FEDERAL COURT OF AUSTRALIA

Racing New South Wales v Betfair Pty Limited (No 2) [2009] FCAFC 158 

COSTS – interlocutory appeal – discovery – costs of the hearing at first instance 

Held: the respondent pay 50% of the appellants’ costs of the first instance hearing of the notice of motion 

Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd (1993) 26 IPR 261 at 271-272 referred to
Racing New South Wales v Betfair Pty Limited [2009] FCAFC 119 cited 

RACING NEW SOUTH WALES (ABN 86 281 604 417) and HARNESS RACING NEW SOUTH WALES (ABN 16 962 976 373) v BETFAIR PTY LIMITED (ACN 110 084 985)
NSD 521 of 2009

BUCHANAN, JAGOT AND FOSTER JJ
12 NOVEMBER 2009
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA		
NEW SOUTH WALES DISTRICT REGISTRY		
General Division	NSD 521 of 2009	

ON APPEAL FROM THE FEDERAL COURT 	

BETWEEN:	RACING NEW SOUTH WALES (ABN 86 281 604 417)
First Appellant

HARNESS RACING NEW SOUTH WALES (ABN 16 962 976 373)
Second Appellant
	
AND:	BETFAIR PTY LIMITED (ACN 110 084 985)
Respondent
	
AND:	ATTORNEY-GENERAL (NEW SOUTH WALES)
Intervening

JUDGES:	BUCHANAN, JAGOT AND FOSTER JJ	
DATE OF ORDER:	12 NOVEMBER 2009	
WHERE MADE:	SYDNEY	

THE COURT ORDERS THAT:

1.	The respondent, Betfair Pty Limited, pay 50% of the costs of the appellants, Racing New South Wales and Harness Racing New South Wales, in respect of the hearing at first instance of the notice of motion filed 17 April 2009, as agreed or taxed.

Note:	Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. 
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA		
NEW SOUTH WALES DISTRICT REGISTRY		
General Division	NSD 521 of 2009	

ON APPEAL FROM THE FEDERAL COURT	

BETWEEN:	RACING NEW SOUTH WALES (ABN 86 281 604 417)
First Appellant

HARNESS RACING NEW SOUTH WALES (ABN 16 962 976 373)
Second Appellant
	
AND:	BETFAIR PTY LIMITED (ACN 110 084 985)
Respondent
	
And:	Attorney-general (new South Wales)
Intervening

JUDGES:	BUCHANAN, JAGOT AND FOSTER JJ	
DATE:	12 NOVEMBER 2009	
PLACE:	SYDNEY	

REASONS FOR JUDGMENT
THE COURT:
1		On 18 August 2009 we allowed an appeal from an interlocutory decision of the primary judge concerning discovery.  In our reasons for decision published on 8 September 2009 (Racing New South Wales v Betfair Pty Limited [2009] FCAFC 119) we recorded the following (at [40]) with respect to the costs of the hearing before the primary judge:
[40] Our orders made on 18 August 2009 included the costs of the appeal but not the costs before the primary judge.  Racing NSW submitted that it should have the benefit of an order that Betfair pay 50% of the costs below, recognising that Racing NSW did not contest the correctness of the primary judge’s refusal to make orders for discovery of documents in categories 2-5, 6, 7, 18, 19, 25 and 26.  As matters presently stand, we consider that Racing NSW’s submission reasonably and fairly reflects the differing success of the parties and, accordingly, also propose to order that Betfair pay 50% of Racing NSW’s costs below.  Betfair may make a brief submission in writing within 14 days if it wishes to dispute this proposed order, failing which an order will be made in chambers as proposed.  If Betfair does make such a submission, Racing NSW may make a brief submission in reply within a further seven days.

2		Betfair Pty Limited (Betfair) filed a written submission to the effect that each party should pay its own costs of the hearing before the primary judge.  The appellants, together referred to as Racing NSW in our reasons for decision, did not file any submission in response.  
3		Betfair observed that of the 29 categories of discovery sought by Racing NSW nine were agreed by Betfair and one abandoned by Racing NSW before the first instance hearing.  Of the remaining 19 categories, Betfair did not appeal against the primary judge’s decision with respect to 12 categories.  Further, of the seven categories in respect of which Betfair did appeal, all were considerably narrowed.  Specifically, Racing NSW responded to Betfair’s evidence that the discovery was oppressive by narrowing the categories of documents on two occasions before the first instance hearing (6 and 13 May 2009 respectively) and again during the appeal.  In other words, the categories of documents that this Court ordered be discovered were not the same as those disputed before the primary judge.  
4		Betfair said that it followed from these facts that Racing NSW was relatively unsuccessful on its original notice of motion before the primary judge.  The fact that Racing NSW did not contest some of the categories in the appeal is irrelevant.  This Court had already ordered that Betfair pay the costs of the appeal.  Racing NSW was unsuccessful in respect of its arguments about many disputed categories.  Accordingly, Betfair submitted, each party should pay its own costs of the hearing before the primary judge.
5		We are not persuaded by Betfair’s submissions.  
6		Determining degrees of relative success in order to give effect to the compensatory purpose of an order for costs inevitably involves matters of impression.  The issue is not readily susceptible to mathematical exactitude (Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd (1993) 26 IPR 261 at 271-272).  For this reason comparing the number of categories which Racing NSW succeeded in challenging on appeal (seven) compared to the number on which it failed before the primary judge and did not challenge on appeal (19) and the number in its original notice of motion (29) is unlikely to expose the real degrees of success of the parties or where the interests of justice lie in respect of any order for costs.  
7		Betfair opposed discovery of classes of documents directly relevant to its case and Racing NSW’s defence as pleaded.  The classes were significant to Racing NSW’s defence and, as Betfair’s own evidence of alleged oppression disclosed, involved numerous documents.  Racing NSW thus had to prosecute a notice of motion in order to obtain discovery of relevant documents and incurred the costs associated with doing so.  Racing NSW narrowed its categories to meet Betfair’s evidence of oppression.  The need for that evidence may have been avoided altogether if Betfair had accepted the relevance of the categories and taken a constructive approach to their framing.  Indeed, if such an approach had been taken the dispute about these categories of documents may have been avoided altogether.  These considerations found our conclusion that an order for costs in Racing NSW’s favour is appropriate.  The allowance of 50% referred to in our principal reasons reflects our broad assessment of the relative success of the parties in the hearing before the primary judge having regard to both the range of issues decided and their importance when assessed against the pleadings.  
8		We therefore remain of the view identified in our principal reasons and make orders accordingly. 
I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Buchanan, Jagot and Foster.	

Associate:

Dated:	12 November 2009

Counsel for the Appellants:	Mr J Gleeson SC, Mr S Kerr SC and Mr J Emmett	
		
Counsel for the Respondent:	Mr A Robertson SC and Ms K Morgan	
		
Counsel for the Intervener:	Mr J Kirk and Ms A Mitchelmore	
		
Solicitor for the Appellants:	Yeldham Price O'Brien Lusk	
		
Solicitor for the Respondent:	Gilbert + Tobin	
		
Solicitor for the Intervener:	Crown Solicitor for the State of New South Wales	

Date of Hearing:	18 August 2009

Further written submissions filed by the Respondent on 22 September 2009	
		
Date of Judgment:	12 November 2009