PRACTICE AND PROCEDURE – application for leave to discontinue proceedings – conditional terms on grant of leave – no evidence of reasons for discontinuance provided – discontinuing party purported to have costs award arising from interlocutory determination of separate question – conditional term imposed - whether any order as to costs appropriate in circumstances
JAMES JOSEPH O'NEILL v ARNOLD MANN ACT G15 of 1994, ACT G29 of 1994
FINN J
29 NOVEMBER 2000
SYDNEY (HEARD IN CANBERRA)
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
ACT G15 OF 1994 ACT G29 OF 1994
BETWEEN:
JAMES JOSEPH O'NEILL APPLICANT
AND:
ARNOLD MANN RESPONDENT
JUDGE:
FINN J
DATE OF ORDER:
29 NOVEMBER 2000
WHERE MADE:
SYDNEY (HEARD IN CANBERRA)
THE COURT ORDERS THAT:
On the applicant undertaking not to take steps to have taxed the costs orders of the Full Court in ACT G29 of 1994, leave is given to discontinue this proceeding.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
ACT G15 OF 1994 ACT G29 OF 1994
BETWEEN:
JAMES JOSEPH O'NEILL APPLICANT
AND:
ARNOLD MANN RESPONDENT
JUDGE:
FINN J
DATE:
29 NOVEMBER 2000
PLACE:
SYDNEY (HEARD IN CANBERRA)
REASONS FOR JUDGMENT
Though in form an application for leave to discontinue a defamation proceeding of over eleven years standing the present matter is in substance one about costs. The applicant, James Joseph O'Neill, had a costs order made in his favour by the Full…
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
AGLC
O'Neill v Mann [2000] FCA 1680
Case
[2000] FCA 1680
Decision Date
CaseChat Overview and Summary
In O'Neill v Mann, the applicant, James Joseph O'Neill, sought leave to discontinue a defamation proceeding that had been ongoing for over eleven years against Arnold Mann. The primary dispute was whether O'Neill should be allowed to discontinue the case without reason and still benefit from a previous costs order awarded in his favor by the Full Court. The case reached the court on the question of whether O'Neill should be permitted to enjoy the dual advantages of discontinuing the case without justification and retaining the benefits of his costs award. This issue arose because O'Neill had initiated the defamation action in November 1989, and the matter was cross-vested to the Federal Court in February 1994. O'Neill's case was dismissed on constitutional grounds, and he had sought to discontinue the proceedings without the necessary court leave.
The legal issues centered around the interpretation and application of the Federal Court Rules, specifically Order 22 regarding discontinuance and Order 62 concerning costs. The court had to determine whether O'Neill should be granted leave to discontinue the case and, if so, the appropriate conditions under which such leave should be granted. The central question was whether O'Neill should be allowed to discontinue the case and still retain the costs awarded to him by the Full Court. The court examined whether it was appropriate to grant O'Neill leave to discontinue the proceeding without imposing conditions that would ensure fairness to the respondent. The court also had to consider the precedent set by previous cases, such as Covell Matthews & Partners v French Wools Ltd, which provided guidelines on the exercise of discretion in granting leave to discontinue.
The court concluded that, while it was within its discretion to grant O'Neill leave to discontinue the proceeding, it was necessary to impose conditions to ensure fairness to the respondent. The court ruled that O'Neill should not be permitted to have the costs order taxed without first agreeing not to take steps to enforce it. Consequently, leave was granted to O'Neill to discontinue the proceeding on the condition that he did not seek to have the costs orders taxed. This decision balanced the interests of both parties, ensuring that neither would be unjustly disadvantaged while allowing O'Neill to discontinue the case.
Orders
Orders of the court
On the applicant undertaking not to take steps to have taxed the costs orders of the Full Court in ACT G29 of 1994, leave is given to discontinue this proceeding.
Background
Background to the litigation
Though in form an application for leave to discontinue a defamation proceeding of over eleven years standing the present matter is in substance one about costs. The applicant, James Joseph O'Neill, had a costs order made in his favour by the Full Court of this Court against the respondent, Arnold Mann, in an interlocutory hearing in this proceeding on a preliminary question of law: O'Neill v Mann (1994) 54 FCR 212. No order has, as yet, been made for the taxation of those costs: see Federal Court Rules O62 r 3(3) ("the Rules"). The substantial issue between the parties is whether Mr O'Neill should enjoy the dual advantages of discontinuing for no given reason a proceeding he initiated and of being permitted to enjoy the benefits of his costs award.Factual Background In November 1989 Mr O'Neill commenced a defamation action against Dr Mann. Dr Mann, a medical practitioner, had been a defendant in two cases that had come before Mr O'Neill in his then capacity as a Special Magistrate of the Australian Capital Territory (ACT). The alleged defamation related to several letters written by Dr Mann to public officials that reflected on Mr O'Neill's competence. The Supreme Court proceeding was cross-vested to this Court by consent on 18 February 1994 under the provisions of s 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth). In O'Neill v Mann [2000] FCA 1180 I held that there was no constitutional impediment to this Court's jurisdiction to entertain that matter. In the defamation action Dr Mann raised defences both of absolute and of qualified privilege. Whether the former of these was available was tried by Heerey J as a separate question, seemingly, by consent. It was decided favourably to Dr Mann: O'Neill v Mann (1994) 49 FCR 370. The Full Court by majority reversed that decision in O'Neill v Mann (1994) 54 FCR 212. It ordered that the absolute privilege plea be struck out and, of present significance, that Dr Mann pay the costs of the appeal and Mr O'Neill's costs of the separate question at first instance. Dr Mann appealed to the High Court against these orders. By a majority (4:1), the appeal was disallowed: Mann v O'Neill (1997) 191 CLR 204. On 5 February 1998 Mr O'Neill through his solicitors purported to discontinue the proceeding by filing a notice to that effect in the ACT District Registry of the Court. The notice was ineffective, the required leave of the Court not having been obtained: O 22 r 2 of the Rules. Nonetheless Mr O'Neill's solicitors proceeded on the assumption that it had achieved its object and on 15 December 1998 filed a bill of costs for taxation in respect of the Full Court's costs order to which I have referred, again without the required order of the Court: O 62 r 3(3) of the Rules. That action spawned further litigation between the parties. Dr Mann challenged on constitutional grounds the jurisdiction of this Court to entertain the cross-vested defamation action. He was unsuccessful: O'Neill v Mann [2000] FCA 1180. It was that proceeding that brought to light the ineffective notice to discontinue.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Mr O'Neill's legal representatives foreshadowed that if he was successful in resisting the constitutional challenge, he would seek the leave of the Court to the discontinuance of the defamation proceeding. Though no motion to that effect has been filed and no evidence put on to support the grant of leave, the parties have proceeded on the assumption, as have I, that the present hearing was for such leave.Submissions and Conclusions Put shortly, the position taken by Mr O'Neill is that he concedes he should pay Dr Mann's costs thrown away by reason of the discontinuance. That concession, though, is without prejudice to Mr O'Neill's entitlement to seek the benefit of the Full Court's costs award. Dr Mann, while wishing to have the proceeding discontinued, contends that the price of it should be that each party should bear his own costs including the costs of the hearing of the preliminary question. Before expressing my own view on the matter I would make the following preliminary observations. (1) Order 22 r 2 of the Rules specifies the circumstances in which a party making a claim for relief may discontinue the whole or any part of that claim (a) without the leave of the Court or the consent of any other party; (b) with the consent of any or all of the parties; and (c) with the leave of the Court. Subject to a qualification I will note below, where the leave of the Court is sought:"the court will, normally, at any rate, allow a plaintiff to discontinue if he wants to, provided no injustice will be caused to the defendant. It is not desirable that a plaintiff should be compelled to litigate against his will. The court should therefore grant leave, if it can, without injustice to the defendant, but in doing so should be careful to see that the defendant is not deprived of some advantage which he has already gained in the litigation and should be ready to grant him adequate protection to ensure that any advantage he has gained is preserved": Covell Matthews & Partners v French Wools Ltd [1977] 1 WLR 876 at 879. The qualification is that inability completely to protect a respondent will not in all circumstances result in leave being refused. The matter remains one for the exercise of the Court's discretion in each case: SCI Operations Pty Ltd v Trade Practices Commission (1984) 53 ALR 283. The common device employed to protect a respondent is the imposition of terms on an applicant as a condition of the grant of leave: see eg Young, Austen & Young Ltd v British Medical Association [1977] 1 WLR 881. Those terms may be so onerous that an applicant for leave may not wish to accept them: Covell Matthews & Partners v French Wools Ltd [1978] 1 WLR 1477 at 1485. (2) In relation to the incidence of costs on discontinuance, in the first two of the three categories referred to above (ie discontinuance without leave or consent and discontinuance with consent), it has been held that, unless the Court otherwise orders, the discontinuing party is liable to pay the costs occasioned by the discontinued claim of the person(s) against whom that claim was made and which were incurred before service of the notice of discontinuance: see Ahmed v Minister for Immigration and Multicultural Affairs [2000] FCA 1436. This conclusion is a consequence of the combined effect of O 22 rr 2 and 3 and O 62 r 26(1) of the Rules. The costs consequences to a discontinuing party where leave is required and granted is somewhat more complex. Unlike with the previous two categories, the Rules do not provide expressly for the incidence of costs on discontinuance with leave, the Court's power to award costs being that general one provided by s 43(1) of the Federal Court of Australia Act 1976 (Cth) and O 62 r 3(1) of the Rules. It is a discretionary power to be exercised judicially: Mineralogy Pty Ltd v National Native Title Tribunal (Full Court of the Federal Court, 23 December 1998, unreported).