Zek's Clothing and Giftware Pty Ltd v Li's T-Shirt Pty Ltd

[2002] FCA 462

FEDERAL COURT OF AUSTRALIA

Zek’s Clothing & Giftware Pty Ltd v Li’s T-Shirt Pty Ltd
[2002] FCA 462

ZEK’S CLOTHING AND GIFTWARE PTY LIMITED v LI’S T-SHIRE PTY LIMITED
V 3001 OF 2002

GYLES J
SYDNEY
9 APRIL 2002

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	V 3001 OF 2002

BETWEEN:	ZEK'S CLOTHING AND GIFTWARE PTY LIMITED APPLICANT
AND:	LI'S T-SHIRT PTY LIMITED RESPONDENT
JUDGE:	GYLES J
DATE OF ORDER:	9 APRIL 2002
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The application is dismissed.

2.          The applicant is to pay the costs of the respondent on a solicitor/client basis.

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	V 3001 OF 2002

BETWEEN:	ZEK'S CLOTHING AND GIFTWARE PTY LIMITED APPLICANT
AND:	LI'S T-SHIRT PTY LIMITED RESPONDENT

JUDGE:	GYLES J
DATE:	9 APRIL 2002
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. In this matter, as the transcript will record, the Sydney solicitor on the record appeared this morning in order to seek leave to file a notice of ceasing to act.  Ultimately that leave was granted, it transpiring that the solicitor on the record in Melbourne, who directly represents the client, recently had his instructions withdrawn.  There is no other appearance by or for the applicant.  The matter thus proceeds in the absence of the applicant. 

2. It is inevitable that this application for relief pursuant to s 459G of the Corporations Act 2001 (Cth) should be dismissed, and it will be dismissed, but counsel for the respondent seeks an order that costs be paid on an indemnity basis, in view of the history of the matter. He submits that the affidavit which was filed in support of the application which was made in January in Melbourne is a document which, if the rules were applied to it, would form a very slender basis for this application. That, in itself, would not normally provide a basis for any special order as to costs. However, it is submitted that the subsequent history of the matter reveals that this application is an abuse of the process as it was commenced for the collateral purpose of deterring the respondent from pursuing matters against it, at least in the short term.

3. I will not sketch in detail the history of the matter.  On 15 March directions were given as to the filing of further affidavits by the applicant.  That, of course, provided no obligation for the filing of further affidavits, but bearing in mind the fact that there were comprehensive affidavits filed by then on behalf of the respondent, it would have been expected, were the matter to proceed, that there would have been some answering material.  When the matter came before me on 26 March, I granted no leave to the applicant to file further evidence, and the matter was set down for hearing today.  I do not have a transcript of those proceedings before me at the moment, but I do recall making it clear to the solicitor who appeared for the applicant on that occasion that it was not to be assumed that any leave would be granted, and there would have to be a case made out for it in view of the fact that there was no explanation tendered on that day for the absence of evidence.  Indeed, my recollection is that the solicitor who appeared for the applicant was unable to give any assistance to me at all in relation to preparation of the case on behalf of the applicant.

4. The matter thus comes on for hearing today before me.  Subpoenas have been issued, I am told, and made returnable and, indeed, there was a witness here from interstate to give evidence.  It seems to me that the respondent does make a sound case for a special order as to costs.  The history of the matter goes beyond the filing of an insufficient affidavit in the first place.  There has been literally no action on behalf of the applicant since the filing of that affidavit, apart from some formal appearances from solicitors, who have said they have received no instructions or have nothing to add to the matter.

5. In those circumstances, it is a fair inference that the applicant did not intend to properly pursue this matter, or at least has not intended to properly pursue the matter for many weeks now.  In all the circumstances, I think that the appropriate order for costs is that costs be paid on a solicitor/client basis.  I am reluctant to make an order for indemnity costs without much greater knowledge of what those costs might be likely to be.  The respondent has not sought any order against the solicitors for the applicant.

6. The order of the Court, therefore, is that, in view of the absence of the applicant, the application is dismissed.  The applicant is to pay the costs of the respondent on a solicitor/client basis.

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Associate:

Dated:            16 April 2002

Solicitor for the Applicant:	Makinson & d’Apice, Sydney agents of Dominic Esposito Solicitors
Counsel for the Respondent:	P Glissan
Solicitor for the Respondent:	Rutland’s Law Firm
Date of Hearing:	9 April 2002
Date of Judgment:	9 April 2002