Stevens, G. v Westpac Banking Corporation

[1992] FCA 474

4-74 j Q 2

JUDGMENT NO. ..ae. .n.e r m m m s m

IN TIIE FEDERAL COURT OF AUSTRALIA)

NEW SOUTFI WALES DISTRICT REGISTRY)	NO NG 436 of 1991
GENERAL DIVISION	1

BETWEEN	GARRY STEVENS
Applicant

AND	W E S T P A C -	B A N K I N G
CORPORATION
Respondent

EX TEMPORE JUDGMENT

EINFELD J SYDNEY 29 JUNE 1992

The matter before the Court this morning was fixed for a two day hearing. After some opening discussion, it became clear that it amounted to a claim by the applicant for $150,000 for an alleged loss of profits on a proposed sale of a hotel in Redf ern. The licensee of the hotel, or the party who apparently lost the profit, was the applicant's company, which is now in liquidation. It therefore does not seem to be disputed that if there was a loss, it was a loss of the company of which the applicant held a 49 per cent shareholding. That meant that the maximum entitlement of the applicant would have been 49 per cent of whatever award was found appropriate in terms of any loss that could have been proved. The company apparently was significantly insolvent at the time and therefore the chances of the applicant recovering any money at all, whatever be the position on liability,

appeared to be very minimal.

Now, after some discussions for which I adjourned, the applicant applies to withdraw his application.

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According to order 22, rule 2, a party maFiing a c&im 2bLr~.

relief may only discontinue a this point either with consent or with	7:l.i':	,, ,!-,
refuses consent and therefore the

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should be granted. A-$.' '

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It is obvious that a court would allow an applicant to discontinue or withdraw a claim rather than force him to a costly hearing which he does not wish to undertake and which may be unsuccessful. However, the respondent has come to Court ready for a hearing and incurred costs in preparation. There is a need to protect it from the possibility that the claim could be brought at another time, with all or most of the costs having to be incurred again.

The applicant's counsel, who is new to the case in the sense

that he has apparently only recently been instructed, advises	fairly that it is the applicant's intention to pursue the
respondent for damage to his reputation rather than under section 52 of the Trade Practices Act 1974 and for breach of contract as raised in the current form of the statement of claim. A defamation action would not normally be available in this Court.
It is said on behalf of the applicant that in realistic terms it is not at all likely that this case will or could be resurrected. On the basis of what I have read of the material filed and of the discussions which have taken place in the course of today's hearing, it seems to me that there is no - point in allowing these proceedings to be commenced again when the applicant has been given these two days for the hearing and he does not wish to avail himself of them. Obviously if leave were granted, conditions would have to be imposed. Those conditions would undoubtedly include that a new claim could not be filed without leave in the absence of consent. I cannot see why the Court, having already given this matter a two day hearing and time in the directions hearings, should grant extra time when there is so much other work that the Court is unable to deal with.
The tragedy about this particular case is why the matters which are activating the applicant's present approach to it were not ascertained before today. The bringing of cases
which are simply unable to be supported and incurring costs
which are just thrown away are the very sorts of thing which
bring the legal system into disrepute. I find it very difficult to understand how in this case the applicant, who is presumably not a lawyer, was allowed to continue the case for so long without someone examining what his chances of success were and in which court it would be best for him to proceed if he had a case at all.
It seems to me that a grant of leave to withdraw is inconsistent with the state of the case at present. When parties are given a date for hearing, they know that that is their hearing, and that subject to inadvertent happenings which might cause an adjournment, the case should be disposed - of finally on the days fixed for hearing. The Court would simply be unable to manage its affairs if cases could be brought on a speculative basis and, when the speculations could not be sustained at the hearing fixed, the parties went away, prepared the cases all over again and again brought them back before the Court.
In the circumstances I refuse leave to discontinue. I note that the applicant has advised the Court that if leave is not granted, he wishes to produce no evidence in support of the claim. The claim will therefore be dismissed.
The respondent asks for costs on an indemnity or solicitor and client basis. The respondent points to the fact that the case
which are unrecoverable on a party and party basis. In a is and always has been hopeless and that costs were incurred
situation where the applicant simply abandons the claim, it is not appropriate for the respondent to bear these additional imposts.
The applicant does not contest the usual party and party order for costs. He responds to the indemnity application by pointing to the different and substantially unequal financial

and substantive bases of the parties before the Court. Obviously the respondent is a substantial organisation whose financial and asset backing will substantially exceed that of the applicant. However, I doubt very much that this is an appropriate way to approach the question of indemnity costs. Certainly no authority is put forward suggesting that one criterion for awarding costs on a solicitor and client basis is the unequal nature of the parties in a financial sense.

The real question is whether the case was bona fide and whether the costs which the respondent has incurred over and above those which they could recover on a party and party basis ought to be visited home to the applicant.

My problem in this regard is that I really cannot see that the applicant is the person who should bear this responsibility. This is a case at law based upon the Trade Practices Act and breach of contract. I know nothing about the applicant except what is revealed by the pleadings and evidence filed in Court. He seems to have been, at least in recent years, a publican.

He is apparently not a lawyer. Although many parties come	before the Court despite legal advice to the contrary because
of their own desires or stubbornness to pursue rights which have little or no chance of success, that does not seem to be the position here. Obviously I have not examined why the case came this far before someone was ready to review the likelihood of success or even the possibility of making out a prima facie case. It is hard to imagine that the applicant personally was the person primarily responsible for this situation.
As I mentioned in argument, whatever might be the legal
position, it does not appear that this would be a suitable
case for a declaration of rights in favour of the applicant if
there are no damages that he can recover. That is a technical
matter which a lay person simply could not be expected to

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understand without legal advice. Therefore, if a litigant wanted to bring this case before the Court, he should have been advised by his lawyers precisely what he could expect to gain if it was successful and what he might lose by way of his own costs and the costs of the respondent if it was unsuccessful. I have certainly seen litigants who, notwithstanding the hopelessness of their actions, have nonetheless wanted to pursue them. However, when lawyers remain on the record in a case which bears no sign of being likely to succeed, they must bear at least some of the responsibility for the abandonment of the case when the hearing commences and the chances of success are seen as negligible.

applicant personally the responsibility for costs outside the

In those circumstances it would be unjust to impose upon the

usual party and party order that applies and which in this case the applicant does not resist. I realise that this does not give the respondent any particular comfort but there is a limit to how far the Court can remedy wrongs in circumstances such as this. It is a limit not only imposed by common sense but by the rules of Court and by the law. If there is injustice in this result, the resolution of it will have to be found elsewhere.

There remains the cross-claim brought by the respondent. It amounts to a claim for the repayment of the principal and interest in what appear to be two overdrafts which the applicant apparently had with the respondent bank. The amount now said to be the applicant's indebtedness is set out in an - affidavit sworn today by an officer of the respondent bank, M r Rajesh Chand, as $27,993.12. The applicant says that he is unable to resist this claim and has no contrary evidence or any wish to cross-examine Mr Chand.

I therefore take it that the applicant withdraws the defence filed to the cross-claim on 3 October 1991, leaving the cross- claim undefended.

The Court rules in this regard are a little complex. Order 20 rule 1 makes provision in respect of summary juddgment on an applicant's claim for relief and requires that notice must be given of any application for judgment. On the face of it, that rule does not apply to this case because the respondent

that the rule is not intended to put a respondent in exactly	is making the claim for relief, but it is difficult to imagine
the same position on a cross-claim as an applicant is on a substantive claim.
Order 19 rule 3 makes provision that the motion in writing must be served not less than three days before the date fixed for the motion. However, Order 1 rule 8 makes provision that the Court may dispense with compliance with any of the requirements of the rules, either before or after the occasion for compliance arises. In those circumstances, I take the respondent to be applying for dispensing with the requirement that three days written notice in advance be given of an application for summary judgment on the cross-claim in the - absence of a defence from the applicant.
RECORDED NOT TRANSCRIBED
The respondent puts the alternative proposition that I can proceed to a hearing of the cross-claim, based upon the affidavit evidence of the bank officer. There are two affidavits sworn by M r Chand; one is 20 January 1992, the other is 29 June, to which I have earlier adverted. There is no wish to cross-examine Mr Chand and there is no contrary evidence. In the circumstances, I agree that I can proceed to enter judgment for the respondent on the cross-claim fol: $27,993.12, without worrying about the rules as to summary judgment.
claim and the cross-claim to be assessed or taxed. The I order that the applicant pay the respondent's costs of the
documents that have been produced on subpoena may go back to the persons who produced them.

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