Perdaman CHEMICALS and Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd [No 10]
[2013] WASC 103
•18 FEBRUARY 2013
PERDAMAN CHEMICALS & FERTILISERS PTY LTD -v- THE GRIFFIN COAL MINING COMPANY PTY LTD [No 10] [2013] WASC 103
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2013] WASC 103 | |
| Case No: | CIV:1925/2011 | 18 FEBRUARY 2013 | |
| Coram: | EDELMAN J | 18/02/13 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Proceedings can be discontinued upon conditions Costs orders made | ||
| B | |||
| PDF Version |
| Parties: | PERDAMAN CHEMICALS & FERTILISERS PTY LTD THE GRIFFIN COAL MINING COMPANY PTY LTD LANCO INFRATECH LTD LANCO RESOURCES AUSTRALIA PTY LTD RUSSELL CONLEY MANOJ AGARWAL LAGADAPATI MADHUSUDHAN RAO KANDIMALLA K V NAGA PRASAD LANCO RESOURCES INTERNATIONAL PTE LTD S AMARENDRAN PERDAMAN CHEMICALS AND FERTILISERS PTY LTD RAMBAL VIKAS WALEWSKI ANDREAS |
Catchwords: | Practice and procedure Discontinuance of proceedings Conditions required before counterclaimants have leave to discontinue Appropriate order for costs of discontinuance |
Legislation: | Corporations Act 2001 (Cth) |
Case References: | Covell Matthews and Partners v French Wools Ltd [1977] 1 WLR 876 Covell Matthews and Partners v French Wools Ltd [1978] 1 WLR 1477 Heartlink v Jones [2007] WASC 254; (2007) 35 WAR 190 Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589 Visy Board Pty Ltd v Attorney-General (Cth) (1984) 2 FCR 113 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- CIV 2422 of 2011
CIV 2423 of 2011
CIV 3201 of 2011
Consolidated by orders dated 18 August 2011 & 14 November 2011
- Plaintiff
AND
THE GRIFFIN COAL MINING COMPANY PTY LTD
First Defendant
LANCO INFRATECH LTD
Second Defendant
LANCO RESOURCES AUSTRALIA PTY LTD
Third Defendant
RUSSELL CONLEY
Fourth Defendant
MANOJ AGARWAL
Fifth Defendant
LAGADAPATI MADHUSUDHAN RAO
Sixth Defendant
KANDIMALLA K V NAGA PRASAD
Seventh Defendant
LANCO RESOURCES INTERNATIONAL PTE LTD
Eighth Defendant
S AMARENDRAN
Ninth Defendant
(BY ORIGINAL ACTION)
THE GRIFFIN COAL MINING COMPANY PTY LTD
Plaintiff
AND
PERDAMAN CHEMICALS AND FERTILISERS PTY LTD
First Defendant
RAMBAL VIKAS
Second Defendant
WALEWSKI ANDREAS
Third Defendant
(BY COUNTERCLAIM)
Catchwords:
Practice and procedure - Discontinuance of proceedings - Conditions required before counterclaimants have leave to discontinue - Appropriate order for costs of discontinuance
(Page 3)
Legislation:
Corporations Act 2001 (Cth)
Result:
Proceedings can be discontinued upon conditions
Costs orders made
Category: B
Representation:
Original Action
Counsel:
Plaintiff : Mr J D Elliott SC & Mr M L Bennett
First Defendant : Mr G P Harris & Mr B D Luscombe
Second Defendant : Mr G P Harris & Mr B D Luscombe
Third Defendant : Mr G P Harris & Mr B D Luscombe
Fourth Defendant : Mr G P Harris & Mr B D Luscombe
Fifth Defendant : Mr G P Harris & Mr B D Luscombe
Sixth Defendant : Mr G P Harris & Mr B D Luscombe
Seventh Defendant : Mr G P Harris & Mr B D Luscombe
Eighth Defendant : Mr G P Harris & Mr B D Luscombe
Ninth Defendant : Mr G P Harris & Mr B D Luscombe
Solicitors:
Plaintiff : Bennett + Co
First Defendant : Clifford Chance
Second Defendant : Clifford Chance
Third Defendant : Clifford Chance
Fourth Defendant : Clifford Chance
Fifth Defendant : Clifford Chance
Sixth Defendant : Clifford Chance
Seventh Defendant : Clifford Chance
Eighth Defendant : Clifford Chance
Ninth Defendant : Clifford Chance
(Page 4)
Counterclaim
Counsel:
Plaintiff : Mr G P Harris & Mr B D Luscombe
First Defendant : Mr J D Elliott SC & Mr M L Bennett
Second Defendant : Mr S Penglis
Third Defendant : Mr S Penglis
Solicitors:
Plaintiff : Clifford Chance
First Defendant : Bennett + Co
Second Defendant : Herbert Smith Freehills
Third Defendant : Herbert Smith Freehills
Case(s) referred to in judgment(s):
Covell Matthews and Partners v French Wools Ltd [1977] 1 WLR 876
Covell Matthews and Partners v French Wools Ltd [1978] 1 WLR 1477
Heartlink v Jones [2007] WASC 254; (2007) 35 WAR 190
Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589
Visy Board Pty Ltd v Attorney-General (Cth) (1984) 2 FCR 113
(Page 5)
- EDELMAN J:
(These reasons were delivered orally immediately after the hearing. They have been edited from the transcript.)
1 This is an application by the plaintiff by counterclaim to discontinue the counterclaim. There are two issues in dispute concerning the appropriate orders upon the discontinuance.
2 The first issue in dispute is the appropriate order for costs that should be made against the first defendant by counterclaim, Perdaman. The plaintiff by counterclaim, Griffin Coal, says that the appropriate order for costs that should be made on the discontinuance is that Griffin Coal pay Perdaman's costs which are thrown away by the discontinuance of the counterclaim. Perdaman says that the appropriate order should be the same order as that which the parties agree should be made in relation to the second and third defendants by counterclaim, Messrs Rambal and Walewski. The agreed order in relation to Messrs Rambal and Walewski is that Griffin Coal pay their costs, including the costs of the application by Griffin Coal for leave to discontinue and all reserved costs to be taxed.
3 The starting point for orders following a discontinuance is that the discontinuing party should usually pay the costs of the defendants to the counterclaim. There may be some circumstances where it would be appropriate that the discontinuing party pay only the other party's costs which are thrown away by the counterclaim. One such circumstance might be where the facts that arise as a result of the counterclaim are facts which are identical or nearly identical to those which are raised in the principal proceedings.
4 In this case, although there is a common substratum of fact underlying the counterclaim and the principal claim, there are also substantially different allegations raised by the counterclaim. In particular, the allegations of sham payments and the allegations that causes of action were advanced in the principal proceedings with no reasonable basis or with knowledge of the falsity of facts upon which those causes of action were based.
5 The substantially different issues raised by those allegations as well as the serious nature of those allegations mean that in these circumstances it is appropriate that the usual costs order be made rather than an order only for costs thrown away by the counterclaim.
(Page 6)
6 The order that I make is therefore that the plaintiff by counterclaim (Griffin Coal) pay the costs of the first, second and third defendants by counterclaim, including the costs of the application by the plaintiff by counterclaim for leave to discontinue, and all reserved costs, to be taxed.
7 The second issue that arises from the application by Griffin Coal to discontinue the counterclaim concerns whether any conditions should be imposed upon the grant of leave to discontinue and, if so, what conditions should be imposed. In this regard, Messrs Rambal and Walewski seek orders as follows, with my addition of the italicised word 'First' to reflect the orders sought by Perdaman (ts 2033 - 2034):
Subject to and conditional upon the Plaintiff by Counterclaim filing an undertaking that it will not in the future bring any action in this Court, or in any other court, against the First, Second or Third Defendants by Counterclaim in respect of:
(a) any cause of action pleaded in its Counterclaim dated 7 January 2013; and/or
(b) any other cause of action with respect to any fact or matter alleged in the Counterclaim (save and except for any cause of action for abuse of process);
(c) alternatively to (b), any other cause of action with respect to any fact or matter alleged in paragraphs 190, 199, 201, 215-218, 200-221, 225-227 and 233-239 of the said Counterclaim (save and except for any cause of action for abuse of process).
8 The submissions of the parties focussed upon the decision of Martin CJ in Heartlink v Jones [2007] WASC 254; (2007) 35 WAR 190. That case concerned an application brought by originating process seeking the removal of liquidators and for the appointment of other persons as liquidators under s 503 of the Corporations Act 2001 (Cth). The order for removal was sought on nine different, although to some degree overlapping, grounds.
9 In Heartlink, the Chief Justice set out the authorities concerning the power to impose conditions or to require an undertaking as a term of the grant of leave to discontinue. At [46] his Honour quoted from the decision of Graham J in Covell Matthews and Partners v French WoolsLtd[1977] 1 WLR 876, 879 (affirmed inCovell Matthews and Partners v French WoolsLtd [1978] 1 WLR 1477):
[T]he 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
(Page 7)
- 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 it 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.
10 His Honour then referred to, and applied, the refinement of this test by Sheppard J in Visy Board Pty Ltd v Attorney-General (Cth) (1984) 2 FCR 113, 182, that where a party seeks to discontinue proceedings, the Court should lean towards granting him leave unless to do so would cause 'manifest injustice' to, or the loss of some advantage by, his opponent. The order tentatively proposed by the Chief Justice upon discontinuance of the action commenced by originating process in Heartlink included orders that Heartlink proffer an undertaking not to commence any subsequent proceedings seeking removal of the liquidators from office.
11 In the circumstances of this case, it would be manifestly unjust not to require Griffin Coal to discontinue its counterclaim without an undertaking that it would not raise any cause of action pleaded in its counterclaim against the first, second or third defendants by counterclaim other than those raised in the principal proceedings against Perdaman (the first defendant by counterclaim). This qualification 'other than in the principal proceedings' was common ground.
12 The two reasons why it would be manifestly unjust not to require such an undertaking are as follows. The first is the extent and the seriousness of the allegations described above against each of Perdaman and Messrs Rambal and Walewski. The second reason is that each of Perdaman and Messrs Rambal and Walewski are, by the discontinuance of the counterclaim, being deprived of the opportunity in these proceedings to defend themselves now against these serious allegations and deprived of the benefit of a final judgment on the cause of action. They should not be subject to the possibility of those allegations being re-agitated in later proceedings.
13 As to proposed orders (b) or (c), these seek to provide additionally for undertakings by Griffin Coal that it will not bring any action against Messrs Rambal and Walewski with respect to any fact or matter alleged in the counterclaim or in the alternative any other cause of action with respect to any fact or matter alleged in various paragraphs of the counterclaim except for any cause of action for abuse of process.
(Page 8)
14 It is not necessary to consider the extent to which the proposed orders (b) or (c), set out above, add anything to par (a). The reason why it is unnecessary to consider the extent, if at all, to which pars (b) or (c) add anything to par (a) is because I do not consider that it would be manifestly unjust to allow a discontinuance without the undertaking sought in those paragraphs. This is for two reasons.
15 First, Messrs Rambal and Walewski did not identify any other causes of action that might arise as a result with respect to any fact or matter alleged in the counterclaim which is not a 'cause of action pleaded in the counterclaim'.
16 Secondly, to the extent to which pars (b) or (c) might be concerned with relief that is based in part or affected by any fact or matter which is alleged in the counterclaim, but as to which new facts or matters might subsequently be discovered giving rise to different causes of action, then I do not consider that it would be manifestly unjust to require an undertaking not to prosecute those causes of action as a condition on the leave to discontinue. It is a different question whether or not any such new causes of action would be barred by an 'Anshun' or 'issue' estoppel (see Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589).
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