Silkchime Pty Ltd v Warwick Entertainment Centre Pty Ltd
[2013] WASCA 30
•8 FEBRUARY 2013
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: SILKCHIME PTY LTD -v- WARWICK ENTERTAINMENT CENTRE PTY LTD
[2013] WASCA 30
CORAM: PULLIN JA
HEARD: ON THE PAPERS
DELIVERED : 8 FEBRUARY 2013
FILE NO/S: CACV 14 of 2011
BETWEEN: SILKCHIME PTY LTD (RECEIVERS AND MANAGERS APPOINTED) atf THE SILKCHIME UNIT TRUST
Appellant
AND
WARWICK ENTERTAINMENT CENTRE PTY LTD (RECEIVERS AND MANAGERS APPOINTED) atf THE WARWICK ENTERTAINMENT CENTRE UNIT TRUST
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram :LE MIERE J
Citation :WARWICK ENTERTAINMENT CENTRE PTY LTD (RECEIVERS AND MANAGERS APPOINTED) atf THE WARWICK ENTERTAINMENT CENTRE UNIT TRUST -v- SILKCHIME PTY LTD (RECEIVERS AND MANAGERS APPOINTED) atf THE SILKCHIME UNIT TRUST [2011] WASC 20
File No :CIV 1094 of 2008
Catchwords:
Costs - Discontinuance of appeal - Whether court should make order other than that specified in r 59(4) Supreme Court (Court of Appeal) Rules 2005 (WA)
Legislation:
Nil
Result:
Appellant's application dismissed
Order that appellant pay respondent's costs
Category: B
Representation:
Counsel:
Appellant: Mr A Metaxas
Respondent: Mr J A Thomson
Solicitors:
Appellant: Metaxas & Hager
Respondent: Corrs Chambers Westgarth
Case(s) referred to in judgment(s):
Beeson v Carrello [2010] WASCA 155
Warwick Entertainment Centre Pty Ltd v Silkchime Pty Ltd [2011] WASC 20
Warwick Entertainment Centre Pty Ltd v Silkchime Pty Ltd [2012] WASC 275
PULLIN JA: This appeal was against an order made by Le Miere J on 2 February 2012 in action CIV 1094 of 2008 dismissing an application by the appellant to stay that action until judgment in another case (COR 223 of 2009).
This appeal has been discontinued. Rule 59(4) of the Supreme Court (Court of Appeal) Rules 2005 (WA) states that unless a single judge orders otherwise, an appellant who discontinues an appeal must pay the respondent's costs in respect of the appeal which must be taxed if they are not agreed. The appellant has sought an order that:
The costs of this appeal follow the event in CACV 105 of 2012.
The respondent opposes that application. Instead, it seeks the usual order; that is:
The appellant … pay the respondent's costs of the appeal (including any reserved costs) to be taxed if not agreed.
In addition, the respondent seeks an order that the appellant pay the respondent's costs of its application for a costs order fixed in the sum of $1,500.
The parties have agreed that a single judge of this court should deal with the application on the papers.
Observations concerning this type of application were made in Beeson v Carrello [2010] WASCA 155, which read:
In the case of an appeal, r 59 of the Court of Appeal Rules reflects the policy that a party which has commenced proceedings and then discontinued, should have to pay the respondent the costs of the proceedings unless there is some reason why the appellant should not pay the costs. Factors that might be relevant in displacing the effect of the order are the considerations which are relevant in relation to the making of costs orders upon discontinuance in the general proceedings [14].
Further, it was stated that:
In the General Division, proceedings may not be discontinued after the defence has been filed, without the leave of the court and the court has the power to grant leave upon such terms as to costs, or otherwise as may be just. See O 23 r 2 of the Rules of the Supreme Court 1971 (WA). This confers a wide discretion on the court. The conduct of the parties in the matter and the reasons for the discontinuance can bear heavily on the exercise of the discretion as to costs: McClure v City of Stirling [No 3] [2009] WASC 247 [4]; O'Neill v Mann [2000] FCA 1680. If the plaintiff obtains leave to discontinue the action in circumstances in which without trial, the plaintiff has secured from the defendant the relief sought in the proceedings, the court has the power to order the defendant to pay the costs of the proceedings. If, however, the plaintiff discontinues because the plaintiff cannot succeed, the plaintiff may be granted leave on terms that it pays the defendant's costs of the action: Garwolin Nominees Pty Ltd v Statewide Building Society [1984] VR 469, 472 [13].
To decide the application and make the appropriate costs order, it is necessary to describe the various proceedings and to set out a chronology of steps taken in those proceedings.
The Debt action - CIV 1094 of 2008
In Warwick Entertainment Centre Pty Ltd v Silkchime Pty Ltd [2011] WASC 20, Le Miere J described the debt action in the following terms:
Mark Korda and David Winterbottom are receivers and managers of the plaintiff company, Warwick Entertainment. On 31 January 2008 the receivers commenced this action in the name of the plaintiff against the defendant, Silkchime, for recovery of an alleged intercompany debt in the amount of $12,706,904. The debt is recorded in the loan account between Warwick Entertainment and Silkchime. Silkchime denies the debt. Silkchime says that there was a joint venture agreement between Warwick Entertainment and Silkchime to the effect that the loan was advanced on a non-recourse interest free basis. Warwick Entertainment denies the alleged joint venture agreement [1].
The Accounting action - COR 223 of 2009
This action was commenced in 2009. The appellant and others, being various borrowers or guarantors under the control of the receivers, were the plaintiffs. ING and others were the defendants. In substance, the appellant in the Accounting action claimed that the receivers appointed by ING to control their affairs should have retired in 2008 and that they have overcharged for costs charged during the receiverships.
The Directions proceedings - COR 173 of 2009
These proceedings were commenced by the receivers seeking directions in respect of the conduct of the receiverships pending the determination of the Accounting action. They also sought various declarations about the construction of the charges, security documents and indemnities relating to their appointment.
Chronology
The chronology of events is as follows:
(a)2008 - Debt action commenced.
(b)31 August 2009 - Directions proceedings commenced.
(c)4 September 2009 - Accounting action commenced.
(d)15 September 2009 - Debt action stayed pending the determination of the Directions proceedings.
(e)February 2010 - Directions proceedings heard.
(f)25 June 2010 - judgment of Le Miere J in Directions proceedings. Le Miere J ordered that, subject to findings and orders made in the Accounting action, the receivers were justified in not retiring and justified in realising assets to create a fund available to satisfy the future liabilities of the chargors to ING as a result of the Accounting action and any other threatened litigation. This determination of the Directions proceedings meant that the stay of the Debt action pursuant to the 15 September 2009 order fell away.
(g)The appellant applied in the Debt action for a further stay of proceedings until determination of the Accounting action. The appellant contended in its submissions that the Directions proceedings did not resolve the issue of whether the receivers should have retired in January 2008 and that the issue remained to be determined in the Accounting action. On 2 February 2011, Le Miere J dismissed this action. This meant that the Debt action could proceed to trial.
(h)9 February 2011 - the appellant commenced this appeal by filing an appeal notice. It alleged error by Le Miere J in refusing to extend the stay of the Debt action until determination of the Accounting action.
(i)15 February 2011 - Le Miere J reserved dates in May and June 2011 for trial of the Debt action.
(j)31 March 2011 - the appellant's case in this appeal was filed.
(k)27 April 2011 - the respondent's answer was filed in this appeal.
(l)3 May 2011 - Le Miere J made consent orders vacating the trial dates for the Debt action and rescheduled the trial for August 2011. These dates were later vacated.
(m)4 October 2011- the Registrar of the Court of Appeal asked the solicitors for the appellant whether the appeal was to be pursued. The reply was that the appellant intended to pursue the appeal 'unless the claim is dismissed at trial' (presumably the claim in the Debt action).
(n)18 October 2011 - the trial of the Debt action commenced.
(o)1 August 2012 - judgment was entered in the Debt action. See Warwick Entertainment Centre Pty Ltd v Silkchime Pty Ltd [2012] WASC 275.
(p)30 August 2012 - appellant commenced an appeal against judgment in the Debt action. This appeal is appeal CACV 105 of 2012 referred to in the appellant's application.
(q)4 December 2012 - the appellant filed the discontinuance notice in this appeal.
Disposition of application
The appellant's submissions in support of its application sets out the history of the proceedings and then submits that:
If the result in the [Accounting action] is that the receivers should have retired in January 2008, then the receivers should not have commenced and had no authority to prosecute the Debt Action.
This is followed by a submission that when the original trial dates in the Debt action were vacated, 'the prejudice to Silkchime from the refusal of the stay was substantially abated'. The submissions add:
When the August dates for trial were also vacated and replaced with October 2011 dates then Silkchime made a decision to defend the Debt Action on its merits.
This submission does not make sense. The respondent correctly states in its written submissions:
The object of this appeal is the stay of the Debt Action pending the determination of the Accounting Action. The Accounting Action has not yet been determined.
The appellant did not seek to have this appeal determined prior to the trial of the Debt Action despite the fact that the trial of the Debt Action occurred 11 months after the commencement of this appeal.
Once the Debt action had been determined, this appeal could never have succeeded because no order could have been made by the Court of Appeal staying the Debt action until a determination of the Accounting action.
The mere changes of dates for trial of the Debt action do not provide any logical reason for deciding to abandon the attempt to gain an order from this court staying the Debt action. The change of trial dates could not 'substantially abate' the 'prejudice to Silkchime from the refusal of the stay'. Whether the appellant recognises it or not, the fact is that the appeal could not succeed once the Debt action had been determined.
The conduct of the appellant in failing to comply with times prescribed by the Supreme Court (Court of Appeal) Rules 2005 (WA) and the directions made by the court in this appeal is also a factor that is relevant to the exercise of the court's discretion. That conduct and the history set out above favour dismissal of the appellant's application.
The appellant's application should be dismissed. The order contemplated by the rule should be made. Orders will be made as sought by the respondent, namely:
(a)The appellant pay the respondent's costs of the appeal (including any reserved costs) to be taxed if not agreed.
(b)The appellant do pay the respondent's costs of this application fixed in the sum of $1,500.
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