FEDERAL COURT OF AUSTRALIA
Croft v Evertop Investments Pty Ltd [2014] FCA 1098
Citation: Croft v Evertop Investments Pty Ltd [2014] FCA 1098 Parties: RODNEY KIM CROFT & JANICE ANNE CROFT and NUNAGIN HOLDINGS PTY LTD ACN 990 230 176 v EVERTOP INVESTMENTS PTY LTD ACN 091 802 201 and JAMES ALEXANDER KIDD NUNAGIN HOLDINGS PTY LTD v EVERTOP INVESTMENTS PTY LTD ACN 091 8020 201 and JAMES ALEXANDER KIDD File numbers: WAD 21 of 2005; WAD 308 of 2006 Judges: BARKER J Date of judgment: 10 October 2014 Catchwords: COSTS – where leave was granted to discontinue proceeding under R 26.12(2) Federal Court Rules 2011 (Cth) – appropriate costs order to be made – whether Court should refrain from ordering costs in the circumstances – effect of deed of settlement in earlier proceeding between certain parties – whether applicant liable for costs of discovery and inspection in earlier proceeding
PRACTICE AND PROCEDURE – application to rectify consent order in earlier proceeding
Legislation: Trade Practices Act 1974 (Cth) s 80
Federal Court Rules 2011 (Cth) R 26.12(2), R 26.12(7)
Trade Practices (Industry Codes – Franchising) Regulations 1998 (Cth) s 3 of ScheduleCases cited: Clark v ING Life Limited [2007] FCA 1960
Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622Date of hearing: 3 May 2013 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 162 Counsel for the First Applicant in WAD 21 of 2005: The First Applicant filed written submissions but did not appear Counsel for the Fourth Applicant in WAD 21 of 2005: Mr T Carmady Solicitor for the Fourth Applicant in WAD 21 of 2005: Williams & Hughes Counsel for the Respondents in WAD 21 of 2005 at the time of the hearing: Mr A Metaxas Solicitor for the Respondents in WAD 21 of 2005 at the time of the hearing: Metaxas & Hager Counsel for the Applicant in WAD 308 of 2006: Mr T Carmady Solicitor for the Applicant in WAD 308 of 2006: Williams & Hughes Counsel for the Respondents in WAD 308 of 2006 at the time of the hearing: Mr A Metaxas Solicitor for the Respondents in WAD 308 of 2006 at the time of the hearing: Metaxas & Hager
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 21 of 2005
BETWEEN: RODNEY KIM CROFT & JANICE ANNE CROFT
First ApplicantNUNAGIN HOLDINGS PTY LTD ACN 990 230 176
Fourth ApplicantAND: EVERTOP INVESTMENTS PTY LTD ACN 091 802 201
First RespondentJAMES ALEXANDER KIDD
Second Respondent
JUDGE:
BARKER J
DATE OF ORDER:
10 OCTOBER 2014
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.The order issued by the Court on 5 October 2012 be recalled and discharged.
2.In lieu thereof there be orders as follows:
(a)This application by the first applicants against the respondents be dismissed.
(b)Any unsatisfied orders for costs as between the first applicants and the respondents be recalled and discharged.
(c)Subject to…
Keep reading for free
Create a free CaseChat account to read Croft v Evertop Investments Pty Ltd and more:
- Read every judgment in full
- Ask AI and get answers linked to paragraphs
- See how each paragraph was cited in later cases
- Download judgments as PDF or Word
One click creates your free account or signs you in.
By continuing you agree to the Terms and Privacy Policy.
- Case
- [2014] FCA 1098
- Decision Date
CaseChat Overview and Summary
The legal issues the court had to decide included whether the Court should refrain from ordering costs in favour of the respondents following the discontinuance of the proceeding and whether the respondents were liable for the costs of discovery and inspection in an earlier proceeding. The court also had to determine whether the conduct of the respondents warranted a departure from the usual approach to costs orders.
The court found that the respondents’ conduct did not justify the Court refraining from making a costs order in their favour. The court held that the function of the Court was not to predict the outcome of a hypothetical case when exercising its costs discretion. The court dismissed the application to rectify the consent order and ordered that the costs of the respondents were not to include any of the costs of discovery and inspection in the earlier proceeding. The court also made no order as to costs in relation to the hearing of the application concerning the costs payable following the discontinuance of the proceeding.
The final orders included dismissing the application by the first applicants against the respondents, discharging any unsatisfied orders for costs between the first applicants and the respondents, and ordering the applicant to pay the respondents’ costs of the proceeding. The respondents’ costs were not to include any of the costs of discovery and inspection in the earlier proceeding, and no order was made as to costs in relation to the hearing of the application concerning the costs payable following the discontinuance of the proceeding.
Orders
Orders of the court
1. The order issued by the Court on 5 October 2012 be recalled and discharged.
2. In lieu thereof there be orders as follows:
(a) This application by the first applicants against the respondents be dismissed.
(b) Any unsatisfied orders for costs as between the first applicants and the respondents be recalled and discharged.
(c) Subject to (2(b)) above, there be no order as to the costs of the application as between the first applicants and the respondents.
3. There be no order as to costs on the respondents’ interlocutory application dated 11 April 2013.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
1. The applicant pay the respondents’ costs of the proceeding to be taxed, if not agreed.
2. The costs of the respondents shall not, however, include any of the costs of discovery and inspection in WAD 21 of 2005.
3. There be no order as to costs in relation to the hearing of the application in respect of the costs payable in WAD 308 of 2006 following discontinuance of the proceeding by the applicant.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
So far as the costs following the discontinuance of WAD 308 are concerned, the parties accept that it is not the function of the Court to make a prediction as to the outcome of a hypothetical case when exercising the Court’s costs discretion following the discontinuance of a proceeding. See Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 at 624‑625 (McHugh J); Clark v ING Life Limited [2007] FCA 1960 at [19] (Rares J). Nonetheless, Nunagin says the conduct of the respondents is such that the Court should order otherwise and refrain from making a costs order in their favour in this case. Nunagin primarily relies on the affidavit of Mr Kimball John McIntyre sworn 25 March 2013 and the affidavit of Ms Hermien Bouman sworn 25 March 2013 to establish relevant disentitling circumstances. It submits that disentitling conduct relates to what it calls a significant change in position by the respondents in October 2012 in relation to the types of expenses they say were properly chargeable to an advertising fund set up to promote the Jim Kidd Sports brand. Nunagin says it and other franchisees were previously in dispute with the respondents in relation to the advertising fund going back to late 2003 and early 2004. It says audited financial statements for the advertising fund were provided amongst others to Nunagin in response to an even earlier proceeding in the Court in WAD 168 of 2004. Nunagin says the audited financial statements disclosed the respondents’ position in relation to the advertising fund which was very significant expenditure said to be incurred under the descriptor promotional support administration costs. It says there was further dispute between Nunagin and other franchisees, on the one hand, and the respondents, on the other, in relation to, amongst other things, those costs, including whether they were of a type that could be properly charged to the advertising fund. Nunagin says that the application for pre-action discovery was then made by the franchisees in WAD 21 which was directed in part to the promotional support administration costs and that significant discovery and inspection were provided in relation to that issue on the orders made. Nunagin and the other franchisees then engaged Pitcher Partners to prepare an opinion in relation to, amongst other things, the proper level of expenditure of the type described in the audited financial statements as promotional support administration costs. That opinion, contained in a report of September 2006, was that those costs were not properly chargeable against that fund or were overstated. It was against that background, Nunagin says, that WAD 308 was commenced in October 2006 and a minute of amended statement of claim was filed in July 2007, in which, at [9(b)], Nunagin pleaded in effect the conclusions reached in the Pitcher Partners’ report in relation to the advertising fund. Nunagin says that the respondents did not file a defence in the proceeding until 10 December 2007 and when it did so, the response to [9(b)] was a bare denial of the allegations made. Nunagin says no substantive defence was advanced until the minute of proposed re‑amended defence was given to it in late October 2012, some few months before trial was due to commence in March 2013 and six years after the proceeding in WAD 308 had been commenced. Nunagin notes that despite the respondents having been ordered to provide an amended defence by 19 May 2012, they failed to comply with that order until much later.