Case: Barrett Property Group Ltd v Metricon Homes Pty Ltd (No 2) [2007] FCA 1823
Outcome: referred to
As indemnity costs are sought in a number of the proposed orders it will be convenient, before turning to the circumstances in which the various costs orders are sought, to outline the principles which govern the determination of applications for the award of indemnity costs. These principles are, conveniently, drawn together in the recent judgment of Gilmour J in Barrett Property Group Ltd v Metricon Homes Pty Ltd (No 2) [2007] FCA 1823 at [3] and [4]. His Honour there said: "An award of costs is in the discretion of the Court or Judge except as provided by any other Act: Federal Court of Australia Act s 43(2). The discretion must be exercised judicially. In the normal course, costs are ordered to be paid on a party and party basis: Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 at 232; Re Wilcox; Ex parte Ventura Industries Pty Ltd (No 2) (1996) 72 FCR [151] at 158 per Cooper and Merkel JJ. A costs order is not intended to punish the unsuccessful party but rather to compensate the successful party: Hurst v Education Queensland (No 2) [2005] FCA 793 at [5] . This is so even where the ordinary practice is departed from. The aim is not to punish or deter future litigants but simply to compensate a party fully for costs which normal party-party costs could not be expected to do, where it was unreasonable for that party to be subjected to any expenditure of costs, such as where a hopeless proceeding is brought: Cirillo v Consolidated Press Property Ltd (No 2) [2007] FCA 179 at [4] - [5] . Any departure from this general rule requires a special reason: Access For All Alliance (Hervey Bay) Inc v Hervey Bay City Council [2007] FCA 974 at [10] ; Pacific Publications Pty Ltd v Next Publishing Pty Ltd [2005] FCA 971 at [5] . The categories in respect of which departure from the usual rule are contained are not closed: John S Hayes &amp; Associates Pty Limited v [Kimberly-Clark] Australia Pty Limited (1994) 52 FCR [201]; Jianshe Southern Pty Ltd v Turnbull Cooktown Pty Ltd (No 2) [2007] FCA 903 at [32] . In Colgate-Palmolive, (at p 233) Sheppard J identified various categories which might give rise to an award of indemnity costs. These include: &#8226; the making of allegations of fraud knowing them to be false, and the making of irrelevant allegations of fraud; &#8226; evidence of particular misconduct that causes loss of time to the Court and to other parties; &#8226; the commencement or continuation of proceedings for an ulterior motive; &#8226; wilful disregard of known facts or clearly established law; &#8226; the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions; and &#8226; an imprudent refusal of an offer to compromise." 4 The principal orders sought in the notice of motion dated 4 October 2007 were orders requiring the respondents and cross-claimants to provide further and better particulars of their pleadings. Those further and better particulars had been requested on 4 June 2007. They had not been provided despite consent orders having been made on three occasions (in June, July and August 2007) for them to be provided. 5 The notice of motion was returnable on 18 October 2007. On that day senior counsel for the respondents obtained leave to file and serve amended defences. He advised the Court that, having regard to the pleadings in those amended defences, it would be inappropriate and unnecessary to renew the orders for provision of further and better particulars of the defences.