Khoury v Sidhu

Case [2011] FCA 857

FEDERAL COURT OF AUSTRALIA

Khoury v Sidhu [2011] FCA 857

Citation: Khoury v Sidhu [2011] FCA 857
Parties: MANUEL KHOURY and SAMIRA KHOURY v BALDEV SINGH SIDHU, ALLIANCE CAPITAL CORPORATION PTY LTD ACN 102 712 836 and QUEENSLAND DIRECT FINANCE PTY LTD
ACN 112 372 111
File number: QUD 131 of 2009
Judge: GREENWOOD J
Date of judgment: 2 August 2011
Catchwords: PRACTICE AND PROCEDURE – consideration of submissions in relation to the disposition of costs of and incidental to a notice of motion of the respondents filed 1 June 2010 and a notice of motion of the applicants dated 12 July 2010 consequent upon publication of reasons of the Full Court in Khoury v Sidhu [2011] FCAFC 71
Legislation: Federal Court of Australia Act 1976 (Cth), s 43
Federal Court Rules, Order 62, rule 29
Cases cited:

Khoury v Sidhu (No. 2) [2010] FCA 1320 – cited
Khoury v Sidhu [2011] FCAFC 71 – cited
Henville v Walker (2001) 206 CLR 459 – cited
I & L Securities v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 – cited
Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (unreported, Federal Court, French J, 3 May 1991) – cited
Orrcon Operations Pty Ltd v Capital Steel and Pipe Pty Ltd (No 2) [2008] FCA 24 – cited and quoted
Rafferty v Time 2000 West Pty Ltd (No 3) (2009) 257 ALR 503 – cited
O’Keefe Nominees Pty Ltd v BP Australia Ltd (No. 2) (1995) 55 FCR 591 – cited and quoted
Stanley & Ors v Layne Christensen Company & Ors [2006] WASCA 56 – cited and quoted
Bladel v Russel Allport (unreported Full Court of the Supreme Court of Tasmania, Gibson ACJ, 12 November 1964) - cited
Saizeriya Co Ltd & Anor v Peregrine Management Group Ltd Pty & Ors [2005] FCA 1174 - cited
Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 – cited
Re Wilcox: Ex parte Venture Industries Pty Ltd (No. 2) (1996) 141 ALR 727 - cited
Abbot v Random House Australia Pty Ltd  [1999] FCA 1540 – cited
Fiduciary Limited v Morningstar Research Pty Ltd (2002) 55 NSWLR 1 - cited
Date of hearing: 19 July 2010
Date of last submissions: Judgment on each notice of motion reserved pending delivery of judgment in Khoury v Sidhu [2011] FCAFC 71
Place: Brisbane
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 66
Counsel for the Applicants: Dr Andrew Greinke
Solicitor for the Applicants: Cranston McEachern
Counsel for the Respondents: Mr Andrew Lyons
Solicitor for the Respondents: Plastiras Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISION

QUD 131 of 2009
BETWEEN:

MANUEL KHOURY
First Applicant

SAMIRA KHOURY
Second Applicant
AND:

BALDEV SINGH SIDHU
First Respondent

ALLIANCE CAPITAL CORPORATION PTY LTD
ACN 102 712 836
Second Respondent

QUEENSLAND DIRECT FINANCE PTY LTD
ACN 112 372 111
Third Respondent

JUDGE:

GREENWOOD J

DATE OF ORDER:

2 AUGUST 2011

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:

1.The respondents pay the applicants’…

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AGLC
Khoury v Sidhu [2011] FCA 857
Case
[2011] FCA 857
Decision Date

CaseChat Overview and Summary

The matter before the Court was a consideration of the costs associated with two notices of motion filed by the parties in the case of Khoury v Sidhu. The first notice of motion was filed by the respondents on 1 June 2010, and the second was filed by the applicants on 12 July 2010, following the publication of the reasons of the Full Court. The applicants sought leave to issue a subpoena, directions for the filing and service of further affidavit evidence, and an order that the respondents pay the applicants' costs of the motion and the motion filed by the respondents on 1 June 2010. The respondents had previously been granted leave to amend their defence, with some exceptions. The applicants contested the leave to amend certain paragraphs, arguing that they did not provide a legally arguable ground for reducing the compensation awarded by the Court.

The court had to decide whether the applicants' costs of the motion dated 12 July 2010 should be taxed on an indemnity basis or whether the applicants should bear their own costs. The court also had to consider whether the respondents should pay the applicants' costs of and incidental to the notice of motion filed on 1 June 2010. The applicants argued that the respondents' proposed amendments to their defence did not provide a legally arguable ground for reducing the compensation awarded by the Court. The respondents, on the other hand, argued that the proposed amendments were relevant to the exercise of the Court's discretion as to whether the level of compensation awarded under s 87 should be reduced.

The court found that the respondents' proposed amendments to their defence were relevant to the exercise of the Court's discretion as to whether the level of compensation awarded under s 87 should be reduced. The court also found that the applicants' costs of the motion dated 12 July 2010 should be taxed on an indemnity basis, and that the respondents should pay the applicants' costs of and incidental to the notice of motion filed on 1 June 2010. The court made orders to this effect.

The court ordered that the respondents pay the applicants' costs of and incidental to the notice of motion filed on 1 June 2010, and that the applicants' costs of and incidental to their notice of motion dated 12 July 2010 be the applicants' costs in the cause. The court also ordered that the applicants' costs of the motion dated 12 July 2010 be taxed on an indemnity basis.

Orders

Orders of the court

1. The respondents pay the applicants’ costs of and incidental to the notice of motion filed 1 June 2010.

2. The applicants’ costs of and incidental to its notice of motion dated 12 July 2010 are the applicants’ costs in the cause.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

By their notice of motion dated 12 July 2010, the applicants sought the following orders:a. Leave to issue a subpoena directed to Denis Stephenson;b.Directions for the filing and service by the applicants of further affidavit evidence in relation to the respondents’ amended defence should the Court grant leave and in reply to the affidavits of Mr Sidhu and Mr Stephenson should the court grant leave; andc.The respondent’s pay the applicant’s costs of this motion and the motion filed by the respondents on 1 June 2010 to be taxed on the indemnity basis. The decision of 30 November 2010Amended defence By Order 1 the respondents’ were granted leave to amend their defence in the terms of their proposed amended defence with the exception of the proposed paras 73 to 81. In granting leave to amend, the Court had regard to the following factors: the importance of resolving all issues put in controversy; the proposed amendments were not futile; and, granting leave would not cause substantial prejudice or injustice to the respondents: [93] of the principal judgment. Leave was granted in respect of proposed paras 10A to 29 variously on the basis that the paragraphs: merely expanded an existing contention; affirmatively pleaded facts within an existing controversy; sought to give an affirmative denial to an allegation of the applicants in circumstances where the respondents had previously pleaded that the allegation was simply a state of mind; and, the paragraphs contained admissions of matters pleaded by the applicants: [38] to [49] of the principal judgment. Leave was granted to plead paras 32 to 42 which affirmatively plead matters going to the amount of loss said to have been suffered by the applicants as a result of their reliance upon the pleaded representations (denied by the respondents). Paragraphs 44 to 47 were more controversial than the other proposed amendments. These paragraphs plead further facts in answer to the applicants’ allegations, if found to be true. By these paragraphs the respondents plead that the applicants would have suffered the claimed loss because they would have granted the mortgage in issue in any event regardless of whether they knew the contended truth of the matter and, further, the applicants suffered loss partly as a result of their failure to take reasonable care to protect their economic interests. The applicants contended that leave to amend ought to be refused as the pleaded facts do not give rise, as a matter of law, to an arguable ground upon which the amount of compensation awarded by the Court could be reduced. The applicants relied principally on the High Court decisions in Henville v Walker (2001) 206 CLR 459 and I & L Securities v HTW Valuers (2002) 210 CLR 109. Leave was granted on the basis that the Court was satisfied that having regard to the wide discretion conferred by s 87 of the Trade Practices Act 1974 (Cth), the pleaded matters were at least arguably relevant to the exercise of the discretion as to whether the Court ought to reduce the level of compensation awarded under s 87: [71]-[72] of the principal judgment.

Ratio Decidendi

Legal Principle Established

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