FEDERAL COURT OF AUSTRALIA ALDI Foods Pty Limited as General Partner of ALDI Stores (a Limited Partnership) v Transport Workers' Union of Australia [2020] FCA 654 File number: NSD 1441 of 2017 Judge: FLICK J Date of judgment: 18 May 2020 Catchwords: PRACTICE AND PROCEDURE – costs – apportionment of costs Legislation: Competition and Consumer Act 2010 (Cth) s 45D; Sch 2 (Australian Consumer Law) ss 18, 31 Federal Court of Australia Act 1976 (Cth) s 43 Cases cited: ALDI Foods Pty Limited v Transport Workers' Union of Australia [2020] FCA 269 Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56, (2007) 234 CLR 52 Gladstone Park Shopping Centre Pty Ltd v Ross Wills (1984) 6 FCR 496 LFDB v SM (No 2) [2017] FCAFC 207 National Roads and Motorists' Association Limited v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCA 1491 Ruddock v Vadarlis (No 2) [2001] FCA 1865, (2001) 115 FCR 229 Trade Practices Commission v Nichol Enterprises Pty Ltd (No 3) (1979) 42 FLR 213 Date of hearing: Determined on the papers Date of last submissions: 23 April 2020 Registry: New South Wales Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 18 Counsel for the Applicant: Mr G Hatcher SC and Ms M Painter SC with Ms A Perigo Solicitor for the Applicant: Enterprise Law Counsel for the Respondent: Mr M Gibian SC with Mr Philip Boncardo Solicitor for the Respondent: Transport Workers' Union ORDERS NSD 1441 of 2017 BETWEEN: ALDI FOODS PTY LIMITED AS GENERAL PARTNER OF ALDI STORES (A LTD PARTNERSHIP) Applicant AND: TRANSPORT WORKERS' UNION OF AUSTRALIA Respondent JUDGE: FLICK J DATE OF ORDER: 18 MAY 2020 THE COURT ORDERS THAT: 1. The Interlocutory Application filed on 9 April 2020 is dismissed. 2. The Applicant is to pay one-half of the costs of the Respondent. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT FLICK J: 1 In August 2017 the Applicant, ALDI Foods ("ALDI") commenced a proceeding in this Court. The Respondent to that proceeding was the Transport Workers' Union of Australia (the "Union"). A Defence was filed in January 2018. 2 The issues to be resolved in the proceeding were ultimately set forth in a Further Amended Statement of Claim filed in May 2019. The causes of action relied upon were: section 45D(1) of the Competition and Consumer Act 2010 (Cth); section 18 of the Australian Consumer Law, being Sch 2 to the Competition and Consumer Act; section 31 of the Australian Consumer Law; nuisance; trespass; and injurious falsehood. It was only those causes of action founded upon s 18 of the Australian Consumer Law and injurious falsehood which were ultimately relied upon. The other causes of action were abandoned during the course of the hearing. 3 It was concluded that both claims failed: ALDI Foods Pty Limited v Transport Workers' Union of Australia [2020] FCA 269. In very summary form, the claim founded upon s 18 failed because it was concluded that the Union was not a trading corporation and that the statements made by it were not made in trade or commerce. But for that obstacle, it was otherwise concluded that all but one of the eight representations relied upon were at least likely to mislead or deceive for the purposes of s 18. The claim founded upon injurious falsehood failed because ALDI had not established malice or any loss or damage. 4 No order was made when judgment was delivered in respect to costs. By way of Interlocutory Application filed on 9 April 2020, the Union now seeks its costs, including an order that ALDI pay its costs on an indemnity basis in respect to those causes of action which were abandoned. 5 It is concluded that ALDI should be ordered to pay one half of the Union's costs and that there should be no order that any costs be paid on an indemnity basis. 6 With respect to the claims founded upon s 18, the bulk of the evidence, hearing time and submissions focussed upon whether the representations relied upon were false or misleading or, at least, likely to mislead or deceive. The basis upon which the Union prevailed, namely the conclusion that it was not engaged in trade or commerce and that the statements it had made were not made in trade or commerce, occupied comparatively little hearing time. So much is, with respect, reflected in the manner in which each of those two broadly described issues were addressed and resolved in the reasons provided. 7 When delivering judgment in March 2020 the course pursued was to not then resolve the question of costs in the absence of hearing further submissions. 8 One course which was then in contemplation was that no order for costs should be made – the Union having succeeded on one issue (albeit an issue determinative of its liability); but failed on issues which occupied the bulk of the hearing time. 9 There is no doubt that s 43 of the Federal Court of Australia Act 1976 (Cth) (the "Federal Court Act") confers a wide discretion as to the power to award costs and that attempts to specify narrow criteria for its exercise have long been rejected: e.g., Gladstone Park Shopping Centre Pty Ltd v Ross Wills (1984) 6 FCR 496 at 505 per Davies J. The discretion, it has been said, is absolute and unfettered, except that it must be exercised judicially and not arbitrarily or capriciously: Trade Practices Commission v Nichol Enterprises Pty Ltd (No 3) (1979) 42 FLR 213 at 219 per Fisher J. As a general rule, however, costs follow the event: cf. Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56 at [25], (2007) 234 CLR 52 at 62-63 per Gleeson CJ, Gummow, Hayne and Crennan JJ. But there is no "absolute rule": LFDB v SM (No 2) [2017] FCAFC 207 at [6] per Besanko, Jagot and Lee JJ. 10 There is also no doubt as to the power of this Court to apportion costs, taking into account the fact that a party may have succeeded on only part of the case resolved: cf. Ruddock v Vadarlis (No 2) [2001] FCA 1865 at [11]-[12], (2001) 115 FCR 229 at 234-235. Black CJ and French J there summarised some of the more generally applied principles when exercising the discretion conferred by s 43 as follows: [11] Within the general discretion of the courts to award costs it is accepted by decisions in both Australian and English jurisdictions that: • Ordinarily costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order. • Where a litigant has succeeded only upon a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which he or she has failed. • A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other parties' costs of them. In this sense "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or law. See Hughes v Western Australian Cricket Association (Inc) (1986) ATPR ¶40-748 at 48,136; approved by the Full Court in Queensland Wire Industries Pty Ltd v Broken Hill Pty Co Ltd (1987) 17 FCR 211 at 222. [12] The award of costs to a successful party is principally by way of perceived restorative justice. The general rule assumes that where an applicant succeeds it will have incurred costs because the respondent's conduct made it necessary for the applicant to bring the proceedings. If the applicant fails, the respondent will have incurred costs defending an action which ought not to have been brought against it. The order made in such cases is compensatory. … 11 On the facts of the present case – and but for one factor – the general rule would have prevailed such that an order would have been made ordering ALDI to pay the costs of the successful Union. 12 The bulk of the evidence and hearing time was focussed on that part of the case in respect to which the Union failed. That fact would not necessarily have been considered a sufficient basis upon which to deprive the Union of its costs incurred in securing overall success in the litigation. A prudent party may not consider it open to take the forensic course of placing sole reliance upon a contention that it was not engaged in trade or commerce. No matter what judgment call may have been made to address the separate question as to whether statements were likely to mislead or deceive, and no matter how briefly that question was to be addressed, it was a factual question which could not be left to chance. 13 The factor, however, which warrants the discretion conferred by s 43 of the Federal Court Act being exercised in favour of apportioning costs, such that the Union should only recover one-half of its costs, is that the very reason the Union engaged in the conduct the subject of its dispute with ALDI was to call ALDI to account as to its transport practices. The Union sought to resist ALDI's claims in this proceeding by attempting to further vindicate its concerns as to ALDI's transport practices. The safety of ALDI's transport operations was at the very heart of the Union's case. And upon this issue, namely the manner in which it was expressing its concerns, the Union failed. 14 The appropriate order to be made in respect to those costs incurred in respect to the issues resolved is that ALDI should be ordered to pay one-half of the Union's costs. 15 No reason to depart from this conclusion is provided by the fact that the Union expressly brought to the attention of ALDI – but during the course of the hearing – the decision in National Roads and Motorists' Association Limited v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCA 1491. The application of that decision to the facts of the present case was a principal reason for concluding that ALDI's reliance upon s 18 of the Australian Consumer Law failed. ALDI sought in its submissions, however, to distinguish that decision. The continued pursuit of the proceeding by ALDI after having had the decision brought to its attention, rather than discontinuing the proceeding as suggested by the Union, does not support any different conclusion as to costs. 16 Nor do the offers made by ALDI warrant any different conclusion. ALDI, for example, offered to discontinue the proceeding upon the Union undertaking: …. not to make statements or publish, whether via social media, websites, mainstream media or otherwise, any allegations of misconduct in relation to ALDI's transport operations which have not been the subject of judicial determination. The Union was correct in submitting for the purposes of the present costs application that the constraints sought to be imposed upon it went beyond that which were justifiable. The making of such offers by ALDI may well have been well-motivated with a view to avoiding a protracted hearing; but such offers were quite properly not accepted by the Union. 17 As to those costs incurred with respect to the abandoned causes of action, it is again considered that no separate order for costs should be made. Although it may readily be appreciated that there may have been impediments to those causes of action prevailing, a party should not be discouraged from abandoning causes of action during the course of a hearing and focussing attention upon those causes of action which are perceived to have greater prospects of success. 18 Although the Union has been unsuccessful in securing the relief sought in its Interlocutory Application filed on 9 April 2020, seeking an order for costs in respect to the principal proceeding resolved in March 2020, there should be no separate order for costs in respect to this Interlocutory Application. THE ORDERS OF THE COURT ARE: 1. The Interlocutory Application filed on 9 April 2020 is dismissed. 2. The Applicant is to pay one-half of the costs of the Respondent. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. Associate: Dated: 18 May 2020