Case: Hickman v Berens [1895] 2 Ch 638
Outcome: considered
The question remains whether costs should follow the event, so that the ACCC should be ordered to pay the costs of Mr Carmichael, Mr Warner and Mr Heikkila, in the application of the usual principle, or whether there is something in the circumstances of the case that would warrant departure from that principle. The researches of counsel, and my own researches, have not revealed the existence of any authority that is of great assistance. The nearest is perhaps Hickman v Berens [1895] 2 Ch 638. In that case, the plaintiff applied to set aside an agreement to compromise a proceeding, on the ground that no consensus had existed as to the basis of the agreement. An official referee declined to set aside the agreement. Kekewich J dismissed an appeal from the official referee's decision. The Court of Appeal allowed an appeal from the judgment of Kekewich J. At 647, Lindley LJ (with whom Lopes LJ and Rigby LJ agreed) said: With regard to the costs, the plaintiff ought to pay the costs of the summons and hearing before the official referee to set aside the mistake, the mistake being on the part of the plaintiff. The order of Kekewich J. must be discharged, and there must be no costs of either side, either of the appeal to him or of the appeal to us. We take that to be as near justice in the matter of costs as is possible. 14 Of course, in the present case, there is no application to set aside the compromise agreements, and no such application is needed. The Court has simply declined to give effect to the agreements, so far as they committed the relevant respondents to consenting to orders of the Court. In the light of that, the ACCC, properly in my view, has accepted that it should not seek to enforce those agreements in so far as they require consent to orders for, or the actual payment of, the ACCC's costs. 15 In my view, as in Hickman v Berens , the justice of the case with respect to costs is that there should be no order as to costs as between the ACCC and the respondents who entered into agreements. It appears to me that there were mistakes on both sides in relation to the agreements. I do not know what the ACCC's cooperation policy (in accordance with which it is said that the agreements were made) says in detail. It does seem to me, however, that the ACCC needs to be more aware of the disparity that may exist between itself and opposing parties with whom it proposes to enter into agreements of this kind, in terms of the resources available to contest litigation. The legal costs of defending a proceeding may be so great as to induce respondents to be more ready than they should to concede all that the ACCC claims against them, when the claims may in truth be unfounded, or some good defence may exist. In addition, the ACCC needs to recognise that large-scale litigation often has a profound effect on the lives of people who are caught up in it, an effect much greater than that suffered by those who manage large corporations caught up in similar litigation. The present case is a good example of the need for caution in accepting total capitulation. On the other hand, there was no obligation on the part of any respondent to enter into an agreement with the ACCC as to the outcome of the case. Each of Mr Carmichael, Mr Warner and Mr Heikkila opted to do so, after receiving legal advice. One alternative was to play no significant part in the trial, as Colin Williamson did. He will now be the beneficiary of an order that the ACCC pay his costs of the proceeding as a successful respondent. Another possible option might be to defend the case in person, perhaps with some coaching from a legal adviser. In the present case, without the oral evidence of Mr Carmichael, Mr Warner and Mr Heikkila, the ACCC's case would have depended even more on the circumstantial evidence, particularly the alleged relationship between telephone calls and petrol price increases, than it did. A detailed analysis of that data, together with evidence produced by the cross-examination of such other witnesses as the ACCC called would have made clear some of the weaknesses of the ACCC's case. 16 Plainly, the result of the case has falsified the assumption on which the ACCC and each of the relevant parties entered into the agreements, namely that there had in fact been unlawful price-fixing in the Geelong petrol market. In the circumstances, the justice of the case seems to me to require that there be no order as to costs as between the ACCC and the parties who entered into the agreements. It is significant that this view appears to have commended itself to both the ACCC and Mr Shuvaly, who have consented to an order that no order for costs be made as between them, despite the fact that there was an agreement between them that dealt with the question of costs.