BDT Holdings Pty Ltd v Piscopo

principles AS TO GRANTING LEAVE TO Discontinue 5 Where a party seeks to discontinue proceedings without the leave of the court, ordinarily, that party becomes liable to pay the costs of the other party or parties unless, in cases where they consent, the consent provides otherwise. As Jacobson, Siopis and Foster JJ said in Rickus v Motor Trades Association of Australia Superannuation Fund Pty Limited (2010) 265 ALR 112 at 136 [116], O 22 r 3 reflects a more general policy of the law to the effect that a party should always be permitted to discontinue his, her or its proceedings, but that, in the modern setting, they should usually have to pay the costs of the other parties occasioned by the bringing of the proceedings and their subsequent abandonment. Their Honours noted that in Mineralogy Pty Limited v National Native Title Tribunal [1998] FCA 1700, Lee, Tamberlin and RD Nicholson JJ had held that, when the court was considering the question of costs in relation to an application for leave to discontinue proceedings pursuant to O 22 r 2(1)(d), the appropriate test to apply was that explained by McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 at 624-625. 6 Jacobson, Siopis and Foster JJ noted that in Mineralogy [1998] FCA 1700 the Full Court had held that, in most cases where there has been no trial on the merits, it is not appropriate, in determining an issue of costs, to make a prediction as to the outcome of the hypothetical case. They said that the question of costs thrown up by a grant of leave to a trustee (of a superannuation fund) to discontinue proceedings was one which had to be determined in light of that discontinuance and having regard to the circumstances in play at the time that the discontinuance was put into effect: Rickus 265 ALR at 136-137 [118]. 7 In Qin 186 CLR at 624, McHugh J cautioned against a court being put in a position, when the moving party no longer wished to proceed with the action, of trying a hypothetical action between the parties. He drew attention to the need to consider whether or not the parties could be seen to be acting reasonably in their stances. McHugh J identified the ordinary rule as being that, if it appeared that both parties had acted reasonably in commencing and defending the proceedings, and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the costs discretion will usually mean the court will make no order as to the cost of the proceedings: Qin 186 CLR at 625. The Full Court followed that approach in Rickus 265 ALR 137 [119]-[120].

Consideration 8 Here, the trustee also sought today to rely upon material in an affidavit which he had read last year for the purposes of obtaining leave to join and serve Ms Walker and Nominee Shareholders in New Zealand: BDT Holdings Pty Limited v Piscopo (No 2) [2009] FCA 1126. There, I determined that there was a sufficient prima facie case, on the material then before me, to show that inferences were open that, if translated into findings of fact, would support the relief claimed. That was the test for service out of the jurisdiction identified in Ho v Akai Pty Limited (in liq) (2006) 24 ACLC 1526; [2006] FCAFC 1598 at [10] per Finn, Weinberg JJ and myself. However, such a finding on an application to serve outside the jurisdiction is not a determination of anything more. It is an interlocutory proceeding. The material on which Mr Piscopo relied at that time may or may not have been admissible in evidence on a final hearing so as then to give rise to inferences that, if translated to findings of fact, actually would support the relief claimed. 9 It would be inappropriate to determine, on the present motion, the validity of the claims made by Mr Piscopo against Mr Hill. Mr Hill has not had to answer them at this stage. To require him now to do so would involve the Court in having to undertake the very exercise which McHugh J pointed out ought be eschewed: Qin 186 CLR at 624. Mr Piscopo no longer wishes to pursue these proceedings. That is his right. In my opinion, I should grant him leave to file and serve a notice of discontinuance against each of Nominee Shareholdings, the fourth cross-respondent, Ms Walker, the fifth cross-respondent and Mr Hill, the tenth cross-respondent, on or before 23 December 2010. If no notice of discontinuance is filed by then, I will order that, on 24 December 2010, the cross-claim be dismissed against each of those respondents, with no order as to costs. I see no reason why, on the material Mr Piscopo has put before me, it would be appropriate to order Mr Hill or Ms Walker to pay costs. 10 Given that Mr Piscopo has filed no evidence to elucidate the basis of his present application, I am not able to resolve the circumstances as to why Ms Walker, Nominees Shareholdings or Mr Hill have not been involved in the otherwise successful resolution of these proceedings and, apparently, the Federal Magistrates Court proceedings. Because I cannot resolve the rights and wrongs of the proceedings, it seems to me that the appropriate order is, other than on this motion, to make no order as to the costs of the proceedings as against the three parties against whom Mr Piscopo seeks leave to discontinue. 11 Mr Hill, however, has been served with the motion and has opposed it. Indeed, his opposition is both reasonable and supported by authority of Full Courts of this Court and McHugh J as a single justice of the High Court. Mr Hill has appeared in person, representing himself, as he has throughout most of the proceedings. Such costs as he may be able to recover, were an order for costs made in his favour, are within a narrow compass: Cachia v Hanes (1994) 179 CLR 403. In my opinion, the motion is misconceived, and I will order that it be dismissed with costs. 12 Mr Piscopo should not be entitled to claim any indemnity out of the bankrupt estate of Mr Hill in respect of the motion seeking leave to discontinue: Donnelly v Maxwell-Smith [2010] FCAFC 154 per Bennett, Rares and McKerracher JJ. It will be a matter for the taxing officer to determine whether and to what extent the bankrupt estate ought to bear any costs involved in the cross-claim that Mr Piscopo brought against Mr Hill which is now to be discontinued or dismissed. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.