Deputy Commissioner of Taxation v Richard Anthony Fountayne England (as Liquidator of UB Minerals (Nevada))

[1998] FCA 1158

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SG 3130 of 1996

BETWEEN:	DEPUTY COMMISSIONER OF TAXATION APPLICANT
AND:	RICHARD ANTHONY FOUNTAYNE ENGLAND (AS LIQUIDATOR OF UB MINERALS INC (NEVADA)) RESPONDENT
JUDGE:	MANSFIELD J
DATE:	25 AUGUST 1998
PLACE:	ADELAIDE

REASONS FOR DECISION

HIS HONOUR:   I have been asked to rule on a number of outstanding matters concerning costs in respect of applications which have been dealt with by the Court or which are no longer pursued.  I will deal with them severally.

The applicant applied by motion on 15 April 1997 to strike out the respondent’s defence.  That application was heard and dismissed on 14 November 1997.  At that time I reserved the question of costs because it seemed to me that it was possible that the appropriate order for costs may, to some extent, be influenced by the arguments in the motion for summary judgment which was to be heard immediately following the strike-out motion.  That motion for summary judgment has now been dismissed, as it is no longer pursued.  In those circumstances I see no reason why the ordinary order for costs should not apply.  I order that the applicant pay to the respondent costs of the applicant’s notice of motion dated 15 April 1997 to be taxed.

The motion for summary judgment dated 10 November 1997 came on for hearing on 14 November 1997 but was then adjourned to a date to be fixed because the hearing was not completed.  There have been difficulties in arranging a further hearing date for that motion.  It was listed for hearing on 25 and 26 August 1998 for that purpose.  In the meantime, no doubt prompted by the elapse of time, the parties have sought and have been granted a hearing date for the trial itself on 14 December 1998.  It is in that context, in part, that the motion for summary judgment is no longer pursued.  I do not know what the applicant’s attitude would have been had a hearing date not been available in the relatively near future.  The issues on that notice of motion have not been resolved.  It has been pointed out that the onus upon the applicant to succeed on the notice of motion is a heavy one.  Summary judgment is not readily given, and indeed is given only in the clearest of cases.  The respondent contends that in the circumstances, the summary judgment procedure was inappropriate and that the respondent should obtain its costs but, as I have not finally adjudicated on the motion, I do not think I can take that consideration into account except in a very general way.  The respondent also says that, in any event, the motion is no longer proceeded with and that it therefore ought to have costs in the normal course as following the event.  I have sympathy with that point of view, but I am mindful that the motion is not proceeded with in the context of a relatively prompt final hearing date now available to the parties.

In my view, an appropriate order for costs is that the costs of the motion for summary judgment of 10 November 1997 should be the respondent’s costs in the cause.  I so order.  In that way the respondent, if it succeeds in the proceedings, will recover the costs of that motion.  If it does not do so, neither party will be entitled to costs of the motion.

The third outstanding issue as to costs relates to the respondent’s motions for further and better discovery of 26 May 1997 and 12 November 1997.  Those motions for discovery were heard on 7 August 1998.  On 20 August 1998 I made orders for further and better discovery of limited categories of documents.  There had, however, in the meantime been significant further discovery made by the applicant by the affidavits of Mr Cook sworn on 30 May 1997 and 18 June 1997, by a further supplementary list of documents filed on 2 September 1997, by production of documents in the course of Mr Cook’s evidence on the summary judgment application on 14 November 1997, and in a further affidavit of Mr Cook sworn on 10 July 1998.

In those circumstances, it is my view that the motions for discovery have been largely successful, partly by the applicant acknowledging in the procedures to which I have referred that further documents should have been discovered by him, and partly by reason of the decision made on 20 August 1998 which ordered discovery of some but not all of the documents then still sought by the respondent.  It is true, as counsel for the applicant indicated, that at that point only a small proportion of the documents remaining in issue required to be discovered.  That was in part because within certain categories of the documents sought, Mr Cook’s affidavit of 10 July 1998 explicitly covered some area of those categories.  In respect of the balance of those documents I took the view that it was necessary only that a summary-type document be discovered and produced for inspection, on the basis that the material background facts in which the agreement in issue came to be entered into could and should be able to be identified by such a limited type of document.  In respect of the other categories of documents numbered 3 and 4, again I formed the view that notwithstanding the documents that had been discovered or made available by the applicant, there were some further documents which ought to have been discovered and I ordered their discovery.  In respect of categories 6 and 7 I made no further order.  However, the fact that the then application or the then disputed documents resulted in only a small additional number of documents being ordered to be discovered must, in my view, be seen in the context of the process of the applicant having given discovery progressively in the ways I have identified over a period of time since the first motion was issued.

In those circumstances, in my view, the respondent has been substantially successful on those two motions and I order the applicant to pay to the respondent costs of the motions of 26 May 1997 and 12 November 1997 to be taxed.

There remains the issue of costs in respect of the applicant’s oral application pursued on 20 August 1998 for the dates then set aside for the completion of the summary judgment application, namely 25 and 26 August 1998, to be converted into a hearing of the trial generally.  I declined that application because I was not satisfied that the respondent could or could reasonably be expected to be ready for trial in the short period of time then available, and also bearing in mind that the period of time then set aside for the hearing would not enable the hearing to be completed in any event so that the matter would have to be put off for a further hearing date. 

It is correct, as counsel for the respondent indicated, that affidavit evidence indicated that the respondent had only lately procured further information relevant not simply to the construction of the agreement comprised in the letter of 16 September 1991 and its formal acceptance on 19 September 1991, but also to the question of whether, even at the time of the agreement, UBM (Nevada) was in fact still a subsidiary of ACIL.  Up to that point it had been assumed between the parties and asserted by the applicant that it had ceased to be a subsidiary of ACIL in 1989.  Whether that proves to be the fact is a matter for trial.  However, the timing of the obtaining of that information or the fact that the respondent was still pursuing further inquiries in respect of that and other information, which he regarded as relevant to the defence of the proceedings as well as to his conduct of the liquidation generally, was not the reason why I concluded that in fairness the respondent could not be expected to be ready for trial at that short notice.  I explained my reasons at the time.

I also bear in mind that, to an extent, the applicant in seeking to have the matter heard at that time was unaware of the extent of the respondent’s recent investigations, at least until served with the affidavit of Mr Karas of 20 August 1998 only on the morning of that hearing.  I am not critical of that fact because, as appears, it was only recently acquired information but it is, in my view, relevant to how I should exercise my discretion as to costs on that application.

The applicant was unsuccessful.  I do not think the applicant should be in a position to obtain costs on that application.  On the other hand, there were reasons why it was pursued at the time, and the reasons why it was unsuccessful are reasons which in part emerged only on the day of the hearing.  In those circumstances, in my view, it is appropriate that the costs of that motion should be the respondent’s costs in the cause and I so order.

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

Associate:

Dated:        16 September 1998

Counsel for the Applicant:  Ms S Maharaj

Solicitors for the Applicant:  Australian Government Solicitor

Counsel for the Respondent:  Mr D R Meagher QC
  with him
  Mr J D Karas

Solicitors for the Respondent:  Fisher Jeffries

Date of Hearing:  25 August 1998

Date of Decision:  25 August 1998