Knight & Anor v FP Special Assets Limited

[1991] HCATrans 155

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B6 of 1991

B e t w e e n -

DESMOND WILLIAM KNIGHT and

WILLIAM GERARD MALONE

Applicants

and

FP SPECIAL ASSETS LIMITED,
KEEN BAY PTY LTD and MAINDOLLAR

PTY LTD

Respondents

Application for special leave

to appeal

BRENNAN J
TOOHEY J

GAUDRON J

Knight 1 26/6/91

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON WEDNESDAY, 26 JUNE 1991, AT 4.08 PM

Copyright in the High Court of Australia

MR I.V. GZELL, QC: If the Court pleases, I appear with my

learned friend, MR H.B. FRASER, for the applicants.

(instructed by Blake Dawson Waldron)

MR D.F. JACKSON, QC:  May it please the Court, I appear with

my learned friends, MR E.J.P.F. LENNON, QC and

MR G.M. McGRATH, for the respondents. (instructed

by Purvis Duncan)

BRENNAN J: Yes, Mr Jackson. Yes, Mr Gzell.

MR GZELL: If Your Honours please, I will state a number of

propositions in general terms and then return and

make them good. The issue of importance which, in

our submission, arises from the matter ts the
extent to which a court can or should make an order
for costs against a non-party to the proceedings, a
non-party who has been guilty of no impropriety and
in particular, in this case, a receiver- appointed

out of court.

Until comparatively recently, with a number of

decisions culminating in the decision in the

House of Lords of Aiden Shipping Co v Interbulk Ltd

to which I will return, it had consistently been

held that general discretion in a court to award costs only justified orders against parties to a

suit.

TOOHEY J:  When you say it only justified such orders,

Mr Gzell, are you speaking at this point of jurisdiction or power or discretion or which?

MR GZELL:  Your Honour, I am deliberately not buying into

the distinction between power on the one hand and

discretion on the other, because if - whichever way

it is viewed, whether it is viewed as a question of

jurisdiction or whether it is viewed as a question

of the exercise of discretion, in our respectful

submission, this case, on either basis, is a proper

vehicle for the grant of special leave, because the

course of the matter in the past has been, whether

the courts have viewed it as one of jurisdiction or
discretion, that when they have viewed general
provision as to costs, they have seen their
function as being limited to granting orders for

costs against parties to a suit. Now, this case

has taken the obverse view and, whether it be

viewed as one of the exercise of discretion or

power, in our respectful submission, it still

raises a matter which this Court ought to

entertain.

BRENNAN J: But you have put it on the basis, I take it,

that there can be no sound exercise of the

discretion, if it be discretion, in the case of an

order against a person who is not a party.

Knight	2	26/6/91
MR GZELL: Quite. BRENNAN J: Yes.

MR GZELL:  And I must add a gloss on what - I am sorry

Your Honour.

GAUDRON J: Well I have some difficulty in your answer to

the presiding judge. I mean, if there is a

discretion - if it is a matter of construction,

there is a discretion. Then it does not help to
say, as a matter of sound principle, it cannot be
exercised notwithstanding the power that derives

from the proper principles of construction.

MR GZELL:  Could I put it this way, Your Honour: a general

provision that empowers a court to order costs in a

matter, if the court sought to exercise that power

by awarding costs against somebody who had had no

relationship whatsoever to the matter before the
court, in our respectful submission that would be

clearly a wrong exercise of discretion.

TOOHEY J: But does it not go to jurisdiction, put that way?

MR GZELL:  Your Honour, I would prefer to put it that way

and certainly the authorities at common law - - -

TOOHEY J: Well, you seem to baulk at putting it that way.

MR GZELL: Well, perhaps I was seeking to have a go each

way, as it were, and to avoid the question, because

in the end -

BRENNAN J: Well, can we understand your submission

basically to be this, that in this case there was

no foundation for the exercise of the power to

order costs against a person who is not a party?

MR GZELL: Yes, and
BRENNAN J:	And you put that basically as a question of

jurisdiction, but you want a saver, in case it is

held as a matter of construction, that the power is

wider?

MR GZELL:  That is right. And, Your Honour, the dissenting

judge below took the view that it was not a

question of jurisdiction, but was a question of

discretion, and he came to the view that the

discretion ought not to be exercised in favour of a

non-party.

TOOHEY J: Well, is that putting it correctly? I mean, when

you say that one of the judges below thought it was

not a question of jurisdiction, as I understand

that judgment, it was because the judge accepted

Knight 26/6/91

that there was jurisdiction, but thought that the

power ought not be exercised in this particular

case. In other words, is there not a unanimity

below as to the existence of a jurisdiction to make

an order for costs against a non-party, at least in

circumstances such as this?

MR GZELL:  Yes. Each of the judges who constituted the

Full Court, took the view that the power existed. Two of them took the view that the discretion had not miscarried at the primary level; one of them

took the view that it had, and he took the view
that it had because he was of the view that it was

only in exceptional circumstances that the power

should be exercised against a non-party and there

was nothing exceptional about the circumstances in

this case.

BRENNAN J:  Mr Gzell, if you were to adopt the argument that

this is a case where, if there is jurisdiction, it

was clearly a case in which the order should have

been made against your clients, you would then be

able to isolate, as a very clear and crisp question

for decision, the question of whether there is

jurisdiction to make it.

MR GZELL: Yes, Your Honour, but I do not want to be pushed

into that position if I can avoid it.

BRENNAN J: It is entirely a matter for you.

MR GZELL:  And perhaps if I could simply develop it in the

way that I have, of suggesting to Your Honours that

it does not really matter for the purpose of

determining this application, as to whether one
does look at it as a qu·estion of jurisdiction or

one looks at it as a question of the exercise of

discretion.

TOOHEY J: Well I find that really a quite extraordinary

proposition.	I mean, if there is no jurisdiction,
that is the end of the matter, is it not?

MR GZELL: Quite, but I am putting to Your Honours that even

if there is - as the Full Court held below -

jurisdiction, the manner in which the discretion

was exercised in this case, against a non-party
guilty of no impropriety in relation to the conduct

of the matter, that that was a miscarriage of a

discretion, which is a proper basis for special

leave in this case.

BRENNAN J: You would be speaking long and hard to convince

this Court that special leave should be granted to

rehearse the question of the exercise of a

discretion on costs, Mr Gzell.

Knight 4 26/6/91

MR GZELL:  I appreciate that, Your Honour. At the forefront

of the submission in that case is the proposition

that the judges below were wrong in concluding that

there was jurisdiction to order costs against a

non-party, and I will put that at the forefront of

our submissions on the basis of jurisdiction.

I had been saying to Your Honours that up

until a number of decisions culminating in the

House of Lords in Aiden, courts had consistently

stated that the general discretion in a court to

award costs only justified orders against parties

to a suit and I was about to say, a gloss must be

placed upon what is meant by parties to a suit in

that context, that including persons who were

regarded as parties, and thus the landlord in the

fictional action in ejectment was regarded as a

party for that purpose, relaters were regarded as a

party for that purpose, as were next friends.	The
power of the court to visit an order for costs

against other persons was on a different basis:
the basis of an abuse of the process of the court,

or control by the court over its officers.

The Full Court regarded section 58 of the

Supreme Court Act as a general discretion and

following Aiden they took the view that it ought

not to be regarded as limiting the discretion to

order costs to parties. The matter is not limited

to Queensland however, because section 58 is

expressed no more widely than are the provisions in

other Australian jurisdictions, so that if the

decision below is correct, it would apply equally

elsewhere. The decision has important

ramifications because, not only does it reverse the

perceived immunity as to costs of a receiver

conducting litigation as the agent of a company,

but it also may lead to a piercing of the corporate

veil, as Mr Justice Dowsett recognized in his

dissenting judgment, because there is no difference in principle, in our submission, between a receiver

financing an action for a company or a director
financing an action for a company.	And we would

add that there is no difference in principle to the
situation of an insurer financing an action in the

name of its insured. In all those situations, if the decision below is correct, an order for costs

might be visited upon those non-parties.

This is not a case in which the only remedy

available is the order for costs. The appropriate

remedy, in our submission, in this type of

situation, is to seek an order for security for

costs and a stay of proceedings until security be

granted.

Knight 26/6/91

TOOHEY J: Security for costs against whom, Mr Gzell? You

mean against the company - - -

MR GZELL: Security for costs against the plaintiff or the

defendant; the company in this case where one has a receiver conducting the litigation as agent for the

company.

TOOHEY J: But at that point perhaps the existence of the

receiver is not terribly relevant, is it? The

company either furnishes security or it does not.

MR GZELL: Well, it may be, because if the company is

insolvent and the party standing behind the company
is the receiver, an order for security with a stay

of proceedings until the security be granted will

either have the effect of the action being

discontinued or the effect of it being financed by

somebody, presumably the receiver or, through the

receiver, the secured creditor, and security being

given, thereby protecting the defendants in the

action. And indeed, in this case - - -

TOOHEY J: In that situation, if the receiver furnishes the

security, though through the medium of the

plaintiff company, your argument would be that

nevertheless, if security fell short of the amount of costs awarded, the receiver could not be called

upon to meet that difference.

MR GZELL:  Yes, the remedy in that situation is for a fresh

application for security. In this case security

was sought and was obtained, but no further

applications were made to increase the level of the

security.

GAUDRON J:	Mr Gzell, could you now formulate the major premise of what you say is the argument that will
be at the forefront of your submissions if special leave is granted?
MR GZELL: Yes. Could I say one further thing if I answer

Your Honour about that, because it leads into the

answer that I will give, and it is the one further

thing I wanted to say in general terms about

special leave, and that was this: the view that

was taken by the House of Lords in Aiden about the

words that were used in a particular costs

provision in that case as removing any question of

a limitation of the power to parties to the action,

is a view which has not been followed in other

jurisdictions, and in particular in a Canadian

case, which was referred to in the court below.

The opposite view was taken of those words which

were regarded as so important by the House of Lords. Those words were an extension to what

appears in Queensland, but words which do appear in

Knight 6 26/6/91

other jurisdictions throughout Australia, and those

words were that "the Court shall have full power to

determine by whom and to what extent the costs are

to be paid".

Now, at the forefront of our submissions, if

leave is granted, we would submit that those words

really do not take the matter any further; that

those words do not really add to the general

discretion which existed in a formulation which

simply said that costs were in the discretion of

the court.

GAUDRON J:	What do those words mean, in your submission?
MR GZELL:	The words mean that the court has the power to

determine by whom of the parties, in the matter

before it, shall pay the costs.

BRENNAN J:  By whom of the parties only?

MR GZELL:  Of the parties only. So that the submission that

we will be making is that the words that were

fastened upon by the House of Lords in Aiden are
not really words which add to the power, and that

the approach that has been in the Canadian case of

simply saying: What do the words mean? There must

be some limitation placed upon the person who can

be visited with an order for costs.

BRENNAN J:  You do not need to knock down the straw man that

you are building up in Aiden. All you are saying

is that the words of the statute in this case do

not extend to empower the court to make an order

against a person who is not a party. Is that

right?

MR GZELL: Quite.

BRENNAN J: I understand it, I think. If you are content to

rest on that, Mr Gzell.

MR GZELL:	I will, if Your Honours please.
BRENNAN J:	Mr Jackson.
MR JACKSON:	Your Honour, we would accept, for the moment in

any event, that if one states it in the abstract,

the question to which reference has just been made,

is a question of some interest - and I say again in

the abstract - we would say two things about it.

The first is that the decision of the supreme court to the effect that there is such power, that is a

power to go beyond persons who are formally the

parties to the proceedings, is a decision which,

whatever aberrations there might have been for a

Knight 7 26/6/91

short period in the past, is not attended by
sufficient doubt.

Now, what I mean by that, Your Honours, is

this: in the first place there is the unanimous
decision of the House of Lords in Alden Shipping to

the effect that there is such a power. Your

Honour, I will not go to the case, but it is a

unanimous to that effect; and, no, we would agree

with our learned friends, there is no relevant

distinction in terminology.	The second thing
is that - - -

BRENNAN J: There was no relevant distinction?

MR JACKSON:  No relevant distinction. I accept that.

Perhaps I misunderstood my learned friend. I

thought - - -

BRENNAN J:  I rather thought he was saying that the words

that were there - - -

MR JACKSON:  Your Honour, I must have misunderstood. I

thought he was saying the words were different, but

they did not have a different effect.

Your Honour, we would submit there simply is not

one, because indeed the provisions are really

wider, in a sense. If there is anything to be said

about them here it is simply the costs are in the

discretion of the court. But, Your Honours, the

second thing is that no doubt has been cast upon

the correctness of Alden Shipping on the occasions

on which its correctness might have been in issue

in Australia since it was decided.

In the first place one has the present case where five justices of the supreme court were of the view that there was such a jurisdiction. I

shall not take Your Honours to the passages, but

Your Honours are familiar with that fact. Your

Honours, that is a judgment, of course, of the

judges of the supreme court on a question which is,

I accept, a question of jurisdiction, but it is a

question somewhat akin to a question of practice

and procedure.

Your Honours, one sees also that the issue has

been dealt with in passing. In New south Wales a

decision of the Court of Appeal, Barbaro v

Gambacorta, No 42 of 1986, decision given

on 26 February 1987, - Your Honours should have

that I think - and if Your Honours look at page 12

in the judgment of the court which was delivered by

Mr Justice Priestley, about two-thirds of the way

down the page there is a reference to Aiden - I

should perhaps say that why I am referring the

Court to this and a number of other·cases, and I

Knight 26/6/91

will do so quickly, is not to say that these cases

say Aiden is right, but that Aiden has not been

doubted, if I can put it that way, in its

application to the various courts in Australia.

Your Honours will see a reference about two-thirds

of the way down the page:

On the footing that this court has the same

power -

and then Aiden is followed, and, Your Honours, the

case came back. Your Honours will see, a few pages

on there is a short judgment on costs in the last

three pages, where, in effect, the same passage is

quoted once more. Your Honours, in Western

Australia, in decision Rendell Holdings Pty Limited

v Athans, 26 1989, decision given on 15 November

1989, at page 5 the Full Court referred to Aiden in

the second new paragraph on the page, saying - - -

TOOHEY J: But did they do so, Mr Jackson, in the context of

a possible order for costs against a non-party?

MR JACKSON:  Your Honour, I think the answer is, no, to to

that, but perhaps I might have that checked and I

can come back to it, but it is clear, Your Honours,

that the Court was not doubting in any event what

was said by the House of Lords in Aiden.

TOOHEY J:  No, but at a very quick glance, what it appears

to be saying is that costs area matter of

discretion -

MR JACKSON:	Yes.
TOOHEY J:	- - - and that that is affirmed by Aiden and so

be it, but it does not really seem to bear upon the

point we are concerned with here, does it?

MR JACKSON:  I take Your Honour's point. May I say,

however, that what was said in Aiden, was that the

discretion was a very wide one; the width of it

being emphasized by the fact that it could apply in

particular circumstances to non-parties.

TOOHEY J: But you would have to find some statutory

foundation, would you not, or query a rule which

had some statutory effect which would empower a

court to order costs against a non-party?

MR JACKSON: Well, Your Honours, the rule is there; it is

order 91, rule 1 of the Supreme Court Rules, which

is - - -

TOOHEY J: Yes, I appreciate there is a suggested source,

all I am saying is that the general ·provision that

costs are in the discretion of the court would

Knight 9 26/6/91

hardly empower the court to order someone who is

not a party to the litigation to pay the costs.

MR JACKSON:  Your Honour, it does, in our submission, order

such a - the question of jurisdiction, of course,

is one thing, and we submit it does. How it is

exercised, of course, is a different question.

TOOHEY .J: Well, in so far as it is a question of

jurisdiction, I suppose it might be said that the

statute in the present case empowers the court to,

as a matter of power, to order costs against

anyone, whether they have had connection with the

litigation or not, but obviously the court is not

going to exercise that power in that case.

MR JACKSON:  One might trim it down a bit beyond that, I

suppose but, Your Honour, it is a question whether

it is limited to parties. What I am seeking to

demonstrate simply, for the moment, is that so far

as Aiden is concerned, that has been followed.

Your Honours could I give two further references,

without going to them: one is Davidson v Dobbie, a judgment of Mr Justice Waddell in New South Wales,

31 August 1989. Your Honours will see it at

page 9, the reference to Aiden and, Your Honours,

the other decision is one of Mr Justice Needham in

Humphrey v Humphrey, a decision on 19 November

1990, pages 4 to 5. He said it was convincing, and

however thought he should not follow it because

there seemed to be some victor which - or the other

way.

But, Your Honours, if I could descend from the general to the particular: our learned friend said

that there was a perceived immunity of a receiver
in instituting proceedings of the kind in question,

or conducting proceedings of the kind in question, prior to Aiden, but, Your Honours, the perception

must have been through a glass darkly, as it were,

because it certainly had been decided prior to that

time that a receiver might be liable to pay costs

in circumstances like these.

Could I refer Your Honours to Bacal

Contracting Ltd v Modern Engineering (Bristol)

Ltd, (1980) 2 All ER 655, decision of Judge Fay,

sitting as an additional judge of the supreme

court, and Your Honours will see at the bottom of

page 659, towards the letter h, he said it was:

reasonably clear the receiver is the real

plaintiff and the company a nominee plaintiff.

He then referred to the question whether the

receiver might be - the position in relation to

security for costs and, having done that, then at

Knight 10 26/6/91

page 660, proceeded to deal with the question of

the liability of the receiver personally for costs.

Your Honours, the passage commences about half-way

down page 660 and it goes through to pages 661, the

start of letter g. Your Honours, I shall not read

it out, but it is clear that His Lordship held that

there was a power at least in the case where the

company was in liquidation, as one of the companies

is in this case, one of the defendant companies,

Howe, to order the receiver to pay the costs.

Now, Your Honours, in addition to that case -

that is a case referred to at some length in the

judgments in the Full Court in this case - there is

a decision of Mr Justice Brownie in Kelaw Pty Ltd v

Catco Developments Pty Ltd, (1989) 15 NSWLR 587.

Your Honours will see at page 593 His Honour

appears to accept - in the passage commencing at B

and going down to F - - -

TOOHEY J:  I am sorry, what page Mr Jackson?

MR JACKSON:  Page 593. It is the passage in the paragraph

commencing between Band C and going down to,

perhaps, letter E and then between letters E and F

- appears to accept the existence of a power.	Your
Honours, my learned friend referred to the

possibility that insurers, for example, might be

liable to pay costs. Well, again, Your Honours,

there is nothing very new about that.

Could I take Your Honours to Hill v Archbold,

(1968) 1 QB 686, at page 694, where Lord Denning,

in reasons for judgment with which the other two

members of the court, at page 697 and 699,

respectively, agreed somewhat enthusiastically,

His Lordship dealt with the question of the

requirement to pay costs in certain circumstances.

Could I take Your Honours to the last paragraph on

page 694, speaking of maintenance His Lordship said

that:

Most of the actions in our courts are

supported by some association or other, or by

the state itself.

And, Your Honours, could I refer to the whole

of that paragraph and, in particular, to the last

two lines of it. Your Honours, that statement was

repeated by Lord Denning in Trendtex Trading

Corporation and Credit Suisse, (1980) QB 629, at page 653 and also in an unreported decision, the

relevant part of which is extracted in the next

and, Your Honours will be pleased to hear, the last

case to which I will go. The unreported decision

is Orme and Associated Newspapers, (1980) Court of Appeal transcript 809, but it is referred to, Your

Knight 11 26/6/91

Honours, in Singh v Observer Ltd,

(1989) 2 All ER 751, at page 756. Now, Your

Honours, this was a case where someone - no-one would say who he was - was maintaining an action by

the plaintiff. Maintenance had ceased to be a tort

in England at the time but, at the bottom of page

754, His Lordship referred to the question whether

the court had:

power to order a maintainer to pay costs?

And, Your Honours, at page 756, commencing

about letter d, the argument is set out in a

passage which goes over to page 757 between letters

c and d.	Now, Your Honours, the passage from Orme
is quoted on page 756.	Your Honours will see, when

you get to page 757, in the first new paragraph on

the page, that the position of insurers, unions and

so on is dealt with by His Lordship.

Now, Your Honours, I should say, in relation to Singh's case, that the case went to the

Court of Appeal; a different result was arrived

at, but what had happened was that in due course

further facts were made available to the

Court of Appeal and that the proceedings went on on

a quite different basis. But Your Honours will

have seen the reference in those observations to

the position of persons who were supporting the

action. And could I take Your Honours to the

position of the receivers in this case? If Your

Honours go to the record, at page 1 - - -

BRENNAN J: For what purpose do we need to go to this,

Mr Jackson?

MR JACKSON:  Your Honour, I simply wish to indicate the

particular findings that were made about the fact

that the receivers were, in effect, maintaining the

action. That is all I am going to it for,

Your Honour.

BRENNAN J: Yes, but before you get to that point, the cases

that you have taken us to are cases which, clearly
enough, none of which are binding on this Court,
and the proposition last advanced in the judgment

of His Lordship, Mr Justice McPherson, seems to

suggest that there are some important questions

which may arise, particularly if the tort of

maintenance is either statutorily abrogated or
regarded as falling into desuetude. Is that not an

appropriate matter for consideration by this Court?

MR JACKSON: Well, Your Honour, our submission

BRENNAN J:  As a matter of principle, not with reference to

the facts of this case.

Knight 12 26/6/91

MR JACKSON:  No, Your Honour, I understand what Your Honour

is putting to me. Your Honour, all I am seeking to

demonstrate for the moment, if I can put it this
way, is that one has a situation where, for a long

time, really - because the first, the Hill's case,

is 23 years ago - there has been a view expressed

that persons who are involved in maintaining - to

put it loosely - actions may have to pay the costs

if the party loses.

Your Honour, so far as receivers are

concerned, that approach has certainly been taken
well before Aiden. There seems nothing very
dramatic about it. Alden's case simply, in effect,

says there is a wide jurisdiction to do it. That

is something, Your Honours, that really has not

been doubted by Australian courts since. What we

would submit is that, whilst it is right to say in

one sense the point is of interest and of some general application, at the same time there is nothing really to suggest that one sees that these

principles are in any way wrong.

TOOHEY J:  And perhaps in the end the principle has to be

tested against a whole range of fact situations for

it to be useful.

MR JACKSON: Well, Your Honour, one does not have a

situation, for example, that there is any decision

in Australia that is contrary, in our submission,

to the decision of the Full Court, at least since

Aiden.

TOOHEY J: Well, one can imagine a fact situation in which a

person lent money to a litigant to enable them to

bring an action, it might be thought to be a

startling consequence that the lender could be up

for the costs of the proceedings.

MR JACKSON:	Yes.
TOOHEY J: If that was the extent of the relationship

between them.

MR JACKSON: 

Yes, Your Honour. Now, Your Honour, it must

depend very much on the facts and that is why, we
would submit, if one looks at the particular

passages to which I was about to go, they

demonstrate that the case was a very particular

kind of case. Your Honour, I shall not go to them

at length but I was going to give Your Honours two

references if I may.  The first is at page 1, at

the start of Mr Justice Connelly's reasons for

judgment.  The passage goes through to page 3,

about line 3, and Your Honours will see that the
passage, within that part to which I wish to refer

particularly, is at page 2, line 14, going through

Knight 13 26/6/91

to page 3, about line 3 and then page 4, commencing

line 17, going through to about page 5, about

line 10.

So, Your Honour, what one does see is a case

very much on its own facts and it is also quite

apparent, Your Honour, that the approach - that the

judges in the Full Court did not regard themselves

as in any way seeking to fetter the exercise of

discretion in cases in the future. It was a

particular case. That appears from Mr Justice

Williams at page 30, line 9, Mr Justice Ryan -

BRENNAN J: Well, appreciating that, Mr Jackson, if the

grounds of appeal in this case were limited to

those set out in paragraph 2 of the draft notice

you would have the benefit, an unassailable

benefit, but if there were jurisdiction upheld,

your order would remain undisturbed.

MR JACKSON: Your Honour, it is always nice to have the

smaller of the mercies; one likes the larger

sometimes too I am afraid.

BRENNAN J:  Do you not have to address the question as to

why we should not grant special leave so limited?

MR JACKSON: Well, Your Honour, I suspect I have, really,

except to say again, Your Honour, where, one asks,

really is the doubt.	The provision is widely
expressed.	The decisions, such as there are,

really, in our submission, all support the

existence of the jurisdiction and certainly the

fact circumstances in which that issue would arise

are ones which are of a particular kind.

BRENNAN J: Well, two questions, perhaps, Mr Jackson, arise

out of this: one is that there is a reference, I

see, on page 3, I think it is, page 14 of the

appeal book, to a Victorian case which Mr Gzell

to distinguish Aiden Shipping, that is AGC v invited His Honour to follow rather than to - well,	de Jayer, and I notice that in one of the judgments
that you referred to in New South Wales there was
an observation that there had been some
observations made by the Court of Appeal and by the limited to making orders against the parties.

MR JACKSON:  Yes. Your Honour, could I say two things? The

first is I am not really certain where the

High Court observations are.

BRENNAN J: Well, I do not know either.

MR JACKSON:  Your Honour, they seem a little elusive.

Knight 14 26/6/91

BRENNAN J:	The judgment of Mr Justice Needham at page 5.
MR JACKSON:	I know the passage to which Your Honour refers.

Perhaps His Honour was speaking from some

recollection, but it is a little elusive.

Your Honour, so far as the Court of Appeal in

New South Wales was concerned - Your Honour, I do

not know that there is any decision which decides

the point. It is right to say, I think, that one

sees a numbe.r of decisions in the period prior to

Aiden in which there is an assumption that there is

a power to award costs, in most cases, only as

between parties, recognizing always that there are

various exceptions to the rule - to the so-called

rule, as it were, because it certainly was not the

rule at an earlier point but, Your Honour, that is

where the situation stands really.

BRENNAN J:  Mr Jackson, there is perhaps one other

interesting problem and that is if a receiver was

in New South Wales and brought an action in

Queensland, by what provisions of either the Rules

or the Service and Execution of Process Act would

the New South Wales Receiver be subject to the

jurisdiction of the Queensland Court in the matter

of the order for costs?

MR JACKSON:	Your Honour, so what the court would do would be that an application for an order for costs would
be made.  Now, the application is one on which, of
course, the receiver would be entitled to be heard.
To bring the receiver before the proceedings, there
would have to be an order made that the receiver be
joined as a party, if I can put it that way, for
the purposes of that application.  Now, that order
is one which would be served on the receiver in the
ordinary way and, Your Honour, it may be - I say
two other things in relation to that - that with
the corporations' law, as it now is, that the
position of receivers is, generally speaking, a
little more Australia-wide than perhaps it might
have been before, but the second thing is that one
might be able to get, if I can put it that way, at
the receiver also by, perhaps, the application of the jurisdiction of courts cross-vesting
legislation.
BRENNAN J:	Mr Gzell, you may have your special leave

limited to the ground specified in paragraph 2.	If
you want anything further you will have to argue
for it in reply.

MR GZELL: Yes. Well, Your Honour, might I draw

Your Honour's attention to ground 3(a) which would

be the only ground on the discretionary aspect

which we would seek to urge to the Court. That one

simply being limited to circumstances in which, if

Knight 15 26/6/91

there is power, it is made as of course, with no

other circumstance in mind but that of the receiver

conducting the litigation.

BRENNAN J: Yes, Mr Gzell.

MR GZELL:  Your Honour, if, during the hearing of an appeal,

this Court decides that it is a matter in which

power exists to make an order under the rule and it

is a matter of discretion as to how that power

should be exercised then, in our respectful

submission, 3(a) does become important, because it

raises the question whether the mere fact that a

receiver, given the statutory right as agent to

conduct litigation in the name of the company,

should be visited with an order for costs.

TOOHEY J: But that takes you directly into the area of

discretion.

MR GZELL: That is, and that is what I - - -

TOOHEY J: It would be impossible to avoid then a scrutiny

of the discretion exercised by the court in which

case why ought it be limited to that particular

ground?

MR GZELL:  We are only interested in arguing the issue in

circumstances where the discretion is exercised

solely on the basis· that there was a receiver who

was standing behind the litigation.

TOOHEY J:  If the Court were not prepared to give you

special leave on 3(a), would you still want special

leave in respect of paragraph 2.

MR GZELL: Undoubtedly, if Your Honour please.

BRENNAN J: Well, I think you understand the sentiment of

the Court, Mr Gzell.

MR GZELL:  I do, Your Honour.

BRENNAN J: There will be a grant of special leave limited

to paragraph 2 of the draft notice of appeal.

AT 4.59 PM THE MATTER WAS ADJOURNED SINE DIE

Knight 16 26/6/91