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[1994] FCA 1504
Federal Court of Australia
1994-11-23
Drummond J
Original judgment source is linked above.
THE APPLICATION FILED ON 10 JULY, 1992 AND HEARD ON 27 JULY, 1992
18. On 27 July, 1992 the Registrar, by consent, made orders in effect extending the time earlier fixed for the applicant to file his affidavit of discovery and to provide the particulars sought by the objectors on 15 June, 1992 from 7 July to 10 August, 1992; he also ordered the applicant to give inspection of his documents by 18 August, 1992 and an order that "the applicant pay the objectors' costs of and incidental to this application to be taxed". (Another order, also then made by consent, was that "costs be reserved in respect of all aspects of the matter before the Court today". I was told by counsel for the objectors that the second costs order erroneously recorded what was intended and that it should have expressly referred to the summons - apparently a summons to a stranger to the litigation to produce documents - referred to in another of the orders then made. Counsel for Mr. Hewlett did not dispute this.)
19. In the period between the order of 30 June, 1992 and the order of 27 July, 1992, specifically 8 July, Mr. Hewlett filed and served his client's affidavit material. This resolved the matter of Mr. Bendeich's evidence. After discussions between Mr. Hewlett and Mr. Bendeich on 9 and 10 July, Mr. Hewlett, on 13 July, 1992, delivered to Lynch and Co. the particulars which should, in accordance with the order of 30 June, have been delivered by 7 July. He also delivered, at the same time, Mr. Bendeich's affidavit of documents, which should have been served by 7 July also. It is not possible from the material before me to identify what action Mr. Hewlett took in relation to the preparation of the affidavit of documents. Mr. Bendeich, in his affidavit, refers only to conversations with Mr. Hewlett on 29 June and then on 13 July, 1992 concerning the provision of this affidavit. But Mr. Hewlett must have done a deal of work on the affidavit between these two dates to have been able to serve it on 13 July. In the meantime, on 10 July, Lynch and Co. filed and served the application that led to the hearing on 27 July.
20. Neither the particulars nor the affidavit of documents, which they got on 13 July, i.e., three days after filing this application, satisfied Lynch and Co.. On 14 July, 1992 Lynch and Co. wrote to Mr. Hewlett setting out what they said were a number of deficiencies in the form of the affidavit of documents. They called on Mr. Hewlett to file a fresh affidavit of discovery which met the objections they raised. By a second letter of the same date, they also complained about the inadequacy of the particulars and requested the supply of further particulars. Despite complaint by Lynch and Co., Mr. Hewlett ignored the direction of 30 June that Mr. Bendeich give inspection of his documents by 14 July. It may be that Lynch and Co.'s ongoing complaints about deficiencies in the affidavit of discovery and the fact that, as early as 10 July, they had filed their application returnable on 27 July, when they proposed to raise this matter, coupled with Mr. Hewlett's acceptance, evidenced by his conduct on 27 July, that a fresh affidavit of documents should be filed, caused Mr. Hewlett not to take any action in that particular regard.
21. Apart from telling Mr. Bendeich on 13 July that Lynch and Co. were making an application to the Court on 27 July for further directions relating to the affidavit of documents, Mr. Hewlett did not mention anything to Mr. Bendeich about Lynch and Co.'s complaints, although it appears from paragraph 54 of Mr. Bendeich's affidavit filed 1 September, 1993 that there must have been some discussion concerning additional discovery since Mr. Bendeich says that, without any intervening discussion with Mr. Hewlett about the matter, on 7 August he provided Mr. Hewlett with, among other things, material relating to discovery. Nor did Mr. Hewlett inform Mr. Bendeich prior to the hearing on 27 July (or after it, either) of the orders made that day by consent, including the order that Mr. Bendeich pay the objectors' costs of that hearing. This is so even though Mr. Hewlett and Mr. Bendeich conferred on Sunday, 2 August, about the case and had, on 17 July, spoken about other matters associated with the case.
22. On 24 July, Lynch and Co. referred to the forthcoming hearing on 27 July and proposed a consent order to Mr. Hewlett. He responded the same day, agreeing to Lynch and Co.'s proposals, although he made some suggestions which were agreed to by Lynch and Co. and incorporated in the consent order made on 27 July. Mr. Hewlett, however, accepted that a new affidavit of documents was required and that further particulars should also be provided.
23. He was, in relation to the application heard on 27 July, in breach of his duty to his own client by failing to keep him informed of what was happening and by consenting, without instructions, to the costs order then made. He was also in breach of his duty to the Court in that he failed to move with the expedition required by the order of 30 June: he was six days late in having the particulars and the affidavit of documents prepared, completed by Mr. Bendeich and served and he achieved that only after Lynch and Co., acting reasonably, filed the application that was ultimately heard on 27 July. But however his breaches of duty are characterised, they did not cause the objectors to incur any useless costs. Although Lynch and Co. filed their application on 10 July, once they received on 13 July the outstanding particulars and affidavit of documents, they raised new issues, viz., the alleged insufficiency of those particulars and of that affidavit. They used their now-pending application to obtain orders designed to resolve those new issues (and the issue of inspection to which I have already referred). The objectors' counsel did not submit to me that Lynch and Co.'s criticisms of the affidavit of documents and the particulars were so plainly well- founded that it would have been hopeless for Mr. Bendeich to have resisted the making of further orders in those respects. He would not have done that, at any event in relation to the particulars, given Lynch and Co.'s later abandonment of their demand for that information. The making of this application on behalf of the objectors and its hearing on 27 July did not therefore cause them to incur useless costs: rather did they achieve, as a result, a new position in the litigation to their advantage. Moreover, they got their costs of that application from Mr. Bendeich and it is irrelevant, so far as the objectors' position is concerned, out of whose pocket - Mr. Hewlett's or Mr. Bendeich's - those costs were paid. They therefore have no entitlement to the order for further costs which they seek against Mr. Hewlett in respect of this application.
THE APPLICATION FILED ON 2 SEPTEMBER AND HEARD ON 14 SEPTEMBER, 1992
24. Having agreed, without reference to Mr. Bendeich, that the latter's affidavit of documents was so deficient that a fresh affidavit was required, Mr. Hewlett for a time did nothing to comply with the order of 27 July. Although the evidence is incomplete, it appears from Lynch and Co.'s letter of 1 September that Mr. Bendeich's fresh affidavit of documents which the order of 27 July required to be served by 10 August was still outstanding and that on 10 August Mr. Hewlett began to assert that, despite the order of 27 July to which he had consented on behalf of Mr. Bendeich, Mr. Bendeich's original affidavit served on 13 July was sufficient compliance with his client's discovery obligations. Lynch and Co. understandably would have none of this. On 1 September, 1992, they complained about the failure of Mr. Bendeich to provide the fresh affidavit of discovery required by that order and said they would file an application seeking enforcement of the order if that affidavit was not received by close of business that day. The affidavit was not received and on 2 September, Lynch and Co. filed the application that came before the Court on 14 September. On 9 September, Lynch and Co. wrote to record that the affidavit still had not been received notwithstanding the filing of the application and (having apparently inspected some of Bendeich's documents) reiterated their demand for an affidavit properly identifying various of the documents and rejected Mr. Hewlett's suggestion that they should interrogate to ascertain that information as a step which would be wasteful and inappropriate. On 10 September, Lynch and Co. wrote to advise Mr. Hewlett that they were abandoning their entitlement under the order of 27 July for the further particulars, but were persisting with their claim for a further affidavit of discovery. Mr. Hewlett replied the same day, enclosing Mr. Bendeich's new affidavit of documents (a month after the time fixed by the order of 27 July); he repeated his earlier assertion that adequate discovery had already been made and that if Lynch and Co. wanted to know the identity of the author of any document already discovered, Mr. Hewlett had Mr. Bendeich's instructions to inform Lynch and Co. of Mr. Bendeich's preparedness to do that. (This was false: Mr. Bendeich gave no such instructions, although Mr. Hewlett probably expected to have no difficulty in persuading Mr. Bendeich to do this, if the need arose.) He also suggested that the application brought by Lynch and Co. and due to come before the Court on 14 September should be adjourned to the Registry. Lynch and Co.'s response of 11 September was to maintain the complaint first made on 14 July as to the inadequacy of Mr. Bendeich's fresh affidavit of documents in failing properly to describe the documents in respect of which privilege was claimed; they said that unless this deficiency was remedied, "our client intends to persist with its notice of motion (filed 2 September) in this regard." There apparently was a discussion between Mr. Lynch and Mr. Hewlett on 11 September which led to Mr. Lynch, under cover of his facsimile of that same date, forwarding to Mr. Hewlett a proposed consent order to be put before the Court on 14 September. Lynch and Co. took up Mr. Hewlett's suggestions and included in this an order that the objectors have leave to interrogate Mr. Bendeich. It appears that Mr. Hewlett advised Lynch and Co. that Mr. Bendeich was agreeable to the proposed order. Mr. Bendeich, however, had no knowledge that Lynch and Co. were dissatisfied with his new affidavit of documents served on 10 September or that they had filed an application on 2 September. Nor did he know that an application had come before the Court on 14 September until the next day, when Mr. Hewlett telephoned him to advise him that the matter had been mentioned the previous day.
25. On 14 September, the District Registrar ordered by consent that the objectors have leave to deliver interrogatories for the examination of Mr. Bendeich and that Mr. Bendeich file and serve an affidavit of discovery identifying the documents contained in Schedule 1 Part 2 of his affidavit of discovery filed on 10 September, 1992 sufficiently to enable the objectors to evaluate any claim for privilege asserted by Mr. Bendeich, by 28 September, 1992. It was also ordered by consent that Mr. Bendeich pay the objectors' costs of and incidental to the application that was heard that day.
26. Mr. Bendeich knew nothing of the events leading up to this consent order being made by Mr. Hewlett on his behalf and he did not give any instructions to Mr. Hewlett to consent to any of the orders then made. At no time did Mr. Hewlett tell Mr. Bendeich that he had to file a further affidavit of documents as required by the consent order of 14 September.
27. When the objectors' application came before the Court on 14 September, they had previously abandoned their right to the particulars that Mr. Bendeich was ordered, on 27 July, to provide by 10 August. They had had Mr. Bendeich's fresh affidavit of documents from 10 September which met some of Lynch and Co.'s objections to his first affidavit of documents. Inspection of Mr. Bendeich's documents had taken place. The only matters dealt with at the hearing on 14 September were thus the objectors' complaint about the continuing deficiency in Mr. Bendeich's fresh affidavit of documents which Lynch and Co. had raised for the first time on 14 July and which Mr. Hewlett conceded, by consenting to the order of 27 July, was well-founded but which he failed to attend to thereafter; the question of interrogation of Mr. Bendeich, suggested by Mr. Hewlett in early September and discussed further between him and Mr. Lynch on 11 September, and the costs of that particular application.
28. Once again, Mr. Hewlett committed numerous breaches of his duty to his own client in connection with the events that led to the filing on 2 September and disposal on 14 September of this application. He was also in breach of his duty to the Court in this same regard since he delayed until 10 September, i.e., until after the application was filed, in having Mr. Bendeich comply with the order of 27 July requiring the filing of a fresh affidavit of documents by 10 August. Mr. Hewlett's delay did not result in the objectors' incurring costs uselessly in respect of the application filed 2 September and heard on 14 September. No attempt was made by counsel for the objectors to suggest that by overseeing preparation of and by filing this second affidavit of documents, Mr. Hewlett was in breach of his duty to the Court because it was manifestly defective and so he was liable, for that reason, to compensate the objectors in respect of their costs of this application. But they were put to the trouble of applying for a further order with respect to Mr. Bendeich's affidavit of documents because Mr. Hewlett did nothing in the period between 27 July and 14 September to remedy one of the defects he conceded existed in Mr. Bendeich's original affidavit of documents when he consented to the order of 27 July.
29. However, in addition to a further order that Mr. Bendeich do what he had been required by the order of 27 July to do with respect to further discovery, the objectors also sought and got, as a result of their application that was heard on 14 September, the forensic advantage of an order allowing them to interrogate Mr. Bendeich. Some of their solicitor and own client costs of this application would have been incurred in relation to their objection to the adequacy of Mr. Bendeich's particulars, an objection abandoned on 10 September. They did not seek an order against Mr. Hewlett limited to so much of their costs of this application as were attributable to their complaint about the continuing defect in Mr. Bendeich's affidavit of documents. In these circumstances, I am not prepared to find that Mr. Hewlett's default in this particular regard caused the objectors to needlessly incur costs in respect of this application to any significant extent. They are not entitled to relief against Mr. Hewlett in respect of this application.
THE APPLICATION FILED ON 28 OCTOBER AND HEARD ON 6 NOVEMBER, 1992
30. On 15 September, Mr. Hewlett telephoned Mr. Bendeich to tell him that the matter had been mentioned the previous day and that the objectors would be delivering interrogatories and he would have to identify the author of particular documents. Mr. Hewlett did not, however, mention that he had consented on Mr. Bendeich's behalf to Mr. Bendeich paying the objectors' costs of this application, the third time that such an order had been made. The same day, Lynch and Co. forwarded to Mr. Hewlett the objectors' interrogatories. They were voluminous: they run to 124 pages. They appear to owe more to the capacity of the word processing equipment of the objectors' solicitors than to any professional judgment by them about the information the objectors truly needed to run their case. They went well beyond seeking identification of the authors of certain documents produced by Mr. Bendeich on inspection, the matter in respect of which Mr. Hewlett suggested it was appropriate to interrogate earlier on. Mr. Lynch appears to have sought to justify this by saying in his covering letter: "Our decision to interrogate your client is, in part, based upon the vigorous submissions made by you, on behalf of the Applicant, in your recent correspondence that it was entirely appropriate to interrogate your client with respect to this matter." Rule 143(1) required Mr. Bendeich to answer these interrogatories by 29 September, 1992. Mr. Hewlett never gave them to Mr. Bendeich; he did not see them until after he had terminated Mr. Hewlett's retainer and was shown them by his new solicitor on 25 November, 1992. It may be that, once he received these very extensive interrogatories, Mr. Hewlett was too embarrassed to inform Mr. Bendeich of the burden he had created for Mr. Bendeich by proposing that the objectors interrogate and then by consenting to them having unrestricted leave to interrogate. He made no attempt to obtain instructions from Mr. Bendeich to answer them. He just ignored the matter. He also long ignored his obligation to ensure that Mr. Bendeich complied with the order of 14 September insofar as it required Mr. Bendeich to file and serve a third affidavit of documents by 28 September, 1992.
31. On 24 September, 1992, Mr. Lynch apparently proposed to Mr. Hewlett a meeting with Mr. Bendeich with a view to resolving the dispute between the objectors and Mr. Bendeich in the Federal Court, and also certain Supreme Court proceedings. Mr. Hewlett promptly relayed this approach to Mr. Bendeich and a meeting was held on 30 September between Messrs. Hewlett, Lynch and Bendeich to discuss the objectors' settlement proposal. The proposal came to nothing. This cannot excuse Mr. Hewlett's inaction.
32. On 8 October, 1992, Lynch and Co. wrote to Mr. Hewlett demanding that Mr. Bendeich comply with his obligations in relation to discovery - he should have filed a further affidavit as required by the consent order of 14 September by 28 September - and, with respect to interrogatories - he should have filed his answers by 29 September, 1992. Lynch and Co. gave Mr. Hewlett only until the following day to attend to these matters and threatened to file an application if this was not done. Mr. Hewlett did nothing. Lynch and Co. filed the application with respect to Mr. Bendeich's affidavit of documents on 28 October, returnable on 6 November. Further complaints by Lynch and Co. on 28 October and on 30 October about the absence of any answers by Mr. Bendeich to their interrogatories produced no response on the part of Mr. Hewlett and, on 2 November, Lynch and Co., as they foreshadowed in their letter of 30 October to Mr. Hewlett, filed the application for an order that Mr. Bendeich answer the interrogatories. It was returnable on 1 December, 1992.
33. Mr. Bendeich spoke with Mr. Hewlett on 12 October and again on 28 October about briefing counsel and about pressing on with his application for registration. On the latter occasion, Mr. Hewlett told Mr. Bendeich that he had spoken with Mr. Lynch and that Mr. Bendeich was outside the period of time allowed to him to answer the interrogatories; when he expressed concern, Mr. Hewlett told him that he was looking after the matter for him. Mr. Bendeich said that, until then, Mr. Hewlett had not told him that the objectors had, in fact, already delivered interrogatories.
34. On the morning of 6 November, Lynch and Co. forwarded to Mr. Hewlett a draft order and invited his consent to its being made. Mr. Hewlett gave consent on behalf of Mr. Bendeich and an order was then made which, in effect, extended the time fixed by the order of 14 September, 1992 for Mr. Bendeich to file a third affidavit of documents from 28 September, 1992 to 13 November, 1992 and which went on to order that, in default, Mr. Bendeich's originating application for registration as a trustee was to be dismissed and he was to pay the objectors' costs of and incidental to that originating application, including all reserved costs. The only other order made, again by consent, on 6 November was an order that Mr. Bendeich pay the objectors' costs of and incidental to that particular application.
35. Quite apart from the serious breaches of duty to his own client committed by Mr. Hewlett in the period between 14 September and 6 November, he was also in serious breach of his duty to the Court in that period: throughout the whole of that period he simply did nothing to have Mr. Bendeich comply with the order made on 14 September, 1992 for the filing and service of a third affidavit of documents, an order to which he consented on behalf of Mr. Bendeich. His breach of duty to the Court in this regard is probably explained, but not of course justified, by his breach of duty to his own client constituted by his failure to mention that he had consented to such an order on 14 September and that Mr. Bendeich was under an obligation imposed by order of the Court to file yet another affidavit of documents. Nor did he do anything with respect to the order which he also consented to on behalf of Mr. Bendeich on 14 September which resulted in Mr. Bendeich coming under an obligation under the Bankruptcy Rules to file and serve answers to the objectors' interrogatories delivered on 15 September by 29 September. His duty was clear: either he was bound, following receipt of the interrogatories, to take instructions from his client and attend to the preparation of Mr. Bendeich's answers or he was bound, after advising and taking instructions from Mr. Bendeich, to object to answering the interrogatories because of their oppressiveness. His breach of duty to the Court here is also explained, but not justified, by the fact that, in breach of duty to his own client, he failed to let his client know just what he had committed him to in relation to interrogatories.
36. As a result of these breaches by Mr. Hewlett of his duty to the Court in this period, the proceedings simply languished. The objectors, acting reasonably, were left with no option but to bring matters to a head by making their application relating to discovery which was heard on 6 November. They achieved nothing by taking those steps other than a reiteration by the Court of the obligation which the Court imposed by consent on Mr. Bendeich back on 14 September. Mr. Hewlett's breach of duty to the Court in the period now in question thus directly resulted in the objectors' incurring the costs of filing the application of 28 October and the costs associated with the disposal of that application, on 6 November. The objectors, of course, obtained, by Mr. Hewlett's actions on behalf of Mr. Bendeich, an order that Mr. Bendeich pay the objectors' costs of and incidental to that application. That order stands, notwithstanding that Mr. Hewlett had no authority from his client to consent to the making of that order. But whether Mr. Bendeich pays these costs to the objectors out of his own pocket or extracts the money from Mr. Hewlett is irrelevant for present purposes. For the reasons I have given, in addition to being entitled to look to Mr. Bendeich for their party and party costs of and incidental to the application heard on 6 November, 1992, the objectors are entitled to an order that Mr. Hewlett pay to them the difference between their party and party costs of that hearing recoverable from Mr. Bendeich and the costs they have reasonably incurred to their own solicitors in connection with that matter.
THE APPLICATION FILED ON 2 NOVEMBER AND HEARD ON 1 DECEMBER, 1992 37. As I have mentioned, the objectors made this application to obtain, for the first time, an order that Mr. Bendeich answer their voluminous interrogatories.
38. On 1 December, 1992 I dismissed this application and made no order as to the costs associated with it. I did this because, as appears from what took place in argument on that day, I took the view that the interrogatories were generally oppressive and because Mr. Bendeich undertook to provide the limited information which was all that the objectors were legitimately entitled to obtain under the leave they got on 14 September to interrogate him.
39. While a small part of the costs the objectors have incurred to their solicitors in respect of this application was due to Mr. Hewlett ignoring his obligation flowing from the order of 14 September which he consented to on behalf of his client, by far the bulk of these costs here are due to the action of their own solicitors in preparing and pressing for answers to unjustifiably wide ranging interrogatories.
40. The objectors are not entitled to the costs order against Mr. Hewlett which they seek here.
41. The sixth application in respect of which the objectors seek a costs order against Mr. Hewlett is the application filed by Mr. Bendeich on 26 November, 1992 for relief against the self-executing order of 6 November, 1992. This order had operated to bring about the dismissal on 14 November, 1992 of Mr. Bendeich's originating application for registration as a trustee because of Mr. Hewlett's failure to attend to the preparation and filing and service of the requisite affidavit of documents. On 1 December, I heard this application by Mr. Bendeich and set aside the orders of 6 November, 1992; I also ordered Mr. Bendeich to file and serve on or before 8 December, 1992 the third affidavit of documents the subject of the orders of 14 September and 6 November. I reserved my decision on what should be done about the costs of this application. In a judgment reported at [1993] FCA 98; 41 FCR 237, I ordered that the objectors' should have their costs of Mr. Bendeich's application up to, but not including the hearing of that application and that otherwise, there should be no order as to the costs of the application. I deprived the objectors of their costs of the hearing itself because they unsuccessfully opposed the argument advanced at the start of the hearing on behalf of Mr. Bendeich that the Registrar's self-executing order of 6 November, 1992 was beyond power and had to be set aside for that reason alone, quite apart from the discretionary reasons which I held Mr. Bendeich made out and which also justified the setting aside of the orders.
42. That I considered that the appropriate order as between the objectors and Mr. Bendeich was one which denied the objectors their costs of the hearing of 1 December does not necessarily mean that they are also to be denied those costs as against Mr. Hewlett. Quite different considerations govern the latter question from those which governed their entitlement to costs against Mr. Bendeich.
43. Mr. Hewlett was in serious breach of his duty to the Court with respect to his former client's application of 26 November, 1992: he did nothing at all between 11 September and 14 November when the self-executing order operated to bring about the dismissal of Mr. Bendeich's originating application to meet the objectors' specific complaint as to Mr. Bendeich's affidavit of documents, which was the subject of the orders of 14 September and 6 November, a complaint that they had first raised as long ago as 14 July. Mr. Hewlett's activities on 18 November, which he acknowledged as panic-stricken, in procuring Mr. Bendeich to execute a further affidavit of documents, which he falsely told Mr. Bendeich had to be filed by 4.00 p.m. that same afternoon was pointless.
44. The critical question is whether this misconduct on Mr. Hewlett's part caused the objectors to incur costs that have produced no benefit in the advancement of their case in opposition to Mr. Bendeich's application for registration. In a sense, the objectors incurred the costs they did up to the commencement of the hearing on 1 December only because they chose to try to hold on to the advantage they had obtained as a result of Mr. Hewlett's misconduct which allowed the self-executing order to operate to bring about the dismissal on Mr. Bendeich's original application. But in seeking relief against that, Mr. Bendeich deposed to a story of misconduct on the part of Mr. Hewlett that had such an element of improbability about it, although it turned out to be quite true, that the objectors were, in my opinion, entitled to try to hold the position they had achieved on 14 November. It was Mr. Hewlett's misconduct that, in a real sense, caused the objectors to incur the costs of trying to retain this advantage that ultimately turned out to be productive of no benefit to them.
45. In my opinion, the objectors are entitled to an order that Mr. Hewlett pays the difference between the amount of the party and party costs up to but not including the hearing on 1 December, which they are entitled to recover from Mr. Bendeich, and the costs they have reasonably incurred to their own solicitor in respect of Mr. Bendeich's application of 26 November, 1992, up to that same point.
46. It remains to consider whether they are entitled to any of the costs they have incurred in relation to Mr. Bendeich's application from that point. At an early stage of the hearing, counsel for Mr. Bendeich raised the argument that the self-executing order was beyond power and had to be set aside for that reason, an argument which I ultimately found to be correct. The objectors elected to oppose that proposition. That Mr. Hewlett, in breach of duty to both his client and the Court, gave his consent to the making of the self-executing order which I held to have been beyond power does not mean that it was his misconduct that caused the objectors to incur the costs of the hearing on 1 December. Their own solicitors acting on their instructions proposed that order. It seems to me that because the objectors elected to try to hold the advantage they obtained on 14 November from the order of 6 November which was sought and obtained by their own solicitors and opposed the setting aside of that order on the ground that it was made beyond power, they incurred their own costs of the hearing because of a decision of their own, even though it was a decision made against the general background of breaches of duty by Mr. Hewlett.
47. I am not prepared to make any further order in favour of the objectors against Mr. Hewlett in respect of these costs.
THE COSTS OF THE OBJECTORS' SUMMONS TO MESSRS. FEEZ RUTHNING
48. Prior to the self-executing order of 6 November operating to bring about the dismissal of Mr. Bendeich's original application, the objectors issued a summons in the action requiring Messrs. Feez Ruthning to produce certain documents to the Court and it was set down by the Court for hearing on 1 December, 1992, Messrs. Feez Ruthning having indicated that they objected to produce the documents. Mr. Bendeich's application of 26 November, 1992 was also set down by the Court to be heard on 1 December, without any prior notification to the objectors.
49. When the objectors' summons came before me on that day, it was apparent that Mr. Bendeich's application to have his originating proceeding reinstated should be heard first and that it was unlikely that there would be time left to deal with the objectors' summons, should Mr. Bendeich be successful. It was therefore agreed between the objectors and Messrs. Feez Ruthning that the summons should be adjourned to a date to be fixed and that the objectors would pay Messrs. Feez Ruthning's costs.
50. It was said that the adjournment of the objectors' summons was occasioned solely by the filing of Mr. Bendeich's application for reinstatement and the listing of it for hearing on the same day that Messrs. Feez Ruthning's objections to the objectors' summons were also to be heard. The objectors accordingly claim both their own costs of the summons to Messrs. Feez Ruthning thrown away because of the adjournment on 1 December and an indemnity in respect of the costs payable by them to Messrs. Feez Ruthning pursuant to the order to which they consented on that same date which adjourned the summons to a date to be fixed and which also ordered that the objectors pay Messrs. Feez Ruthning's costs of and incidental to the summons to witness to be taxed, including reserved costs if any.
51. There is no possible basis that I can see upon which the objectors are entitled to the order for indemnification in respect of Messrs. Feez Ruthning's costs: on its face, the order to which both the objectors and Messrs. Feez Ruthning consented goes well beyond an order obliging the objectors to pay Messrs. Feez Ruthning's costs in connection with the hearing involving the summons on 1 December, 1992 thrown away because of the adjournment. Nothing that Mr. Hewlett did could be said to justify throwing onto him the whole of the wide liability in costs voluntarily assumed by the objectors under that order. Nor is there any basis, in my opinion, for requiring Mr. Hewlett to pay the objectors' own costs of the adjournment of their summons on 1 December, 1992: Mr. Hewlett had nothing to do with the objectors' summons being set down on the same day as Mr. Bendeich's application in circumstances in which there was not sufficient time available for the Court to embark upon the hearing of the summons. It is true that it was his breach of duty to both the Court and to Mr. Bendeich that was the occasion for Mr. Bendeich filing his own application which the Court made returnable for 1 December, but such connection as there is between Mr. Hewlett's breach of duty to the Court and to the objectors' incurring costs when their summons to Messrs. Feez Ruthning was adjourned is too remote to justify a conclusion that the breach of duty was the cause of the wasted costs.
(1) Mr. Hewlett pay to the objectors the difference
between their party and party costs of their
application filed 28 October, 1992 and heard on 6
November, 1992 recoverable by them from Mr. Bendeich
under the order of 6 November, 1992 and the costs they
have reasonably incurred to their own solicitors in
connection with their application and its hearing.
(2) Mr. Hewlett pay to the objectors the difference
between their party and party costs of the application
filed on behalf of Mr. Bendeich on 26 November, 1992
recoverable by them from Mr. Bendeich under the order
of 1 December, 1992 and the costs they have reasonably
incurred to their own solicitors in connection with
these applications up to but not including the hearing
of that application on 1 December, 1992.
(3) Save as aforesaid, the objectors' application is
dismissed.
53. The objectors have had some success on their application. However, the extent to which they have failed is substantial. Their failure is a little less than that which appears from a mere comparison of the orders they sought with the orders they obtained: as to two of the matters in relation to which I declined to make the orders they sought, I found that Mr. Hewlett was a cause of a small part of useless costs incurred by them.
54. In these circumstances, I will make no order in relation to the costs of this application of either the objectors or Mr. Hewlett.
Bent
Gough
Bankruptcy Rules - r 146
Federal Court of Australia Act 1976 - s 43
Federal Court Rules - O 62 r 9
English Rules of Court - O LXV s 11
Bent v Gough [1992] FCA 267; (1992) 36 FCR 204 Applied
Caboolture Park Shopping Centre Pty. Ltd. (in liquidation) v White
Industries (Qld.) Pty. Ltd. [1993] FCA 471; (1993) 45 FCR 224 Applied
Felix v General Dental Council (1960) AC 704 Referred to
Myers v Elman (1940) AC 282 Followed
Orchard v South Eastern Electricity Board (1987) 1 QB 565 Referred to
Re Garofano; Ex parte American Express International Inc. [1990] FCA 422; (1990) 26 FCR 592
(1994) 53 FCR 422
(1992) 36 FCR 204
(1994) 126 ALR 643
(1993) 45 FCR 224
(1990) 26 FCR 592