Anderson Formrite Pty Ltd v Baulderstone Pty Ltd

REASONS FOR JUDGMENT 1 The matter presently before the Court is a Notice of Motion filed by the respondent on 24 March 2009 seeking, amongst other things, an order that a verdict be entered in favour of the respondent in the proceedings. Another Notice of Motion presently before the Court and heard together with the earlier Notice of Motion was one filed in Court by the applicant earlier today. That Notice of Motion seeks a variation of an order previously made in respect of the provision of security for costs on or before a date which was agreed between the parties to have been, in the events which have transpired, 16 March 2009. 2 These proceedings were commenced by an application filed 5 July 2007. The application was accompanied by a Statement of Claim filed on the same day. On 23 August 2007, the applicant filed an Amended Statement of Claim and on 15 November 2007, the respondent filed its Defence to the Amended Statement of Claim. 3 On 11 December 2007, the respondent filed a Notice of Motion seeking orders for security for costs, and on 1 February 2008, the applicant filed a Notice of Motion seeking summary judgment under s 31A of the Federal Court of Australia Act 1976 (Cth) in respect of part of its claim. The amount for which summary judgment was sought was $309,455. 4 On 4 February 2008, the Notice of Motion filed 11 December 2007 came before the Court. That motion was stood over to 10:15am on 6 February 2008. On 6 February 2008, the Court was informed at about 12:10pm that the security for costs issue had been resolved, that an agreement had been reached between the parties and that the agreement had been reduced to writing. 5 On 6 February 2008, the Court ordered that the applicant give security for the payment of the respondent's costs that may be awarded against the applicant in accordance with paragraphs 1, 2, 3 and 4 of short minutes initialled by me and dated 6 February 2008. 6 The Court also noted the agreement of the parties contained in paragraphs 5 and 6 of those short minutes, in relation to any default on the part of the applicant. The Short Minutes took the form of a manuscript agreement on a letterhead of the solicitors for the respondent, or more accurately, a form of document bearing the printed name of the solicitors for the respondent. The agreement was signed by Mr Nicholas Mavrakis, as solicitor for the respondent, and by Fiona Touhill, as solicitor for the applicant. The agreement was dated 6 February 2008. Paragraph 4 of the short minutes provided as follows: '(4) The Applicant to provide a further unconditional bank guarantee in favour of the Respondent in the amount of $125,000 on or before a date being 14 days prior to the date upon which the matter is first listed to commence hearing.' 7 In respect of a possible non-compliance by the applicant with paragraph 4 of the short minutes, which was the subject of an order made by the court, the parties agreed as follows: '(6) In respect of order 4, if the Applicant fails to provide to the Respondent the unconditional bank guarantee referred to therein: (1) on the date specified therein, the parties agree that the trial be vacated with an order as to costs thrown away in favour of the Respondent; (2) further if the Applicant continues to be in default of Order 4 for a period of 7 days after the security was due to be provided then the Applicant consents to a verdict being entered in favour of the Respondent with an order for costs in respect of the proceedings' 8 On 7 April 2008 the applicant's Notice of Motion filed 1 February 2008 seeking summary judgment in respect of part of its claim was heard by the Court and on 9 April 2008 an order was made dismissing that Notice of Motion and ordering the applicant to pay the respondent's costs of the motion. 9 On 7 April 2008 an order was made provisionally fixing the matter for hearing on Monday, 30 March 2009 with an estimate of 3 weeks, but on the basis that the hearing would continue until concluded. 10 On 4 November 2008 an order was made that the matter be fixed for hearing commencing on Monday, 30 March 2009 at 10:15am with an estimate of 15 hearing days but on the basis that the hearing would proceed until the matter was concluded. 11 As mentioned earlier the parties are agreed that the date on or before which the applicant was required to provide a further unconditional bank guarantee in favour of the respondent in the amount of $125,000, referred to in paragraph 4 of the short minutes, was 16 March 2009. 12 By its Notice of Motion filed in Court on 20 March 2009 the applicant sought an order that the hearing date of 30 March 2009 be vacated and, amongst other orders, an order that the applicant pay the respondent's costs thrown away as a result of the vacation of the hearing date. This relief was sought on the basis that the applicant failed to provide to the respondent the unconditional bank guarantee referred to in paragraph 4 of the short minutes on or before 16 March 2009 and the agreement of the parties contained in paragraph 6(i) of the short minutes, which was noted by the Court on 6 February 2008. 13 A further basis on which a vacation of the hearing date has been sought relates to a source of funding, referred to in an affidavit of Warren Perry Anderson sworn 18 March 2009, which it was said had been frozen. 14 Whilst it is true that the Court will not necessarily vacate hearing dates by agreement of the parties, this is a case where the parties provided for an agreed vacation of the hearing dates in circumstances which have now come to pass, and the agreement was noted by the Court as long ago as 6 February 2008. 15 When the Notice of Motion was called for hearing, seeking a vacation of the hearing date, senior counsel for the respondent indicated that whilst the respondent accepted and acknowledged the terms of its agreement with the applicant of 6 February 2008 contained in paragraph 6 of the signed short minutes, nevertheless, it opposed the grant of relief as sought by the applicant. After taking further instructions in relation to the matter the respondent withdrew its opposition to the making of the orders sought. 16 In my opinion it would be quite inappropriate for the Court to act otherwise than in accordance with the agreement of the parties, which it noted as long ago as 6 February 2008. 17 On 20 March I made a number of orders including the following: '6. The hearing dates fixed to commence on 30 March 2009 be vacated. 7. The respondent's costs thrown away as a result of the vacation of the hearing dates be paid by the applicant.' 18 The respondent's Notice of Motion filed 24 March 2009 was filed in circumstances where the applicant had continued to be in default of order 4 for a period of 7 days after the security for which Order 4 provided was due to be provided. The agreed date for the purposes of paragraph 6(2) was 23 March 2009. However, whilst the applicant failed to provide a further unconditional bank guarantee in favour of the respondent in the amount of $125,000 on or before 23 March 2009, it did in fact cause an amount of $125,000 to be remitted by bank transfer on 23 March 2009 into the trust account of the solicitors for the respondent, Messrs Clayton Utz. 19 That amount was returned by the solicitors for the respondent shortly after the day on which it was received. However, earlier today an unconditional bank guarantee was provided to the respondent by the applicant, a copy of which is annexure 'Q' to the affidavit of Warren Perry Anderson sworn 27 March 2009. That bank guarantee was provided by Bank SA a division of St George Bank Limited, which I understand now to be a subsidiary of Westpac Banking Corporation. The respondent asks the Court to make an order providing for a verdict to be entered in favour of the respondent in the proceedings on the basis that the further security for costs in the sum of $125,000 was not provided strictly in accordance with the terms of the short minutes of order of 6 February 2008. 20 The relief sought by the respondent is in the nature of specific performance of what is said to have been an agreement between the applicant and the respondent under which the applicant agreed to submit to the order now sought. Specific performance is a discretionary remedy and given that the purpose of the orders on 6 February 2008 was to provide security for costs, one might have thought that the provision of an amount of $125,000 by way of bank transfer on 23 March 2009, was as good as, if not better than, a bank guarantee to provide the necessary security for the benefit of the respondent. 21 I would not be disposed to exercise my discretion to enforce the consent to a verdict contained in paragraph 6(2) of the short minutes of 6 February 2008 in the circumstances. One of the circumstances in which it is proper for the court, in its discretion, to refuse specific performance is where the relief would be such as to inflict an unreasonable hardship upon the party affected by the order. 22 It has been suggested by senior counsel for the respondent that the guarantee, provided by Bank SA does not meet the requirements of paragraph 4 of the short minutes of order of 6 February 2008. Order 4 required a 'further unconditional bank guarantee in favour of the respondent in the amount of $125,000' to be provided. It seems to me that the form of bank guarantee now in place, being annexure 'Q' to the affidavit of Mr Anderson of 27 March 2009, answers the description of the form of unconditional bank guarantee required by Order 4. 23 In my opinion, the somewhat strange history of this matter in recent weeks requires that the respondent be given an opportunity to have the case against it heard and disposed of promptly. The parties are agreed that Monday, 20 April 2009 would be a convenient date for the commencement of the hearing of the proceedings, in the events which have transpired. There has been no indication to suggest that the estimate of 15 hearing days originally made is inappropriate. I note that senior counsel for the respondent, and perhaps junior counsel also, will be unavailable on 7 and 8 May 2009 and I would be disposed to adjourn the hearing