JUDGMENT No. JS. wk, IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY No VG 346 of 1993 GENERAL DIVISION BETWEEN: LEIGH-MARDON PTY LTD Applicant AND: TITAN CORPORATION LTD and OTHERS Respondents COURT: NORTHROP J PLACE: MELBOURNE DATE: 19 JUNE 1996 REASONS FOR JUDGMENT There is a motion on notice before the Court by which the respondents are seeking a number of orders relating to questions of costs. The Court has on two occasions ordered that the applicant pay the respondents costs thrown away by reason of amendments to the statement of claim being made by the applicant. The first order was that of Heerey J, on 14 September 1993, where an order was made giving leave to the applicant to amend the statement of claim, but as I understand it there was no order made that the costs of the respondents thrown away by reason of the amendment should be reserved. This is an interlocutory order and in accordance with the provisions of the rules dealing with interlocutory orders and, in my opinion the Court can, if need be, re-open the order to deal with costs - not reserved but which should have been reserved. The position is, as I understand it, that on interlocutory steps costs in the cause have the effect that those costs follow the event in due course unless some specific order is made later on. Costs reserved in favour of one party or generally, have the effect that unless at the final outcome orders are made in relation to those reserved costs, they also are costs in the cause. Thirdly, the mere fact of an order that costs be paid has the effect of not being taxed and paid immediately unless the Court otherwise orders. This is provided for by Order 62 rule 3 of the Federal Court Rules. There was no reservation of the costs of the respondents of the order made by Heerey J. It is a well known rule, as I understand it, that where a party seeks leave and obtains leave to amend a pleading the opposing party, almost as of right, has the benefit of an order for the costs thrown away by reason of that amendment. I see no reason why that order should not be made now by way of variation if need be, of the order made by Heerey J, on 14 September 1993. The first order being sought by the motion relates to that order and also an order referred to in paragraph 2C of the affidavit of Mr Newman, where an order was made reserving costs thrown away. In relation to both of those orders, orders are now being sought that those costs be taxed and paid now, pursuant to provisions of order 62 rule 3. There is no doubt that the order that the applicants pay the respondent's costs thrown away is correct. In fact those orders were not being disputed by counsel for the applicants. But there was an argument about whether those costs should be taxed and paid forthwith or wait until the outcome of the action. There is a dearth of authority in relation to the construction and application of 062, 13(2) which reads:- "Where the Court makes an order in any proceeding for the payment of costs the Court may require that the cost be paid forthwith notwithstanding that the proceeding is not concluded." That subrule must be understood in the light of other parts of subrule 3, namely: "3(1) A Court may in any proceeding exercise its powers and discretions as to costs at any stage of the proceedings or after the conclusion of the proceeding." "3(3) An order for costs of an interlocutory proceeding shall not, unless a Court otherwise orders, entitle a party to have a bill of cost taxed until the principal proceeding in which interlocutory order is made is concluded or further order." During the course of submissions reference was made to three authorities, but with respect none of them really assists me in this case. I accept as a matter of principle that if there is a discreet matter which is so isolated from the main procedural matters of the action, that it can be treated as if it were a separate matter from the main action and if orders for costs are awarded then there is at least a prima facie case for having those costs taxed and paid forthwith. It is not a case of determining whether costs likely to be so incurred are great or small. In my opinion that is irrelevant. The important aspect is whether the costs are in relation to a matter of such a nature which, as it were, can be treated as finally dealing with that matter. In cases where an order is made that a party pay costs thrown away as a result of an indulgence, in this case the amendment of the statement of claim, I can see much force to support the view that an order should be made under 062, r3(3) of the Federal Court Rules. Accordingly I order that the costs awarded by the orders made on 14 September 1993, 14 November 1995 and 29 February 1996 be taxed and paid forthwith. The respondents are also seeking, in their motion, an order for costs thrown away by reason of the vacation of the trial date of 18 March 1996. During the course of submissions many comments were made in relation to how this came about but by way of general observation I would say that in cases where the Court does play an active part in the management of proceedings in the Court, expenses will be incurred by parties pursuant to directions given by the Court and from time to time the Court might need to make variations of orders previously made as part of the overall management concept. In this case the date for hearing had been fixed apparently without consultation with the parties and at a time when on any proper analysis of the proceedings the case would not have been ready for trial. It was shortly after that that this case which is a very complex one and which is going to involve a lengthy hearing, was assigned to a particular Judge to deal with all the interlocutory matters, to take charge of the management of that case and to conduct the trial of the hearing provided nothing occurred which might disqualify the Judge from hearing the matter. As a result of that new arrangement the Court, really for the first time, took an active part in trying to ascertain what were the real issues between the parties and to ensure that the pleadings at least reflected what were the true issues between the parties. As part again of the Court management arrangement it is often desirable to have pressure brought on the parties by way of a date fixed for hearing and that was in fact done in this case until it became absolutely clear that the case could not be ready for that date and so the adjournment was granted. It is not for the Court to determine who was to blame for that occurring. To a large extent blame can be apportioned between the parties. It is understood that there are arrangements in the profession for the well-being of proceedings to proceed harmoniously, not always to rely upon a formal motion and that is to be encouraged, particularly where the Court does have management. But in a case like this where it was really only following fairly lengthy discussions at directions hearings that the matters became clearer, that it became necessary to have a proper statement of claim prepared and filed and the date for hearing vacated. In my opinion, having regard to the nature of this case, it is inappropriate to make any order for costs thrown away by reason of a trial date being vacated. Accordingly the motion of the order sought in the notice of motion by order 1(b) is refused. The same may be said in relation to the costs of the directions hearing of the 30th and 31st January. This was at the time where the real discussions took place as to what the action was all about. During the course of those discussions questions of discovery and other matters did arise, but in my opinion they are not of themselves sufficient to make orders apart from the normal type of order that they should be costs of the cause. Likewise with respect to the time taken dealing with the whole issue of the proceedings on the 30th and 31st January. These were costs normally incurred by parties as part of the interlocutory management of the proceedings. There should be no special order in relation to those, except that they be costs in the cause. The same applies in relation to the costs of the directions hearing on 29 February. That was when the final order was made in relation to the statement of claim. It concluded what had been considered earlier. The respondents have the benefit of the order for the costs thrown away by reason of the leave being granted to amend the statement of claim. They have the benefit of those costs being taxed and paid before the end of the action. Insofar as costs of that day were concerned, in my opinion they form part of the normal processes of the Court in the management of the matter before the Court. Accordingly the motion is refused in relation to an order that the respondents' costs of that day's directions hearing, be paid by the applicant. So in the result on the motion orders are made in relation to orders 1(a) which cover the orders of 14 September 1993; 14 November 1995; and 29 February 1996, insofar as they relate to the respondents' orders for costs thrown away. A further order is made that those costs be taxed and paid forthwith notwithstanding that the proceeding has not been concluded. Otherwise the motion is refused and the costs of the motion be costs in the cause, and costs of the directions hearing also be costs in the cause. I certify that this and the preceding seven (6) pages are a true copy of the Reasons for Judgment of the Honourable Justice R M Northrop. Associate: M ; KL a Date: 4 June 1997 Counsel for the applicant: Solicitors for the applicant: Counsel for the respondents: Solicitors for the respondents: Date of hearing: ATTACHMENT Mr P Hayes QC with Ms K Williams Gerrard & Stuk Mr G Nettle QC with Mr N Lucarelli Maddock Lonie & Chisholm 19 June 1996