Education of Australia (formerly Takama Holdings) Pty Ltd trading as Wessex College of English v Commonwealth of Australia

[1995] FCA 1191

IN THE FEDERAL COURT OF AUSTRAL1 1141 , 95

A JUDGMENT No ........ ........ . ...... .*.. .*

I

NEW SOUTH WATnES DISTRICT REGISTRY ) NO. NG 275 of 1992

1

GENERAL DIVISION )

BETWEEN : EDUCATION OF AUSTRALIA (Formerlv TAKAMA HOLDINGS PTY LIMITED tradina as WESSEX COLLEGE OF ENGLISH AND WESSEX COLLEGE

Applicant

AND: THE COMMONWEALTH OF AUSTRALIA

Respondent

15 FEBRUARY 1995

REASONS FOR JUDGMENT

LOCKHART J.

This is a motion by the Commonwealth of Australia which has been filed in a matter other than the appeal G905 of 1993. By consent I shall treat the motion as if it had been filed in that appeal. The motion seeks the dissolution of order 1 as made by the Court (constituted by myself) by consent on 6 December 1993, provided that the undertaking mentioned therein continues in force and effect notwithstanding the dissolution of that order.

The background to the matter is this. There was a dispute between the parties, the Commonwealth of Australia and Education Australia Pty Limited, trading as Wessex College of English and Wessex College. This dispute culminated in the judgment of another judge of the Court, Beaumont J, given on 3 September 1993 for a sum in excess of $2 million. ducati ion

Australia then appealed to a Full Court of this Court and the parties came to an arrangement embodied in the consent orders of 6 December 1993. The terms of those consent orders are as

follows :

1.   Upon the appellant by its director Sudradjat Siswandi giving the undertakings to the Court set out in Schedule A, execution on the judgment entered against the appellant in proceedings no G275 of 1992 on 10 November

1993 be stayed until future order;

2. Within seven days of the date of this order the appellant provide security for the respondent's costs of this appeal in the sum of manner set out in Schedule B;

3. Costs of the motion be costs in the appeal; and

4.   Liberty be granted to either party to restore on two days' notice to the Court and to each other.

SCHEDULE A

(a)	That the appellant will prosecute this appeal with all due diligence and expedition.
(b)	That until further order the appellant shall not by itself, its servants or agents remove, or cause to permit to be removed from Australia, or sell, charge or mortgage

(or increase the quantum of that charge or mortgage if already charged or mortgaged at the date of this order), or otherwise deal with or dispose of, or cause any of those things to be done to all or any of its assets wheresoever situated, including the property situated at and known as 55 Regent Street Sydney, other than in the usual course of its business carried on in the usual way without 2 weeks written notice to the respondent.

SCHEDULE b

$30,000 to be deposited in a controlled money account in the joint names of and under the joint control of the respective solicitors of the appellant and respondent interest thereon to benefit each party equally.

As I read the orders, the evident intent is that, because

Education Australia had appealed to a Full Court of this Court

- from Beaumont J.'s judgment, the Commonwealth should not be allowed to pursue its remedies to recover the fruits of its judgment until the determination of that appeal, or further order. "Further order", of course ordinarily, and indeed in this case, means until further earlier order. The quid pro quo offered by Education Australia for having the benefit of a stay was its undertaking that it would not in substance sell or dispose of any of its assets, or encumber them whatever they might be, other than in the usual course of its business, without giving two weeks prior written notice to the

Commonwealth of its intention to do so. This is an arrangement that is not infrequently made.

The problem is that the order number 1 made on 6 December did not indicate that the judgment of Beaumont J. was to be stayed until the determination of the appeal or further order.

I have no doubt that such was the evident intent of the

parties as expressed in the consent order. Similarly the undertaking set out in paragraph (b) of schedule A was expressed to be until further order. I read it similarly to have the meaning as those words bear in order 1.

The consequence of this construction (which is in my view

correct) would be that the stay, and hence the undertaking as

I construe it, would be spent upon the determination of the

appeal to the Full Court. The appeal was determined on 10 June 1994 and the result was that the Commonwealth succeeded and Education Australia failed.

What then ensued was that Education Australia sought special leave to appeal to the High Court from the Full Court's judgment. A notice of motion came on for hearing before another judge of this Court (Einfeld J.) on 21 September 1994 and the essence of his Honour's judgment and order was that the stay and the undertaking of the 6 December 1993 to which I have referred were to continue in force until

the disposition of the High Court proceeding.

His Honour took the view, as expressed in his reasons for judgment on 21 September, that the stay of the 6 December was to operate literally according to its terms, that is, until further order. This construction would mean that the stay would operate indefinitely unless the Court otherwise ordered, irrespective of the results of the appellate process. I respect his Honourfs view, but regret to say that I differ from it.

The High Court dismissed the application for special leave on 9 December 1994, thus bringing the appellate proceedings from Beaumont J. Is judgment to an end. As I construe the order of 6 December 1993 and the undertaking then proffered on behalf of Education Australia, the stay was spent in any event upon the determination of the appeal to this Full Court and the undertaking was similarly spent. However, in case I be wrong in that view, I will deal with the matter out of respect for my colleague Einfeld J. Is judgment on the same footing as his Honour did; namely, I will assume that the stay and the undertaking are still on foot.

On this alternative reasoning, the question arises, as a matter of discretion whether the court would release Education Australia from its undertaking. It is agreed between the parties that in any event the Commonwealth should be freed from the burden of any further stay. The only dispute is whether the undertaking should remain on foot. As the

appellate process is exhausted and as the Commonwealth has been since 9 December 1994 at liberty to exercise its rights as a creditor to enforce its judgment of 3 September 1993, I see no useful purpose to be served in requiring the undertaking of Education Australia to remain on foot.

It seems to me that both the stay and the undertaking went in tandem from the inception and that they should similarly go in tandem. Accordingly, as a matter of discretion if I were of a contrary view to the construction of the order from the view which I have expressed, I would order that Education Australia be released forthwith from the undertaking which it gave on 6 December 1993 embodied in schedule A paragraph (b).

That leaves costs. It follows from my earlier reasons that the notice of motion filed on 18 January 1995 must be dismissed. The question arises as to the costs of the motion. Counsel for the Commonwealth seeks an order that Education Australia pay the Commonwealth's costs of the motion on an indemnity basis. It is agreed by both parties that, whatever order for costs is made, these costs should not include in favour of a successful party, the costs of 7 February 1995 which was the return date of the motion.

Counsel for Education Australia has submitted that the proper order for costs is that there be no order as to costs.

The correspondence between the solicitors of the parties (which consists of letters of 13 December 1994 and 20 December 1994) so far as presently relevant, results in the Commonwealth having sought consent to the removal of the stay and Education Australia having declined to give it. Shortly after that correspondence concluded, the Commonwealth filed its notice of motion on 18 January 1995, though it is dated, I see, 23 December 1994.

Order 1, which is the substantive order in the motion, seeks that order 1 of the orders made by the Court on 6 December 1993 by consent be dissolved but then adds this proviso : "Provided that the undertaking therein referred to shall continue in force and effect notwithstanding the dissolution of that order". Hence, notwithstanding the correspondence that passed between the parties, it is clearly inherent in the proceeding before me that the Commonwealth seeks the dissolution of the stay but the continuation of the undertaking.

The Commonwealth has succeeded in having the stay removed, indeed that was not opposed today by counsel for Education Australia; but it has failed in relation to the question of the undertaking. It is not in the circumstances of the case appropriate for indemnity costs. Indeed, I think the proper order for costs is that there be no order as to the costs of the motion.

Accordingly, the motion is dismissed with no order as to

costs.

I certify that this and the

preceding seven (7) pages are a true copy of the reasons for judgment herein of the Honourable Justice Lockhart.

Associate

Dated: 15 Fe W 9 9 5

Counsel for the Applicant Mr F Kunc

Solicitors for the Applicant : Australian Government

Solicitor

Counsel for the Respondent	Miss J Needham
Solicitors for the Respondent :	De Rubeis & Associates
Date of Hearing	15 February 1995
Date of Judgment	15 February 1995