Gemini Industries Pty Limited v Oceano Bathroom Pty Limited
[2015] FCA 732
•16 July 2015
FEDERAL COURT OF AUSTRALIA
Gemini Industries Pty Limited v Oceano Bathroom Pty Limited [2015] FCA 732
Citation: Gemini Industries Pty Limited v Oceano Bathroom Pty Limited [2015] FCA 732 Parties: GEMINI INDUSTRIES PTY LIMITED (ACN 079 297 617) and MARBLETREND PTY LIMITED (ACN 109 273 912) (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) v OCEANO BATHROOM PTY LIMITED (ACN 604 482 206), DIRECT BUILDING PRODUCTS PTY LIMITED (ACN 151 440 845), MICHAEL LEE and ROBERT WALTON File number: NSD 707 of 2015 Judge: FOSTER J Date of judgment: 16 July 2015 Catchwords: COSTS – whether costs of an aborted application for interlocutory injunctive relief should be paid by the applicants Date of hearing: 16 July 2015 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 14 Counsel for the Applicants: Mr J O’Sullivan Solicitor for the Applicants: Benjamin-Nicholson-Law Counsel for the Respondents: Mr J Knackstredt Solicitor for the Respondents: Macpherson & Kelley Lawyers (Sydney) Pty Limited
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 707 of 2015
BETWEEN: GEMINI INDUSTRIES PTY LIMITED (ACN 079 297 617)
First ApplicantMARBLETREND PTY LIMITED (ACN 109 273 912) (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION)
Second ApplicantAND: OCEANO BATHROOM PTY LIMITED (ACN 604 482 206)
First RespondentDIRECT BUILDING PRODUCTS PTY LIMITED (ACN 151 440 845)
Second RespondentMICHAEL LEE
Third RespondentROBERT WALTON
Fourth Respondent
JUDGE:
FOSTER J
DATE OF ORDER:
16 JULY 2015
WHERE MADE:
SYDNEY
THE COURT:
1.NOTES the undertaking given to the Court by the respondents by their Counsel that, up to and including the final hearing of this proceeding, they will keep proper and comprehensive accounts of all transactions involving the acquisition by purchase or otherwise howsoever of all products of the type itemised at Annexure GAW-2 to the affidavit of GA Wilson sworn on 8 July 2015 from Shanghai Aojin Acrylic Products Co Ltd and/or Shanghai Aojin Fibreglass Products Co Ltd (together Aojin) and the subsequent sale or other disposition of such products wherever made.
2.ORDERS that, by 31 July 2015, the applicants file and serve any further evidence upon which they intend to rely at the final hearing of their Application.
3.ORDERS that, by 5 August 2015, the applicants file and serve a concise statement of the causes of action relied upon by them, which statement shall be no longer than 1½ pages and which statement which shall set out briefly in narrative form the causes of action relied upon and the basis upon which those causes of action are said to arise.
4.ORDERS that, by 19 August 2015, the respondents file and serve:
(1)Any further evidence upon which they intend to rely at the final hearing of the applicants’ Application;
(2)Any Cross-Claim which they intend to make; and
(3)All evidence upon which they intend to rely at the hearing of any such Cross-Claim.
5.ORDERS that, by 28 August 2015, the applicants file and serve:
(1)Any evidence in reply in respect of their Application;
(2)Their Defence to Cross-Claim; and
(3)All evidence upon which they intend to rely at the hearing of the Cross-Claim.
6.ORDERS that, by 4 September 2015, the legal representatives of the parties confer with a view to preparing a bundle of documents to be tendered or otherwise deployed at the final hearing, which bundle shall be organised appropriately having regard to the issues in dispute in the case and be duly indexed and paginated. In particular, the bundle should be organised in at least two separate segments, in an order which is appropriate, as follows:
(a)All documents considered to be relevant to the question of ownership of any master moulds or production moulds furnished by the second applicant to Aojin; and
(b)All documents considered to be relevant to the issue of whether competitive similar products exist in the marketplace.
7.ORDERS that, by 9 September 2015, the respondents:
(a)File and serve their Reply to Cross-Claim (if any); and
(b)All evidence-in-reply in respect of their Cross-Claim.
8.ORDERS that, by 10 September 2015, each side of the record notify the other side of the record of:
(a)All affidavits or parts of affidavits to be read and relied upon at the final hearing of the applicants’ Application; and
(b)All affidavits or parts of affidavits to be read and relied upon at the hearing of any Cross-Claim.
9.ORDERS that, by 11 September 2015, each side of the record:
(a)Notify the other side of the record of all objections to the affidavits sought to be relied upon by the opposing parties by identifying with precision the material to which objection is taken and the ground or grounds upon which each objection is taken; and
(b)Notify the other side of the record of the names of witnesses who are to be cross-examined together with an estimate in each case of the likely length of the cross-examination.
10.ORDERS that, by 14 September 2015, the parties lodge with the Associate to Griffiths J two copies of the final version of the bundle of documents required to be prepared pursuant to Order 6 above.
11.ORDERS that, by 14 September 2015, each side of the record notify the other side of the record of their response to objections notified in accordance with Order 9(a) above.
12.ORDERS that, by 15 September 2015, the applicants file and serve an Outline of Submissions in which they set out:
(a)The findings of fact which they ask the Court to make;
(b)The propositions of law upon which they will rely (supported, as appropriate, by references to authority); and
(c)The way in which the law should be applied to the facts (including a clear statement of the ultimate conclusions which the applicants contend the Court should reach).
13.ORDERS that, by 16 September 2015, trial counsel confer in a bona fide fashion with a view to resolving all outstanding objections.
14.ORDERS that, by 18 September 2015, the solicitors for the applicants prepare, serve and lodge with the Associate to Griffiths J a composite list of objections in which they set out with precision:
(a)All agreed rulings in relation to objections which the parties will ask the Court to make; and
(b)All unresolved objections together with the grounds of objection in each case.
15.ORDERS that, by 18 September 2015, the respondents file and serve an Outline of Submissions which addresses in detail the submissions of the applicants and which brings forward any positive submissions which they intend to make either in resisting the applicants’ case or in support of their Cross-Claim.
16.ORDERS that the two Notices to Produce dated 26 June 2015 served by the respondents upon the applicants be set aside.
17.NOTES that the respondents call on a Third Notice to Produce being the Notice to Produce dated 10 July 2015 and that the letter required to be produced thereby is produced.
18.ORDERS that access to the letter referred to in par 17 above be provided to the respondents and that the solicitors for the applicants immediately provide a copy of the said letter to the solicitors for the respondents.
19.ORDERS that the application for interlocutory injunctive relief made by the applicants in their Originating Application be dismissed.
20.ORDERS that, subject to any costs orders already made, the costs of and incidental to the applicants’ claims for interlocutory injunctive relief be the respondents’ costs in the proceeding.
21.GRANTS liberty to all parties to apply on three (3) days’ notice or on such shorter notice as the docket Judge or another Judge might allow.
22.ORDERS that the final hearing of the proceeding be expedited and take place at 10.15 am on each of 22, 23, 24 and 28 September 2015 before Griffiths J.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 707 of 2015
BETWEEN: GEMINI INDUSTRIES PTY LIMITED (ACN 079 297 617)
First ApplicantMARBLETREND PTY LIMITED (ACN 109 273 912) (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION)
Second ApplicantAND: OCEANO BATHROOM PTY LIMITED (ACN 604 482 206)
First RespondentDIRECT BUILDING PRODUCTS PTY LIMITED (ACN 151 440 845)
Second RespondentMICHAEL LEE
Third RespondentROBERT WALTON
Fourth Respondent
JUDGE:
FOSTER J
DATE:
16 JULY 2015
PLACE:
SYDNEY
REASONS FOR JUDGMENT
(REVISED FROM TRANSCRIPT)
This proceeding was commenced on 19 June 2015 by the filing of an Originating Application and several affidavits in support of that Application. On the same day, the applicants approached the Court ex parte seeking an abridgement of the time for service of their Application and the affidavits filed in support thereof. In their Application, the applicants claimed the following interlocutory relief:
Claims for interlocutory relief
12.An order that the respondents be restrained, by themselves, their servants or agents, from selling or distributing any of the Products [as defined in the Application] until further order of the Court.
13.An order that the respondents be restrained, by themselves, their servants or agents, from taking steps to obtain possession of Products held in Australia by VISA Global Logistics Pty Limited, until further order of the Court.
14.An order that the respondents be restrained, by themselves, their servants or agents, from ordering or requesting any Products from Aojin [as defined in the Application] or any other person until further order of the Court.
The matter came before the Commercial and Corporations Duty Judge who granted an abridgement of the time for service as sought and listed the applicants’ Application for interlocutory relief for directions at 9.30 am on 24 June 2015.
On 24 June 2015, the Commercial and Corporations Duty Judge made an order that the respondents file all evidence-in-chief with respect to the applicants’ claim for interlocutory relief by 12 noon on 29 June 2015 and adjourned the applicants’ claims for interlocutory relief for hearing before her Honour to 30 June 2015 at 2.15 pm with an estimate of half a day.
When the matter came before the Court on 30 June 2015, the applicants sought an adjournment of the interlocutory hearing in order to give them time to supplement their evidence. That adjournment was opposed by the respondents but nonetheless granted. Her Honour ordered the applicants to file all affidavit evidence in reply directed to their claim for interlocutory relief by 7 July 2015 and ordered that the hearing of the applicants’ claim for interlocutory relief and the foreshadowed application to set aside the Notices to Produce served by the respondents upon the applicants be adjourned for hearing before the Commercial and Corporations Duty Judge as soon as reasonably practicable after 7 July 2015.
The applicants’ claim for interlocutory relief was then fixed for hearing before me today.
When the matter was called on today I initiated an exchange with Counsel designed to best manage the real issues in dispute between the parties. It seemed to me that, given the considerable amount of material filed in relation to the Interlocutory Application and given the undisputed facts concerning the recent transactions carried out by the respondents with certain Chinese corporations concerning the supply of the relevant bathroom products, the best way forward was for the matter to be given some priority for a final hearing rather than for the parties to expend significant costs and time in dealing with the Interlocutory Application presently on foot.
In light of the remarks which I made, Counsel for the respondents agreed to seek instructions as to whether his clients would be prepared to keep appropriate accounts of all relevant transactions pending the final hearing and Counsel for the applicants agreed to seek instructions as to whether his clients would be prepared to forego a contested interlocutory hearing upon the basis that some priority would be given to fixing the matter for final hearing. All parties then agreed to forego an Interlocutory Hearing and to proceed with an early final hearing. The respondents agreed to give an undertaking to the Court to keep accounts.
I have, therefore, proposed certain orders and directions to ready the matter for a final hearing as soon as possible and the substance of those orders and directions are not in dispute between the parties.
However, when announcing those orders and directions, I indicated that I was minded to make an order that the costs of the applicants’ Interlocutory Application be costs in the proceeding generally.
Counsel for the respondents rose to make submissions designed to persuade me not to make that order but to make an order for costs in favour of his clients. In particular, he submitted that the applicants would have failed to obtain any interlocutory relief at all had the matter proceeded today and that I should weigh that in the balance. He also tendered a letter dated 29 June 2015 which was marked “Without prejudice except as to costs” in which his clients offered to agree that costs of the Interlocutory Application be costs in the cause provided that the applicants immediately abandoned their Interlocutory Application. In the letter, the respondents’ solicitors foreshadowed an application for costs including on an indemnity basis should the Interlocutory Application be pressed and lost.
Against this, Counsel for the applicants submitted that much of the work that has been done to date will not be wasted and that the applicants should not be punished for adopting the course which was initiated by me at the commencement of the hearing this morning. In addition, he sought leave to file an affidavit by his instructing solicitor sworn yesterday to which is annexed a letter sent to the solicitors for the respondents on 8 July 2015. In that letter, the applicants made an offer to purchase the stock which the respondents have committed to purchase from the manufacturers in China upon terms which the applicants contend were fair and reasonable in all the circumstances. It was submitted that that letter contained a reasonable proposal for dealing with one of the important issues going to the balance of convenience and justice which needed to be considered on the present Interlocutory Application. However, it is fair to say that the offer in the letter is not an offer to resolve the Interlocutory Application but rather to deal only with one aspect of it. As far as I know there was no response to that letter.
I do not propose to comment on the strength of the applicants’ case in deciding this argument about costs beyond saying that, at first blush, the case has its weaknesses. In addition, the outcome of the Interlocutory Application would have been heavily influenced by the Court’s attitude to the balance of convenience and justice. On that issue, it seemed to me that the respondents probably had the better of the argument.
In the circumstances, given the underlying complexity of the case and given that the parties have behaved sensibly this morning in order to ready the case for a final hearing, I should not place too much emphasis on the weaknesses in the applicants’ case in deciding the question of costs. On the other hand, upon reflection, I am persuaded that the appropriate order is an order that the costs of the applicants’ Interlocutory Application be the respondents’ costs in the proceeding. I have arrived at that position by weighing in the balance the weaknesses in the applicants’ case as well as the willingness on the part of the respondents to cooperate in moving the case forward in an appropriate way. I have also taken into account the history of the matter both in the Court and prior to its commencement. The effect of an order for costs in those terms will be that, if the applicants win the case in due course, they will not get the costs of the Interlocutory Application. On the other hand, the respondents will only get the costs of the Interlocutory Application if they win the case. That seems to me to balance all relevant considerations in a reasonable fashion.
There will be orders accordingly.
I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. Associate:
Dated: 20 July 2015
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