Case: Life Airbag Company of Australia Pty Ltd v Life Airbag Company (New Zealand) Ltd [1998] FCA 545
Outcome: applied
Both parties recognise that the Court retains a discretion ( McKellar v Container Terminal Management Services Ltd [1999] FCA 1639 at [14] [15], [38] per Weinberg J; Life Airbag Company of Australia Pty Ltd v Life Airbag Company (New Zealand) Ltd [1998] FCA 545 at 11 per Branson J; Courtney v Medtel Pty Ltd (No 3) [2004] FCA 347 at [21] per Sackville J). The authorities provide that, in considering whether to depart from the ordinary rule, ' the discretion should be exercised in favour of a party who establishes that the demands of justice require that there be a departure from what appears to be the general practice... ' ( Thunderdome Racetiming and Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297 at 312 per Olney J, cited in Life Airbag at 11 per Branson J; see also McKellar at [38] per Weinberg J). 8 Peoplebank submits that the demands of justice require that the costs of the notice of motion be paid forthwith for the following reasons: 1. To prevent the frustration of prior Court orders. Peoplebank submits that the Court has made it clear to Cytel that the costs awarded to Peoplebank on 3 November 2006 must be paid, before Peoplebank is required to incur any further costs in this action. Peoplebank notes that the current costs order arises out of attempts by Peoplebank to secure this payment. 2. The application ought not to have been brought. Peoplebank submits that the notice of motion ought not to have been brought and that the application is devoid of merit. Peoplebank submits that ' propounding interlocutory applications of dubious merit is a relevant consideration in the exercise of the Court's discretion on costs '. In Life Airbag at 12 Branson J observed that the demands of justice may require a departure from the ordinary rule where a party has been required to incur significant costs over and above those it would have incurred had the opposing party acted with competence and diligence. Peoplebank says that this observation is apposite. 3. The end of the proceedings is still not in sight. Peoplebank: &#8226; notes that the proceedings are stayed until Cytel pays the amount of the 3 November 2006 costs order. &#8226; submits that the Court can infer that Cytel has no present intention to pay this debt and is aiming to postpone payment. &#8226; submits that the length of time until the proceedings can be concluded is a relevant factor in exercise of the Court's discretion ( Allstate Life Insurance Co v Australia and New Zealand Banking Group Limited (No 13) [1995] FCA 626 at [4] [5]). 4. Costs granted by the current costs order are discrete. Peoplebank submits that it is a relevant factor that the current costs order relates to a discrete issue, separate from the principal proceedings. 5. No evidence that a 'forthwith order' will stifle the proceedings. Peoplebank submits that there is no evidence to support Cytel's claim that it will be 'further prejudiced in prosecuting its claim'. 11 Cytel submits that, if the costs due under the 3 November 2006 costs order are paid and the stay on the proceedings is lifted, a hearing can take place. I am not satisfied that Cytel intends to comply with the 3 November 2006 costs order. If the stay remains in place, Peoplebank will not receive the benefit of the current costs order for a considerable period of time, if at all ( Life Airbag at 12 per Branson J). 12 Cytel also argues that there was no abuse of process in bringing the notice of motion. Cytel relies on the fact that its present solicitors were only retained in around October 2007 and the notice of motion was brought in November 2007. While I accept that Cytel retained new solicitors in 2007, these proceedings were commenced in 2003. Cytel has retained a number of different solicitors since that time. Cytel did not notify or formulate any objections to the amount sought in the certificate of taxation or provide evidence or particulars to support a reduction. Cytel had every opportunity to apply to set aside the certificate of taxation, of which it acknowledged receipt. It did not do so. Instead Cytel chose to file the notice of motion. Because of this, Peoplebank was forced to incur costs it would not have incurred had Cytel acted appropriately. These costs are discrete and separate from the principal proceedings. 13 The costs the subject of the 3 November 2006 costs order related to Cytel's continual amendments to the pleadings and Cytel's omissions to act, causing Peoplebank to incur costs. The current costs order arises from Cytel's attempt to defer and delay payment of costs the subject of that earlier costs order. The interests of justice require that there be a departure from the ordinary rule. The costs of the notice of motion should be taxed and payable forthwith.