Ralkon Agricultural Company Pty Ltd v Aboriginal Development Commission

[1986] FCA 181

Re: RALKON AGRICULTURAL COMPANY PTY. LIMITED
And: ABORIGINAL DEVELOPMENT COMMISSION and ANOTHER
No. SA G 50 of 1981
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Northrop J.

CATCHWORDS

Practice and Procedure - motion to stay execution of an order for costs pending review - whether serious issue to be tried - whether in all the circumstances it is fair and just that a stay should be granted.

Federal Court of Australia Rules; 0.37, 0.52, 0.62

Fat-Sel Pty. Ltd. v. Brambles Holdings Ltd. (1985) 61 ALR 536

Sundell v. Queensland Housing Commission (1954) 28 ALJ 296

HEARING

ADELAIDE

#DATE 15:4:1986

ORDER

Federal Court of Australia Rules; 0.37, 0.52, 0.62 Registrar on 11 April 1986 that the applicant, Ralkon Agricultural Company Pty. Limited, do pay to the respondent, Aboriginal Development Commission, the sum of $100,579.45 be stayed until the hearing and determination of two of the motions herein, notice of which was given by Ralkon Agricultural Company Pty. Limited on 9 April 1986, or until further today.

Order 1 is conditional upon Ralkon Agricultural Company Pty. Limited paying to the Aboriginal Development Commission the sum of $30,000 on account of the order for costs by 4.00 p.m. on Friday, 18 April 1986 with the intent that if that sum is not so paid by that time, order 1 herein lapses.

The costs of the parties on the motion for interlocutory orders be their costs in the motions pending before the Court.

Liberty to either party to apply on 24 hours notice.

JUDGE1

On 29 February 1984 in matter S.A. No. G 50 of 1981 the Court dismissed an application in which the applicant, which I will call "Ralkon", sought a judicial review of a decision made by the respondent, which I will call "the Commission". In dismissing the application, the Court ordered Ralkon to pay the Commission's costs. On 14 December 1984, a Full Court dismissed an appeal from the orders made on 29 February 1984 with costs.

1. Pursuant to O.62 of the Rules of Court, the Commission sought a taxation of the costs awarded to it by the judgment of 29 February 1986. On 10 January 1986, the taxing officer allowed those costs in the sum of $103,323.75. Pursuant to O.62 r.42, Ralkon applied to the taxing officer to reconsider his decision. On 27 March 1986, the taxing officer announced his decision on the reconsideration. Pursuant to O.62 r.43, he gave his certificate in the sum of $100,597.45. At the same time he published his reasons for decision on reconsideration.

2. On 9 April 1986, Ralkon, by two separate motions, gave notice that it would move the Court for certain orders. By one notice, Ralkon is seeking two substantive orders, namely:-
   
   

1. that the Court declare that the certificate given by the taxing officer on 27 March 1986 is invalid and,

2. that pursuant to O.37 r.10, the order for costs be stayed until further order.

By the other notice, Ralkon is seeking one substantive order, namely, that pursuant to O.62 r.44, the Court review the decision of the taxing officer on reconsideration. On a review under that rule the Court exercises all the powers and discretions of the taxing officer in relation to the subject matter of the review. The motions for the declaration of invalidity and for review cannot be heard by the Court until 1 May 1986.

1. On 11 April 1986, pursuant to O.62 r.45, the taxing officer drew up and signed an order in favour of the Commission and entered that order. Under that order, Ralkon is ordered to pay to the Commission the sum of $100,597.45. It should be noted that under sub-rule 45(4), interest is payable by Ralkon on that sum from 11 April 1986 until paid.

2. The matter presently before the Court is the motion that the order for payment for costs be stayed until further order. Ralkon relies upon O.37 r.10 which provides that the Court may stay execution of an order. During the course of submissions there was some suggestion that the motion for review of the decision of the taxing officer should be treated as an appeal so that O.52 r.17 applied. There is no substance in that suggestion since, of necessity, the review is in the original jurisdiction of the Court. I am satisfied that the Court has power under O.37 r.10 to make an order staying the execution of the order of the taxing officer pending the hearing and determination of the motions by Ralkon relating to the declaration of invalidity and the review of the decision of the taxing officer.

3. The wording of O.52 sub-rule 17(1) is to be contrasted with the wording of O.37 r.10. That sub-rule reads:-
   
   

"17. (1) An appeal to the Court shall not-

(a) operate as a stay of execution or of proceedings under the judgment appealed from; ...

except so far as the Court or a Judge or the court below may direct."

That sub-rule makes it clear that an appeal of itself does not operate as a stay. Under that sub-rule the Court normally does not make an order staying the order appealed from unless there are special reasons for so doing. In substance, that means that a stay order is not made normally unless in all the circumstances it is fair and just as between the parties that a stay should be made.

1. Order 37 r.10 is in a different form and there is no express prima facie position. That rule provides as follows:-
   
   

"10. The Court may stay execution of a judgment or order."

1. In relation to the present matter before the Court, I proceed on the basis that an order is in existence - an order which requires Ralkon to pay to the Commission costs which have been fixed at an amount of just over $100,000. Having regard to the provisions of O.62 relating to reconsideration of a taxation, I am prepared to act on the basis that prima facie the decision of the taxing master is correct.

2. There is a lot of evidence before the Court relating to aspects of the dispute between Ralkon and the Commission in relation to the payment, or rather non-payment, of costs. Some of those aspects are set out in reasons for judgment given by Fisher J. in relation to an interlocutory matter in proceedings S.A. No. G 50 of 1981 on 7 March 1986. The facts referred to therein are noted. In addition, a large number of affidavits have been filed and a large number of documents have been exhibited to those affidavits. The matter presently before the Court is of an interlocutory nature and in those circumstances it is undesirable that I express any concluded or final opinion on the factual matters giving rise to the motions pending before the Court and also in relation to matters of law which are relevant to the determination of the interlocutory matter presently before the Court.

3. From all material before the Court, I am satisfied, for the purposes of the interlocutory order sought, that the assets of Ralkon exceed its liabilities and thus in the long term, the Commission would be able to recover its costs of just over $100,000 together with interest thereon from the assets of Ralkon if it is forced to execute the order obtained by it. The main assets of Ralkon comprise some 1900 head of cattle and that in prime condition and as fat cattle they are worth some $260 per head if sold under good conditions. The cattle comprise heifers and steers. From the point of view of Ralkon's business, difficulties would arise if a sale of heifers was forced upon Ralkon but there would be less damage if a forced sale of steers took place. Nevertheless, any forced sale would be to the financial disadvantage of Ralkon and in this regard any sale is further complicated by the existence of a stock mortgage over cattle in favour of another creditor and the existence of other securities given by Ralkon in relation to a third creditor.

4. Ralkon has paid some $10,000 on account of the costs awarded in favour of the Commission. Ralkon concedes that on any view it should pay another $30,000 by way of costs. It has sold cattle and I was informed from the bar table this morning that a further amount of $28,000 can be paid on account of costs in the very near future. That would leave a further sum of $2,000 still owing in relation to the amount of costs which are not in dispute. There is no reason why it should not pay that $40,000. Ralkon is disputing the decision for costs insofar as the remaining $60,000 is concerned. Ralkon also made reference of claims which it says it would be able to set off against the order for costs. I disregard entirely that contention. The amounts are not quantified and there are many unquantified claims for costs remaining between the parties including the Commission's costs of the appeal by Ralkon. Ralkon claims further that the sale of cattle is made more difficult by the existence of the stock mortgage and other security given by Ralkon to the bank and that sales of cattle depend upon actions taken by the creditor or rather creditors of Ralkon. I accept that contention but as against that, the Commission, having full knowledge of these matters, would need to consider its position with respect to secured creditors generally if it attempted to execute the order for costs. Finally, the hearing of the motions will take place in the not too distant future and interest is accruing in favour of the Commission on amounts of costs unpaid.

5. In opposing the making of the interlocutory order, counsel for the Commission relys upon the existence of the taxing officer's order. They referred to the fact that the major item of costs being disputed by Ralkon relates to items allowed on the basis of perusing documents on a folio basis and not on a time basis. They referred to and relied upon views expressed by Beaumont J. in Fat-Sel Pty. Ltd. v. Brambles Holdings Ltd. (1985) 61 ALR 536. The other main items in dispute relate to counsel's fees and in this regard counsel for the Commission relied upon views expressed by Webb J. in Sundell v. Queensland Housing Commission (1954) 28 ALJ 296. Counsel further contended that Ralkon had shown no basis for suggesting that the decision of the taxing master was invalid.

6. There is much force in those submissions by counsel for the Commission. In reality, they are directed to the issue of whether there is a serious issue to be tried with respect to the motions for the declaration and for the review of the decision of a taxing officer. In my opinion, in the present case, the Court should proceed on the basis that the decision of the taxing officer is correct and that Ralkon must as the first step in its argument satisfy the Court that there is a serious issue to be tried as a result of the orders arising in the orders it is seeking. To some extent the present matter is different from a motion for interlocutory injunctions, nevertheless, in my opinion, similar principles should be applied. It is very difficult to determine in this interlocutory matter the strength or weakness of the claims made by Ralkon. Nothing has been put before me to suggest that there is a serious issue arising in relation to the invalidity of the decision of the taxing officer. Accordingly, I proceed on the basis that there is no serious issue arising from that motion. Nevertheless, the claim for interlocutory relief extends to cover the other motion in relation to the review of the taxing officer's decision.

7. On that review matter different considerations apply. I have had regard to what was said in the Fat-Sel Pty. Ltd. case and in the Sundell case. Each was different from the present case. Here the Court is considering the review and in that consideration is exercising the powers of the taxing officer. Prima facie the Court must exercise its discretion concerning the quantum of the items of cost in dispute. In this regard counsel for Ralkon has drawn attention to the provisions of O.62 r.19, a rule which was not relevant to the decision of Beaumont J. in the Fat-Sel Pty. Ltd. case, see p.538 of that report.

8. Further, it is noted that a footnote to the Fat-Sel Pty. Ltd. case reads:-
   
   

"His Honour remarked: 'It should be noted that the Rules of Court have recently been amended so as to give the taxing officer a discretion in a manner such as the present, but the amendment has not yet come into operation.' ".

Counsel has not been able to assist the Court as to the position of the Rules that were in existence at the time the order for costs was made in 1984 and what they are today. It is not clear what is the relevant rule having application to the present taxation of costs. Counsels fees will be in the discretion of the Court. In all the circumstances I am satisfied that an issue does arise on the motion in relation to the review of the decision of the taxing officer. But not much weight should be on that issue in favour of Ralkon. Nevertheless, there is an issue to be tried on the motion and the Court must then consider the question of prejudice.

1. Accordingly, this interlocutory matter must be determined on a consideration of the conflicting views of what is fair and just as between Ralkon and the Commission. To some extent this is similar to the balance of convenience consideration in interlocutory injunction motions.

2. Although not expressly stated, implicit in the submissions of counsel for the Commission, is the contention that Ralkon is engaged in delaying tactics without merit in its claim for the interlocutory relief. There is much force in that suggestion. The order for costs was made over two years ago. An appeal failed some sixteen months ago. The taxation of the costs proceeded at a leisurely pace, but no blame can be allocated for that delay. Proceedings have moved more speedily since the costs were allowed at about $103,000 in January of this year. I am satisfied that Ralkon could have made provision for payment of those costs without unduly prejudicing its business activities. It did not make such provision.

3. As against the prejudice to Ralkon if the interlocutory order is not made, it should be noted that the Commission has an order for costs which have been quantified after due process. It is entitled to interest on amounts unpaid. If the costs are paid, and in due course Ralkon is successful in its motion, I am satisfied that the Commission will be able to pay any excess of costs it has received, but in law I know of no basis upon which Ralkon would be able to recover interest on moneys paid and which are to be refunded.

4. To overcome this problem, counsel on behalf of the Commission, have given or offered to give, two undertakings to the Court as follows:-
   
   

1. The Commission undertakes by its counsel that in the event that on review the amount of cost is reduced to below the amount recovered by the Commission from Ralkon to the date of review judgment, the Commission will refund the difference to Ralkon within seven days of the review judgment; and

2. that in the event the Commission is required to refund any moneys pursuant to its first undertaking, it will, when refunding such moneys, also pay to Ralkon interest on the amount of such moneys at the rate provided in O.62 r.45 from the date of receipt to the date of refund.

Those undertakings would overcome the problems which I have just mentioned. It should be remembered that the motions are due to be heard on 1 May 1986. There is no evidence that the Commission would suffer any hardships by the non-payment of the costs or the balance of the costs, namely $60,000, since it is entitled to interest on the amounts unpaid.

1. On the other hand, although I find that Ralkon would be in a position to pay those moneys, that payment could adversely effect its business operations and if in due course the amount of the costs are not reduced it will be able to pay the balance of costs unpaid and must pay interest on that amount.

2. In all the circumstances and weighing the conflicting interests of the parties, in my opinion, the interlocutory order sought should be made. Nevertheless, the order should be made subject to the condition that Ralkon pay the sum of $30,000 on account of costs by 4.00 p.m. on Friday, 18 April 1986. It is realised that from the sale of cattle which has taken place, an amount of $28,000 can be paid by that time, but on the submissions made on behalf of Ralkon a total amount of $30,000 should be paid, since that sum together with the $10,000 already paid represents the amount of costs which are not in dispute. If the amount of $30,000 is not paid by 4.00 p.m. on Friday, 18 April 1986, the interlocutory order, which I propose to make, will lapse and the Commission will be free to take such steps to execute the order for costs as it thinks fit. The costs of the motion for interlocutory orders should follow the result of the substantive orders sought by Ralkon in the motions presently before the Court. Accordingly, I would merely make an order that the costs of the interlocutory order be the costs of the parties in the motions before the Court.