Elevate Brandpartners Ltd v Hammond

1. Pursuant to r 26.12(2)(c) of the Federal Court Rules 2011 (Cth), the applicants have leave to discontinue the proceeding by filing a notice of discontinuance in accordance with Form 48 within seven days;
2. The applicants are to pay the respondents' costs of the proceeding as agreed or assessed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 The earlier history of this proceeding appears from what I have previously said in Elevate Brandpartners Ltd v Hammond [2019] FCA 1103 (Judgment 1), Elevate Brandpartners Ltd v Hammond (No 2) [2019] FCA 1598 (Judgment 2) and Elevate Brandpartners Ltd v Hammond (No 3) [2019] FCA 1788 (Judgment 3). See in particular paragraphs [7]-[14] in Judgment 1 for an overview of the background to this proceeding. I adopt the same shorthand references to the parties as I have previously adopted. 2 What is before me now is an application by the applicants for leave to discontinue the proceeding. Such leave is required by r 26.12(2)(c) of the Federal Court Rules 2011 (Cth) (FCR) because the respondents do not consent to the discontinuance. The respondents do not oppose leave to discontinue being granted, provided that it is on terms favourable to them with regard to costs. In that regard, the respondents seek the following costs orders: (1) that Elevate (the first applicant) pay the costs of Dream Bandits (the fourth respondent) on a party and party basis until 27 September 2019 and on an indemnity basis thereafter; and (2) that Elevate pay the costs of the remaining respondents, being Linda Hammond and Allen Hammond (the first and second respondents) on a party and party basis until 25 October 2019 and on an indemnity basis thereafter. 3 In written submissions, the respondents had also sought an order that Elevate pay any costs incurred by Quay (the second applicant) or that Elevate indemnify Quay for the payment of those costs. In oral submissions, Mr Newlinds SC (who appeared for the respondents) accepted that it was doubtful that the Court had the power in this proceeding to make such an order and he did not press it. 4 The reason for seeking costs against Elevate and not Quay is that the Hammonds are substantial shareholders of Quay. Thus any of the costs to be borne by Quay would in effect be visited on them in due course in an indirect way by reason of their shareholding. That was also the reason for the respondents having initially sought the order referred to in the preceding paragraph which they no longer press. 5 The applicants, in contrast, seek an order that the respondents pay the applicants' costs up to 15 November 2019 and that the applicants pay the respondents' costs thereafter. Mr Dawson SC, who appeared with Ms Cairns for the applicants, explained that an alternative order would be that there be no order as to costs. The attraction of such an order is that the need for, and expense of, competing costs assessments would be obviated. It was suggested that the competing costs assessments would likely come close to cancelling each other out in any event. 6 Mr Dawson explained that the significance of the date of 15 November 2019 is that on that date Linda and Allen Hammond gave final undertakings to the applicants and the Court which obviated the need and justification for the injunctive relief that was sought in the proceeding. It was submitted for the applicants that at that point Linda and Allen Hammond in effect capitulated with the result that the applicants were essentially successful in the proceeding and that the costs should, as in the ordinary course, follow that event. 7 The reason for the applicants accepting that they should be liable for the costs thereafter is that they did not immediately seek to discontinue the proceeding but rather allowed it to continue for a period. In that period the respondents brought a strikeout application in which they sought to remove Dream Bandits as a respondent since no relief was claimed against it, and to strike out certain paragraphs of the amended statement of claim (in respect of which I had given leave as explained in Judgment 3). 8 The parties were in agreement that any costs orders made as conditions of leave being granted to discontinue the proceeding would not affect the costs orders previously made by me. They are: (1) in Judgment 2, I ordered that each party is to pay its own costs on the applicants' interlocutory application for interim injunctions filed on 3 June 2019; and (2) in Judgment 3, I ordered that with regard to the costs thrown away by the applicants' further amended originating application and amended statement of claim filed on 27 September 2019, the applicants are to pay the costs of the proceeding of the third respondent, Zak Hammond, and that the costs of the remaining respondents be costs in the cause.