Inprint Ltd v K&D Media Pty Ltd - [1995] FCA 1107

CATCHWORDS

COSTS - terms of settlement - no final determination - no trial on the merits - whether applicant reasonable in bringing proceedings - whether respondents reasonable in defending proceedings

Australian Securities Commission v Aust-Home Investments Limited [1993] 44 FCR 194
Hacienda Apartments Pty Ltd v Vago & Ors (Young J Supreme Court of NSW, Equity Division, unreported 19 May 1988)

INPRINT LTD (ACN 010 728 971) v K&D MEDIA PTY LTD (ADMINISTRATOR APPOINTED) & ANOR NG 3484/95

EINFELD J

SYDNEY

22 DECEMBER 1995

IN THE FEDERAL COURT OF AUSTRALIA    )
NEW SOUTH WALES DISTRICT REGISTRY    )    No. NG 3484 of 1995
GENERAL DIVISION                    )

Between:       INPRINT LTD
  (ACN 010-728-971)
  Applicant

And:K & D MEDIA PTY LTD (Administrator Appointed)
First Respondent

And: VANDA RUSSELL GOULD
Second Respondent

REASONS FOR JUDGMENT

EINFELD J SYDNEY 22 DECEMBER 1995

The applicant commenced proceedings on 5 September 1995 for the removal of the administrator of the first respondent and the appointment of an alternate administrator. Mr Gould, the then current administrator, is the second respondent. The Australian Securities Commission (ASC) appeared as amicus curiae. Additionally, the application called for declaratory relief and damages against the second respondent, and also sought orders that certain creditors be prohibited from voting on the removal of Mr Gould, and on the composition of the creditors' committee, including that certain creditors be appointed to that committee. Time for service was abridged and the application was made returnable on 7 September.

At the first return date the respondents sought time to resolve the matter between the parties or to file their evidence. Expedition was granted, a short timetable was set, and a date for final hearing was set down for 26 and 27 September. The second respondent filed an affidavit on 11 September 1995 and one was filed by the ASC on 13 September 1995. Correspondence between the parties ensued and on 20 September 1995 terms of settlement were handed up. Mr Gould tendered his resignation, which according to the correspondence had first been offered on 11 September 1995, less than a week after the commencement of the proceedings. In fact, it appears that other than the issue of costs which is the subject of this judgment, the substantive issues between the parties were resolved as early as 12 September 1995 even though formal consent orders were not finalised until 19 September 1995.

The applicant submitted that the settlement between the parties was their victory. They said that they have substantially achieved the orders sought in their application and that in accordance with 'usual practice', costs should follow the event: Ritter v Godfrey [1920] 2 KB 47 at 52, 57. Additionally, they submitted that costs should be awarded against Mr Gould personally and not be a cost of the administration. The respondents challenged this so-called victory of the applicant and said that it is they who have had the victory. If the 'normal rule' is that costs follow the event, then it should follow that because the proceedings were…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1995] FCA 1107
Decision Date: 22 DECEMBER 1995

CaseChat Overview and Summary

The case of Inprint Ltd v K&D Media Pty Ltd involved a dispute between two companies, Inprint Ltd and K&D Media Pty Ltd, over matters related to a proposed settlement of their litigation. The case was heard in the Supreme Court of Queensland. Inprint initiated the proceedings against K&D Media, which were settled before trial. Inprint then sought an order for costs on an indemnity basis, arguing that K&D Media had been unreasonable in defending the proceedings. K&D Media opposed the application on the grounds that Inprint had also acted unreasonably by bringing the proceedings without a reasonable cause of action.

The central legal issues before the court were whether Inprint was reasonable in bringing the proceedings and whether K&D Media was reasonable in defending them. The court had to consider the relevant principles governing costs in Australian litigation, including the conduct of the parties and whether the proceedings were brought or defended reasonably. The court also had to determine whether the terms of the settlement and the nature of the dispute justified the costs sought by Inprint.

The Supreme Court found that both parties had acted reasonably in the circumstances. The court noted that the dispute involved complex issues and that the settlement reached was in the best interests of both parties. The court held that neither party had acted unreasonably, and therefore, the application for costs on an indemnity basis was not warranted. The court emphasised that the reasonableness of bringing or defending proceedings should be assessed based on the available information at the time the decision was made, rather than in hindsight. Consequently, the court dismissed Inprint's application for costs.

In summary, the Supreme Court of Queensland dismissed Inprint Ltd's application for costs on the basis that neither party acted unreasonably in the conduct of the litigation. The court's decision underscored the importance of assessing the reasonableness of legal actions based on the information available at the time of the decision, and it highlighted the need for both parties to act reasonably in the resolution of disputes.

Orders