Scott v Kennedy

[2025] NSWSC 386

Supreme Court

New South Wales

Medium Neutral Citation:

Scott v Kennedy [2025] NSWSC 386

Hearing dates:

8 April 2025

Date of orders:

23 April 2025

Decision date:

23 April 2025

Jurisdiction:

Equity - Applications List

Before:

Brereton J

Decision:

See [68]-[71]

Catchwords:

CIVIL PROCEDURE – Discontinuance of proceedings – proper construction of UCPR r 12.1 - where there are co-plaintiffs who are separately represented in the proceedings – where one co-plaintiff seeks to discontinue proceedings – whether all plaintiffs are active parties in the proceedings pursuant to UCPR r 12.1 – whether UCPR r 12.1 permits a co-plaintiff to file a notice of discontinuance only in respect of their claims – whether notice of discontinuance filed by the second plaintiff is void – whether the Court should make orders dismissing the claims made by the second plaintiff – whether defendants consent to orders dismissing the second plaintiff’s claims.

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Interpretation Act 1987 (NSW)

Legal Profession Uniform Law Application Act 2014 (NSW)

Uniform Civil Procedure Rules 2005

Uniform Civil Procedure Rules (Amendment No 11) 2006

Uniform Civil Procedure Rules (Amendment No 4) 2005

Cases Cited:

Castanho v Brown and Root (UK) Ltd [1981] AC 557; [1981] 1 All ER 143

John Herbert McLachlan v Christopher Stephen de Vere [2006] NSWSC 959

King v Sunday Pictorial Newspapers Ltd (1924) 41 TLR 229

Singh v Secretary, Department of Family and Community Services [2001] FCA 1281

Texts Cited:

Ritchie’s Uniform Civil Procedure NSW

Category:

Consequential orders

Parties:

Benjamin Scott (First Plaintiff)
Kentel Australasia Pty Ltd (Second Plaintiff)
James Kennedy (First Defendant)
Kencom Pty Ltd (Second Defendant)
Kentel Pty Ltd (Third Defendant)
Kencom Entertainment Pty Ltd (Fourth Defendant)

Representation:

Counsel:
R Scruby SC, J Mack (First Plaintiff)
D J Walter (Solicitor) (Second Plaintiff)
C Bova SC, H Rogers (Defendants)

Solicitors:
XD Law and Advocacy (First Plaintiff)
A&O Shearman (Second Plaintiff)
Artemide Law (Defendants)

File Number(s):

2023/61859

Publication restriction:

N.A.

Judgment

Background

1. This application by the First Plaintiff (Mr Scott) concerns two things:

1. the effectiveness of a Notice of Discontinuance filed by the Second Plaintiff (Kentel Australasia Pty Ltd) on 26 March 2025; and

2. whether the Court should decline to make orders dismissing all claims for relief by Kentel.

2. The proceedings were commenced by Statement of Claim on 23 February 2023 by Mr Scott and Kentel as co-plaintiffs. At that time, Mr Scott was the sole director of Kentel.

3. The primary claims advanced by the Statement of Claim, and now by the Amended Statement of Claim filed on 23 July 2024, concern various alleged breaches of fiduciary duty by the First Defendant (Mr Kennedy). It is alleged that Mr Scott and Mr Kennedy were in a partnership or joint venture involving the pursuit of opportunities developing television series. The Second to Fourth Defendants are alleged to be companies owned and controlled by Mr Kennedy who were involved in his breaches of fiduciary duty.

4. Mr Kennedy is a former director of Kentel. He controls some 70% of the issued capital of Kentel. That is, Kentel, under the management control of Mr Scott, sued the person who controls 70% of the shares in Kentel.

5. On about 6 November 2024, two new directors were appointed to Kentel to serve with Mr Scott.

6. While Mr Scott and Kentel had common legal representation when the proceedings were commenced, on 3 February 2025 A&O Shearman filed a Notice of Change of Solicitor on Kentel’s behalf. On 27 February 2025, XD Law and Advocacy filed a Notice of Change of Solicitor on behalf of Mr Scott. The Defendants took issue with the separate representation of the Plaintiffs. It is unusual for co-plaintiffs to be separately represented.

7. On 26 March 2025, Kentel filed a Notice of Discontinuance. It gave notice details as follows:

1. The Second Plaintiff discontinues the whole of these proceedings insofar as they are brought by the Second Plaintiff.

2. The Second Plaintiff does not represent any other person.

3. Each active party consents to the discontinuance.

8. Under the heading “Notice of Consent”, the notice includes a signature of the legal representative for the First to Fourth Defendants. They are not signed by the solicitor for Mr Scott, the First Plaintiff. Mr Scott did not give his consent to this notice being filed.

9. The first main issue for determination is whether the Notice of Discontinuance was filed in accordance with the Uniform Civil Procedure Rules 2005 and is effective to discontinue the proceedings in so far as they were brought by Kentel.

10. On 27 March 2025, the respective solicitors for Kentel and the Defendants signed Short Minutes of Order, which provided for the following orders by consent:

1. The proceedings be dismissed in relation to any claim for relief made by the second plaintiff.

2. The second plaintiff pay the defendants’ costs of the proceedings.

11. The circumstances leading to the execution of those Short Minutes of Order are explained in a letter dated 27 March 2025 from the solicitors for Kentel, A&O Shearman. The letter notes that Kentel has received advice from Mr Barnett SC and Ms Mellos of counsel and that Kentel has formed the view that the claims it made in the proceedings do not have reasonable prospects of success. Further, the letter states that A&O Shearman has formed the view that they are no longer able to certify for the purposes of clause 4 of Schedule 2 of the Legal Profession Uniform Law Application Act 2014 (NSW) in relation to the claims. The letter asserted that the Notice of Discontinuance was duly filed and sealed. The letter went on to state:

Without any admissions, our client has additionally signed a consent order to the above effect. We enclose a copy of that consent order. Our client consents to orders being made in those terms in the Proceedings at the hearing on 28 March 2025.

The letter asserted that Kentel was no longer a party to the proceedings and noted that it did not intend to appear at the hearing that was fixed for 28 March 2025.

12. The second main issue for determination is whether orders should be made in accordance with the Short Minutes of Order dated 27 March 2025.

13. On the afternoon of 27 March 2025, and after the Short Minutes of Order were signed, it appears that there was a meeting of two of the three directors of Kentel. Mr Scott did not attend. At 4.54pm on 27 March 2025, a Form 505 was lodged with ASIC indicating that Kentel was in administration.

14. The matter came before me on 28 March 2025. That date had initially been fixed to hear a Notice of Motion dated 6 February 2025, by which the Defendants sought orders for a stay of the proceedings, summary dismissal of Mr Scott’s claims and costs. On 25 March 2025, Mr Scott filed a Notice of Motion seeking an adjournment of the Defendants’ application for summary dismissal, and to the extent necessary, that the Plaintiffs be granted leave to be separately represented in the proceedings.

15. At the hearing on 28 March 2025, the Defendants submitted that the Notice of Discontinuance of 26 March 2025 was valid, and accordingly the proceedings brought by Kentel were at an end. They also submitted that the consent orders reflected in the Short Minutes of Order would rectify any anomaly in the Notice of Discontinuance. I understood that the Short Minutes of Order were proffered as orders to be made if the Notice of Discontinuance was ineffective. As foreshadowed, there was no appearance for Kentel on 28 March 2025.

16. I made directions on 28 March 2025 to give Mr Scott an opportunity to make any application he wished to make concerning the Notice of Discontinuance and gave the parties an opportunity to make submissions about the notice and about the Short Minutes of Order. That is what led to Mr Scott’s Notice of Motion of 2 April 2025, which is the subject of these reasons.

17. There was some further relevant correspondence between the solicitors for the Defendants and the solicitors for Kentel. A&O Shearman continue to act for Kentel, now under administration. It appears that the solicitors for Mr Scott were not included in the correspondence.

18. On 3 April 2025, the solicitors for the Defendants wrote as follows:

4. Our clients’ position is that:

a. The notice of discontinuance was effective according to its terms;

b. The notice of discontinuance and the consent orders record an agreement between our clients and Kentel Australasia that the proceedings in so far as they are brought by Kentel Australasia should be terminated without a judgment on the merits, but subject to an order for costs; and

c. In view of the agreement referred to in paragraph 4(b), Kentel Australasia cannot continue to prosecute the proceedings.

5. Our clients oppose the relief sought in Mr Scott’s Motion. In the alternative, and to the extent necessary, they will seek an order that leave be granted under r 12.1 nunc pro tunc for Kentel Australasia to file the notice of discontinuance.

6. We would be grateful for confirmation of Kentel Australasia’s position on those matters.

19. By letter dated 4 April 2025, A&O Shearman, responded as follows:

Kentel’s position, now under the stewardship of its Administrators, is as follows:

(1) Kentel takes no view on the effectiveness or otherwise of the discontinuance and consent orders. That will be a matter for the Court to determine, assisted by your clients and by the first plaintiff as contradictors.

(2) This said, Kentel does not by taking the above position or otherwise resile from or repudiate whatever was duly and effectively done prior to the appointment of the Administrators, to the extent those matters are binding on Kentel.

As to paragraph 5 of your letter, your clients’ position is noted. Again, Kentel takes no view on the position taken by your clients. It is a matter for the first plaintiff and your clients to assist the Court in determining whether or not the discontinuance and consent orders are in effect binding.

The letter also recorded that if the Court determines that Kentel’s claims in the proceedings are extant, “the Administrators are not presently in a position to substantively progress the Proceedings during the pendency of the administration for various reasons, including inadequacy of funding”.

20. At the hearing on 8 April 2025 of Mr Scott’s Notice of Motion dated 2 April 2025, Mr Walter, from A&O Shearman, appeared for Kentel. He confirmed that Kentel did not take any position on whether the Notice of Discontinuance was valid and took no position about the consent orders reflected in the Short Minutes of Order that were signed on 27 March 2025 (including by Mr Walter as solicitor for Kentel before the administrators were appointed). Mr Walter explained that the administrators had only been appointed for a short time and were “effectively unfunded”. Mr Walter did not seek an adjournment to give the administrators an opportunity to form a position.

21. The reason Mr Scott has expressed an interest in the effectiveness of the Notice of Discontinuance and the consent orders is that he has paid security for the Defendants’ costs of the proceedings, including amounts paid on behalf of Kentel. He wishes to have an opportunity to protect his position. The Defendants contend that he is adequately protected, whether the proceedings by Kentel are discontinued or are dismissed. I do not need to resolve that question. I am satisfied that Mr Scott is not being merely officious in taking issue with the Notice of Discontinuance or the making of the orders reflected in the Short Minutes of Order.

The Notice of Discontinuance

22. UCPR r 12.1 provides:

(1)  The plaintiff in any proceedings may, by filing a notice of discontinuance, discontinue the proceedings, either as to all claims for relief or as to all claims for relief so far as they concern a particular defendant—

(a)  with the consent of each other active party in the proceedings, or

(b)  with the leave of the court.

(2)  A notice of discontinuance—

(a)  must bear a certificate by the plaintiff, or by his or her solicitor, to the effect that the plaintiff does not represent any other person, and

(b)  except where it is filed with the leave of the court, must be accompanied by a notice from each party whose consent is required by subrule (1) to the effect that the party consents to the proceedings being discontinued in accordance with the notice of discontinuance.

(3)  If any such consent is given on terms, those terms are to be incorporated in the notice of consent.

(4)  If any party has not been served with the originating process, the plaintiff must file an affidavit to that effect.

(5)  For the purposes of this rule, proceedings on a cross-claim are taken to be different proceedings to the proceedings on the originating process and to proceedings on any other cross-claim.

23. Mr Scott contends that the Notice of Discontinuance is not valid for two reasons. First, Mr Scott was an active party in the proceedings and he had not given his consent. Secondly, UCPR r 12.1 does not permit a plaintiff to discontinue part of a claim in so far as it concerns a particular plaintiff. For the reasons that follow, I accept these contentions.

Can a co-plaintiff discontinue?

24. It is best to deal first with Mr Scott’s second argument. The argument emphasises that the right conferred by UCPR 12.1 is to “discontinue the proceedings, either as to all claims for relief or as to all claims for relief so far as they concern a particular defendant”. Mr Scott submitted that where there are co-plaintiffs, the rule does not permit one plaintiff to discontinue the claims brought by that plaintiff, because the reference to “all claims for relief” is a reference to all of the claims in the proceedings, made by all plaintiffs. The Defendants contended that the rule permits a co-plaintiff to discontinue the claims that it brings, provided they are separate or alternative claims, and not joint claims. There is no dispute that in the present case, the claims of Mr Scott are separate from the claims of Kentel.

25. This raises a question about the proper construction of r 12.1(1).

26. The parties drew attention to the decision of White J in McLachlan v de Vere [2006] NSWSC 959, delivered ex tempore on 26 September 2006. That case concerned an application for leave to be given to the first, third and fourth plaintiffs “to discontinue”. There were five plaintiffs. At [10]-[11] of that judgment, White J stated as follows:

Counsel for the defendants referred to the commentary in Peter Taylor et al, Ritchie’s Uniform Civil Procedure (NSW) Vol 1, ‘Discontinuance by Co-Plaintiffs’, Lexis Nexis Butterworths, Sydney, 2005 at [12.1.35] where the learned authors say:

“[12.1.35] Discontinuance by co-plaintiffs Individual co-plaintiffs may discontinue where they rely upon separate, or alternative, causes of action: King v Sunday Pictorial Newspapers Ltd (1924) 41 TLR 229. Individual co-plaintiffs who sue on a joint cause of action cannot discontinue. A co-plaintiff who does not wish to prosecute the proceedings may be added as a defendant: Re Matthews [1905] 2 Ch 460.”

I do not accept that the first, third and fourth plaintiffs cannot discontinue their claims. There may be objections to one co-plaintiff discontinuing her claim if she is entitled jointly to a cause of action with another co-plaintiff. However, in the present case, the plaintiffs do not sue on causes of action held by them jointly. They sue in their different capacities as shareholders, director or employee of the fifth plaintiff. They claim that the first and second defendants have breached statutory and fiduciary duties owed by them to SHQ. Insofar as claims are brought for statutory relief against oppressive conduct, both the second and third plaintiffs sue as shareholders. However, they are not suing on a joint cause of action.

27. Although White J did not specifically refer to UCPR r 12.1, it is clear enough from the reference to Ritchie’s [12.1.35] that it was r 12.1 that was being considered. UCPR r 12.1(1) was in different terms at the time of the decision in McLachlan v de Vere. It then provided:

(1)  The plaintiff in any proceedings may, by filing a notice of discontinuance, discontinue the proceedings, either as to all claims for relief or as to the whole or any part of a claim for relief:

(a)  with the consent of each other active party in the proceedings, or

(b)  with the leave of the court.

By the Uniform Civil Rules (Amendment No 11) 2006, made on 4 December 2006, the words “as to the whole or any part of a claim for relief” were omitted and replaced with the words “as to all claims for relief so far as they concern a particular defendant”. That change could be material to the question of construction I am required to consider. It is easier to conclude than one co-plaintiff can discontinue its claims where the rule provided that the plaintiff could discontinue “any part of a claim for relief”.

28. White J did not expressly address the question of construction that arises on Mr Scott’s application. The result in McLachlan v de Vere is inconsistent with the contention advanced for Mr Scott in these proceedings. However, I do not think I should place any weight on the outcome in that decision given the change to the wording in UCPR r 12.1.

29. Paragraph [12.1.35] of Ritchie’s remains in the same terms today, save for the addition of a reference to McLachlan v de Vere. That commentary suggests that it remains the case under the current form of the rule that individual co-plaintiffs may discontinue where they rely on separate, or alternative, causes of action, but not if they sue on a joint cause of action. I have come to the view that the commentary does not accurately state the effect of r 12.1(1) in its present form.

30. The distinction between separate or alternative claims and joint causes of action is not drawn in the express language of r 12.1. It is not clear how this distinction can be read into the rule.

31. Apart from McLachlan v de Vere, Ritchie’s [12.1.35] refers to King v Sunday Pictorial Newspapers Ltd (1924) 41 TLR 229. I do not find that decision helpful when seeking to construe r 12.1. That case concerned differently worded rules of the English High Court of Justice. Further, it concerned the right of a co-plaintiff to withdraw making a claim in proceedings while remaining a party to them. It did not concern a discontinuance by a co-plaintiff. Lush J observed (at 230) that where a co-plaintiff is a necessary party to the proceedings, he or she has no absolute right to withdraw because the withdrawal “would cause a discontinuance of the action”. In that case a co-plaintiff who brought a separate action for libel was free to withdraw her claim without leave, but that did not involve any discontinuance on her part. She remained a party to the proceedings and judgment was given against her. The decision in King v Sunday Pictorial Newspapers is a long way removed from the question of construction that I need to consider.

32. I have difficulties reading into UCPR r 12.1 any distinction based on whether co-plaintiffs bring an action that is joint or actions that are separate or alternative. Giving the words in r 12.1(1) their natural meaning and reading the reference to “plaintiff” in r 12.1 as a reference to both the singular and plural form (Interpretation Act 1987 (NSW), section 8), where there are co-plaintiffs, I would read the rule as conferring a right on the plaintiffs to take the steps together as plaintiffs. All co-plaintiffs can file a notice of discontinuance (with consent or leave) that discontinues the whole of the proceedings – either as to all claims for relief (by all plaintiffs) or as to all claims (by all plaintiffs) for relief so far as they concern a particular defendant. That is, just as a single plaintiff cannot discontinue some but not all of its claims for relief against a defendant, co-plaintiffs cannot discontinue some but not all of their claims against a defendant.

28. This construction of r 12.1(1) is supported by r 12.1(5). That rule specifically deems proceedings on a cross-claim to be different to the proceedings on the originating process and to proceedings on any other cross-claim. This suggests that, absent r 12.1(5), the reference to “the proceedings” in r 12.1(1) would include cross-claims. There is obvious sense in treating cross-claims as separate proceedings for the purposes of r 12.1(1) and this is provided for expressly. There is no similar deeming provision in respect of separate claims made by co-plaintiffs, suggesting that where there are co-plaintiffs, the reference to “the proceedings” picks up all claims made by all plaintiffs.

29. I recognise that on the construction I prefer, it would follow that one co-plaintiff could not use r 12.1 to discontinue proceedings made solely by that co-plaintiff, even with leave of the Court. I also recognise that it will more commonly be the case that co-plaintiffs will share the same legal representatives and will be aligned, so that if one of them wishes to discontinue it will be with the consent of the plaintiff (or plaintiffs) who wish to press on. But this does not alter my conclusion about the operation of r 12.1.

30. Up until November 2005, r 12.1 was concerned with discontinuance by consent and r 12.2 was concerned with discontinuance by leave. That was changed by the Uniform Civil Procedures Rules (Amendment No 4) 2005, which omitted r 12.2 and rolled consent and leave into r 12.1. The old r 12.2 provided:

The court may grant leave to a plaintiff to discontinue proceedings:

(a) so far as they concern the whole of the plaintiff’s claim for relief, or

(b) so far as they concern a particular defendant.

There would have been a strong argument that this rule permitted a co-plaintiff acting without other co-plaintiffs to seek leave to discontinue that plaintiff’s claims, because the rule referred to what “a plaintiff” may do. However, r 12.1 referred (and still refers) to what “the plaintiff” may do. If there was a relevant distinction before November 2005 between discontinuance by consent and discontinuance with leave, it did not survive the amendments.

36. Where there is a single plaintiff, r 12.1(1) does not permit that plaintiff to discontinue part of its claim against any defendant, even with leave of the Court. It is concerned with all claims made by that plaintiff (at least against any particular defendant). Where that plaintiff does not wish to continue with part of its claim against a defendant, it could amend the statement of claim to remove part of its claim, which may require leave (UCPR r 19; s 64 of the Civil Procedure Act 2005 (NSW)) or apply for an order for the dismissal of the proceedings to the extent the proceedings concern part of the claim (UCPR r 29.8). It is not surprising that where there is more than one plaintiff, r 12.1 is only concerned with the discontinuance of all claims made by those plaintiffs (against any particular defendant). That is, r 12.1 in its current form is concerned with the discontinuance, either by consent or with leave, of “all claims” against a defendant, whether there be one or more than one plaintiff.

37. I have taken into account section 57 of the Civil Procedure Act, which provides as follows:

(1)  For the purpose of furthering the overriding purpose referred to in section 56(1), proceedings in any court are to be managed having regard to the following objects—

(a)  the just determination of the proceedings,

(b)  the efficient disposal of the business of the court,

(c)  the efficient use of available judicial and administrative resources,

(d)  the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.

(2)  This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1).

This section does not permit or compel me to overlook the plain language of r 12.1.

38. The Defendants submit that r 12.1 provides a convenient way for a plaintiff to discontinue its separate or alternative claims without having to make any kind of application. I accept that there is convenience for a co-plaintiff who wishes not to proceed with a claim to be able to bring that claim to an end as quickly and inexpensively as possible, and ideally without having to make any kind of application. However, the right to discontinue proceedings (without leave) under r 12.1(1) is, on any view, limited. It is not an avenue open in respect of part of a claim by a plaintiff.

39. There is a risk that on the construction advanced by the Defendants, there will be injustice and dispute that will cause delay and inefficiency where one co-plaintiff files a notice of discontinuance without notifying another co-plaintiff. That other co-plaintiff may be, or contend to be, prejudiced by the discontinuance. That co-plaintiff may wish to contend that there will, or may be, prejudice as to costs (as is the case here), or it may take issue about whether the causes of action are separate. Rule 12.1(1) works most clearly and likely without controversy when it operates on an all or nothing approach – it applies in respect of all claims for relief, or all claims for relief so far as they concern a particular defendant. That is true whether there is one or multiple plaintiffs. I am satisfied that the construction that I have accepted is more likely to promote, rather than hinder, the overriding purpose and the objectives set out in section 57 of the Civil Procedure Act.

40. The conclusion that r 12.1(1) does not permit a co-plaintiff to file a notice of discontinuance only in respect of that co-plaintiff’s claims does not mean that the co-plaintiff is bound to prosecute its claims, even where that co-plaintiff has concluded that the claims cannot be properly sustained. There is ample provision in the rules to accommodate a co-plaintiff in this position. One way is to make an application for summary dismissal of that plaintiff’s claims (see UCPR r 29.8).

41. Another avenue lies in the removal of the co-plaintiff as a party. Where co-plaintiffs are not jointly entitled to the same relief (engaging r 6.20), they will usually have taken advantage of r 6.19, which provides:

(1)  Two or more persons may be joined as plaintiffs or defendants in any originating process if—

(a)  separate proceedings by or against each of them would give rise to a common question of law or fact, and

(b)  all rights of relief claimed in the originating process are in respect of, or arise out of, the same transaction or series of transactions,

or if the court gives leave for them to be joined.

(2)  Leave under subrule (1) may be granted before or after the originating process is filed.

Where one of the co-plaintiffs forms the view that it cannot properly maintain its claims, it could make an application to be removed as a party pursuant to UCPR r 6.29. That rule provides:

The court may order that a person—

(a)  who has been improperly or unnecessarily joined, or

(b)  who has ceased to be a proper or necessary party,

be removed as a party.

A co-plaintiff who cannot properly maintain its claims should either not have been joined in the first place or has ceased to be a proper or necessary party. That will be particularly obvious if the statement of claim is amended to remove any claims by that co-plaintiff.

42. In the usual case, where co-plaintiffs have common representation and sue under a single originating process, if one co-plaintiff concludes that it cannot properly continue, the most obvious course is for the pleadings to be amended to remove the claim by that co-plaintiff and for an application to be made for that co-plaintiff to be removed as a party.

43. Of course, if a co-plaintiff simply declines to prosecute its claim, there are various steps that can be taken by defendants to bring the proceedings to an end. For instance, UCPR r 12.7(1) provides:

(1)  If a plaintiff does not prosecute the proceedings with due despatch, the court may order that the proceedings be dismissed or make such other order as the court thinks fit.

Who are the active parties in the proceeding?

44. Mr Scott’s second argument is that the Notice of Discontinuance was not filed in accordance with the rules because he is an “active party in the proceedings” and he did not give his consent.

45. There is no doubt that Mr Scott did not consent. The question is whether his consent was required.

46. Rule 12.1 relevantly confers a right to file a notice of discontinuance “with the consent of each active party in the proceedings”. The expression “active party” is relevantly defined in the UCPR Dictionary as meaning “a party who has an address for service in the proceedings”. Where there are co-plaintiffs, all of them must have an address for service (and it will nearly always be the same address for all plaintiffs): see UCPR r 4.2(1).

47. The Defendants submit that once it is appreciated that a co-plaintiff can rely on r 12.1 to file a notice of discontinuance in respect of claims that it brings separately or alternatively to claims by another co-plaintiff, the reference in r 12.1(1)(a) to “in the proceedings” is to be read as a reference to that which is being discontinued, being the separate or alternative claims advanced by that co-plaintiff. The other co-plaintiff, they contend, is not an active party to those proceedings.

48. I reject that submission for two reasons. The first is that I have rejected the premise: r 12.1(1) does not give a co-plaintiff any right to file a notice of discontinuance in respect of claims that it brings separately or alternatively to claims by other co-plaintiffs.

49. The second is that I would, in any event, construe the words “with the consent of each other active party in the proceedings” as a reference to all those parties who have an address for service in the proceedings as a whole (subject to r 12.1(5)). It is not possible to give the words any other meaning. Where proceedings are to be discontinued without leave, pursuant to r 12.1(1)(a), there is prudence in the right only arising where all parties who have an address for service have consented, or with leave. That promotes certainty and ensures any party who might have an interest in the discontinuance is alerted to it and has an opportunity to oppose it. If the consent of all active parties is not forthcoming, it is appropriate for the discontinuance to occur only with leave of the Court.

50. The construction of r 12.1(1)(a) advanced by the Defendants is a forced one that is driven by the Defendants’ construction of the opening words in r 12.1(1). The alternative construction of the words in r 12.1(1)(a) is harmonious with, and supports, the construction of the opening words that I have accepted.

Should leave be granted nunc pro tunc?

51. The Defendants submitted that if there is any doubt about the validity of the Notice of Discontinuance, the Court should grant leave nunc pro tunc under r 12.1(1)(b) for the notice to be filed. I decline to do so because: (a) the Court does not have power to give that leave; and (b) the Defendants do not have the right to make an application under r 12.1(1). It may be that some form of dispensation could overcome these limitations, but this is not a path I would entertain.

52. It was submitted for the Defendants that section 86 of the Civil Procedure Act confers power to make the orders on an application made by the Defendants. That section provides:

(1)  The power of the court to make orders in relation to proceedings, whether under this or any other Act or otherwise, includes the power—

(a)  to make orders by way of leave or direction, and

(b)  to make all or any orders on terms.

(2)  The power of the court to make orders on terms is taken to be a power to make orders on such terms and conditions as the court thinks fit.

(3)  Subject to this Act and to rules of court, the court may make any order that it has power to make either of its own motion or on the application of a party or any other person entitled to make such an application.

(4) Nothing in this Act limits the operation of section 43 of the Interpretation Act 1987.

I cannot see how that section gives the Court power to entertain any application by the Defendants under r 12.1. Section 86 does not give some the Court some kind of plenary power.

The Notice of Discontinuance does not conform with r 12.1

53. The result is that the Notice of Discontinuance that was filed on 26 March 2025 was not filed in conformity with r 12.1(1) because:

1. it purported to discontinue only the proceedings in so far as they are brought by Kentel, and not all claims for relief in the proceedings;

2. Mr Scott was an active party in the proceedings and he did not consent to the filing of the Notice of Discontinuance.

54. I would not label the filing of the Notice of Discontinuance as an abuse of process (compare Ritchie’s at [12.1.55]). It is not a case, for example, where a notice of discontinuance that is filed in accordance with court rules may still constitute an abuse of process: see Castanho v Brown & Root (UK) Ltd [1981] AC 557 at 571. The Notice of Discontinuance in this case was not filed in conformity with the rules. Kentel had no right or ability to discontinue the proceedings, in so far as they concerned claims by Kentel, by filing the notice. It is of no effect.

55. Mr Scott’s Notice of Motion of 2 April 2025 seeks an order pursuant to r 4.10(4) that the Court refuse to accept the Notice of Discontinuance for filing. That sub-rule provides:

(4)  The court may refuse to accept a document for filing whether or not an officer of the court has accepted the document for filing.

The difficulty is that the Notice of Discontinuance has not merely been accepted for filing, it has been filed.

56. The appropriate course is for me to rule that the Notice of Discontinuance filed on 26 March 2025 is void and make orders that will have the consequence that the Courts electronic records will reflect that position.

The consent orders

57. The Short Minutes of Order dated 27 March 2025 signed by the legal representative for Kentel and by the legal representative for the Defendants provides for the proceedings to be dismissed in relation to any claim for relief by Kentel and for Kentel to pay costs.

58. The occasion for considering those orders only arises on the contingency that the Notice of Discontinuance filed on 26 March 2025 failed to effect a discontinuance. It follows that I must now consider the Defendants’ application that I make the orders.

59. The Defendants rely on r 36.1A(1), which provides as follows:

(1)  The court may, if satisfied that all relevant parties have been notified, give judgment, or order that judgment be entered, in the terms of an agreement between parties in relation to proceedings between them.

60. It was submitted for the Defendants that they and Kentel have a binding agreement to settle the proceedings and that Kentel could not revoke its consent to the orders, unless the agreement is set aside, or it is apparent that the agreement is capable of being set aside in a duly constituted proceeding: see Singh v Secretary, Department of Family and Community Services [2001] FCA 1281 at [4].

61. The problem in this case for Kentel is that the character and terms of any “agreement” are unclear. There is no doubt that the Short Minutes of Order were signed by both parties. That is consistent with the existence of an underlying binding settlement of the proceedings but does not prove an underlying binding settlement. Two parties to a proceeding may agree in a non-contractual way to join in asking the Court to make orders in accordance with short minutes. In those circumstances, either party is free to withdraw from the non-binding agreement at any time and only becomes legally bound once the orders have been made by the Court. The principles identified in Singh have no application in such a case.

62. In this case, on 27 March 2025, when Kentel was still controlled by its directors, the company, through its solicitors, wrote to the other parties to the proceedings, informing them that the Short Minutes of Order had been signed and stated: “Our client consents to orders being made in those terms in the Proceedings at the hearing on 28 March 2025”. The communication seems to be consistent with the company consenting to the orders but without being legally bound by a settlement. It is not obvious that Kentel did not retain the right to revoke its consent.

63. For reasons I have explained, the orders were not made on 28 March 2025. Kentel did not appear at that hearing. Indeed, by the time of that hearing, Kentel was no longer under the control of its directors, administrators having been appointed on 27 March 2025, sometime after the letter of 27 March 2025 was sent. It could not be assumed that on 28 March 2025, Kentel’s position was unchanged notwithstanding that it had been placed under administration.

64. By the time the matter came before me on 8 April 2025, Kentel’s position (by then under the control of administrators) had shifted. Kentel did not join the Defendants in asking the Court to make the orders reflected in the Short Minutes of Order. It did not contend that there was an extant “agreement”, binding or otherwise, between Kentel and the Defendants, which provided that the orders should be made. On the evidence, the only (probably non-binding) agreement that Kentel made was that it consented to the orders being made on 28 March 2025. Even that consent was arguably revoked by the appointment of administrators on the afternoon of 27 March 2025. Kentel’s solicitors said that the company did not “resile from or repudiate whatever was duly and effectively done”, but that begs questions about what was done and whether is it was done duly and effectively.

65. It follows that, as things stand, I am not satisfied that there is any “agreement” within the meaning of r 36.1A. Given the position taken by Kentel, I am not satisfied that there are orders that can now be made by consent.

66. Accordingly, I decline to make orders in accordance with the Short Minutes of Order dated 27 March 2025.

Future steps

67. Kentel remains a party to the proceedings. My conclusions do not compel Kentel to prosecute the proceedings if it does not wish to do so – which is a matter for the administrators. However, some other steps are required to be taken by Kentel, or by the Defendants, or by all of them, to bring Kentel’s claims to an end. That is likely to require leave or some application to the Court. Mr Scott may have an interest in any such application. In any event, it is a matter for the parties to chart their course.

Result

68. There will be an annotation to the Court’s records to note that the Notice of Discontinuance filed by Kentel on 26 March 2025 is void.

69. I decline to make the orders reflected in the Short Minutes of Order dated 27 March 2025

70. I will hear the parties on the question of costs.

71. I direct the matter be stood over before me for directions in the Applications List on 2 May 2025.

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