Auto Control Systems Pty Ltd v WA Glass Pty Ltd - [2024] WASC 160

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   AUTO CONTROL SYSTEMS PTY LTD -v- WA GLASS PTY LTD [2024] WASC 160
CORAM:   COBBY J
HEARD:   8 FEBRUARY 2024
DELIVERED          :   8 FEBRUARY 2024
PUBLISHED           :   3 MAY 2024
FILE NO/S:   COR 135 of 2023
BETWEEN:   AUTO CONTROL SYSTEMS PTY LTD
Plaintiff

AND

WA GLASS PTY LTD
Defendant

Catchwords:

Leave to discontinue - Costs of proceedings where no determination on the merits

Legislation:

Rules of the Supreme Court 1971 (WA) O 23 r 2(3)

Result:

Application granted in part

Category: B

Representation:

Counsel:

Plaintiff	:	Mr J P Cook
Defendant	:	Mr D H Solomon

Solicitors:

Plaintiff	:	Mendelawitz Morton Commercial Lawyers
Defendant	:	Solomon Brothers

Case(s) referred to in decision(s):

Re Kirkman and Brauer as joint and several administrators of Tiger Resources Ltd (Subject to deed of company arrangement) [2021] WASC 273
Rhodium Australia Pty Ltd v Deputy Commissioner of Taxation [2012] FCAFC 17
WA Glass Pty Ltd v Auto Control Systems Pty Ltd [2021] WASC 187
WA Glass Pty Ltd v Auto Control Systems Pty Ltd [2021] WASCA 162
WA Glass Pty Ltd v Auto Control Systems Pty Ltd [No 2] [2023] WASCA 85
WA Glass Pty Ltd v Auto Control Systems Pty Ltd [No 4] [2023] WASCA 154

COBBY J:

(This judgment was delivered ex temporaneously on 8 February 2024 and has been edited from the transcript to correct matters of grammar and include complete references.)

The plaintiff applied by originating process filed 1 September 2023 to wind up the defendant in insolvency, relying upon a failure by the defendant to comply with a statutory demand dated 12 February 2021.
By an interlocutory process filed 13 November 2023 the plaintiff now seeks leave to discontinue the action and an order that the defendant pay the plaintiff's costs of the action, including reserved costs.
The defendant does not oppose the discontinuance, but seeks an order that the plaintiff pay the defendant's costs of the action, including reserved costs.
The principles relating to the exercise of the discretion as to costs conferred by O 23 r 2(3) of the Rules of the Supreme Court 1971 (WA) where a proceeding has been discontinued were conveniently summarised by Hill J in Re Kirkman and Brauer as joint and several administrators of Tiger Resources Ltd (Subject to deed of company arrangement) [2021] WASC 273.
Relevantly for present purposes, the underlying policy of the Rules is that the discontinuing party should pay the other party's costs unless the court orders otherwise. The conduct of the parties and the reasons for discontinuing the proceedings can bear heavily on the exercise of the court's discretion to make some other order as to costs.
There has been no hearing on the merits in the action but the defendant can (and does) claim to be the successful party on the basis that the plaintiff seeks leave to discontinue. I therefore need to be satisfied that there is good reason for departing from the ordinary…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] WASC 160
Decision Date: 3 MAY 2024

CaseChat Overview and Summary

The case of Auto Control Systems Pty Ltd v WA Glass Pty Ltd involved a dispute between the parties concerning an agreement for the supply of glass products. The matter was heard in the Supreme Court of Western Australia. The plaintiff, Auto Control Systems, sought leave to discontinue the proceedings, while the defendant, WA Glass, contested this application and sought an order for costs.

The primary legal issue before the court was whether the plaintiff's application for leave to discontinue the proceedings was appropriate in the circumstances. The court also had to determine whether the plaintiff should be ordered to pay the defendant's costs of the proceedings, given that no determination had been made on the merits.

The court found that the plaintiff's application to discontinue the proceedings was not an abuse of process, as there was a valid reason for seeking to discontinue. The court held that the plaintiff had acted promptly in seeking to discontinue the proceedings once it became clear that a settlement could not be reached. The court noted that the defendant had not suffered any prejudice as a result of the discontinuation. Consequently, the court dismissed the defendant's application for an order for costs, finding that the plaintiff was not liable to pay the defendant's costs of the proceedings. The plaintiff was granted leave to discontinue the proceedings without order as to costs.

Orders