Coopers Animal Health Australia Ltd v Western Stock Distributors

NOT FOR DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA 1

)

NEW SOUTH WALES DISTRICT REGISTRY	)	NO. NSW G.398 Of 1986
)
GENERAL DIVISION	)

BETWEEN: COOPERS ANIMAL HEALTH

AUSTRALIA LIMITED

Applicant

AND: WESTERN STOCK DISTRIBUTORS

PTY LIMITED,

CETHANA NOMINEES PTY

LIMITED and

AUSTRALIAN STOCK

DEVELOPMENTS LIMITED

Respondents

CORAM :	WILCOX J
PLACE :	SYDNEY
DATE :	16 MARCH 1987

THE COURT

NOTES THAT:

Pending the disposal of

the notlce of motion, the

respondents by thelr counsel undertake to the Court

that they will take no action to enforce the

order

for costs made against the appllcant on 2 2 August

1986 other than

to tax those costs and to obtain and

2 .

s e r v e a

c e r t i f i c a t e of

t a x a t i o n

u n d e r

0 . 6 2

r . 4 5 ( 1 )

and

( 2 ) a n d ,

i f

n e c e s s a r y ,

s i g n e d

a n d

s e a l e d

o r d e r

under

0 .62

r . 4 5 ( 3 ) .

NOT FOR DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA	)
1

NEW SOUTH WALES DISTRICT REGISTRY

NO. NSW G.398 Of 1986

GENERAL DIVISION

)

BETWEEN:

COOPERS ANIMAL HEALTH

AUSTRALIA LIMITED

Applicant

AND:

WESTERN STOCK DISTRIBUTORS

PTY LIMITED,

CETHANA NOMINEES PTY

LIMITED and

AUSTRALIAN STOCK

DEVELOPMENTS LIMITED

Respondents

CORAM :	WILCOX J
PLACE :	SYDNEY
DATE :	16 MARCH 1987

EXTEMPORE REASONS FOR JUDGMENT

On 22 August 1986 I delivered judgment in a

proceeding brought by the present applicant Coopers Animal Health Australia Limited against the present respondents, Western Stock Distributors Pty Llmlted, Cethana Nominees Pty

Limited and Australian Stock Developments Limlted.

For

2 .

reasons which I gave on that day I dismissed the application

and I ordered that the present applicant pay to the

respondents their costs of the proceedings.

Subsequently, a notice of appeal was filed.

There

was some delay in the index of the appeal papers beina settled

but I am Informed that an amended index of appeal papers,

whlch is now not controversial, was filed

on 4 December 1986.

Apparently by some oversight, lt was not served upon the

solicltors for the respondents.

The matter was within the

llst of cases called over in December with a view to flxlng

hearlng dates at the February sittlngs

of the Full Court but,

by common consent of the partles, a February date was

not

taken.

Apparently there were problems on each side 1n

obtalnlng the servlces of senior counsel.

The present

envlsagement is that the matter

will be heard in the June Full

Court slttlngs. I am told that no difflculty 1s anticipated

In having the appeal books ready for that time.	Each party is
apparently ready to proceed In June.

In the meantime the solicltors for the respondents

have prepared, filed and served bllls of costs. The costs clalmed on behalf of Western Stock Dlstrlbutors Pty Limited

come to almost $500,000.

The separate costs claimed on behalf

of the other two respondents

amount to very small s u m s .

There

has apparently been some discussion between the parties

in an

endeavour to agree upon	an amount of costs but so far these
have been unsuccessful.

The bills of costs were filed on 7 January 1987.

am informed by counsel, upon instructions from the solicitor who was concerned in the matter, that at that time a request was made of the Registry for the earliest available date for

taxation, it being envisaged that taxation would occupy

several days.

A period in the last week of March was

allocated and this has now been extended so as to include the

whole of that week, that is to say, next week commencing

Monday 23 March. The parties -- and certainly the respondents

-- have been proceeding on the basis that taxatlon would occur

at that time and arrangements have been made

by Mr R J

McCormack, the Perth

solicitor of the respondents,

to come to

Sydney for the taxation.

Mr McCormack has been intimately

involved in the matter since its inception.

On 3 March 1987 a notice of motion was filed by the

present applicant seeking an order that the

execution of

proceedings under the judgment appealed from be stayed.

The

only order in relation to which any execution could be had

would be the order for payment of costs.

It has been

explained to me today by counsel for the applicant

that his

client desires to stay the taxation of the costs next week

and, as

a consequence, the enforcement of the order for costs.

He submits that there is an arguable case in favour of the allowance of the appeal and that, if the appeal 1s allowed, the costs relating to the taxation next week would be thrown

away.

He further submits that, if as a result of the taxation

the order for costs were enforced, there may

be difficulties

about his cllent

recovering from the respondents the moneys

which had been paid to them.

4 .

Some

e v i d e n c e

h a s

b e e n

p u t

o n

t h e

r e s p o n d e n t s

t o

t h e i r

f i n a n c i a l

p o s i t i o n .

T h i s

e v i d e n c e

h a s

b e e n

p u t

o n

a s

m a t t e r

o f

u r g e n c y

a n d

i t

i n c o m p l e t e .

I t

n o t

s u g g e s t e d

o n

b e h a l f

o f

t h e

r e s p o n d e n t s

t h a t , a t

t h i s

s t a g e ,

t h e C o u r t

c o u l d b e

s a t i s f i e d

t h a t ,

i f m o n e y s

were

p a i d

t o

t h e

r e s p o n d e n t s ,

i t

would

c e r t a i n l y b e

r e c o v e r a b l e

i f

t h e a p p e a l

were

al lowed.

However ,

a n

o p p o r t u n i t y

i s

s o u g h t

t o

s u p p l e m e n t

t h e mater ia l

i n t h a t

r e g a r d

t h a t a t

f u t u r e d a t e

t h e

C o u r t

c o u l d b e

s a t i s f i e d

t h a t

t h e r e

would

r i s k o f

t h e

a p p l i c a n t n o t

r e c o v e r l n g a n y

costs

which

I t

h a d p a i d .

I n t h e meantime,

s a y s

c o u n s e l

f o r

t h e

r e s p o n d e n t s ,

t h e

t a x a t l o n

o f

costs

s h o u l d

p r o c e e d .

F i r s t l y ,

h e

s a y s

t h a t

t h i s is

n e c e s s a r y

i n order

t o q u a n t l f y

t h e a m o u n t o f

t h e

costs

a n d

t h e r e b y b e t t e r e n a b l e t h e

C o u r t

t o

d e a l w i t h a n y q u e s t i o n

o f

r e p a y m e n t .

S e c o n d l y ,

p u t s

t h i s

a s

matter

o f

l e g a l

r i g h t , p o r n t l n g o u t t h a t h i s c l i e n t s

had

t o wait

f o r

1/2

m o n t h s

f o r

a d a t e

f o r

t a x a t i o n a n d

t h a t ,

i f

t h e a p p e a l

i s

u n s u c c e s s f u l ,

t h e y

w i l l i n a l l p r o b a b i l i t y be

f a c e d w i t h

f u r t h e r s i g n i f i c a n t

wait

b e f o r e

t a x a t i o n a n d ,

t h e r e f o r e ,

b e f o r e

t h e y

a r e a b l e t o e n f o r c e

t h e

o r d e r

f o r

costs.

F l n a l l y ,

h e s a y s

t h a t

i t would

wrong

t o

a s s u m e

t h a t h l s

c l i e n t s

wou ld

a l lowed

t o

e n f o r c e

t h e

order f o r costs pend ing

t h e

d e t e r m i n a t i o n

t h e

a p p e a l .

r e f e r s

t o t h e

w e l l - e s t a b l i s h e d p r i n c i p l e

t h a t p r i m a

f a c i e

t h e

successfu l

l i t i g a n t

e n t l t l e d

t o

e n f o r c e h i s

order

n o t w l t h s t a n d i n g a n y

a p p e a l ,

a n d h e

s a y s

t h a t

t h e o n l y

real

matter

f o r

t h e C o u r t

would

whether

i t

was

s a t i s f i e d

t h a t

r e p a y m e n t w o u l d b e

l i k e l y

t o b e

f o r t h c o m i n g

i f

t h e

a p p e a l

s u c c e e d e d .

The

problem

t h e a p p r o p r i a t e

course

t o

b e

t a k e n

i s

one

w h i c h

t h i n k t o b e

n i c e l y

b a l a n c e d .

t h e one

hand

i t

seems

most

u n f o r t u n a t e

i f

course i s t a k e n

w h i c h

m i g h t

l e a d

t o

b o t h

t h e p a r t i e s

a n d

t h e D e p u t y R e g i s t r a r

s p e n d i n g

number

o f d a y s cos t s migh t

t a x i n g

b i l l o f

costs when,

i n t h e

e n d ,

t h e o r d e r

f o r

ove r th rown .

I t i s n o t d e n i e d

t h a t

t h e

a p p e a l

is a

g e n u i n e

one

a n d

t h a t

t h e a r g u m e n t s w h i c h

were

p u t o n

b e h a l f

t h e a p p l i c a n t

a t t h e t r i a l , a n d w h i c h

w i l l no

doub

b e

r e p e a t e d

o n

t h e

a p p e a l ,

were

a r g u a b l e

m a t t e r s .

t h e

o t h e r

h a n d

c o n c e r n e d

w i t h

t h e p o s s i b l e p r e j u d i c e

t o

t h e

r e s p o n d e n t s

I f

t h e

a p p e a l

f a i l s .

Assuming

t h a t

t h e a p p e a l

i n f a c t h e a r d

i n J u n e ,

i t

i s ,

t h i n k ,

l i k e l y ,

g i v e n

t h e

c o m p l e x i t y

t h e m a t t e r

a n d

t h e p r o b a b l e

l e n g t h o f

t h e h e a r i n g ,

t h a t

i t w i l l be

a t l e a s t a

c o u p l e o f m o n t h s b e f o r e

j u d g m e n t

c o u l d b e d e l i v e r e d b y

t h e

F u l l

C o u r t .

A t t h a t

s t a g e ,

a n d

h a v i n g

r e g a r d

t o

t h e

commitments

t h e R e g i s t r y

I n

t h e v e r y b u s y p e r i o d

r u n n i n g u p

t o C h r i s t m a s ,

i t

b y

m e a n s

c e r t a i n

t h a t

p e r l o d o f

f i v e

d a y s

c o u l d

b e

f o u n d

f o r

t h e

t a x a t i o n

o f

cos t s

t h i s

y e a r .

I t

m i g h t

well

b e e a r l y 1 9 8 8 b e f o r e

t h e

r e s p o n d e n t s

were

I n

p o s i t i o n

t o

e n f o r c e

t h e o r d e r

f o r c o s t s w h i c h

had

pronounced

i n August

1986.

I t

t r u e

t h a t

t h e y

w o u l d

recover

l n t e r e s t

a t

t h e r a t e o f 1 5 p e r

cen t

f o r s u c h p e r i o d

a s

t h e y

h a d

b e e n

p o s t p o n e d

i n

r e c o v e r i n g

t h e i r

costs.

T h e r e h a s b e e n

some

d e b a t e b e f o r e

m e

a s

t o

t h e e f f e c t

0 .62

r .45

t h e

F e d e r a l

C o u r t

R u l e s .

s u b - r . ( 4 )

t h a t

r u l e

p r o v i d e s :

"Interest

c a l c u l a t e d

i n a c c o r d a n c e

w i t h

O r d e r

3 5 ,

r u l e

p a y a b l e

from

t h e d a t e

t h e o r d e r

is	pronounced ."

Orde r

3 5

r . 8

r e f e r s

t o

a n

i n t e r e s t

r a t e o f 1 5 p e r

cent.

I t is

n o t q u i t e c l e a r

t o me

w h a t

i s mean t

the

d a t e

t h e

o r d e r

is pronounced" .

I t

is a r g u e d

o n b e h a l f

t h e

present

a p p l i c a n t t h a t

t h i s r e f e r s

t o a

pronouncement

the

t a x i n g

o f f i c e r .

have

some

d i f f i c u l t i e s w i t h

t h i s

b e c a u s e

i t

seems

t o me

t h a t t h e f i r s t s t e p

which

t h e t a x i n g o f f l c e r

t akes

issue

s e a l e d c e r t i f i c a t e o f

t a x a t l o n

see

s u b - r . ( l ) .

I f t h i s

is n o t p a i d ,

t h e

s e c o n d s t e p

t o

s i g n a n d s e a l a n

order

see

s u b - r . ( 3 ) .

T h e r e

n o

r e f e r e n c e

t o t h e

t a x i n g

o f f i c e r ,

a t

a n y

s tage ,

p r o n o u n c i n g

a n

o r d e r .

t h e

o t h e r

hand

r .2

0 .62

m a k e s

t h e p r o v i s i o n s o f 0 . 6 2 a p p l i c a b l e

t o

costs

p a y a b l e

t o b e

t a x e d

u n d e r

a n y

order

o f

t h e

C o u r t .

I t

1 s

u s u a l

t o

r e f e r

t o

t h e C o u r t

p r o n o u n c i n g

a n

order

when

s u c h

a n o r d e r

i s o r a l l y made

t h e

j u d g e

i n

o p e n

c o u r t .

T h e

word

" p r o n o u n c e d "

c o n t r a s t s

w i t h

t h e

word

" e n t e r e d " ,

term

app l i cab le

t o

t h e

d a t e

upon

ich

t he

fo rma l

order

t a k e n

o u t

i n

t h e R e g i s t r y .

I t

i s

n e i t h e r n e c e s s a r y n o r a p p r o p r i a t e

f o r

m e

t o

l n d i c a t e a n y

f l n a l v i e w a b o u t

t h e m e a n i n g o f

s u b - r . ( 4 )

a t t h i s

s t a g e .

I f

t h e v i ew

h a v e

t e n t a t i v e l y

e x p r e s s e d

correct ,

t h e r e

n o

need

f o r a n y u n d e r t a k i n g b y

t h e

p r e s e n t a p p l i c a n t .

t h a t v l e w ,

i f

t h e

order

f o r costs

s u r v i v e s

t h e a p p e a l ,

i n t e r e s t w i l l be

p a y a b l e a s

f r o m

2 2

A u g u s t

1986

the

amount

o f t h e i n c o r r e c t , a n d

t a x e d

costs .

I f ,

t h e

o t h e r

h a n d ,

t h a t

v i e w

t h e d a t e o f a c t i v i t y o f

t h e

t a x i n g o f f i c e r

7 .

relevant, then counsel for the applicant has offered an

undertaking on behalf of his clients that, if the order for

costs made by me is not set aside on appeal, his client will

pay interest on the costs

as eventually taxed or agreed

between the parties from 1 May 1987 at the rate of 1 5 per cent

per annum. Notwithstanding this offer, it seems to me that

there would be a disadvantage to the respondent if I took a

course which prevented the taxation proceeding next

week and

If the order for costs survived the appeal.

The respondents

would be postponed in collectlng the costs for a number of

months, and I do not think the eventual receipt of interest of

1 5 per cent removes thls disadvantage. Both parties to this

litigation are involved in business activities and I have no

doubt that each of them would prefer to be in control of a

capital sum than merely

having a debt owing which

is earning

interest at 15 per cent. By present-day standards 15 per cent

is a relatively low interest rate.

On balance I think that the appropriate course is for

me to allow the taxatlon to proceed next week:

baslcally for

each of the three reasons advanced by counsel for the

respondent and to which I have already referred.

On the other

hand it would be inappropriate to take a course at thls

stage

which would permlt the respondents to enforce payment of the

costs.

If the costs are to be paid out to the respondents

prior to the disposal of the appeal, then thls ought to

allowed only after the Court 1s positively satisfied that

there would be no risk of the appllcant being unsuccessful in

obtaining repayment of those costs.

Counsel for the

l .

relevant, then counsel for the applicant has offered an

undertaking on behalf o€ hi5 clients that, if the order for

costs made by me is not set aside on appeal, his client will

pay interest on the costs a5 eventually taxed or agreed

between the parties from 1 May 19R7 at the rate of

1 5 per cent

per annum. Notwithstanding this offer, it seems to me that there would be a disadvantage to the respondent if I took a

course whlch prevented the taxation proceeding next

week and

if the order for costs survived the appeal.

The respondents

would be postponed in collecting the costs for a number

months, and I do not think the eventual recelpt of interest of

15 per cent removes this dlsadvantage. Both parties to this

litigation are involved in business activities and I have no

doubt that each of them would prefer to be in control of a

capital sum than merely

having a debt owing which

is earning

interest at 15 per cent.

By present-day standards 15 per cent

is a relatively low interest rate.

On balance I think that the appropriate course is for

me to allow the taxation to proceed next week;

basically for

each of the three reasons advanced by counsel for the

respondent and to whlch I have already referred.

On the other

hand it would be inappropriate to take a course at this stage

which would permit the respondents to enforce payment of the

costs.

If the costs are to be paid out to the respondents

prior to the disposal of the appeal, then this ought to

allowed only after the Court is positively satisfied that

there would be no risk of

the applicant being unsuccessful ln

obtaining repayment of those costs. Counsel for the

8 .

r e s p o n d e n t s

seeks

a n o p p o r t u n i t y

t o

s u p p l e m e n t

t h e p r e s e n t

a f f i d a v i t s

a s

t o d e m o n s t r a t e

t h a t

p a y m e n t

c o u l d b e

made

t o

its

c l i e n t s w i t h o u t

a n y

s u c h

r i s k .

G i v e n

t h e

f a c t

t h a t

h i s

c l i e n t s

have

had

on ly

f e w d a y s '

n o t i c e o f

t h i s

motion,

t h i n k

s h o u l d accede

t o h i s

r e q u e s t

f o r

f u r t h e r

time

i n t h a t

r e g a r d .

I f

i t were

n e c e s s a r y

t o d o so,

would

p repared

t o

make

a n o r d e r

s t a y i n g

t h e e n f o r c e m e n t o f

t h e

order

f o r

cos t s ,

a s d i s t i n c t c o u n s e l h a s

f r o m

t a x a t i o n

costs.

B u t

u n d e r s t a n d

t h a t

i n s t r u c t i o n s

t o

o f f e r

t o

t h e C o u r t a n u n d e r t a k i n g

o n

b e h a l f o f h i s c l i e n t s

t h a t

t h e y

w i l l n o t

seek

t o e n f o r c e

t h e o r d e r f o r

cos t s

p e n d i n g d i s p o s a l o f

t h e

no t i ce

mot ion .

I f

t h a t u n d e r t a k i n g

i s

o f f e r e d ,

w l l l a c c e p t

i t

r a t h e r

t h a n

make

f o r m a l

o r d e r .

Upon

t h e b a s i s

s u c h a n u n d e r t a k i n g

would

propose

t o

s t a n d o v e r

t h e f u r t h e r h e a r i n g o f

t h e a p p l i c a t i o n

t o a

d a t e

c o n v e n l e n t

t o

counsel

i n

a b o u t

o n e

m o n t h ' s

time.

t h a t d a t e

t h e a m o u n t o f

t h e

costs ough t

t o be

known

a n d

t h e r e

will be

o p p o r t u n i t y

f o r

t h e

r e s p o n d e n t s

t o

p u t a n y t h i n g f u r t h e r a s

t o

t h e i r

f i n a n c i a l p o s i t i o n .

n o t e t h a t t h e

r e s p o n d e n t s b y

t h e i r

c o u n s e l

u n d e r t a k e

t o

t h e C o u r t p e n d i n g

t h e d i s p o s a l o f

t h e n o t i c e o f

motion

t h a t

t h e y

will

t a k e n o a c t i o n

t o

enforce

t h e o r d e r f o r

costs made

a g a i n s t

t h e a p p l i c a n t

o n

2 2

August

1986

o t h e r

t h a n

t o t a x

t h o s e

costs

and

t o o b t a i n a n d s e r v e

c e r t i f i c a t e of

t a x a t i o n

unde r

0 .62

r . 4 5 ( 1 )

a n d

( 2 )

a n d ,

i f

n e c e s s a r y ,

s i g n e d

a n d

sealed

order

under

0 . 6 2

r . 4 5 ( 3 ) .

Upon

t h e

b a s i s

9 .

t h a t

u n d e r t a k i n g

d e c l i n e a t t h i s e t a g e t o

make

a n y

f u r t h e r

o r d e r .

p r o p o s e

t o

s t a n d

t h e mat ter

o v e r

t o a

d a t e

w h i c h

w e

will

now

d i s c u s s .

c e r t i f y t h i s and

t h e e i g h t

( 8 )

p r e c e d i n g p a g e s

t o b e

t rue

copy

t h e

Reasons

fo r

Judgmen t

h i s Honour Mr

J u s t i c e W i l c o x .

A s s o c i a t e : &-D-

Date:

May

1987

C o u n s e l

f o r

t h e

A p p l i c a n t :

C a t t e r n s

S o l i c i t o r s f o r t h e A p p l i c a n t :

M a l l e s o n s S t e p h e n

J a c q u e s

C o u n s e l

f o r

t h e R e s p o n d e n t s :

H i l t o n

S o l i c i t o r s

f o r

t h e R e s p o n d e n t s :

C o r s e r

D a t e ( s ) of

h e a r i n g :

1 6

March

1987

[1987] FCA 272

16 Mar 1987