Cameron, L. v Qantas Airways Ltd [1995] FCA 510

CATCHWORDS

COSTS - Discretion - whether O.62 r.36A of Federal Court Rules should apply. Cummings v Lewis (1993) 41 FCR 559 - cons. Inn Leisure Industries Pty Ltd v D.F. McCloy Pty Ltd (1991) 28 FCR 172 - cons. O.62 r.36A(1) - cons. LEONIE CAMERON v QANTAS AIRWAYS LIMITED No. G205/93 BEAUMONT J. SYDNEY 10 JULY 1995

IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G205 of 1993 ) GENERAL DIVISION )

BETWEEN: LEONIE CAMERON Applicant AND QANTAS AIRWAYS LIMITED Respondent

CORAM: Beaumont J. DATE: 10 July 1995 PLACE: Sydney

MINUTES OF ORDER

THE COURT ORDERS THAT: 1. The respondent pay 70% of the applicants' costs of the proceedings, subject to, and without disturbing, the special orders for costs made in favour of the respondent on 14 July and 21 December 1993 and 19 April 1995. 2. O.62 r.36A(1) not apply. 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. G205 of 1993 ) GENERAL DIVISION )

BETWEEN: LEONIE CAMERON Applicant AND QANTAS AIRWAYS LIMITED Respondent

CORAM: Beaumont J. DATE: 10 July 1995

REASONS FOR JUDGMENT (ON COSTS)

In this matter, I have now heard argument on the question of costs in the form of both written submissions and oral argument. At the outset, it should be noted that three special orders for costs have already been made, and it is accepted that nothing that I now propose to order in respect of costs should touch those orders. These were orders made on 14 July 1993 (where I ordered that the applicants pay the respondent's costs of the notice of motion for the striking out of part of the statement of claim), 21 December 1993 and 19 April 1995. In each case those orders were made as a result of amendments made to pleadings, and it was ordered that the party making the amendment pay the costs, if any, of the other side thrown away as a result of the amendment. There I was dealing with specific issues, and nothing that I will now deal with should derogate in any way from those orders. By way of a preliminary observation, it should also be mentioned that early in the proceedings the applicants, (being the applicant and the group members) abandoned a claim that they had pleaded in contract. No order was made at the time of the notification of this abandonment and consequent amendment of the pleading. In principle, I am of the view that the respondents should have the costs, if any, thrown away by reason of that abandonment; however, it appears that those costs would not be substantial. Prima facie, they would consist of the costs of the legal representatives of the respondent considering the claim in contract and preparing a defence to that claim. I will not, however, make a special order in this connection. Rather I propose to take it into account as a matter in the respondent's favour in the ultimate order I make for costs. I have concluded that, in all the circumstances, the respondent should pay 70 per cent of the applicants' costs of the principal proceeding. The general principles to be applied in this area are conveniently set out by Cooper J in his judgment in Cummings v Lewis, (1993) 41 FCR 559 at 602-3. I need not repeat that discussion. It is, however, necessary to advert to one special feature of this litigation and that is the provisions of O.62 r.36A(1) of the Federal Court Rules. The judgment in this matter was for a sum less than $100,000, and unless the court otherwise orders, an amount of one-third would be taxed off any award of costs. I propose to so order. There are several reasons for this. First, this matter is clearly in the nature of a test case, there being no previous decisions in the area. Secondly, the applicants availed themselves of the group proceedings procedure which is available exclusively in this Court. Finally, at the time these proceedings were commenced, the state of authority then indicated that it was unlikely that proceedings in the nature of a "class action" such as these could have been brought in any other court or tribunal. For the purposes of O.62 r.36A(1), I order that the reduction of one-third of the amount, otherwise allowable, will not take effect. I turn now to the general question of costs in the light of the particular circumstances of this litigation. As a reading of the orders made shows, there has been a mixed outcome. On two issues the respondent has succeeded, and on two issues the applicants have succeeded. On the question whether the respondent's conduct was unconscionable, the applicants have failed. On the question whether the respondent's conduct was misleading or deceptive where there was silence and no specific representation made, the respondent has also succeeded. This involved five of the 10 applicants. In the remaining five cases, the applicants succeeded in making out a case of misleading conduct, but in that respect only, damages were awarded, and in the exercise of the Court's discretion an injunction was refused. Moreover, I declined to make a declaratory order in that respect. On the other hand, the claim in negligence was entirely successful. Although the damages were not large, it is fair to say that no extravagant claim was made in terms of the amounts that were claimed on behalf of the applicants. In the course of final argument in the principal proceeding, counsel for the applicants indicated, perhaps in a colourful way, that the claims for damages were not as important from his point of view as the claims for injunctive and declaratory relief. But the claims for damages were never abandoned. They were strongly contested, and as I have said, they were the subject of a decision in an area that had not been previously considered by any court, not only in this country, but so far as the researches of counsel went, in any other country. I take that matter into consideration on the question of costs. I also mention (although I give little weight to it in the exercise of my discretion) an offer of settlement that was made by the applicants' solicitors in a letter dated 6 December 1994. This was not, in strictness, a "Calderbank" offer and it is not suggested that it fell within that principle. I note it as an indication of a willingness to mediate the question of damages so far as the applicants were concerned. It appears that there was no response by the respondent. As I have said, I take these circumstances into account, but not significantly. One matter that I have taken into account significantly in the applicants' favour is that they were, as my reasons demonstrate, substantially successful in two general areas: First, on the proof of the primary facts; and secondly, in the area of the expert opinion evidence. In both instances, this material provided a common substratum of facts and background against which the litigation took place. These are matters relevantly to be taken into account in this case for the reasons given by French J in Inn Leisure Industries Pty Ltd v D. F. McCloy Pty Ltd (1991) 28 FCR 172 at 174. I take into account also in the applicants' favour that, although injunctive relief was refused for the established contravention of s.52 of the Trade Practices Act 1974, this refusal was very much a matter of discretion. On the other hand, I have taken into account, in the respondent's favour, the fact that, albeit for discretionary reasons, the applicants did not succeed in obtaining the injunction sought. Looking at the matter overall, I have come to the view that the applicants should receive a substantial proportion of their costs. I have come to that conclusion not only because they were substantially successful in the two general areas mentioned, namely the primary facts and the expert evidence where the greater part of the time needed for the trial was taken, but also because five of the group members succeeded in the misleading conduct claim, and all of them succeeded in the claims in negligence. As has been said, I propose to put aside statements made in the course of argument by counsel for the applicants which may have tended to suggest that the claim in negligence was not as significant as the other claims. It is not really appropriate for counsel to attempt to attribute any particular degree of significance to parts of the applicants' claims in terms of outcome; but, in any event, the facts are that every aspect of the claim made by the applicants was strongly contested by the respondent, and the claim for negligence was never the subject of any admission of liability or concession in terms of the amount of the damages. For completeness, I record formally that I have taken into account, in fixing the proportion of 70 per cent, the circumstance that there should be allowed, in the respondent's favour, the costs, if any, thrown away by it as a result of the abandonment of the claim in contract. More importantly, in assessing the proportion of 70 per cent, I have given credit to the respondent for the circumstance, which is not unimportant, that the respondent was successful on the issue of unconscionable conduct; and that the respondent was successful, to some extent, on the claim for misleading conduct. However, it should also be noted that, in respect of the claim for unconscionable conduct, the greater proportion of the costs incurred by the respondent would be reflected in the presentation of legal argument. That is, applying the approach taken by French J in Inn Leisure, it appears that there was here also a common substratum of facts (being the primary facts and the expert opinion evidence) which applied to all three of the causes of action alleged by the applicants.