which the respondent was put in meeting the numerous and detailed complaints raised by the Notice of Appeal; (e) an offer of settlement made by the respondent to the appellants prior to the commencement of the appeal. We note as to the final matter upon which reliance is placed that it appears that the appellants' solicitors were unable to contact their clients to take instructions with respect to such offer within the short time that the offer was expressed to be open for acceptance. This was apparently a factor outside the control of the appellants or their legal advisers. We do not consider it appropriate to place weight on the offer to settle the appeal. The hearing before the trial judge was lengthy and raised issues of some complexity. No criticism can be made of the decision of the appellants to institute an appeal to the Full Court: it was their right. It has not been suggested that they exercised this right for an improper purpose. It is our belief that the appeal hearing would have been expedited had the Notice of Appeal been appropriately drawn. The extent to which it might have been so expedited is difficult to quantify. We do not doubt that the task of the ~4- respondent's legal representatives in preparing to meet the appeal would have been less onerous had the Notice of Appeal been appropriately drawn. Again it is difficult to determine to what extent. In our view a situation might arise in which = an inappropriately drawn Notice of Appeal can be shown so plainly to have added significantly to the costs of the respondent that an order for costs should be made as a compensatory measure. An order of that kind was made in Ah Toy v Registrar of Companies (NT) (1986) 72 ALR 107 at 134-135 where inappropriately voluminous Appeal Books were prepared. On balance, however, we do not consider this to be an appropriate case for the making of such an order. In our view in this case the usual order that the successful party should have its costs of the appeal on a party and party basis to be taxed if not agreed is the appropriate order. We order accordingly. I certify that this and the preceding three (3) pages are a true copy of the Reasons for Decision of Spender, O'Loughlin and Branson JJ. Associate: PA Gp Dated: 26 September 1995