Raffin v Modern Assets Australia Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Raffin v Modern Assets Australia Pty Ltd [2023] FCA 1130  

File number(s): VID 110 of 2021
Judgment of: MCEVOY J
Date of judgment: 21 September 2023
Catchwords: COSTS –review of Registrar’s orders that costs of interlocutory application be paid forthwith – whether costs should be paid forthwith – whether to award indemnity costs – order that costs be paid forthwith on a party and party basis
Legislation:

Federal Court of Australia Act 1976 (Cth) ss 35A(5), 43

Federal Court Rules 2011 (Cth) rr 16.21(1)(c), 40.13

Cases cited:

Axent Holdings Pty Ltd v Compusign Australia Pty Ltd (No 3) [2018] FCA 6

Chancliff Holdings Pty Ltd v Bell [1999] FCA 1783

Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225

Harris v Cigna Insurance Australia Ltd & Dickie (1995) ATPR 41-445

Martin & Anor v Commonwealth Bank of Australia (2001) 217 ALR 63; [2001] FCA 87

Orrcon Operations Pty Ltd v Capital Steel & Pipe Pty Ltd (No 2) [2008] FCA 24

Rafferty v Time 2000 West Pty Ltd (No 3) (2009) 257 ALR 503; [2009] FCA 727

Ruddock v Vadarlis (No 2) (2001) 115 FCR 229; [2001] FCA 1865

Smolle v Australia and New Zealand Banking Group Limited (No 2) [2007] FCA 1967

Walker v State of Victoria (No 2) [2011] FCA 417

Division: General Division
Registry: Victoria
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 29
Date of last submission/s: 7 July 2023
Date of hearing: Determined on the papers
Counsel for the Applicant: Mr Jeffrey Levine
Solicitor for the Applicant: Matrix Legal
Counsel for the Second Respondent: Mr D’Arcy Hope
Counsel for the Third Respondent: Ms Marian Clarkin

ORDERS

VID 110 of 2021
BETWEEN:

ALEXANDRE RAFFIN

Applicant
AND:

MODERN ASSETS AUSTRALIA PTY LTD A.C.N. 622 802 555

First Respondent

JONATHAN PETER ANTHONY ALLISON

Second Respondent

CARLO REMO SCIUBBA

Third Respondent

ORDER MADE BY:

MCEVOY J

DATE OF ORDER:

21 SEPTEMBER 2023

THE COURT ORDERS THAT:

1.The applicant pay the respondents’ costs of and incidental to the respondents’ interlocutory application dated 16 July 2021 (including the costs of the applicant’s amended review application dated 16 May 2023) forthwith on a party and party basis.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

MCEVOY J:

  1. On 15 February 2023 a Registrar of the Court heard the respondents’ interlocutory application dated 16 July 2021, by which the respondents sought an order that the applicant’s amended statement of claim dated 2 July 2021 be struck out. On 10 March 2023 the Registrar determined the application, and pursuant to r 16.21(1)(c) and (d) of the Federal Court Rules 2011 (Cth) ordered that the amended statement of claim be struck out with a right to re-plead. By paragraph 4 of her orders the Registrar also ordered that the applicant pay the respondents’ costs of and incidental to the application, such costs to be paid forthwith.

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Details
Case
[2023] FCA 1130
Decision Date

CaseChat Overview and Summary

Raffin commenced proceedings against Modern Assets Australia, seeking damages for breach of contract. The dispute arose from the interlocutory application made by Modern Assets, which resulted in the striking out of Raffin's amended statement of claim. The matter was before the Federal Court for review of the Registrar's orders, specifically regarding the payment of costs. The primary legal issue was whether the Registrar's order that costs be paid forthwith was appropriate, and if not, whether indemnity costs should be awarded to Modern Assets.

The court considered that the review application was a hearing de novo but only sought to review the costs component of the Registrar's orders, not the substantive order. The respondents did not seek indemnity costs before the Registrar. Given these circumstances, the court did not see a need to depart from the party and party costs order made by the Registrar. The court found that there was no basis to set aside the Registrar's orders or to make an alternative order sought by Raffin.

The court concluded that the costs of the interlocutory application, including the costs of Raffin's amended review application, should be paid forthwith on a party and party basis. The court's decision was based on the fact that the review application only sought to review the costs component, and there was no basis for altering the Registrar's order regarding costs.

The court made an order that Raffin pay the respondents' costs of and incidental to the interlocutory application dated 16 July 2021 (including the costs of Raffin's amended review application dated 16 May 2023) forthwith on a party and party basis. This order was consistent with the Registrar's initial decision and the court's reasoning that there was no basis to set aside or alter the original order.

Orders

Orders of the court

1. The applicant pay the respondents’ costs of and incidental to the respondents’ interlocutory application dated 16 July 2021 (including the costs of the applicant’s amended review application dated 16 May 2023) forthwith on a party and party basis.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

For the reasons that follow, I have determined that there is no occasion to set aside paragraph 4 of the Registrar’s orders dated 10 March 2023, or to make the alternative order sought by the applicant. THE RELEVANT BACKGROUND The applicant’s original statement of claim in this proceeding was dated 8 March 2021. On 25 April 2021, the respondents’ then solicitor wrote to the applicant’s solicitor explaining why the statement of claim was liable to be struck out. On 13 May 2021, the applicant’s solicitor proposed an amended statement of claim. On 19 May 2021, the respondents’ then solicitor again wrote to the applicant’s solicitor contending that the proposed amended statement of claim still did not meet the basic requirements of a pleading. On 15 June 2021, the respondents’ then solicitor again wrote to the applicant’s solicitor commenting on the deficiencies in the applicant’s proposed amended statement of claim. Despite this correspondence, the applicant’s solicitor proceeded to file the amended statement of claim on 2 July 2021. On 16 July 2021, the respondents made an application for security for costs and for the amended statement of claim filed on 2 July 2021 to be struck out. The security for costs application was listed for hearing before the strike out application. On 25 July 2022 and 31 August 2022, orders were made providing for a regime for the parties to confer with respect to the adequacy of the applicant’s amended statement of claim. It would seem that in compliance with these orders, pro bono counsel for the second respondent wrote to the applicant’s solicitor on 12 September 2022 and enquired as to the applicant’s position regarding the adequacy of its amended statement of claim. It would seem that the process put in place did not produce a further amended statement of claim. The parties thereafter filed outlines of written submissions for the interlocutory application. The interlocutory application was listed for hearing before a Registrar on 15 February 2023. On 10 March 2023 the Registrar made the orders striking out the amended statement of claim and for the applicant to pay the costs forthwith. On 24 March 2023, the applicant filed a review application together with an affidavit affirmed by his solicitor, Mr Stanarevic, which stated at [7]:My client has instructed [me] not to appeal the orders striking out the pleading, because it has been his preference to try to deal with any proper objections to the pleading. He instructs us if [he] had been made aware of all of the factors that would have been relied upon in the hearing on 15 February 2023, he would have instructed [me] to amend the pleading to deal with them. He was however deprived of that opportunity by the failure of the Second and Third Respondents to disclose all of their objections to the pleading in their outline of submissions. The respondents’ position is that Mr Stanarevic’s evidence should be rejected in circumstances where their then solicitor wrote to Mr Stanarevic in detailed terms regarding the deficiencies in the pleading on 25 April 2021, 19 May 2021, 4 June 2021 and 15 June 2021.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Although the review application is a hearing de novo, in circumstances where it seeks review only of the costs component of the Registrar’s orders and not the substantive order striking out the amended statement of claim, and the respondents did not seek indemnity costs before the Registrar, I do not consider it necessary or appropriate to depart from the party and party costs order made by the Registrar. CONCLUSION There will be an order that the respondents’ costs of and incidental to their interlocutory application (including this review application) be paid forthwith on a party and party basis.

Ratio Decidendi

Legal Principle Established

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