HCK China Investments Ltd v Solar Honest Ltd

[1999] FCA 1242

FEDERAL COURT OF AUSTRALIA

HCK China Investments Ltd v Solar Honest Ltd [1999] FCA 1242

HCK CHINA INVESTMENTS LTD v SOLAR HONEST LTD

NG 1400 OF 1998

HELY J
3 SEPTEMBER 1999
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 1400 OF 1998

BETWEEN:	HCK CHINA INVESTMENTS LTD Applicant
AND:	SOLAR HONEST LTD Respondent
JUDGE:	HELY J
DATE OF ORDER:	3 SEPTEMBER 1999
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The application is dismissed with costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 1400 OF 1998

BETWEEN:	HCK CHINA INVESTMENTS LTD Applicant
AND:	SOLAR HONEST LTD Respondent

JUDGE:	HELY J
DATE:	3 SEPTEMBER 1999
PLACE:	SYDNEY

EXTEMPORE REASONS FOR JUDGMENT

1. This is a matter which I found to be one of some complexity.  It was heard between 19 and 23 April, again on 29 and 30 April, again between 4 and 26 May, again on 31 May when I reserved my decision.  After that further written submissions were received from both parties.  On 23 August 1999, I published my reasons for judgment and stood the matter over to enable the parties to bring in short minutes of order to give effect to those reasons. 

2. For present purposes, I think it is probably sufficient to say that the claim which Solar Honest has sought to propound by its cross-claim in those proceedings failed, because I concluded that neither the First Solar Honest Document nor the Second Solar Honest Document was effective as a deed and I concluded that neither document was effective as a contract for want of consideration.  That result had the consequence that HCK was substantially successful in achieving the relief which it sought. 

3. During the course of my reasons for judgment, I mentioned that a case based upon a conventional estoppel was neither pleaded nor was it the subject of any submission.  I said that I did not mean to imply by that observation that such a case would have succeeded, I simply recorded that as a case to that effect was not made, it had not been necessary for me to deal with it. 

4. Solar Honest has now taken out a notice of motion in which it seeks leave to amend its pleadings to found a case based upon conventional estoppel pleaded in a number of different ways and for leave to be granted to the first respondent to reopen its case on the issues of estoppel.  I was informed by counsel for Solar Honest that it would not be proposed to call any further evidence on the issue of estoppel.  Rather reliance would be placed upon existing findings that I had made in the course of my reasons for decision or upon the basis of inferences which could and should be derived from those findings.

5. No evidence was filed in support of the motion for leave to amend the pleadings, and to reopen, hence there is simply no material before the Court to indicate why it was that the case now sought to be put was not advanced at some earlier stage in the proceedings.  I should say, that to my recollection, the pleadings were amended on at least one, and I think probably more than one occasion during the course of the proceedings before me and, at least in one instance, the catalyst for an amendment was a suggestion on my part that the pleadings should be brought into conformity with the case which the parties were seeking to put.

6. The application for leave to amend the pleadings and to reopen the case is opposed by counsel for HCK.  Essentially on these bases: first, no explanation is offered for the failure to raise the case before; second, the course of the trial may have been different had the case now sought to be pleaded then been articulated.  Next, further factual investigation is required to meet this new case and finally the pleading sought to be filed is inadequate and embarrassing and, in any event, the case now sought to be made is bound to fail.

7. I do not think that it is appropriate that I should determine the last of those objections on an application such as this.  It seems to me that it would be only the most exceptional circumstances where, after delivery of judgment, a case would be reopened to enable a party to agitate a new matter not previously pleaded, not previously the subject of evidence, and not previously the subject of submission.  There are simply no exceptional circumstances present here as the applicant does not bring forward any material to explain why the course which it now seeks to adopt was not undertaken before, nor does it seek to bring forward any other material that would justify the granting of the exceptional relief which it seeks.  That fact coupled with Mr Klotz's evidence, which was neither contradicted nor the subject of cross-examination, to the effect that the course of the trial would have been different had this matter been raised, provide a sufficient foundation to refuse the application which is now sought. 

8. I therefore decline to accede to the relief sought in paragraphs 1 and 2 of the notice of motion dated 1 September 1999.

9. When I gave judgment in these proceedings I said that whilst I had not heard argument on the question of costs, my prima facie view was that Solar Honest should pay HCK's costs of the proceedings.  I have now heard that argument and my view has changed.

10. Mr Oakes SC puts correctly that a lot of time was spent in this case in examining the illegality point, some time was spent in examining the condition precedent point, and more time was spent examining the stamp duty point.  On each of those points HCK failed.  It is true that HCK succeeded on the illegality point insofar as the basic factual issues were concerned but ultimately having regard to the provisions of the statutes in question, it failed. 

11. I think that it is an exaggeration of the situation to say that it was necessary to examine the facts underlying the illegality issue in the detail which was undertaken in order to understand the factual context in which the matter on which HCK ultimately succeeded fell to be determined.  I think that there should be some allowance in the costs order for the issues on which HCK failed.  Mr Oakes SC suggests that a 30 percent allowance would be reasonable to give effect to that position and I think that his estimate is a reasonable one.

12. In the circumstances what I propose to do is to order that Solar Honest pays 70 percent of HCK's costs of these proceedings.

I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely.

Associate:

Dated:             3 September 1999

Counsel for the Applicant:	G A Palmer QC and R E Dubler
Solicitor for the Applicant:	Deacons Graham & James
Counsel for the Respondent:	M B Oakes SC and D E Perrignon
Solicitor for the Respondent:	McMahons
Date of Hearing:	3 September 1999
Date of Judgment:	3 September 1999