Maniotis v JH Lever & Co Pty Ltd - [2006] FCAFC 7

FEDERAL COURT OF AUSTRALIA
Maniotis v J H Lever & Co Pty Ltd ACN 008 220 666 [2006] FCAFC 7
APPEAL – application for preliminary discovery O 15A Federal Court Rules – costs order – applicant at trial sought leave to discontinue – leave refused – application at first instance dismissed as applicant tendered no evidence
COSTS – whether appellant should pay certain costs of proceedings – whether discovery by appellant provided the respondent with sufficient information to determine whether to pursue its causes of action – whether primary judge erred in principles applied to dismissal of proceedings – whether primary judge misapprehended relevant facts to be considered when making costs orders
Federal Court Rules, O 15A rr 3, 6 and 12
White v Overland [2001] FCA 1333 cited
Oshlack v Richmond River Council (1998) 193 CLR 72 cited
Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 cited
CON MANIOTIS, TASTE MASTER PTY LTD (ACN 066 595 944), ANDREW FOTHERINGHAM AND BRETT COPPING v J H LEVER & CO PTY LTD
(ACN 008 220 666)
SAD 63 OF 2005
FINN, EMMETT & BENNETT JJ
17 FEBRUARY 2006
MELBOURNE (HEARD IN ADELAIDE)

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

SAD 63 OF 2005

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

CON MANIOTIS
FIRST APPELLANT

TASTE MASTER PTY LTD (ACN 066 595 944)
SECOND APPELLANT

ANDREW FOTHERINGHAM
THIRD APPELLANT

BRETT COPPING
FOURTH APPELLANT

AND:

J H LEVER & CO PTY LTD (ACN 008 220 666)
RESPONDENT

JUDGE:

FINN, EMMETT AND BENNETT JJ

DATE OF ORDER:

17 FEBRUARY 2006

WHERE MADE:

MELBOURNE (HEARD IN ADELAIDE)

THE COURT ORDERS THAT:
1. The appeal be allowed in part.
2. Order 3 of the orders made on 21 March 2005 be varied to read:
The first, second and third respondents pay to the applicant its costs of the application made on 13 October 2003 as amended on 26 October 2004 from 18 September 2004 until 10 November 2004.

3.Order 4 of the orders made on 21 March 2005 be set aside and the following order be substituted for it:
The applicant pay the costs of the first, second and third respondents from 11 November 2004 to 7 March 2005.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

SAD 63 OF 2005

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

CON MANIOTIS
FIRST APPELLANT

TASTE MASTER PTY LTD (ACN 066 595 944)
SECOND APPELLANT

ANDREW FOTHERINGHAM
THIRD APPELLANT

BRETT COPPING
FOURTH APPELLANT

AND:

J H LEVER & CO PTY LTD (ACN 008 220 666)
RESPONDENT

JUDGE:

FINN, EMMETT AND BENNETT JJ

DATE:

17 FEBRUARY 2006

PLACE:

MELBOURNE (HEARD IN ADELAIDE)

REASONS FOR JUDGMENT

This appeal is against two of the costs orders made by the primary judge when dismissing proceedings brought by the respondent, J H Lever & Co Pty Ltd…

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: [2006] FCAFC 7
Decision Date: 17 FEBRUARY 2006

CaseChat Overview and Summary

In the case of Maniotis v JH Lever & Co Pty Ltd, the appellants were involved in a legal dispute with JH Lever & Co Pty Ltd (Lever Co) over issues related to discovery and disclosure of documents in a legal proceeding. The case was heard and decided by the court, which reviewed the conduct of both parties and the implications of the discovery process on the litigation. The court was tasked with determining whether the appellants had adequately complied with discovery orders and whether Lever Co was justified in discontinuing the proceedings based on the discovery provided.

The legal issues before the court included whether the appellants had failed to comply with discovery orders that, if complied with, would have shown an absence of a significant prospect of success for Lever Co. Additionally, the court examined whether the appellants had disclosed the essence of their defence in a timely manner. The key dates in the timeline of events were the initial request for explanation on 17 September 2004, the verified discovery given by the appellants on 22 October 2004, and the decision by Lever Co to discontinue the proceedings on 6 March 2005. The court needed to assess the adequacy of the appellants' responses to Lever Co's requests for further information and the impact of these responses on the progression of the case.

The court found that the appellants had provided sufficient explanation and documentation by 10 November 2004, and if Lever Co's decision to discontinue was based solely on the information provided by that date, notice of discontinuance should have been given. However, Lever Co's decision to discontinue was made on 6 March 2005, which the court determined was not the fault of the appellants. Consequently, the appellants should not be deprived of their costs for the period following 10 November 2004, and Lever Co should bear the costs from that date onwards.

The court allowed the appeal in part, varying the costs orders to reflect that the appellants should pay Lever Co’s costs from 18 September 2004 until 10 November 2004, and Lever Co should pay the appellants' costs from 11 November 2004 until 7 March 2005. This decision ensured that the costs orders were adjusted to accurately reflect the parties' responsibilities and the timeline of the litigation.

Orders

Orders of the court

1. The appeal be allowed in part.

2. Order 3 of the orders made on 21 March 2005 be varied to read:

The first, second and third respondents pay to the applicant its costs of the application made on 13 October 2003 as amended on 26 October 2004 from 18 September 2004 until 10 November 2004.

3. Order 4 of the orders made on 21 March 2005 be set aside and the following order be substituted for it:

The applicant pay the costs of the first, second and third respondents from 11 November 2004 to 7 March 2005.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

His Honour appears to have misapprehended the relevant facts. Those facts cast a very different light on the conduct of the appellants and of Lever Co. The appellants should not be deprived of their costs for this period or ordered to pay Lever Co’s costs. Lever Co should pay the appellants’ costs for the period 10 November 2004 until the hearing date of 7 March 2005.CONCLUSION No sufficient reason has been established to interfere with the costs orders related to the discovery that should have been given by the appellants. We would not interfere with the order that the appellants pay Lever Co’s costs from 18 September 2004 until 10 November 2004. By 10 November 2004, Lever Co had sufficient explanation and documentation from the appellants. If the decision to discontinue were based on those factors alone, notice of discontinuance should then have been given. The fact that the decision was not made by Lever Co until 6 March 2005 is not the fault of the appellants. The appellants should not be deprived of the costs to which they would normally be entitled for the period following 10 November 2004. From that date, Lever Co should pay the appellants’ costs.

Ratio Decidendi

Legal Principle Established

The appellants responded to Ms Hemmerling’s affidavit by asserting that the peak reports were not referred to in the order for discovery, as “traces” is a term to describe chromatograms. Detail was then provided in a summary form of the reason for the non-provision of peak reports. Basically it was said either that a paper copy of the peak report was not in existence at the time of discovery or that the original had been seized and the copy in Taste Master’s possession had been overlooked. The failure to discover certain chromatograms was said to be because of “inadvertence”.consideration The contentions before the primary judge were, first, that the appellants failed to comply with orders for discovery which, if complied with, would have disclosed to Lever Co an absence of a significant prospect of success. Secondly, it was alleged that the essence of the defence was not disclosed until belatedly and that Lever Co had proceeded when it would not have done so. The key dates are:·17 September 2004: letter sent from Batt seeking explanation·22 October 2004: verified discovery given by the appellants·26 October 2004: the preliminary discovery process ended and Lever Co indicated its intention to proceed against the appellants. Pleadings and evidence were filed by Lever Co.·10 November 2004: Mr Maniotis’ first affidavit in answer to an application for further interlocutory relief·12 November 2004: Lever Co presses for trial·6 December 2004: access granted to the Brett Lodge hard drive to Lever Co’s solicitors·23 December 2004: Mr Lever permitted to inspect confidential documents·28 January 2005: Lever Co provided with Kendrick report·1 February 2005: Mr Maniotis’ further affidavit·8 February 2005: Lever Co granted access to Brett Lodge hard drives·6 March 2005: Lever Co advises that it is not to proceed·7 March 2005: hearing to commenceThe Brett Lodge hard drives The appellants’ hard drives were seized in October 2003 and copied by Mr Brett Lodge. It was not until mid 2004 that Lever Co first sought access to the Brett Lodge hard drives. No complaint is made about the time taken for the grant of access to that material on 6 December to the solicitors and on 8 February to Lever Co. Much of the time was taken by concerns of confidentiality. It is not suggested that the appellants acted with any impropriety in relation to this delay.The peak reports and discovery Lever Co asserts that the peak reports for the fragrances were not discovered. The traces and the peak reports each represent part of the GCMS data file that would exist if matching had taken place. In the categories for pre-trial discovery, Lever Co did not specify peak reports but did specify traces. The traces were discovered. It was accepted that Lever Co received trace reports for 27 of the fragrances. Trace reports do not encompass peak reports. They are different. They were not asked for in the extensive list of material sought by Lever Co. The position of the appellants, therefore, was that they had complied with the orders. However, the question is whether that was sufficient in the circumstances of this case.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 63 OF 2005

BETWEEN:	CON MANIOTIS FIRST APPELLANT TASTE MASTER PTY LTD (ACN 066 595 944) SECOND APPELLANT ANDREW FOTHERINGHAM THIRD APPELLANT BRETT COPPING FOURTH APPELLANT
AND:	J H LEVER & CO PTY LTD (ACN 008 220 666) RESPONDENT
JUDGE:	FINN, EMMETT AND BENNETT JJ
DATE OF ORDER:	17 FEBRUARY 2006
WHERE MADE:	MELBOURNE (HEARD IN ADELAIDE)

JUDGE:	FINN, EMMETT AND BENNETT JJ
DATE:	17 FEBRUARY 2006
PLACE:	MELBOURNE (HEARD IN ADELAIDE)