McHutchison v Western Research and Development Ltd - [2004] FCA 1522

FEDERAL COURT OF AUSTRALIA
McHutchison v Western Research and Development Ltd [2004] FCA 1522
COSTS – whether indemnity costs appropriate
PROCEDURE – whether application to strike out should be allowed
EVIDENCE – estoppel – whether argument of agency precluded by reasons previously delivered
Trade Practices Act 1974 (Cth) s 51AA
Patents Act 1990 (Cth) s 15
Commercial Arbitration Act 1985 (WA) s 4(1), 53(1)
Botany Municipal Council v Secretary, Department of the Arts, Sport, the Environment, Tourism and Territories (1992) 34 FCR 412 cited
Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 cited
Fountain Selected Meats (Sales) Pty Ltd v National Produce Merchants Ltd (1988) 81 ALR 397 cited
McHutchison v Western Research and Development Ltd [2004] FCA 419 considered
ROY NEIL McHUTCHISON v WESTERN RESEARCH AND DEVELOPMENT LTD
W208 of 2003
RD NICHOLSON J
23 NOVEMBER 2004
PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

W208 OF 2003

BETWEEN:

ROY NEIL McHUTCHISON
APPLICANT

AND:

WESTERN RESEARCH AND DEVELOPMENT LTD
RESPONDENT

JUDGE:

RD NICHOLSON J

DATE OF ORDER:

23 NOVEMBER 2004

WHERE MADE:

PERTH

THE COURT ORDERS THAT:
1.The applicant pay the costs of the respondent and the costs of Eastland Technology Australia Ltd (‘ETA’) of and occasioned by the motion to restrain solicitor dated 13 February 2004, including the costs reserved on 29 March 2004 and the costs reserved on 30 July 2004, forthwith and in the case of costs incurred by the respondent and ETA subsequent to the adjournment on 29 March 2004 of the respondents motion to restrain the applicant’s solicitor up to and including the hearing on 30 July 2004 on an indemnity basis.
2.It be declared that the reasons for judgment delivered on 8 April 2004 do not give rise to an issue estoppel in relation to the question of whether ETA entered into the consultancy agreement dated 7 September 2001 as agent for its subsidiaries including the respondent.
3.The statement of claim dated 10 November 2003 and paragraphs 7, 17(b), 22A and 34 – 40 of the proposed amended statement of claim be struck out.
4.The applicant have leave to file and serve an amended statement of claim and any amended application within 28 days, failing which the action be dismissed.
5.C M McHutchison Pty Ltd (ACN 082 655 196) be joined as an applicant.
6.The respondent’s motion dated 1 July 2004 be otherwise dismissed.
7.The applicant pay the respondent’s costs of the motion dated 1 July 2004, including the costs of the special appointment on 10 September 2004.

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

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

W208 OF 2003

BETWEEN:

ROY NEIL McHUTCHISON
APPLICANT

AND:

WESTERN RESEARCH AND DEVELOPMENT LTD
RESPONDENT

JUDGE:

RD NICHOLSON J

DATE:

23 NOVEMBER 2004

PLACE:

PERTH

REASONS FOR JUDGMENT

These reasons address three interlocutory issues, namely an application to strike out the statement of claim, an application for a declaration in relation to an…

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: [2004] FCA 1522
Decision Date: 23 NOVEMBER 2004

CaseChat Overview and Summary

In the case of McHutchison v Western Research and Development Ltd, the court was presented with several legal issues, primarily concerning costs, estoppel, and the proper procedure for amending pleadings. The applicant sought various orders, including an injunction to restrain a solicitor, a declaration regarding estoppel, and permission to amend the statement of claim. The respondent, on the other hand, argued for the payment of costs and challenged the applicant's legal standing.

The court had to determine whether the applicant should be required to pay the respondent's costs, stemming from a motion to restrain the applicant's solicitor, and whether the previous judgment could estop the respondent from arguing that the consultancy agreement was entered into by the solicitor as an agent for the respondent's subsidiaries. Additionally, the court needed to address the procedural matter of allowing the applicant to amend its statement of claim.

The court ruled that the applicant should indeed pay the respondent's costs, both pre-adjournment and post-adjournment, on an indemnity basis. It concluded that the earlier judgment did not give rise to an issue estoppel regarding the agency argument, as the specific issue had not been clearly addressed or finally determined in the previous proceedings. Furthermore, the court ordered that certain parts of the original and proposed amended statements of claim be struck out, granted leave for the applicant to file an amended statement of claim, and required the inclusion of a specific company as an applicant. The motion to restrain the solicitor was dismissed in all other respects.

In summary, the court made several orders, including the payment of costs, the issuance of a declaration regarding estoppel, the striking out of certain parts of the statement of claim, the allowance of an amended statement of claim, the joining of a specific company as an applicant, and the dismissal of the motion to restrain the solicitor in all other respects.

Orders

Orders of the court

1. The applicant pay the costs of the respondent and the costs of Eastland Technology Australia Ltd (‘ETA’) of and occasioned by the motion to restrain solicitor dated 13 February 2004, including the costs reserved on 29 March 2004 and the costs reserved on 30 July 2004, forthwith and in the case of costs incurred by the respondent and ETA subsequent to the adjournment on 29 March 2004 of the respondents motion to restrain the applicant’s solicitor up to and including the hearing on 30 July 2004 on an indemnity basis.

2. It be declared that the reasons for judgment delivered on 8 April 2004 do not give rise to an issue estoppel in relation to the question of whether ETA entered into the consultancy agreement dated 7 September 2001 as agent for its subsidiaries including the respondent.

3. The statement of claim dated 10 November 2003 and paragraphs 7, 17(b), 22A and 34 – 40 of the proposed amended statement of claim be struck out.

4. The applicant have leave to file and serve an amended statement of claim and any amended application within 28 days, failing which the action be dismissed.

5. C M McHutchison Pty Ltd (ACN 082 655 196) be joined as an applicant.

6. The respondent’s motion dated 1 July 2004 be otherwise dismissed.

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

The period of time of likely deprivation of costs appears likely to be lengthy. In those circumstances I agree with the respondent’s submission that the costs here in issue should be paid forthwith. CONCLUSION For the above reasons I consider that the Court should make the orders attached to these reasons.

Ratio Decidendi

Legal Principle Established

Not all the references to C M McHutchison Pty Ltd have been struck out. It follows that in the event the action is to proceed on the present or a further pleading, that company should be joined as an applicant.APPLICATION FOR A DECLARATION RELATING TO ESTOPPEL The respondent also seeks a declaration that judgement given on 8 April 2004 does not give rise to an issue estoppel in relation to the question of whether ETA entered into the consultancy agreement dated 7 September 2001 as agent for its subsidiaries, including the respondent. Examination of the reasons for judgment shows that the relevant issue there decided was that the respondent had not discharged the onus of establishing that it was ‘another party to the arbitration agreement’ within s 53(1) of the Commercial Arbitration Act so that the preconditions for the application of the power to stay court proceedings were not met. The issues addressed to reach that position were contentions for the respondent that it was encompassed within the description ‘and its subsidiary companies’ used in the consultancy agreement with respect to ETA; the question whether a resolution entered into by ETA to enter into the consultancy agreement bound its subsidiaries and the definition of ‘party’ in s 4(1) of the Commercial Arbitration Act. In those circumstances I do not consider it can be concluded that the issue decided by the Court in those reasons in any way estops argument on the proposed agency argument. That argument was neither clearly addressed nor finally determined. The respondent is therefore entitled to the declaration sought.COSTS ON MOTION TO RESTRAIN SOLICITOR By a motion dated 13 February 2004 (‘the restraint application’) the respondent sought orders restraining Mr Ashdown from acting for the applicant and restraining the applicant from retaining him. By a facsimile dated 26 March 2004 Mr Ashdown conceded that it was inappropriate for him so to act (‘the solicitor’s concession’). Therefore, at a special appointment on 29 March 2004 the motion was adjourned with costs reserved so that it could be disposed of by agreement. On 22 April 2004 new solicitors advised of their appointment for the applicant and indicated that they were instructed not to consent to orders which included a disposition of the motion to restrain. Consequently, by a motion dated 1 July 2004 the respondent sought to have the restraint application re-listed. At a directions hearing on 30 July 2004 as the consequence of undertakings then before the Court, that application was dismissed with the issue of costs reserved to a special appointment. The respondent seeks an order that the applicant pay the costs of the respondent and of ETA of and occasioned by the motion to restrain the solicitor, including the costs reserved on 29 March 2004 and the costs reserved on 30 July 2004, forthwith and on an indemnity basis. Costs sought are described as the ‘pre-adjournment costs’ and ‘post-adjournment costs’. The former are the costs incurred by the respondent and ETA between the time the applicant should reasonably have notified the respondent of the concession and adjournment of the restraint application, including the half an hour of the special appointment which was attributable to the restraint application. The latter are the costs incurred by the respondent and ETA subsequent to the adjournment of the restraint application up to and including the hearing on 30 July 2004.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	W208 OF 2003

BETWEEN:	ROY NEIL McHUTCHISON APPLICANT
AND:	WESTERN RESEARCH AND DEVELOPMENT LTD RESPONDENT
JUDGE:	RD NICHOLSON J
DATE OF ORDER:	23 NOVEMBER 2004
WHERE MADE:	PERTH

JUDGE:	RD NICHOLSON J
DATE:	23 NOVEMBER 2004
PLACE:	PERTH