Elliot Rocke Holdings Pty Limited v Erudgere Vineyard Pty Limited

[2015] FCCA 2780

FEDERAL CIRCUIT COURT OF AUSTRALIA

ELLIOT ROCKE HOLDINGS PTY LIMITED v ERUDGERE VINEYARD PTY LIMITED & ANOR [2015] FCCA 2780

Catchwords:
PRACTICE AND PROCEDURE – Application for adjournment of hearing on grounds that applicant will be unable to raise amount required to comply with order for security for costs – adjournment granted on terms.

Applicant: ELLIOT ROCKE HOLDINGS PTY LIMITED (ACN 147 966 363)

First Respondent: ERUDGERE VINEYARD PTY LIMITED (ACN 107 289 369)

Second Respondent: THISTLE HILL WINES PTY LIMITED (ACN 163 670 513)

File Number: SYG 3367 of 2014

Judgment of: Judge Manousaridis

Hearing date: 12 October 2015

Delivered at: Sydney

Delivered on: 13 October 2015

REPRESENTATION

For part of the interlocutory hearing, Mr H Papadopoulos appeared for the

applicant and for the balance of the interlocutory hearing, Mr Chen, with leave,

appeared on behalf of the applicant.

Counsel for the Respondents: Mr P Knowles

Solicitors for the Respondents: Austen Brown Boog Solicitors

ORDERS

1. By consent, the applicant provide security for the costs of the first and second respondents in the sum of $35,931.

2. The applicant provide the security the subject of order 1 by 14 December 2015 in the form of either:

   (a)the payment of money into Court; or

   (b)the provision to the Court of an irrevocable bank guarantee in favour of the first and second respondents.

3. The hearing dates fixed for 22, 23, 26, 27 and 28 October 2015 are vacated.

4. The applicant pay the respondents’ costs thrown away by reason of order 3.

5. The applicant file and serve all evidence in reply by 14 December 2015.

6. The matter is provisionally listed for hearing on 28, 29, and 30 January 2016 and 1 and 2 February 2016.

7. The matter is listed for directions at 9.30 am on 16 December 2015.

8. The parties have liberty to apply on such notice as the circumstances warrant.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 3367 of 2014

ELLIOT ROCKE HOLDINGS PTY LIMITED (ACN 147 966 363)

Applicant

And

ERUDGERE VINEYARD PTY LIMITED (ACN 107 289 369)

First Respondent

THISTLE HILL WINES PTY LIMITED (ACN 163 670 513)

Second Respondent

REASONS FOR JUDGMENT

1. In these proceedings, which, on 13 February 2015, were set down for hearing for five days commencing on 22 October 2015, the applicant claims damages from the respondents in relation to the spoliation of wine that the applicant engaged the respondents to store.

2. Pursuant to directions I made in the course of the year, the parties have filed their evidence in chief, with the respondents filing their evidence on 20 August, and 11 and 25 September 2015. From that evidence, there is no issue that the wine was spoiled; the principle issue is who is responsible for the spoliation. The applicant claims it is the respondents. The respondents claim it was caused by a person whom the applicant engaged to produce the wine.

3. On 28 September 2015 the respondents filed an application in a case for an order that the applicant provide security for costs. That application came before me at 10.15 am on 12 October 2015. Mr Papadopoulos appeared for the applicant. He appeared, however, only to inform the Court that he was withdrawing as the lawyer for the applicant. He also informed the Court that the applicant would consent to an order requiring the granting of the security claimed by the respondents.

4. After Mr Papadopoulos filed in Court a Notice of Withdrawal as Lawyer, I granted Mr Chen, the sole director of the applicant who was in Court, leave to represent the applicant only for the purposes of the interlocutory hearing before me. He applied for an adjournment of the hearing for two reasons. First, he said he required further time to respond to the evidence filed on behalf of the respondents. In that regard, at the beginning of the hearing before me, and before he filed in Court the Notice of Withdrawal as Lawyer, Mr Papadopoulos identified the evidence to which the applicant wished to respond. It related to evidence that the respondents caused to blend some of the spoiled wine. The second and, on my impression, the principal reason Mr Chen seeks the adjournment, is that the applicant requires further time to obtain money both to pay the amount of the security sought by the respondents and also to obtain funds to again retain lawyers.

5. The first matter I must consider is whether the applicant’s concession that it is liable to pay security for costs is one that is reasonably open to it. That is relevant because the applicant is no longer represented. Although, given the applicant’s concession, the respondents did not formally read the affidavit on which they relied, I read the affidavit and am satisfied that, if the application for security were contested, there would have been a high likelihood that I would have found that there is reason to believe the applicant may not be in a position to meet an adverse costs order. There is also a high likelihood that I would have been satisfied that the security for costs the respondents seek relate to costs that were incurred by the respondents after they gave the applicant notice of their intention to apply for security for costs, and that the amount they seek - $35,931 – is reasonable. The applicant has not filed any evidence to suggest that the sole shareholder of the applicant is willing to guarantee the respondents’ costs; nor has the applicant filed any evidence or suggested that had the respondents applied for an order for security for costs it would not have brought these proceedings. In my opinion, it was reasonably open to the applicant to concede to the Court making an order that the applicant provide security in the amount of $35,931.

6. I next consider the application for the adjournment of the hearing. Whether or not the Court should grant an adjournment is within the discretion of the Court. It must bear in mind a number of factors. These include the reason for which the adjournment is sought, the interests of the parties, and in particular the respective prejudice the parties will suffer on the alternative assumptions that the application to adjourn is or is not granted, whether any prejudice can be compensated by an order for costs, and the interest of the efficient running of this Court’s lists which includes the interest of other litigants.

7. I have already set out the reasons for which the applicant seeks an adjournment, one of which I accept explains the applicant’s need to apply for an adjournment.

8. I am not satisfied that the first reason on which the applicant relies for the adjournment, namely, the need to respond to the respondents’ evidence, is a sufficient reason to adjourn the hearing. The evidence is contained in an affidavit that was made on 11 September 2015. Although I have no reason to doubt Mr Papadopoulos’s statement that the four bottles of blended wine exhibited to that affidavit were not provided to him when he was served with the affidavit, the applicant has had sufficient time to request the delivery to him of the four bottles and undertake tests on it.

9. The second ground on which the applicant seeks the adjournment raises more difficult issues. Mr Chen provided no evidence on the basis of which any assessment can be made about whether the applicant will be able to raise the money to pay the security, and, if so, by when. Further, Mr Chen was unable to inform me from the bar table when he expected to obtain funds. Notwithstanding the absence of evidence, however, there is no reason to doubt that the applicant does not have funds, and that it is Mr Chen’s desire to seek to obtain those funds.

10. As for the interests of the parties, if an adjournment is not granted, but an order for security is made, the likelihood is that the applicant will be unable to provide the security before the hearing currently scheduled on 22 October 2015. That will likely result in the dismissal of the applicant’s claims. This would be a prejudice to the applicant. There is no suggestion the applicant’s claims have not been made in good faith; and, although I have not reviewed the evidence in any detail, there is no suggestion that the applicant’s claims are not reasonably arguable. On the other hand, if I do grant an adjournment, the respondents will suffer prejudice in the form of costs possibly being thrown away, disappointed expectations of not having the matter heard on the appointed day, and consequent delay in the final disposition of the matter. The prejudice of costs thrown away can be compensated with an order for costs. Although the disappointed expectation and delay cannot be compensated by an order for costs, that prejudice must be weighed against the graver consequence to the applicant if the hearing is not adjourned, namely, dismissal of the application. The prejudice to the respondent because of delay, can be ameliorated by providing alternative hearing dates early next year.

11. There is also the interest of the efficiency of the running of the Court’s lists to consider. In my opinion, however, those considerations are outweighed by the prejudice the applicant will suffer if an adjournment is not granted giving the applicant the opportunity to obtain the necessary funds to provide the security for costs that I will order.

12. In these circumstances, I am of the opinion that it would be in the interests of justice if I were to adjourn the matter and vacate the current hearing dates. I propose to so order. I will also order that the applicant provide security for the costs of the respondents in an amount of $35,931, and note that this order is made by consent. I will allow the applicant, however, until 14 December 2015 to provide the security and provide all additional evidence on which he intends to rely and list the matter for directions before me at 9.30 am on 16 December 2015. The purpose of the directions hearing will be to determine what steps should be taken in the proceedings, depending on whether the applicant provides the security. I will also provisionally set the matter down for hearing for five days on 28, 29, and 30 January 2016 and 1 and 2 February 2016.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis

Associate: 

Date:  13 October 2015