STX Developments Pty Limited v Commonwealth of Australia [2005] FCA 382

FEDERAL COURT OF AUSTRALIA

STX Developments Pty Limited v Commonwealth of Australia [2005] FCA 382 Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 48134 – referred to. Gladstone Park Shopping Centre Pty Ltd v Ross Wills (1984) 6 FCR 496 – cited. STX DEVELOPMENTS PTY LIMITED v COMMONWEALTH OF AUSTRALIA & ANOR NSD 1116 of 2002 HILL J 8 APRIL 2005 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 1116 OF 2002

BETWEEN: STX DEVELOPMENTS PTY LIMITED

APPLICANT

AND: COMMONWEALTH OF AUSTRALIA

FIRST RESPONDENT

FEDERAL MINISTER FOR JUSTICE AND CUSTOMS

SECOND RESPONDENT

JUDGE: HILL J

DATE OF ORDER: 8 APRIL 2005

WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. The applicant pay the second respondent's costs of the application.

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 NSD 1116 OF 2002

BETWEEN: STX DEVELOPMENTS PTY LIMITED

APPLICANT

AND: COMMONWEALTH OF AUSTRALIA

FIRST RESPONDENT

FEDERAL MINISTER FOR JUSTICE AND CUSTOMS

SECOND RESPONDENT

JUDGE: HILL J

DATE: 8 APRIL 2005

PLACE: SYDNEY

REASONS FOR JUDGMENT (COSTS – SECOND RESPONDENT) Hill J: 1 On 23 October 2002 the applicant, STX Devlopments Pty Limited ("the applicant"), commenced proceedings in this Court against the Commonwealth of Australia ("the first respondent") and the Federal Minister for Justice and Customs ("the second respondent"). 2 The claim against the second respondent was brought under s 39B of the Judiciary Act 1903 (Cth) and sought a declaration that the whole of the tender process relating to the provision of accommodation for the Australian Customs Service and Australian Federal Police and the decision to select Sydney Airports Corporation Limited as the preferred tenderer was void and an order that the second respondent cause the whole of that tender process to be recommenced and conducted in accordance with the "National Code of Practice for the Construction Industry". The claim against the first respondent was a claim for damages said to have been suffered by the applicant as a result of the tender process not having been conducted, as the applicant alleged, in accordance with the "National Code of Practice for the Construction Industry". 3 The statement of claim alleged that the tender process was undertaken by the Commonwealth in a manner that denied to the applicant its legitimate expectations and procedural fairness. 4 On 16 March 2005 the Court, by consent, dismissed the claim against the second respondent and reserved the question of costs for later argument. In the meantime the parties have filed written submissions. In essence the applicant submits that at this stage no order for costs should be made but that the question should be deferred until the outcome of the proceedings against the first respondent is known. The case against the first respondent has been set down for hearing for nine non-consecutive days commencing 23 May 2005. 5 For the second respondent, it is submitted that costs should follow the event. The claim was dismissed and there was nothing to be gained by an adjournment. Any findings that might be made in the case against the first respondent would not be binding upon the second respondent. It followed, it was said, that whatever might be the outcome of the proceedings against the first respondent it could not affect the dismissal of the case against the second respondent. For the applicant it is submitted that if the applicant is successful in its case against the first respondent, it may be on the basis that the decision of the second respondent was tainted. The applicant submits that the discretion of the Court in ordering costs (it is a discretion to be made judicially) is a wide one and an order for costs might be carefully "calibrated" to ensure that the applicant was properly compensated. 6 It is said on behalf of the applicant that the claim against the second respondent now lacks utility. While no attempt was made to expand upon this it can be assumed that in the time since the case was commenced, the successful tenderer, Sydney Airports Corporation Limited has proceeded with the contract and constructed the accommodation which was the subject of the tender. Whether or not that is the case, it does not bear upon the present question. For whatever reason, the applicant has decided not to proceed with the case against the second respondent and has agreed to the dismissal of the application against him. 7 It can be accepted that the discretion as to costs is a broad one and will not be exercised arbitrarily. The court will take into account matters such as the particular facts of the case and while ordinarily costs will follow the event, there may be particular circumstances which require some other order. For example, where there are multiple claims and an applicant is successful on some and not others, the appropriate order may be that the party which won overall will be awarded costs, but only a percentage of those costs to take into account the claims in respect of which that party has been unsuccessful. The relevant principles are discussed in Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 48134 8 In Gladstone Park Shopping Centre Pty Ltd v Ross Wills (1984) 6 FCR 496, at 505, Davies J noted comments by Atkin LJ in Ritter v Godfrey [1920] 2 KB 47 at 54 that "the discretion of the court or a judge is not an absolute discretion" and, upon a review of cases in which the court decided that there was good reason why costs should not follow the event, his honour expressed the view that a wholly successful party should be awarded costs unless that party: [60] "(1) brought about the litigation, or (2) has done something connected with the institution or the conduct of the suit calculated to occasion unnecessary litigation and expense, or (3) has done some wrongful act in the course of the transaction of which the plaintiff complains." 9 I do not accept the submission that it would be appropriate to defer consideration of the matter until the case against the first respondent has been completed. Where the second respondent is not a party to those proceedings there would be a denial of natural justice if the Court were to take into account matters adverse to the second respondent which were found by the Court in proceedings to which the second respondent was not a party and where the second respondent had neither the opportunity to adduce evidence or to make submissions based upon evidence. Further it would be absurd that the second respondent be allowed to participate in the proceedings against the first respondent and thus make submissions, when he is no longer a party to the proceedings. 10 It seems to me that the present is a case where costs should follow the event. There is nothing in the conduct of the parties or otherwise that has been drawn to my attention, which would make it appropriate to make any other than the usual order. The matter having been brought to an end so far as the second respondent is concerned, he is entitled to have the question of costs decided and decided in his favour. 11 I would accordingly order that the applicant pay the second respondent's costs of the application. No doubt, when or if the costs are taxed, the taxing officer will pay attention to whether the work done by the solicitors of the respondents or counsel instructed by them was done as a result of the proceedings against the first respondent or against the second respondent or both. I do not understand that the first and second respondents were separately represented. That is not, however, a matter which is presently relevant to the question of the appropriate cost order to make. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hill.