Consolidated Transport Industries Ltd & Anor v Noel Lindner [1997] FCA 1359 (12 November 1997)

FEDERAL COURT OF AUSTRALIA

Practice and procedure - costs - exercise of discretion to award costs.

Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 143 ALR 1 - cons.

Reddy v Hughes (1996) 37 IPR 413 - cited.

CONSOLIDATED TRANSPORT INDUSTRIES LIMITED & BRIAN McCAW V NOEL LINDNER

Ng 3160 of 1997

judge: beaumont j

place: SYDNEY

date: 12 november 1997

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	nG 3160 of 1997

BETWEEN:	consolidated transport industries LTD First Applicant brian mcCaw Second Applicant
AND:	noel lindner Respondent
JUDGE:	BEAUMONT J
DATE OF ORDER:	12 november 1997
WHERE MADE:	sydney

ORDERS:

1. The respondent pay the applicants' costs of obtaining orders 1, 2 and 3 of the orders made on 24 July 1997; those costs confined to the period ending on 24 July 1997.

2. Otherwise no order as to costs.

3. By consent, discharge orders 4, 5 and 10 of the orders made on 24 July 1997.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	nG 3160 of 1997

BETWEEN:	consolidated transport industries ltd First Applicant BRIAN McCAW Second Applicant
AND:	noel LINDNER Respondent

JUDGE:	BEAUMONT J
DATE:	12 november 1997
PLACE:	sydney

REASONS FOR JUDGMENT

BEAUMONT J:

The applicants seek the costs of the whole of the proceedings, essentially for the reasons outlined in Mr White's written submissions, dated today. Mr Dubler, for the respondent, resists the application for costs, essentially for the reasons outlined in his written submissions, dated today, and developed further in oral argument.

I take the guiding principles governing the application for costs to be those stated by McHugh J in Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 143 ALR 1 (especially at page 3). I have been referred to other authorities, in particular, reliance is placed by the respondent upon the decision of Branson J in Reddy v Hughes (1996) 37 IPR 413. In my opinion, however, that case is distinguishable for present purposes, given the circumstance that before the action, the respondent in that case clearly indicated to the moving party in the proceedings that the respondent would be quite prepared to remove the video from sale, as requested. That is to say, her Honour was really dealing with the situation where the respondent had, before the litigation commenced, indicated in unequivocal terms that the relief sought would not be opposed in those circumstances. I agree entirely with her Honour's ruling that there should be no costs in such a situation. However, as I have indicated in the course of argument, the present case is, in my view, on a different footing.

There was no formal request made of the respondent for the giving of suitable undertakings before the proceedings were commenced. The representation out of which the proceedings arose had been made to a firm of stockbrokers on 10 July 1997. On the morning of 11 July the applicants' solicitors endeavoured to contact the respondent. Telephone contact was made with the respondent's wife but it was not possible to speak with the respondent during the course of the day.

An application was made to me at 4.15 pm on the afternoon of 11 July on behalf of the applicant, seeking ex parte injunctive relief. I granted some of that relief but refused other parts. When the matter was next before me on 15 July, an interlocutory arrangement was put in place and on 24 July, I was informed that the matter had, except as to costs, been substantially resolved. On that occasion, I made orders by consent in terms of pars 1, 2 and 3 of the orders sought by the applicants in similar form to the existing interlocutory injunctions.

It seems to me, in those circumstances, that the applicants should receive their costs of obtaining orders 1, 2 and 3 made on 24 July. Although, as I have said, no attempt was made to seek, at least in any formal sense, the giving of suitable undertakings by the respondent before the proceedings were commenced, clearly the matter was urgent. It involved potential dealings in the shares of a publicly listed company and, in my view, the applicants were justified in seeking urgent ex parte relief on the afternoon of 11 July, with a view to minimising any distortion in the marketplace when trading was to resume on the Stock Exchange on the following Monday.

Whilst I am of the view that the applicants should receive their costs of obtaining orders 1, 2 and 3, I think it is fair that those costs be limited to the period ending on 24 July when the orders were obtained.

The matter has been before the Court today and previously for directions hearings. Other aspects of the proceedings have been agitated in the course of the litigation and, in particular, I have heard submissions from the parties on the different but related question whether orders, temporary or permanent, should be made in respect of the exercise by the respondent of voting or other rights attached to any shares the respondent might hold in the first applicant. This has emerged as a contentious question, essentially one of fact. On behalf of the respondent, it is said that he now holds no such shares. On behalf of the applicants, reference is made to assertions, apparently made by the respondent at an earlier time, to the effect that he had been purchasing shares in the first applicant. On closer analysis, it emerges that the position is far more complicated. It appears that the statements previously attributed to the respondent depended upon the enforceability, or otherwise, of oral arrangements apparently made by the respondent with certain unnamed persons.

The reality is that the applicants now accept, no doubt for good practical reasons, that this aspect of the matter should no longer be pursued and they ask, and the respondent consents to this course, that I discharge orders 4 and 5 made on 24 July. Those orders had restrained the respondent from, firstly, exercising any voting or other rights attaching to shares in the first applicant, and secondly, from acquiring any shares in the first applicant, in each case until further order. That is to say, the orders were interlocutory only. Accepting the realities of the situation as it is now perceived, the applicants no longer wish to pursue this matter and those orders are now to be discharged. I so order and I also discharge order 10 made on 24 July.

The consequence then is that on this branch of the proceedings, there is an inconclusive outcome. It is true that, in a sense, it may be said that the inconclusiveness of the outcome has arisen by virtue of a supervening event for which the applicants should bear no responsibility. On the other hand, as McHugh J pointed out in Lai Qin, where a matter has not been to trial and where, as is the case on this particular branch of the matter, no order has been made in any final sense even by consent, it is generally not appropriate to order costs unless, to use his Honour's language (at 3), the Court does:

"feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried."

On this particular branch of the present matter, I do not have that degree of confidence. It is difficult to predict what would have been the outcome in this regard, depending as it did, very much upon an assessment of the enforceability of a series of apparently informal arrangements entered into by the respondent. Questions of credit and possibly complicated legal questions could be involved before any resolution could be reached. In all those circumstances, I decline to make any order for costs beyond the order already made.

ORDERS

1. The respondent pay the applicants' costs of obtaining orders 1, 2 and 3 of the orders made on 24 July 1997; those costs to be confined to the period ending on 24 July 1997.

2. Otherwise I make no order for costs.

3. By consent, orders 4, 5 and 10 made on 24 July 1997 are discharged.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Beaumont

Associate:

Dated: 12 November 1997

Counsel for the Applicant:	Mr White
Solicitor for the Applicant:	Freidman Reeves
Counsel for the Respondent:	Mr R E Dubler
Solicitor for the Respondent:	I.S.P. Law
Date of Hearing:	12 November 1997
Date of Judgment:	12 November 1997