Case: NMFM Property Pty Ltd v Citibank Ltd (No 11) [2001] FCA 480 ; (2001) 109 FCR 77
Outcome: referred to
The principles by which a court proceeds in determining whether costs should be awarded on a basis other than a party and party basis are well known and I will not repeat them: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 232-234 per Sheppard J; Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151; NMFM Property Pty Ltd v Citibank Ltd (No 11) [2001] FCA 480 ; (2001) 109 FCR 77 (" NMFM "). Various circumstances have been identified in the cases as warranting a special order. It is trite to say that the discretion is a broad one, no two cases are alike, and the categories or circumstances in which a court will make a special order are not closed. 31 Capital Steel submits that Orrcon's case was hopeless and it should have known that. In this context, I am mindful of the following observations of Lindgren J in NMFM at [72]-[73]. In Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397, Woodward J stated in an oft-cited passage (at 401): "I believe that it is appropriate to consider awarding 'solicitor and client' or 'indemnity' costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion." The expression "where the applicant, properly advised, should have known that he had no chance of success" should not be allowed to give rise to difficulty. It might be suggested, with the benefit of hindsight, that in every case "proper advice" would be advice in accordance with the reasons for judgment delivered by the Court. Accordingly, it might be suggested in the present case that NM, properly advised, would have been advised in accordance with Reasons for Judgment (No 10). Clearly, this is not what Woodward J had in mind. On the other hand, his Honour's expression "properly advised" was intended to introduce an objective notion: it would "set the bar too high" to insist that the party have actually known that there was no chance of success. Of course, questions will arise in relation to sets of circumstances falling between the two extremes. What assumed knowledge of the facts is the party's litigious conduct to be measured against? What factual inquiries is the party "deemed" to have made? What level of legal advice is the party "assumed" to have had? I do not attempt to answer these general questions. 32 I would not put Orrcon's application in the category of a hopeless case. The application came on quickly and it was complex, both legally and factually. It has to be said that views may reasonably differ as to the precise scope of the doctrine of unconscionable conduct. I realise there is an element of impression here, but I would not characterise Orrcon's case as a hopeless one for the purposes of a special order as to costs. 33 I refuse to order that Capital Steel's costs be taxed on an indemnity basis.