Keydata Pty Ltd v Data Connection Pty Ltd

[1992] FCA 415

IN THE FEDERAL COURT OF AUSTRALIA	,JUDGMENT No.
\
VICTORIAN DISTRICT REGISTRY	i VG No. 69 of 1991
)
GENERAL DIVISION	)

Between: KEYDATA PTY LTD

Applicant

and:  DATA CONNECTION PTY LTD
Res~ondent

Coram:	Ryan J
Date:	9 June 1992
Place:	Melbourne

EX TEMPORE REASONS FOR JUDGMENT

RYAN J: By motion on notice dated 5 June 1992 the applicant

seeks leave to discontinue this proceeding pursuant to 0.22
r.2 of the rules of this court. The grant of leave is not
opposed, but it is contended on behalf of the respondent that
it should be a condition of the grant of leave that the
applicant pay the respondent's costs, taxed as between
solicitor and client, or on an indemnity basis.

result of the defendant's having taken, shortly before trial,

I accept that the court retains a discretion not to impose an

proceedings as a

obligation to pay costs as a condition of the grant of leave the relief which it had been seeking in the
to discontinue. However, I regard that as a discretion which
is to be exercised only in exceptional circumstances such as
those which occurred in Garwolin Nominees Ptv Ltd v Statewide

steps to rectify the defendant's non-compl~ance	with certain
covenants in a lease.	In the present case, no exceptional

circumstances have been shown to exist. Indeed, the only fact pointed to as possibly constituting those circumstances is the failure of the respondent by its managing director to disclose a belief or suspicion which he apparently entertained, at

least by 12 December 1991, as to the author or publisher of

what has been called "the offending letter".

I do not consider that the failure of the respondent to

disclose those suspicions, having regard to their nature and
to the course which the litigation had taken up to the end of
last year, merits the criticism which has been made on behalf
of the applicant. Moreover, the leave to discontinue has been
sought because the takeover which the offending letter
threatened to frustrate has turned out satisfactorily for the
applicant and its associates and because any damages which the

applicant might have recovered would probably have been only

min~mal	.
Those matters were, or should have been apparent to the

applicant and its advisers by June last year when they
rejected an open offer of compromise without attempting to

explore further the possibility of bringing the litigation to

an end then. Moreover, there are clear ind~cations from the

correspondence and the affidavit in support of the motion that
the action has been maintained, if not instituted, for the
collateral purpose of discovering the identity of the author
or publisher of the offending letter. It is not appropriate
for me, when both parties agree that the application should be
discontinued, to try the action for the purpose of resolving
the question of liability for costs.

However, from what has been revealed in the course of the hearing of this motion the applicant's prospects of success had the matter proceeded to judgment were apparently not strong. It follows from what I have said so far that the respondent must have its costs as a consequence of the discontinuance. The question which remains is on what basis those costs should be taxed. Having regard to the considerations which I have identified, I regard this case as on the respondent's side of the borderline identified by Woodward J in Fountain Selected Meats (Sales) Ptv Ltd v International Produce Merchants Ptv Ltd (1988) 81 ALR 397 at 401.

Accordingly, I propose to make an order similar to that noted

by his Honour in that case, adopting 1 August 1991 as the date

from which the applicant should attract liability to costs on
an indemnity basis. Accordingly, the order of the court is:

1.    By consent that the applicant have leave to discontinue the application.

2.    That the applicant pay the costs of the respondent, including any reserved costs, those costs incurred on or before 31 July 1991 to be paid on a party and party basis and those costs incurred after that date to include all costs except insofar as they are of an unreasonable amount or have been unreasonably incurred so that subject to the above exceptions the respondent be completely indemnified by the applicant for his costs.

I certify that this and the preceding three (3) pages are a true copy of the reasons for judgment of his Honour M r Justice Ryan.

*

Associate:	-
Date:	9 June 1992

Counsel for the applicant:  Mr J Beach

Solicitor for the applicant: Ebsworth and Ebsworth

Counsel for the respondent:  Mr B Caine

Solicitor for the respondent: Holding Redlich