FEDERAL COURT OF AUSTRALIA Barry v City West Water Limited [2002] FCA 1388 KEVIN FRANCIS PATRICK BARRY & ANOR v CITY WEST WATER LIMITED AND ANOR V 569 of 1999 ALLSOP J 7 NOVEMBER 2002 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY V 569 of 1999 BETWEEN: KEVIN FRANCIS PATRICK BARRY FIRST APPLICANT STREAMLINE DRAINS & PIPELINES PTY LIMITED (ACN 059 665 539) SECOND APPLICANT AND: CITY WEST WATER LIMITED (ACN 066 902 467) FIRST RESPONDENT BRAMBLES AUSTRALIA LIMITED (ACN 000 164 938 SECOND RESPONDENT JUDGE: ALLSOP J DATE OF ORDER: 7 NOVEMBER 2002 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Pursuant to O 29 r 2 of the Federal Court Rules, the decision of the questions raised by paragraph 13 of the amended defence of the second respondent, the amended reply of the applicants and the amended rejoinder of the second respondent be heard before the trial of any other question in these proceedings. 2. The proceedings as against the second respondent be struck out with no order as to costs in respect of any costs incurred in the proceedings up to 31 December 2000. 3. The applicants each be restrained from instituting in any court or tribunal any proceedings against the second respondent: (a) substantially in the form of these proceedings; or (b) claiming any of the relief claimed in these proceedings. 4. The applicants pay the costs of the second respondent of the proceedings after 31 December 2000, such costs to be paid as to 75 % of the costs on a full indemnity basis, such costs to include all costs incurred by the second respondent except insofar as they are of an unreasonable amount or have been unreasonably incurred, so that subject to these exceptions, the second respondent is completely indemnified for its costs, and as to 25% of the costs on a party-party basis. 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 V 569 of 1999 BETWEEN: KEVIN FRANCIS PATRICK BARRY FIRST APPLICANT STREAMLINE DRAINS & PIPELINES PTY LIMITED (ACN 059 665 539) SECOND APPLICANT AND: CITY WEST WATER LIMITED (ACN 066 902 467) FIRST RESPONDENT BRAMBLES AUSTRALIA LIMITED (ACN 000 164 938) SECOND RESPONDENT JUDGE: ALLSOP J DATE: 7 NOVEMBER 2002 PLACE: SYDNEY REASONS FOR JUDGMENT 1 In this matter I delivered my reasons for judgment on 3 October 2002, making an order requiring the second respondent, Brambles Australia Limited, to bring in draft short minutes of order giving effect to my reasons. That has been done. 2 The second respondent appears today seeking orders in accordance with the draft orders supplied pursuant to Order 1 made on 3 October 2002. No appearance is made for the applicants. My associate received a letter dated 1 November 2002 from the erstwhile solicitors for the applicants indicating that they would not be appearing today. Enclosed with that letter, sent by facsimile, were two pages of written submissions, not signed, but, I take it, prepared by Mr Maxwell QC and Mr Nicholas, as to the issue of relief. 3 No legal representative attended today on behalf of the applicants nor did the applicants themselves attend. I had the matter called three times outside the Court in Melbourne and there was no appearance. Nor was there any appearance apparent in Sydney. It is plain from the written submissions of Mr Maxwell and Mr Nicholas that the only matter in issue in relation to relief is the question of indemnity costs. 4 In [248] of my reasons of 3 October 2002, I noted that the suggested order restraining the applicants from bringing like proceedings in the future was appropriate, it seemed to me, though not claimed in any cross-claim. In this respect, I made reference to O 35 r 1 of the Federal Court Rules. The second respondent seeks the order of that kind which I set out in par 246(c) of my reasons and Mr Maxwell and Mr Nicholas have not put any submissions to the contrary of my making such an order. 5 As to the question of costs, it goes without saying that the applicants are to pay the costs of the second respondent. The second respondent seeks costs on a full indemnity basis. The submissions in support of that contention were filed during the course of oral submissions towards the end of the hearing and in further outline submissions sent to my associate on 14 October 2002. The thrust of the submissions is that, given my findings as to the falsity of the evidence in significant respects of the witnesses on behalf of the applicant and one of the applicants, I should make an order for indemnity costs. 6 These reasons should be read with my reasons of 3 October 2002. Given the serious nature of some of the findings I made, it is inappropriate to summarise them globally. However, it is not an oversimplification to say that I found significant parts of the evidence of, and on behalf, of the applicants to be false; on occasions knowingly so and on occasions in circumstances where they ought to have known of it. 7 The submissions of Mr Maxwell and Mr Nicholas accept that, in the light of my findings, the power of the Court to order indemnity costs is appropriately enlivened. It is thus unnecessary for me to engage in any excursus, brief or lengthy, upon the circumstances in which indemnity costs may be awarded. If I may say so respectfully, they are usefully summarised in the written submissions filed on behalf of the second respondent and drafted by Mr Gunst QC and Ms Kennedy. I will leave those submissions, as well as the submissions of Mr Maxwell and Mr Nicholas, on the court file. I should add that I am under no doubt that, given the findings which I have made, the concession of Mr Maxwell and Mr Nicholas is one properly made. 8 The real question which I have to decide is whether or not I award the totality of the costs on an indemnity basis or some lesser proportion. Mr Maxwell and Mr Nicholas in their written submissions identify issues which, while having been lost, are of a kind which should not attract the odium of an order for indemnity costs. In particular, the question of the possible repudiatory conduct by the second respondent after the agreement was made in June 2000. 9 Mr Gunst says that this would have led only to an action for damages. I do not necessarily agree with that. It would depend upon the issue, which I indicated was unnecessary to decide, of the seriousness of the breach. In particular, I refer to my reasons for judgment at [241]. There were issues raised which required an investigation of the conduct of the parties after 8 June 2000 which may have thrown light upon the question as to whether the contract was enforceable or had been discharged or was operative or had been repudiated. Whilst not initially succinctly identified in the pleadings, these matters eventually became exposed and were dealt with during the hearing, in the pleadings and in my judgment. On the balance, I think that some allowance should be made in the respects identified by Mr Maxwell and Mr Nicholas. They suggest that if an award of indemnity costs is to be made, it should only be in respect of half the costs. I think that is somewhat generous to the applicants. I will return to the appropriate percentage in a moment. 10 As I said in White v Overland (2001) 67 ALD 731 last year, litigation is not a game, it is a costly and stressful, but necessary, evil. This case was prolonged for a significant period of time by evidence which was groundless and in significant respects false. Parties should not have to come to court to fight tooth and nail through the thicket of such evidence, then be left with the practical reality of having, at best, something in the order of 60 to 70% of their costs recovered, assuming the unsuccessful litigant is solvent. 11 In my view, bearing in mind the issues that were agitated and lost, but which were issues untainted by the conduct of the applicants, I think in all the circumstances and doing justice to the parties, and in particular the second respondent, I will order that 75% of the costs be paid on an indemnity basis. 12 I will make orders in a moment. However I wish to specifically refer to one aspect of the submissions of Mr Gunst and Ms Kennedy. In the first bullet point under par 14, they make reference to a proposition put forward in submissions on behalf of the applicants. That proposition was that the evidence of Mr Jolson QC should not be accepted as accurate. I dealt with this at [30] of my reasons which I will not repeat, save and except to note that I described the proposition that I should reject the evidence of what Mr Jolson said that he said to the parties about rendering the terms binding as "both surprising and without merit". 13 In par 14 of their submissions on costs, Mr Gunst and Ms Kennedy put the following proposition in part by reference to that matter. They say: A number of other groundless contentions were made on behalf of the applicants that clearly led to the prolongation of the hearing. 14 That is a legitimate submission for counsel to make and I am not critical at all of their making it. However, it should not be thought that the phrasing used by me in [30] was directed to the conduct of the matter by Mr Maxwell or any other legal representative of the applicants. Mr Maxwell conducted the case vigorously and fairly. No doubt a decision was made in the best interests of his clients as to how to deal with Mr Jolson's evidence. While not in any way resiling from my comments in [30], I wish simply to make it clear that they were intended to reflect my view of the strength, or lack of strength to put it more accurately, of the submission and not to the propriety of making them. I intended no criticism whatsoever of Mr Maxwell in that regard, and my comments should not be taken as such. 15 With that qualification, I should express my general agreement with the submissions of the second respondent in relation to costs, should there be any doubt as to the detail of my reasoning for the awarding of costs on the basis that I propose. The orders of the Court will be as follows: 1. Pursuant to O 29 r 2 of the Federal Court Rules, the decision of the questions raised by par 13 of the amended defence of the second respondent, the amended reply of the applicants and the amended rejoinder of the second respondent be heard before the trial of any other question in these proceedings. 2. The proceedings as against the second respondent be struck out with no order as to costs in respect of any costs incurred in the proceedings up to 31 December 2000. 3. The applicants each be restrained from instituting in any court or tribunal any proceedings against the second respondent: (a) substantially in the form of these proceedings; or (b) claiming any of the relief claimed in these proceedings. 4. The applicants pay the costs of the second respondent of the proceedings after 31 December 2000, such costs to be paid as to 75 % of the costs on a full indemnity basis, such costs to include all costs incurred by the second respondent except insofar as they are of an unreasonable amount or have been unreasonably incurred, so that subject to these exceptions, the second respondent is completely indemnified for its costs and as to 25% of the costs on a party-party basis. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop. Associate: Dated: 8 November 2002 Counsel for the Applicant: C M Maxwell QC with P D Nicholas Solicitor for the Applicant: Home Wilkinson Lowry Counsel for the Respondent: C Gunst QC with M Kennedy Solicitor for the Respondent: Freehills Date of Hearing: 7 November 2002 Date of Judgment: 7 November 2002