Hopkins, Ann v Seymour Softwoods Ltd

[1997] FCA 1354

FEDERAL COURT OF AUSTRALIA

PRACTICE & PROCEDURE - application for leave to file cross-claim - whether leave should be granted

ANN HOPKINS v SEYMOUR SOFTWOODS LIMITED, SINTOFF PTY LIMITED, BERREMA FINANCE PTY LIMITED and EQUUSCORP PTY LIMITED (formerly called EQUUS FINANCIAL SERVICES LIMITED)

NG 3039  of   1996

FOSTER J

26 NOVEMBER 1997

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 3039  of   1996

BETWEEN:

ANN HOPKINS
APPLICANT/CROSS RESPONDENT

AND:

SEYMOUR SOFTWOODS LIMITED
(Controller Appointed) (ACN 007 055 889)
FIRST RESPONDENT/CROSS CLAIMANT

SINTOFF PTY LIMITED
(Receiver Appointed) (ACN 006 621 487)
SECOND RESPONDENT/CROSS CLAIMANT

BERREMA FINANCE PTY LIMITED
(Receiver Appointed) (ACN 005 982 605)
THIRD RESPONDENT/CROSS CLAIMANT

EQUUSCORP PTY LIMITED (formerly called EQUUS FINANCIAL SERVICES LIMITED) (ACN 006 012 344)
FOURTH RESPONDENT

JUDGE:

FOSTER J

DATE OF ORDER:

26 NOVEMBER 1997

WHERE MADE:

SYDNEY

THE COURT ORDERS AND DIRECTS THAT:

1. The first, second and third respondents have leave to file a cross-claim in the form of the document entitled ‘cross claim’ and marked with the letter ‘A’ and placed with the papers except for paragraphs sixteen, seventeen and twenty-one of the cross-claim, in respect of which leave is refused.

2. There be no further evidence in respect of the issues raised by the cross-claim other than with leave of the Court, such leave to be sought by 17 December 1997.

3. By 17 December 1997 the applicant form a view as to whether the cross-claim raises significant difficulties as regards the preparation of its reply to cross-claim in relation to the matters identified in para 2(vi) of the schedule to the letter dated 24 November 1997 which is Exhibit A in this motion.  The applicant has leave to apply to the Court to rescind the granting of leave to file the cross-claim, if such a view is formed.

4. The first, second and third respondents provide $10,000 security for costs incurred by the applicant in relation to the cross-claim within twenty-one days.

5. The applicant has leave to seek a direction precluding the first, second and third respondents from claiming that the cross-claim was commenced earlier than the filing of the notice of motion seeking leave to file the cross-claim.

6. The first, second and third respondents pay the applicant’s costs of this motion.

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 3039 of 1996

BETWEEN:

ANN HOPKINS
APPLICANT/CROSS RESPONDENT

AND:

SEYMOUR SOFTWOODS LIMITED
(Controller Appointed) (ACN 007 055 889)
FIRST RESPONDENT/CROSS CLAIMANT

SINTOFF PTY LIMITED
(Receiver Appointed) (ACN 006 621 487)
SECOND RESPONDENT/CROSS CLAIMANT

BERREMA FINANCE PTY LIMITED
(Receiver Appointed) (ACN 005 982 605)
THIRD RESPONDENT/CROSS CLAIMANT

EQUUSCORP PTY LIMITED (formerly called EQUUS FINANCIAL SERVICES LIMITED) (ACN 006 012 344)
FOURTH RESPONDENT

JUDGE:	FOSTER J
DATE:	26 NOVEMBER 1997
PLACE:	SYDNEY

REASONS FOR JUDGMENT
(Extempore)

I have before me a notice of motion on behalf of the first, second and third respondents to file a cross-claim in this matter.   The intended cross-claim has been handed to the Court.  It differs from the cross-claim attached to the affidavit of Mr Nikolaidis which supported the notice of motion insofar as it adds a further paragraph twenty-one.  For the purpose of identifying it, I will put the letter ‘A’ at the top of the cross-claim which has been handed to me.

I have had the benefit of full argument in this matter with submissions being made to me by counsel on both sides and discussion between bench and bar as the matter has proceeded.  I do not intend to have very much to say at this point of time.  This cross-claim is very much out of time.  For the most part, however, it simply seeks to bring into issue between the parties matters that would necessarily arise if the applicant does not succeed in her action.  If she fails, the various agreements which she seeks to set aside will, as appears to me at present, remain on foot with the result that her obligations under them would continue.  These obligations would result in her being obliged to make certain payments under the agreements.  It is those payments which are sought in the cross-claim, at least in all paragraphs except paragraphs sixteen, seventeen and twenty-one.

On a previous occasion I dealt with certain defences sought to be raised by the respondents.  I refused the application that those defences be raised at this late point in time.  The basis of my refusal appears in the short reasons I gave on that occasion.  Put succinctly, the amendments appeared to have a clear problem in that they might well involve the joining of another party, the re-visiting of discovery, or the necessity for additional discovery and other problems to which I made reference.  Those reasons were sufficient in my view to result in those defences not being the subject of leave and I accordingly refused leave that they be added.  It is apparent that paragraphs sixteen, seventeen, and twenty-one of the proposed cross-claim raise identical matters, accordingly, consistently with the orders I have already made in respect of the paragraphs in the defence, I refuse to give leave for the filing of the cross-claim in respect of those particular paragraphs.

Turning to the remaining paragraphs, I express the Court's concern that the cross-claim is sought to be filed at such a late stage.  However, the Court does have an obligation, so far as is possible, to hear all the matters between parties in the course of one proceeding, with a view to reducing the cost and aiding the efficiency of disposal of litigation.  Having that principle in mind, and given that the cross-claim in the paragraphs to which I have referred deals only with the questions to which I have made reference, I think it proper that the balance of the cross-claim be allowed, provided that satisfactory safeguards can be put in place to protect the position of the applicant.  The applicant has had the advantage of the granting of an expedited hearing on the basis of her ill health.  The case is set down for hearing next year.  It is obviously desirable, consistently with decisions already made in this litigation, that nothing be allowed to be done now which may imperil the disposition of the matter at the appointed time. 

Submissions have been made to me on behalf of the applicant that, the evidence having been closed in this matter and there having been distinct directions given previously that no further evidence was to be filed, I should permit the filing of this cross-claim only on the basis that no further evidence in support of it will be allowed.  In other words, that the evidence already filed is the only evidence which will be accepted in support of it.  There is much force in that suggestion.  I think, however, the better course is simply to give a direction, which I give, that no further evidence will be permitted in these proceedings in respect of the issues raised in the cross-action except by the leave of the Court, such leave to be sought by 17 December 1997.

A problem has been raised also by the applicant in relation to the anticipated pleading in respect of the cross-claim.  That anticipated pleading is before the Court in summary form by way of a schedule to a letter which I have admitted in evidence as Exhibit A.  It is the matter referred to in paragraph 2 (vi) of the schedule.  The applicant indicates in that paragraph that it may well be necessary in relation to the cross-claim to seek credit for certain moneys paid to the third respondent in the circumstances set out in that paragraph, the amount involved, as I understand, being some $19,000.  A concession has been sought that that amount should, in effect, be excluded from the cross-claim.  The concession has not been made although of course it can be re-visited.  It is necessary, in my view, in the circumstances in which this cross-claim is brought, that some protection be given to the applicant in this regard.  It is to be hoped, and I have canvassed this matter with counsel, that no great problem will arise in relation to the applicant advancing the matters in that paragraph by way of a response to the cross-claim.  It is hoped that little or no further evidence will be necessary for the matter to be dealt with and that issue decided.  I consider, however, that the applicant, by 17 December 1997, should form a view as to whether there is any significant difficulty involved in relation to the issues raised in that paragraph by way of evidence, further discovery, interrogatories or the like.  If the matter is significant, and, of course, I mean significant, then I will hear the applicant again.  I will hear the applicant on the basis that I give consideration to rescinding the order that I have made for the filing of the cross-claim in respect of the paragraphs that I have allowed.  That is obviously a matter that should be brought to a head quickly and that is the reason I have provided the same time limit.

Another matter was raised by the applicant, namely, that security should be given.  It is obvious, having regard to the receiverships and the like of the respondents, that security should be given.  A figure of $10,000 has been suggested in discussion.  I regard that as a suitable figure to be provided by way of security by the first, second and third respondents at this stage.  That figure relates to the costs of investigation of the cross-action, advice in relation thereto, and the filing, as no doubt will be necessary, of a defence to the cross-action.  I bear in mind that there are always many incidental matters that are involved in a situation such as this and to my way of thinking that figure is an appropriate one and I order that that security be provided within twenty-one days. 

A question was raised as to whether I should give a direction that the claims made in the cross-claim should be regarded as having been made as and from the date of the notice of motion for leave to file the cross-claim.  I have given consideration to that and I am concerned as to whether I can at this stage give such a direction.  I propose to leave it open to the applicant to seek such a direction.  Accordingly, I do not now refuse it.  I consider it preferable at this stage, however, that the limitation defence simply be pleaded to the cross-claim.  The issues in relation to limitation will therefore be spelt out as between the parties.  I give leave to the applicant to seek a direction that the cross-claimants be precluded from asserting that the claims in the cross-claim are relevantly made at any earlier date than the date of filing of the notice of motion.  It is quite obvious that there is a strong case in any event that the cross-claim cannot have an earlier starting date than that date so that in any event the matter will be litigated.  But, as I say, I do reserve to the applicant at this stage the right to raise a submission that I should deal with it in the discretionary manner which has been discussed.

In the circumstances which I have outlined, it is in every way appropriate that the first, second and third respondents pay the applicant's costs of this motion. 

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

Associate:

Dated:            26 November 1997

Counsel for the Applicant:	D.A.C. Robertson
Solicitor for the Applicant:	Thompson Eslick, Solicitors
Counsel for the First, Second and Third Respondents:	J. T. Svehla
Solicitor for the First, Second and Third Respondents:	M D Nikolaidis & Co
Date of Hearing:	26 November 1997
Date of Judgment:	26 November 1997