John Shearer Ltd v Gehl Co
[1996] FCA 435
•31 May 1996
IN THE FEDERAL COURT OF AUSTRALIA )
)
SOUTH AUSTRALIAN DISTRICT REGISTRY )
)
GENERAL DIVISION ) No. SG 54 of 1995
ON APPEAL FROM A SINGLE JUDGE
OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN: JOHN SHEARER LIMITED and
ARROWCREST GROUP PTY LTD
Applicants
AND: GEHL COMPANY
Respondent
MINUTES OF ORDER
JUDGES MAKING ORDER : VON DOUSSA, HILL &
TAMBERLIN JJ
PLACE : SYDNEY (HEARD IN ADELAIDE)
DATE : 31 MAY 1996
THE COURT ORDERS:
That paragraph 8 of the order made by O'Loughlin J on 10 August 1995 be set aside.
That the Gehl Company recover 90% of its costs of and incidental to the actions the subject of this appeal including the hearings before the Registrar, before O'Loughlin J and before this Court.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules
IN THE FEDERAL COURT OF AUSTRALIA )
)
SOUTH AUSTRALIAN DISTRICT REGISTRY )
)
GENERAL DIVISION ) No. SG 54 of 1995
ON APPEAL FROM A SINGLE JUDGE
OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN: JOHN SHEARER LIMITED and
ARROWCREST GROUP PTY LTD
Applicants
AND: GEHL COMPANY
Respondent
Coram: von Doussa, Hill & Tamberlin JJ
Place: Sydney (heard in Adelaide)
Date : 31 May 1996
REASONS FOR JUDGMENT
When the Court delivered judgment in this matter on 22 December 1995 dismissing the appeal, the question of costs was reserved: see John Shearer Ltd and Anor v Gehl Co. (1995) 134 ALR 1. The parties were directed to file and serve upon each other written submissions relating to costs.
There are two appellants, John Shearer Limited ("Shearer") and Arrowcrest Group Pty Ltd ("Arrowcrest"). Arrowcrest, the holding company of Shearer, had guaranteed prompt payment of goods supplied by the respondent to Shearer. The proceedings concerned applications to set aside statutory demands served by the respondent on each of Shearer and Arrowcrest under s.459E of the Corporations Law ("the Law"). Both Shearer and Arrowcrest applied under s.459G of the Law to set aside the demands. Before a Registrar of the Court, the demand served upon Shearer was set aside on the ground that Shearer had an "offsetting claim" within the meaning of
s.459H(5), and the application by Arrowcrest was dismissed. In the Shearer matter the respondent sought to review the Registrar's decision, and in the Arrowcrest matter Arrowcrest sought to review the decision. The reviews, along with additional applications by Shearer and Arrowcrest to set aside other statutory demands served by the respondent, were heard together by O'Loughlin J. His Honour set aside the Registrar's decision in the Shearer matter on the ground that an "offsetting claim" could not be raised by Shearer as the demand was based upon a dishonoured bill of exchange. His Honour upheld the Registrar's decision in the Arrowcrest matter on the ground that its fate depended upon the outcome of the Shearer matter. In the result the applications to set aside the several statutory demands were all dismissed.
Shearer and Arrowcrest then appealed unsuccessfully to this Court. Before this Court the respondent resisted the appeals primarily upon the contention that, as a matter of law, O'Loughlin J was correct in holding that an "offsetting claim" could not be raised where the statutory demand was based upon a dishonoured bill of exchange. This Court rejected that contention, but the appeals were nonetheless dismissed on the ground that Shearer and Arrowcrest had not discharged the onus of establishing that the alleged offsetting claims were genuine claims.
Although their appeals failed, Shearer and Arrowcrest contend that no order for costs should be made either in this Court or in respect of the hearing before O'Loughlin J on the ground that the point of law upon which O'Loughlin J found in favour of Shearer, and upon which the respondent resisted the appeals, has now been decided against it. The respondent, however seeks orders for costs as it has succeeded at all levels on the Arrowcrest matters, and before O'Loughlin J and this Court on the Shearer matters, and adds that the finding by this Court that the alleged offsetting claims could not attract the protection of an order pursuant to s.459J of the Law because there were not shown to be genuine claims gives rise to a compelling entitlement to an award of costs.
Sub-section 43(2) of the Federal Court of Australia Act 1976 provides that the award of costs is in the discretion of the Court. The general rule is that a successful litigant should receive an order for costs of the action to be paid by the unsuccessful party: Donald Campbell & Co. v Pollak [1927] 732 AC at 809. In the present case we consider the result of the litigation is the primary matter which should guide the Court in the exercise of its discretion. However the point of law upon which the respondent failed was central to the decision of O'Loughlin J, and occupied significant time in argument before this Court. In our opinion that is a factor which should also be taken into account in the exercise of the discretion.
Although the issues raised in the Shearer matters were not identical with those in the Arrowcrest matters, all matters have been heard together and it would be impracticable to make orders that require a differentiation to be made on taxation between work relating to each of the separate matters. In our opinion one order should be made which deals with the costs of all matters. We consider Shearer and Arrowcrest should pay 90% of the costs of the respondent of the actions, including the hearings before the Registrar, before O'Loughlin J and before this Court.
To give effect of this conclusion the following orders will be made:
That paragraph 8 of the order made by O'Loughlin J on 10 August 1995 be set aside.
That the Gehl Company recover 90% of its costs of and incidental to the actions the subject of this appeal including the hearings before the Registrar, before O'Loughlin J and before this Court.
I certify that this and the
preceding pages are a true
copy of the Reasons for
Judgment of Justice von Doussa
Associate:
Dated:
Counsel for the appellants : Mr J Wilkinson with Mr J
Clarke
Solicitors for the appellants : Cowell Clarke
Counsel for the respondent : Mr P McNamara
Solicitors for the respondent : Johnson Winter & Slattery
Date of hearing : 14 November 1995
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