Soumelides v Keglor Pty Limited

[2002] FCA 39

FEDERAL COURT OF AUSTRALIA

Soumelides v Keglor Pty Limited [2002] FCA 39

GEORGE SOUMELIDES, STRAVOS MICHAELIDES & LOCO DOG PTY LIMITED v KEGLOR PTY LIMITED & AFRALL PTY LIMITED T/AS RETAIL NATIONWIDE DEVELOPMENTS

N 618 of 1999

WHITLAM J
6 DECEMBER 2001
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 618 of 1999

BETWEEN:

GEORGE SOUMELIDES

STRAVOS MICHAELIDIS

LOCO DOG PTY LIMITED

APPLICANTS

AND:

KEGLOR PTY LIMITED
FIRST RESPONDENT

AFRALL PTY LIMITED
SECOND RESPONDENT

JUDGE:

WHITLAM J

DATE OF ORDER:

6 DECEMBER 2001

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1The applicants pay the first and second respondents’ costs of the hearing on 30 November 2001.

2The applicants pay the first and second respondents’ costs thrown away as a result of the order made on 30 November 2001 vacating the trial dates.

3The applicants pay the first and second respondents’ costs of their motions for such costs.

4The first and second respondents may have such costs taxed forthwith.

5The applicants’ and respondents’ motions are otherwise refused.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 618 of 1999

BETWEEN:

GEORGE SOUMELIDES

STRAVOS MICHAELIDIS

LOCO DOG PTY LIMITED

APPLICANTS

AND:

KEGLOR PTY LIMITED
FIRST RESPONDENT

AFRALL PTY LIMITED
SECOND RESPONDENT

JUDGE:	WHITLAM J
DATE:	6 DECEMBER 2001
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. There are several motions before the court relating to the costs in connection with the vacation of the trial dates in this matter.  The matter has a long and sorry history in relation to default in respect of directions given since it was commenced.  It must be said that the fault has been principally on the applicants’ side.  Several key dates are highlighted by the first respondent but the important date for present purposes is that on 24 April 2001 the matter was fixed for hearing for seven days commencing on Monday, 3 December 2001.

2. Since that date the matter has come back for directions on a number of occasions, once after an unsuccessful attempt at mediation.  The trial date was fixed well in advance and was there to be met, yet the applicants filed and served affidavit material late in contravention of the directions given.  Senior counsel for the applicants argued today that, notwithstanding the late service of that material, it could not be said that it provided any basis for an application to vacate the trial dates.  He referred particularly to the further affidavits sworn by George Soumelides, Stravos Michaelides and Renata McMillan on 28 November 2001, and I think that in respect of those affidavits there is force in what he says.  However, complaint is also made by the respondents as to the service of a late report by an accountant who prepared profit and loss accounts for one of the applicants.  The point is fairly made by senior counsel for the applicants that, in fact, those accounts were exhibited to or relied upon in their expert’s report, which was served as long ago as 19 April 2001.  Counsel also noted that the underlying materials should have or could have been a matter for investigation had there been any inclination on the part of the respondents.

3. More substantially, there is a fresh affidavit by Elias Hawach made on 29 November 2001 and filed on 4 December 2001.  It appears that this affidavit was served at the end of last week and came to the attention of the respondents at that time.  It deposes to fresh conversations about representations that were made in relation to the development that is the subject of these proceedings.  I am told that the person who is alleged to have made these representations, Keith Deane, is a director of the second respondent.  It is suggested therefore, that the respondents would have had no difficulty obtaining instructions from Mr Deane which would permit them to deal with that material.  Even if that be the case, it is still unfair that on the eve of trial the respondents should be confronted with new material which they have to deal with on the assumption that it would be admissible against them in the case.  Accordingly, notwithstanding the submissions of senior counsel for the applicants, in my view the material properly provided a foundation for an application to vacate the hearing dates.  It was for that reason that I made the order last week.  To the extent that I am now more familiar with the materials and with what occurred, I am reinforced in the view that that was the proper order to make.  I am also satisfied that it was appropriate for the respondents to make such an application and I find that they are entitled to their costs of the application to vacate the trial dates.

4. The more difficult question is what to do about the costs thrown away where a trial has had to be vacated after having been fixed for seven days in April this year.  Both sides of the record seek their costs, that is, the applicants and the two sets of respondents.  I am, in the circumstances, convinced that it is appropriate to order that the applicants pay the costs of the respondents thrown away by the trial dates being vacated.  This is because, in my view, the conduct of the case on the applicants’ behalf resulted in the order being made.  These actions were characterised by counsel for the applicants as “plugging gaps”.  Be that as it may, they were obviously gaps that counsel thought were important to be plugged and, being done at the last moment, rendered the applicants likely to have that kind of order made against them.  Senior counsel for the applicants tells me quite frankly that he and his junior came into the case less than a month ago.  It is apparent that, since then, the matter has been given some close attention on the applicants’ side.  The kinds of attention given have led to changes in the applicants’ case and I would expect they may lead to other changes.  In any event, given what transpired in the later days of last month, I think it appropriate to order that the applicants pay the respondents’ costs thrown away by the trial dates being vacated.

5. Two further orders are sought by the respondents in relation to the costs of vacating the trial dates.  First, they seek that such costs be payable on an indemnity basis.  As to that, counsel say, correctly, that, as explained by Sheppard J in Colgate-PalmoliveCo v Cussons Pty Ltd (1993) 46 FCR 225, the categories of cases in which it is appropriate to make such an order are not closed. Nonetheless, I am not convinced that this case is one in which indemnity costs would be payable.

6. Secondly, the respondents seek that the order I make in respect of the costs thrown away should be that those costs be taxed forthwith and the applicants ordered to pay them now.  The latter aspect of that request, that the costs be payable now, is not the usual effect of an order being made at this stage and that is reflected in O 62 r 3(2) of the Federal Court Rules.  The circumstances in which an order can be made for the immediate payment of such costs or, rather the rationale for making such an order, is set out by Emmett J in Brasington v Overton InvestmentsPty Ltd [2001] FCA 571. Whilst giving some guidance to the exercise of such a discretion, it seems to me that in the absence of conduct which at least is unusual, one would not make such an order at this stage, particularly in a case like this where I am not yet in a position to have formed any view about the strength of the applicants’ case. Accordingly, I decline to make an order under O 62 r 3(2). In relation to respondents’ request to have the costs taxed straight away, the applicants did not want to oppose such an order. The respondents apparently would be content for such an order, notwithstanding it may involve some work for which they will not be remunerated in the near future. Accordingly I order that the costs the subject of this order may be taxed forthwith.

7. It follows from what I have said that I refuse to order that the respondents pay the applicants’ costs of the trial dates being vacated.  In doing so, I should refer to one particular aspect of the matter.  That is, that senior counsel for the applicants drew attention to, or rather invited the Court to draw the inference that, the respondents were not ready to proceed.  I may say, frankly, that the application to vacate was acceded to because of the respondents’ preparedness in being able to meet the applicants’ case.  I did not give any consideration, particularly at that time, to the respondents’ ability to prosecute their own cross-claims.  I am not satisfied, notwithstanding the somewhat cryptic letter sent on 9 October 2001 by the solicitors for the first respondent, that the trial dates were vacated on the application of the respondents because they were not in a position to pursue their cross-claims.

8. I also order that each of the respondents have their costs of the motions moved ore tenus today.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam.

Associate:

Dated:             

Counsel for the applicants:	D P F Officer QC with J M Hennessy
Solicitors for the applicants:	Andresakis & Associates
Counsel for the first respondent:	M L Williams SC with DT Kell
Solicitors for the first respondent:	Marsdens
Counsel for the second respondent:	S T White
Solicitors for the second respondent:	Moray & Agnew
Date of hearing:	6 December 2001
Date of judgment:	6 December 2001