Pacific Composites Pty Ltd & Anor v Transpac Container System Ltd (carrying on business as Blue Anchor Line) & Ors [1998] FCA 1264

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 377 of 1996

IN ADMIRALTY

BETWEEN: PACIFIC COMPOSITES PTY LTD

(can 005 952 698)

First pLAINTIFF

LEMARNE CORPORATION LIMITED

(can 004 834 584)

Second PLAINTIFF

AND: TRANSPAC CONTAINER SYSTEM LIMITED carrying on business as BLUE ANCHOR LINE

First DEFENDANT

ANL LIMITED

(can 008 654 206)

Second DEFENDANT

UNITED ARAB SHIPPING COMPANY (S.A.G.)

Third DEFENDANT

JUDGE: TAMBERLIN J

DATE OF ORDER: 8 OCTOBER 1998

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The application for a Bullock order against the first defendant is dismissed with costs. 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 NG 377 of 1996

in admiralty

BETWEEN: PACIFIC COMPOSITeS PTY LTD

(ACN 005 952 698)

First plaintiff

LEMARNE CORPORATION LIMITED

(ACN 004 834 584)

Second plaintiff

AND: TRANSPAC CONTAINER SYSTEM LIMITED

carrying on business as BLUE ANCHOR LINE

First defendant

ANL LIMITED

(ACN 008 654 206)

Second defendant

UNITED ARAB SHIPPING COMPANY (S.A.G.)

Third defendant

JUDGE: TAMBERLIN J

DATE: 8 OCTOBER 1998

PLACE: SYDNEY

REASONS FOR JUDGMENT Judgment on Bullock Order Pacific Composites Pty Limited ("Pacific") seeks an order that the unsuccessful defendant, Transpac Container System Limited carrying on business as Blue Anchor Line, ("BAL") should pay those costs of ANL Limited ("ANL"), which the plaintiff agreed to meet as a term of discontinuing proceedings against ANL. Pacific's submission on this matter is that due to the "ambiguous" nature of the bill of lading it did not know whether ANL was an appropriate defendant but considered it reasonable to join it as a defendant. Pacific wrote to BAL seeking to clarify the matter but BAL refused to make any admissions or concessions, no doubt, on the basis that the documentation was ambiguously worded and that the identity of the relevant carrier was not clear. Pacific agreed to discontinue against ANL and to pay its costs assessed at $11,000. Costs were negotiated downward from $15,516, which was the initial claim of the solicitors for ANL. BAL denied that it was the carrier under the bill of lading. This question was litigated and BAL was unsuccessful on this point. It was ordered to pay the costs of the plaintiff on a party-party basis. However, the plaintiff says that it remains out of pocket as a result of its compromise with ANL and seeks to recover the amount paid as costs to ANL from BAL. The costs order sought is in the nature of what is known as a "Bullock" order. That is a reference to the decision of the English Court of Appeal in Bullock v London General Omnibus Company [1907] 1 KB 264. The primary judge in that case, on hearing a negligence action, entered judgment for the plaintiff against the first defendant, General Omnibus. There were other defendants and judgment was entered for those other defendants with an award of costs in each case against the plaintiff. The trial judge ordered that costs of the plaintiff against General Omnibus were to include those costs paid by her to the successful defendants. These orders were upheld by the Court of Appeal. Speaking of the orders requiring General Omnibus to pay to the plaintiff the costs which she was obliged to pay to the successful defendants, Collins M R said at 269: "The common sense underlying this order is clear, because the learned judge when he made it had evidence that, owing to the attitude taken by the General Omnibus Company, it was reasonable for the plaintiff to join the other defendants." This principle was further spelt out by Asche CJ in Lackersteen v Jones (No 2) (1988) 93 FLR 442 at 449 as follows: "From those cases therefore the following principles seem to be established before a judge can make a "Bullock" or "Sanderson" order. 1. It must be seen to have been reasonable and proper for the plaintiff to have sued the successful defendant. 2. The causes of action against two or more defendants need not be the same but they must be substantially connected or dependant the one on the other. 3. While it is essential to find that the plaintiff has acted reasonably and properly that alone is not sufficient. The court must find something in the conduct of the unsuccessful defendant which makes it a proper exercise of discretion. 4. Finally, in considering whether to make such an order, the court should, in the exercise of its discretion balance overall two considerations of policy: the first, that an unnecessary multiplicity of actions should not be forced on litigants, so that a plaintiff who acts reasonably in joining two or more defendants should not be penalised or lose the fruits of his victory in costs on the basis that he should have either elected or taken separate actions; secondly, that an unsuccessful defendant should not have to pay more than one set of costs merely because he is unsuccessful." In s 43 of the Federal Court of Australia Act (1976) (Cth) the Court has a wide, unfettered discretion as to costs. However, the discretion must be exercised judicially, taking into account the principles referred to in the case law. In the present case, the action against ANL was abandoned and did not proceed to judgment. The merits of the claim were, therefore, not litigated; nor was the question of costs or the reasonableness as to the amount claimed. On the Lackersteen criteria, I am not satisfied that it was reasonable and proper for Pacific to have sued ANL. Nor am I persuaded that there is anything in the nature of the conduct of BAL which would make a Bullock order appropriate in the circumstances. The documentation in this case was ambiguous and there were difficulties of construction as to the responsibility and identification of the relevant carrier. There were oversights on both sides to some extent. Therefore, I am not satisfied that the conduct of BAL in contesting the matter was such as to warrant the making of a special order imposing liability to pay more than one set of costs. In considering this aspect of the costs application by Pacific, I have taken into account the existence of the alleged "Caulderbank" letter as providing possible support for the making of a special costs order to give effect to the principle in Bullock's case. However, because of the way in which the letter was framed and the way in which the baseless allegation of fraud was sought to be used, I am not prepared to give any significant weight to that letter in the exercise of my discretion. In proper circumstances, of course, the sending of such a letter may be given weight where a special costs order is sought such as a Bullock order: cf Messiter v Hutchinson (1987) 10 NSWLR 525 at 528-529 per Rogers J. Accordingly, I dismiss with costs the application by the plaintiff for a Bullock order against the first defendant.