Peter Stuart Cameron & Anor v Goldtek Australia Pty Ltd & Ors [1997] FCA 29 (5 February 1997)

CATCHWORDS

PRACTICE AND PROCEDURE - whether proceedings were discontinued

Trade Practices Act 1974

Federal Court Rules

Re Coles and Ravenshear (1907) 1 KB 4

Re Tieken (unreported, Full Court, Federal Court of Australia, 23 October 1995)

Gilson v The Returned Services League of Australia Ltd (unreported, Federal Court of Australia, 17 May 1996, Tamberlin J)

Packer v Meagher (1984) 3 NSWLR 486

Borthwick-Coleman v Lonergan (1993) Qd R 517

No. NG 183 of 1995

PETER STUART CAMERON & Anor v GOLDTEK AUSTRALIA PTY LIMITED & Ors

MOORE J

SYDNEY

5 FEBRUARY 1997

IN THE FEDERAL COURT OF AUSTRALIA )

)

NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 183 of 1995

)

GENERAL DIVISION )

BETWEEN: PETER STUART CAMERON & ANOR

Applicants

AND: GOLDTEK AUSTRALIA PTY LTD & ORS

Respondents

AND: GOLDTEK AUSTRALIA PTY LTD

First Cross Applicant

ALLEN HERBERT LEWIS

Second Cross Applicant

AND: AUSTRALIAN BUSINESS

DEVELOPMENTS PTY LTD

First Cross Respondent

DAVID CHARLES TYSON

Second Cross Respondent

FRANCIS CHARLES FRATER

Third Cross Respondent

JUDGE: Moore J

PLACE: Sydney

DATE: 5 February 1997

ORDER OF THE COURT

THE COURT ORDERS THAT:

1. The cross-claim be adjourned to Tuesday 4 March 1997 at 9.30am.

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 ) No. NG 183 of 1995

)

GENERAL DIVISION )

BETWEEN: PETER STUART CAMERON & ANOR

Applicants

AND: GOLDTEK AUSTRALIA PTY LTD & ORS

Respondents

AND: GOLDTEK AUSTRALIA PTY LTD

First Cross Applicant

ALLEN HERBERT LEWIS

Second Cross Applicant

AND: AUSTRALIAN BUSINESS

DEVELOPMENTS PTY LTD

First Cross Respondent

DAVID CHARLES TYSON

Second Cross Respondent

FRANCIS CHARLES FRATER

Third Cross Respondent

JUDGE: Moore J

PLACE: Sydney

DATE: 5 February 1997

REASONS FOR JUDGMENT

Introduction

In March 1995 proceedings were commenced by two individuals, Mr and Mrs Cameron, against various companies and other individuals. One respondent was Mr Allen Lewis. The proceedings were founded, in part, on the alleged contravention of s 52 of the Trade Practices Act 1974 associated with the purchase by the Camerons of an interest in a gold plating business. In February 1996 a cross application was brought by, inter alia, Mr Lewis against, inter alia Mr Francis Frater. Leave to bring it was given on 20 March 1996. The cross-claim also raised issues under the Trade Practices Act 1974 .

A hearing of the principal proceedings, but not the cross-claim, commenced on 22 July 1996 which were settled, as against most respondents, shortly after. Judgment was later given against another. I published reasons on 9 August 1996.

An issue has now arisen about the status of the proceedings against Mr Frater brought by Mr Lewis. Mr Frater contends they have been discontinued and seeks an order for his costs. This order is resisted by Mr Lewis. There is a controversy about whether the proceedings have been discontinued and this judgment deals with that issue.

The Facts

On 30 July 1996, the following letter was sent by Mr Lewis, who was then not legally represented, to Mr Frater's solicitors. A copy was also faxed to the New South Wales District Registry of the Federal Court of Australia. The letter stated:

"Attention Mr Martin Bertock,

WITHOUT PREJUDICE

Dear Sir,

In reference to your client Mr. Francis Charles Frater

Please be advised that I, Allen Lewis and Goldtek Australia Pty Ltd Will (sic) be discontinuing the cross claim against your client. Would you please advise the Federal Court of Australia and Mr Frater to bear his own costs."

The Court file shows no record of any response by Mr Frater to this letter.

On 21 August 1996, Mr Lewis sent another letter to the Court. This document was stamped 'filed' by the NSW District Registry on 22 August 1996, and reads as follows:

"To the Registrar

Federal Court of Australia

New South Wales District Registry

16th Level

Law Courts Building

Queens Square

21st August, 1996.

Dear Sir,

Re: Cross Application No. G183 of 1995

My name is Allen Lewis the second cross applicant and Managing Director of GoldTek Australia Pty. Ltd. the first cross applicant. I filed with leave a notice of discontinuance on the 31st July, 1996 in this matter, and also filed an affidavit on 2nd August, 1996 with the registrar.

I have spoken to the registry on a number of occasions since then by telephone, They (sic) advise that nothing further has occurred on the file. Therefore I again request that the application be discontinued. Would you kindly confirm the discontinuance of the application in writing.

Yours faithfully,

(signed)

Allen Lewis."

The following day a letter was sent to Mr Lewis by the Deputy District Registrar, explaining that his attempts to discontinue the matter had been unsuccessful. This letter stated, first, that Mr Lewis' notice of discontinuance of 31 July 1996 was not in an acceptable form and had therefore not been processed by the Registry and, second, that in order to discontinue it was necessary for Mr Lewis to complete the appropriate form. This would require either consent by Mr Frater's legal representative, or the filing and service of a notice of motion seeking leave of the Court to file the discontinuance without the consent of the other party. Neither a notice of discontinuance nor a notice of motion was filed thereafter.

The matter came before me on 25 October 1996 for directions. On that date, Mr Lewis represented himself and indicated that while he did not wish to proceed with his cross-claim against Mr Frater, he did not wish to pay the costs associated with that cross-claim. As it was later claimed by the solicitor appearing for Mr Frater that Mr Lewis had discontinued the proceedings on 25 October 1996, the details of on that date may be of some significance.

First, I asked Mr Lewis how he wished to proceed with the matter.

"His Honour: What is it you want to do with the matter? Do you want to proceed? What do you want to do?

Mr Lewis: Well, no, ..."

Mr Lewis then explained that he had believed his cross- claim had been discontinued on an earlier date when the related actions which brought about his cross-claim were settled. I then asked the solicitor for Mr Frater, Mr Bertock, how his client wished to proceed. He responded:

"Mr Bertock: [W]ell, we are happy for Mr Lewis to discontinue but my instructions are to seek costs."

I explained to Mr Lewis that a party who brings proceedings which result in a person incurring legal costs will, normally, be obliged to pay those costs if the proceedings fail or are not contested to finality. I suggested to Mr Lewis two options. First, he may wish to obtain a legal representative to make submissions about costs or, second, he may be able to reach some agreement with Mr Frater about the question of costs.

Before I adjourned the following exchange took place with Mr Lewis:

"His Honour: What I will do is stand the matter over to Wednesday 27 November at 9 o'clock and, as I said a little while ago, it is being stood over for the purpose of dealing with the question of costs on the basis that you propose and desire to discontinue the cross-claim. That is correct, is it not, Mr Lewis?

Mr Lewis: That is correct, yes and if a settlement could be done before, if Mr Frater decides to walk away, that can be arranged too?

His Honour: Yes, but you ought to be, if I might say so, moving pretty promptly to get hold of Mr Frater and see if you can sort things out with him.

Mr Lewis: Yes.

His Honour: What I will do is adjourn the matter to the time and date just nominated and I will now adjourn. Sorry, is there something more, Mr Lewis?

Mr Lewis: Can I contest the costs at that time too?

His Honour: Yes. You must not have understood what I was saying. The purpose of that hearing is to deal with the question of costs. If you want to contest the costs ... I will be dealing with issues of principle and what I will be asked by Mr Bertock to do is make an order requiring you to pay the costs of Mr Frater. That is the order that he will be asking for and if you want to contest you will be wanting to argue that for whatever reason you should not, as a matter of principle, be required to pay the costs. Now, if Mr Bertock is successful and you are unsuccessful, I will make an order requiring you to pay the costs ...

Had Mr Lewis thereafter filed a notice of discontinuance with the consent of Mr Bertock, evidenced by his signature, costs would have been dealt within under O62 r26 of the Federal Court Rules ("the rules").

When the matter next came before me, on 27 November 1996, Mr Lewis was represented by Mr J Brady who submitted that Mr Lewis wished to discontinue his cross-claim against Mr Frater by filing a notice of discontinuance though, if the question of costs could not be settled by this discontinuance, Mr Lewis wished to pursue his cross-claim against Mr Frater.

Mr Brady further submitted that as Mr Lewis' cross-claim had not yet been dealt with, there could be no order as to costs made by the Court. Mr Brady conceded that, should it be found that the matter has been discontinued, "then our hands are really tied as far as the falling of costs is concerned."

As to his client's position, Mr Brady said:

"[M]y instructions are ... and what Mr Lewis' intention was, it is clear with respect your Honour that from the attempted filing of the notice of discontinuance that he intended the matter to be dealt with on the basis that his cross-claim be discontinued with effectively no order for costs. If it meant that there was going to be an order for costs made, my respectful submission would be that that was not what he intended. What he was after was a discontinuance without costs. If there was to be costs, there was to be no discontinuance."

Mr Bertock submitted that the matter had been discontinued and that I should therefore deal with the question of costs. He argued:

"Mr Bertock: Well, your Honour, I put to you that the matter was discontinued on the last occasion. Certainly Mr Lewis said he wished to discontinue the matter. It was adjourned for a costs hearing on that discontinuance."

In issue is whether Mr Lewis had discontinued his cross-claim by 27 November 1996. That is, whether his letters indicating a desire to discontinue or his statement to the court of his desire to discontinue, constitutes an effective discontinuance. If so, proceedings have been discontinued and an order for costs should be made against Mr Lewis if costs have not been determined by the operation of O22 r3. If the proceedings have not been discontinued, Mr Lewis retains the options of pursuing his cross-claim or seeking to discontinue it, on terms agreed with Mr Frater.

Had Mr Lewis discontinued the cross-claim?

The manner of discontinuing is found in Order 22 of the Rules. Order 22 r 2(1) states:

2(1) [A] party making a claim for relief may discontinue a proceeding so far as concerns the whole or any part of any claim for relief made by him -

(a) at any time before the directions hearing appointed in the application - without the leave of the Court or the consent of any other party;

(b) where after the directions hearing the proceeding continues on pleadings but the pleadings are not closed - without the leave of the Court or the consent of any other party;

(c) where judgment has not been entered - with the consent of all the parties; and

(d) at any time - with the leave of the Court."

No issue is raised about the discontinuance of the proceedings in relation to one party only: see Gilson v The Returned Services League of Australia Ltd (unreported, Federal Court of Australia, 17 May 1996, Tamberlin J), and, in any event, if Mr Lewis has discontinued or is able to discontinue against Mr Frater, there appears to be little likelihood of any controversy in relation to discontinuing against the other cross respondents who have played no part in the proceedings.

Order 22 r 5 deals with the means of effecting a discontinuance. Paragraphs (a) and (b) of O 22 r 2(1) are not relevant to this case. The earliest possible act of discontinuance was the letter of 30 July 1996. There had, by then, been a directions hearing and the pleadings had closed: see O 11 r 15 and also Packer v Meagher (1984) 3 NSWLR 486. Sub-paragraph (d) is also inapplicable as Mr Lewis had not, at any time, been granted leave by the Court to discontinue the proceedings.

As judgment had not been entered, Mr Lewis was able to discontinue the cross claim against Mr Frater with the consent of Mr Frater: O 22 r 2(1)(c). On one view of what has occurred there has been consent. As noted earlier, Mr Bertock told the Court on 25 October 1996: "we are happy for Mr Lewis to discontinue ..." Furthermore, the following exchange occurred on 27 November 1996:

His Honour: So you say, he discontinued on the last occasion and did so with your consent:

Mr Bertock: Yes, your Honour, on the basis that a hearing for costs was set down for today's date."

It may be accepted that Mr Lewis originally intended by his correspondence to the Registry to discontinue conditionally. That is, he was seeking to discontinue on the basis that he would not be liable to pay Mr Frater's costs. However, it is fairly plain that at the hearing on 25 October 1996 Mr Lewis was indicating an intention to discontinue and a preparedness to then argue about whether he should pay Mr Frater's costs. Equally clearly, M Frater's solicitor was consenting to that course.

However, O 22 r 5 mandates the filing of a notice of discontinuance signed by the consenting parties. It provides:

"5(1) A discontinuance or withdrawal under rule 2, 3 or 4 shall be made by fling a notice stating the extent of the discontinuance or withdrawal.

(2) Where the discontinuance or withdrawal is by consent, the notice under sub-rule (1) must bear the consent of each consenting party."

It might be thought that this requirement should not be treated as a condition precent to an effective discontinuance if an applicant provides by other means an unambiguous intimation that he or she wishes to discontinue and that is consented to by the other party. To adopt any other approach might be viewed as treating compliance with the rule as an end in itself: see In Re Coles & Ravenshear (1907) 1 KB 4.

There is authority that O 22 r 2 should not be construed narrowly: see Re Tieken, (unreported, Full Court, Federal Court of Australia, 23 October 1995). However the procedure mandated by O 22 r 5 has a clear purpose of providing a formal and unambiguous method of bringing proceedings to an end. Compliance with provisions dealing with the means of effecting a discontinuance are insisted upon: see Packer v Meagher (supra). In Borthwick-Coleman v Lonergan (1993) Qd R 517, Derrington J made the following observations about a requirement in rules of the Supreme Court of Queensland that a notice of discontinuance be in writing:

"Order 30 r.1 of the Rules of the Supreme Court requires that for a discontinuance in this way there must be notice in writing. It is not enough that the party should simply express the wish or intention that the action should be terminated: Nichol v Fearby [1923] 1 K.B. 480, 502; Moon v Dickinson (1890) 63 L.T. 371. Where relevant the rule reads: "The plaintiff ... may, at any time before receipt of the defence of any defendant ..., by notice in writing wholly discontinue his action ... against such party ..., and thereupon he shall pay such party his costs of the action ..."."

In my opinion, Mr Lewis had not, by 27 November 1996, discontinued his cross-claim against Mr Frater as no notice had been filed in the manner contemplated by O 22 r 5.

It therefore remains for Mr Lewis to either pursue his cross-claim against Mr Frater, discontinue the matter and, in all probability, pay the costs incurred by Mr Frater in defending this action to the point of discontinuance, or reach agreement with Mr Frater about the way the matter should be disposed of. I urge the parties to follow this last mentioned course. I propose to adjourn the matter for further directions on Tuesday 4 March 1997 at 9.30am.

I certify that the preceding ten (10) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Moore.

Associate:

......................

Alexandra George

Dated: 4 February 1997

APPEARANCES

Solicitor for Second Cross Applicant: Mr Brady

Solicitor for Third Cross Respondent: Mr M Bertock

Bertock & Associates

Dates of Hearing: 25 October 1996

27 November 1996