Aircent Pty Ltd v Apple Computer Australia Pty Ltd

5 At all material times, at least from 22 June 2001 (when the original cross-claim was filed in the Supreme Court), the issues raised in the instant proceeding, in my view, could have, and should have, been agitated in the Supreme Court. It is highly artificial to draw a distinction between Mr Liu's role in the Supreme Court and Aircent's role in the Federal Court. Their interests were common at all material times. It was inappropriate in the circumstances to issue the application in this Court. As was said by Mason CJ, Deane and Dawson JJ in Walton v Gardiner (1993) 177 CLR 378 at 393: "… proceedings within the jurisdiction of a court will be unjustifiably oppressive and vexatious of an objecting defendant, and will constitute an abuse of process, if that court is, in all the circumstances of the particular case, a clearly inappropriate forum to entertain them." 6 This Court, given the existence of the proceeding in the Supreme Court and Mr Liu's obvious relationship to Aircent, was a clearly inappropriate forum in which to entertain Aircent's claim. Further, as Goldberg J said in Software Engineers Australia (NSW) Ltd v Bonket Pty Ltd [2002] FCA 1168 at [29]: "… it is undesirable that there be parallel proceedings in relation to the determination of issues of common fact." 7 The Court will order, pursuant to O 20 r 2 of the Rules of Court, that the application be dismissed. It is unnecessary for present purposes to consider whether the application was made for an improper purpose, as distinct from the other categories contemplated by the consideration that a particular action would constitute an abuse of process. It is sufficient in my opinion to rely on the circumstances which were adverted to by the High Court in Walton v Gardiner, at the passage cited above. 8 I see no purpose in staying the proceeding, as distinct from dismissing it, given that it should never have been commenced at all. There was overwhelming duplication between Mr Liu's cross-claim in the Supreme Court and Aircent's claim in this Court. Additionally, counsel for Mr Brott said that the matter, if stayed, would never be agitated in the Supreme Court. I note also that no formal application was made, in Mr Brott's motion, for the matter to be stayed. 9 The next question which arises for consideration is the question of costs. Having succeeded on the principal claim in their motion, it is appropriate that the respondents have their costs of the proceeding and of the motion. Where should those costs come from? The respondents seek costs from Mr Brott on an indemnity basis. Mr Brott resists any order of that type. Alternatively he contends that Aircent and Mr Liu should pay the respondents' costs. In the further alternative, Mr Brott seeks to be indemnified by Mr Liu and Aircent in respect of any costs orders made against him. In the additional alternative, he contends that the new solicitors should pay the costs or indemnify him in respect of any adverse costs order. Finally, he also seeks costs against the respondents. Aircent, additionally, resists any cost order being made against it. 10 There is no basis whatsoever for the making of any costs orders against the respondents. They have successfully moved the Court to dismiss the proceeding. I found that it was inappropriate to issue the current application in this Court. Mr Brott gave evidence that he did so on express instructions of Aircent and Mr Liu. I note in particular the role of Mr Liu in those instructions, given the fact that he was, at that time, a cross-claimant in the Supreme Court. 11 Mr Brott denies being at fault. His evidence in that regard has not been contradicted but has been the subject of criticism, given that it was submitted that he should have known better. However, Mr Brott gave no evidence about any instructions to persist in the application after 10 April 2002, notwithstanding what senior counsel told the Supreme Court on that day. I consider it appropriate therefore to make a costs order against Mr Brott in respect of all costs incurred by the respondents from 10 April 2002 until he ceased to act for Aircent on 1 October 2002. 12 It is not to the point that Mr Brott considers that his instructions were generally withdrawn (in both courts) when he ceased to act in the Supreme Court on 25 June 2002. He did not file a notice of ceasing to act pursuant to O 45 r 7 of the Rules of Court, or otherwise comply with that provision. He was the solicitor on the record for Aircent when the respondents' motion was filed and served. 13 I also consider that the costs order against Mr Brott in respect of the period of time referred to at [11] should be made on an indemnity basis. As Woodward J said in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401: "I believe it is appropriate to consider awarding 'solicitor and client' or 'indemnity' costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion." (emphasis added) 14 This case differs from Fountain Selected Meats in that the Court is not in a position to determine that the particular action has no chance of success, but in my view it is sufficient that it should not have been continued in circumstances where senior counsel effectively communicated that to the Supreme Court on 10 April 2002. In my view, the continuation of what was clearly an embarrassing overlap of legal issues between two courts, could and should have been avoided by competent advice from competent practitioners. 15 In respect of the other periods relevant to this application, 21 March to 9 April 2002 and 1 October to 15 October 2002, I propose to make a costs order adverse to Aircent. I see no reason in particular to make that order on an indemnity basis. Further, I see no reason to make an order adverse to Aircent or Mr Liu in respect of Mr Brott's motion. I make the following orders in respect of the respondents' motion:

1. That the substantive proceeding be dismissed.

(1993) 177 CLR 378

(1988) 81 ALR 397