Hungry Jack's Australia Pty Ltd v TLC Company Pty Ltd

[2014] VCC 4

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST
GENERAL DIVISION

Case No. CI-11-05282

HUNGRY JACK'S AUSTRALIA PTY LTD & ANOR	Plaintiffs
v.
TLC COMPANY PTY LTD & ANOR	Defendants

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	24 January 2014
DATE OF JUDGMENT:	24 January 2014 (revised 28 January 2014)
CASE MAY BE CITED AS:	Hungry Jack's Australia Pty Ltd & Anor v. TLC Company Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2014] VCC 4

REASONS FOR JUDGMENT

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Catchwords: Practice and procedure – Defence and counterclaim amended to delete claim for loss of profits – Plaintiffs sought their costs thrown away from the defendants’ solicitors as well as the defendants – Application under the Civil Procedure Act 2010 – Practice Note required an application pursuant to s.29 of the Act to be issued by summons – Plaintiffs relieved from non-compliance with the Practice Note – Hearing of application deferred – s.29 Civil Procedure Act 2010.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr A. Rollnik	HWL Ebsworth
For the Second Defendant	Ms T. Collins in person
For Maurice Blackburn Lawyers	Mr S. Hay	Maurice Blackburn Lawyers

HIS HONOUR:

1The plaintiffs have made an application that the costs they incurred as a result of an amendment to the defendants’ defence and counterclaim should be paid by the defendants’ solicitors, Maurice Blackburn Lawyers or alternatively by the defendants. The amendment deleted a loss of profits claim from the counterclaim. The application was made upon written notice to the defendants; it was not made by summons. One basis for the application was the alleged breach by the defendants and their solicitors of their overarching obligations pursuant to the Civil Procedure Act 2010.

2Mr Hay of Counsel for Maurice Blackburn Lawyers submitted that the plaintiffs should be required to issue the application formally by way of summons. He also sought to have the hearing of the plaintiffs’ application adjourned until after the trial of the proceeding which is listed to commence on 31 March 2014.

3I have today granted Maurice Blackburn Lawyers leave to forthwith file a notice of ceasing to act as the solicitors for the defendants.

4So far as I am aware, this is the first application that has been brought in this Court pursuant to the Civil Procedure Act. In the circumstances, it is not surprising the plaintiffs overlooked the Practice Note, published effective from 1 January 2011, that required applications pursuant to the Act to be made by summons. Mr Hay likened the application to one issued against a non party which, as a matter of course, should be issued by summons. However, where a costs order is sought against a solicitor for a party, I am not persuaded that it is generally necessary for the application to be by summons.

5The nature of the application has been clarified by documents exchanged following the initial letter dated 17 December 2013 which gave notice of the application. In these circumstances, I consider that it is unnecessary for the plaintiffs to expend further costs on formally issuing a summons and paying an issuing fee.

6In my view, it would be appropriate to defer the hearing of the present application until the trial has been disposed of. If, however, the trial does not proceed as presently listed in March 2014, it may be necessary to reconsider the matter and, in that event, application can be made pursuant to the liberty to apply.

7I accept that the deferral of the hearing of the application is appropriate for the reasons advanced by Mr Hay, namely:

a.the application would be a distraction for the parties as the trial is set to commence on 31 March 2014 and the defendants, who are alternative respondents to the application, should be able to concentrate their efforts on obtaining legal representation or clarifying the issue of alternative representation for the first defendant and, secondly, in preparing for the trial itself;

b.no particular urgency has been shown for the determination of the application. The Rules provide that if costs are ordered upon an interlocutory hearing, application can be made to strike out a defendant’s defence in the event of default. An earlier application based on the defendants’ failure to pay costs orders was dismissed by Her Honour Judge Kennedy on the basis of Court of Appeal authority that, generally, interlocutory costs orders should not be used to shut out a party from defending a proceeding. With the trial set to commence shortly, little point would be served by determining, first, the plaintiffs’ entitlement to a costs order against to the defendants and, secondly, whether their defences should be struck out if they default in paying the costs orders;

c.issues may arise during the course of the application as to what occurred at the mediation and in respect of advice given by defendants’ solicitors to their clients in relation to the further pursuit of the claim for loss of profits. Any issues of privilege would have less significance following the determination of the proceeding;

d.the defendants’ solicitors have today withdrawn from the proceeding, apparently partly due to a disagreement between the solicitors and their clients. As the solicitors and defendants are alternative respondents to the plaintiffs’ application, it may be necessary during the course of the hearing of the application for the respondents to put conflicting submissions to the Court. This may embarrass the defendants in view of the impending trial.

8Accordingly, I will relieve the plaintiffs from their failure to issue the application by summons, but will defer the hearing of the application until after the trial in March 2014. If the trial does not proceed, the plaintiffs can seek to have the application relisted.

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Certificate

I certify that these 2 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 24 January 2014 and revised on 29 January 2014

Dated:      29 January 2014

Philippa Gilkes   

Associate to His Honour Judge Anderson