In the Matter of the Returned & Services League of Australia Ltd Gilson, Brian Laurence & Ors v The Returned & Services League of Australia Ltd
[1996] FCA 368
•17 May 1996
CATCHWORDS
PRACTICE AND PROCEDURE - Application for removal of second respondent from office as president of a district branch of the first respondent - application to discontinue proceedings - application for proceedings to be dismissed - whether proceedings ought to be dismissed because relief sought not available under s 260 Corporations Law - s 260 to be read in a broad and liberal manner - s 260(2) provides wide judicial discretion - O 4 r 3(1)(a) Federal Court Rules - whether application to specify relief claimed - appropriate to grant leave for proceeding to be discontinued - relief no longer available as a result of the circumstances beyond the control of any of the parties - whether discontinuing party ought to pay costs pursuant to O 62 r 26(1) - whether appropriate for an order for costs to be made at this stage of proceedings.
Corporations Law s 260, s 260(2)
Federal Court Rules O 4 r 3(1)(a), O 22 r 2(1)(b), O 62
r 26(1)
Re Spargos Mining NL (1990) 8 ACLC 1218, cited
Belmont Finance Corporation Ltd v Williams Furniture Ltd (1979) 1 All ER 118, distinguished
Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194, applied
BRIAN LAURENCE GILSON & ORS v
THE RETURNED AND SERVICES LEAGUE OF AUSTRALIA LIMITED
No QG 3032 of 1994
Tamberlin J
Heard in Brisbane
Judgment Delivered Sydney
17 May 1996
IN THE FEDERAL COURT OF AUSTRALIA )
QUEENSLAND DISTRICT REGISTRY )No. QG 3032 of 1994
GENERAL DIVISION )
IN THE MATTER OF THE RETURNED &
SERVICES LEAGUE OF AUSTRALIA LIMITED
AUSTRALIAN COMPANY NUMBER 008 488 097
BETWEEN: BRIAN LAURENCE GILSON,
TREVOR FRANK HAGAN,
PETER HAROLD HOPES,
GILBERT KEITH JOYCE,
DONALD GORDON NEWMAN,
CAROLE ANN REYNOLDS and
RAYMOND WILLIAM WILSON
Applicants
AND: THE RETURNED AND SERVICES
LEAGUE OF AUSTRALIA LIMITED
(ACN 008 488 097)
First Respondent
FREDERICK JAMES COWDRAY
Second Respondent
CORAM: TAMBERLIN J
PLACE OF HEARING: BRISBANE
PLACE OF JUDGMENT: SYDNEY
DATED: 17 MAY 1996
MINUTE OF ORDERS
THE COURT ORDERS THAT:
The notice of motion for dismissal as against the second respondent be dismissed.
The applicants be granted leave to discontinue against the second respondent.
The second respondent be granted leave to discontinue his cross-claim against the applicants.
The costs of the application for discontinuance by the applicants (apart from the costs of the hearing before me) be reserved for determination by the trial judge.
There be no order as to the costs of the hearing before me on 3 May 1996.
NOTE: Settlement and entry of orders is dealt with in accordance with Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
QUEENSLAND DISTRICT REGISTRY ) No. QG 3032 of 1994
GENERAL DIVISION )
IN THE MATTER OF THE RETURNED &
SERVICES LEAGUE OF AUSTRALIA LIMITED
AUSTRALIAN COMPANY NUMBER 008 488 097
BETWEEN: BRIAN LAURENCE GILSON,
TREVOR FRANK HAGAN,
PETER HAROLD HOPES,
GILBERT KEITH JOYCE,
DONALD GORDON NEWMAN,
CAROLE ANN REYNOLDS and
RAYMOND WILLIAM WILSON
Applicants
AND: THE RETURNED AND SERVICES
LEAGUE OF AUSTRALIA LIMITED
(ACN 008 488 097)
First Respondent
FREDERICK JAMES COWDRAY
Second Respondent
CORAM: TAMBERLIN J
PLACE of HEARING: BRISBANE
PLACE of JUDGMENT: SYDNEY
DATED: 17 MAY 1996
REASONS FOR JUDGMENT
TAMBERLIN J:
In this matter the relief sought by the applicants, which is the removal of the second respondent as President of the Central Queensland District Branch of the first respondent, can no longer be granted as the result of the fact that the second respondent was not re-elected to office at a meeting held on 9 March 1996.
There are presently two applications before me.
The questions which arise are whether the applicants should be granted leave to discontinue against the second respondent, and if so, on what terms with respect to costs and also whether the proceedings should be dismissed against the second respondent with costs.
The second respondent submits that the proceedings ought to be dismissed on two grounds.
The first is that the proceedings are bound to fail as against the second respondent because the relief sought for removal was not available under s260 of the Corporations Law.
The second is that dismissal, rather than discontinuance, is appropriate because the applicants can no longer be granted the relief sought as a result of the non-election of the second respondent to the office from which it is sought to remove him.
In my view, there is no substance in the argument that the relief sought is not available under s260 of the Corporations Law. The authorities make it quite clear that the section is to be read in a broad and liberal manner so as to provide an extensive range of remedies. See Re Spargos Mining N.L. (1990) 8 ACLC 1218 at 1254.
The language of s260(2) itself makes it clear that the specified forms of relief are not to limit the general power of the Court to grant "such orders as it thinks fit." This is a judicial power conferred in the widest terms.
The second respondent refers to O4 r3(1)(a) of the Federal Court Rules, which provides that an application must specify the relief claimed.
Reliance is placed on the decision in Belmont Finance Corporation Ltd v Williams Furniture Ltd (1979), 1 All ER 118 at 118, a decision of the Court of Appeal. However, that case is distinguishable, because it concerned the issue as to whether the necessary elements of the cause of action were pleaded in the Statement of Claim, namely, whether fraud had been pleaded.
In granting relief following a hearing, in a s260 case, the Court is not narrowly restricted to granting the specific relief sought in the application but has a broad discretion. In my view, if a case is made out, it would be open to the Court on the application to require the first respondent, to remove the second respondent or require the second respondent to resign from that office, on such terms as it saw fit to impose.
Accordingly, I do not consider that the application should be dismissed on this ground.
With respect to the question whether the application ought be dismissed on the basis that the second respondent has not been re-elected President, and the relief sought is not available, I do not think this course is appropriate.
The appropriate course is to grant leave to allow the proceeding to be discontinued as the relief sought could no longer be granted, due to a circumstance beyond the control of the parties. The second respondent has ceased to be an appropriate or necessary party.
For these reasons, I grant leave to the applicants to discontinue the proceeding as against the second respondent.
On the hearing of the Notices of Motion, it was common ground that, in the event of discontinuance against the second respondent, the cross-claim against the applicants brought by the second respondents should also be discontinued and I grant leave to the second respondent for this purpose.
The second issue concerns costs.
As pleadings have not closed the applicant can elect to discontinue without the leave of the Court or the consent of any other party. (See O22 r2(1)(b)).
However O62 r26(1) provides that where a party discontinues without leave, the discontinuing party shall, unless the Court otherwise orders, pay the costs occasioned by the claim which were incurred before service of the notice of discontinuance.
The second respondent submits that the applicants should pay his costs and that an order should be made permitting the costs to be taxed forthwith so that the costs order can be enforced immediately. The applicants, on the other hand, point to the fact that the relief sought in the proceeding against the second respondent has been rendered futile, as a result of the non re-election and not due to any default on their part.
The primary submission of the applicants is that there should be no costs awarded in relation to the discontinuance, but that the second respondent should bear his costs arising from the Notice of Motion to have the costs issue determined today. In accordance with the principles laid down by Hill J in Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201, the applicants say that it is inappropriate for the Court, at this stage of the proceeding, to attempt to predict the likely outcome of the proceeding.
In that case, Hill J embarked on an examination of the reasonableness of bringing the claim. However, that was in circumstances, where the matter was not intended to proceed to a hearing. The difference in the present case, is that the matter will proceed to a hearing as against the first respondent, and such hearing will, on the allegations made in the Further Amended Statement of Claim, involve detailed scrutiny of the second respondent's conduct. The submission is that the trial judge will be in a much better position to examine whether the applicants were justified in bringing the proceedings against the second respondent and therefore to decide which party ought to bear the costs of the application up to and including the time of discontinuance.
The second respondent submits that if costs are not awarded at this stage he will be kept out of costs to which he is or may be found to be entitled, over a considerable period of time, and so lose the use of funds over that period of time without there being any compensatory provision in the way of interest. This would be avoided if a costs order were made at the present time. There is no evidence as to the amount involved or as to when the second respondent will have to pay them or as to whether he may have to pay or forgo interest.
The second matter raised by the second respondent, is that he will not be a party to the hearing of the proceedings against the first respondent and will therefore not be able to put his case as to the merits of his actions, and therefore it is more appropriate that the question of cost be resolved immediately.
As to the first submission, it must be borne in mind that the applicants will be in a similar position if the question of costs is reserved and therefore the force of this argument is effectively neutralised.
As to the second submission, on present indications, the conduct of the second respondent will be the subject of detailed consideration on the hearing. He may not be a witness on the hearing of the proceedings against the first respondent. It is true he will not be represented as a party on the determination of the merits. However, following the hearing, the trial judge will be in an informed position to determine the substance and strength of the applicant's case against the second respondent. Particularly, whether the proceeding was reasonably initiated and continued to the point of discontinuance. It is likely that there will need to be a further appearance by the second respondent after the hearing, in relation to costs but in all the circumstances, I am of the view that the trial judge will have acquired a more accurate perspective as to where the relative merits lie. This consideration outweighs the submissions of the second respondent.
I am persuaded that the appropriate orders are that leave be granted to the applicants to discontinue the proceedings against the second respondent and that leave be granted to the second respondent to discontinue his cross-claim against the applicants. The question of costs arising from the discontinuance should be reserved for determination by the trial judge.
The position, adopted by the second respondent, was that the issue of costs in relation to the dismissal or discontinuance, ought to be finally determined before me today. The applicants adopted a contrary stance. I have decided that the more appropriate course is that, that matter be reserved until determination of the proceedings against the first respondent.
The application for dismissal by the second respondent has been refused.
As the event which gave rise to the discontinuance was not within the control of either party, it is appropriate, in my opinion, that there be no order for costs in respect of the hearing before me.
The orders of the Court are that:
The notice of motion for dismissal as against the second respondent be dismissed.
The applicants be granted leave to discontinue against the second respondent.
The second respondent be granted leave to discontinue its cross-claim against the applicants.
The costs of the application for discontinuance by the applicants (apart from the costs of the hearing before me) shall be reserved for determination by the trial judge.
There be no order as to the costs of the hearing before me.
I certify that this and
the preceding eight (8)
pages are a true copy of the
Reasons for Judgment herein of
his Honour Justice Tamberlin.
Associate:
Date: 17 May 1996
Counsel for Applicant: Mr Bell QC
Mr McQuade
Solicitor for Applicant: James Conomos Lawyers
Counsel for Second Respondent: Mr Crowley
Solicitor for Second Respondent: John Murphy & Co
Date of Hearing (Brisbane): 3 May 1996
Date Judgment Delivered (Sydney): 17 May 1996
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