Keynes v Rural Directions Pty Ltd

The orders sought by the third defendant 8 I start with the second order sought by the third defendant. 9 Counsel for the third defendant presented a cogent argument in support of the third defendant's claim that the plaintiffs' proceeding against it should be dismissed. As I have said, he contended that they had had ample opportunity to put forward a statement of claim in relation to the ABB Grain basis contract which complied with the Federal Court Rules as to pleadings. They had not taken that opportunity and in fact had proffered a pleading which, among other things, had made no attempt to address defects previously identified by me. 10 The plaintiff's counsel asked me to adjourn the application for an order dismissing their proceeding against the third defendant. He told me that certain developments had taken place in relation to the plaintiffs' affairs which he did not wish to mention in open Court but which were known to the third and fourth defendants. He told me that those developments meant that there was - … a very realistic prospect that the dispute between the third and fourth defendant, and the plaintiffs will be resolved, on one basis or another. 11 I accept the implicit assurance of counsel for the plaintiffs that he has good grounds at this stage not to mention the developments in open Court. On the face of it, an order for dismissal will have a significant effect on the plaintiffs' interests. On the other hand, there will not be any substantial prejudice to the third defendant if there is a further short delay. Without forming any view about the merits of the third defendant's application I will stand it over to a convenient date in about three weeks' time. 12 I turn now to the first order sought by the third defendant. 13 The third defendant puts forward its application for costs to be taxed and paid on an indemnity basis on the ground that the plaintiffs' application had no chance of success and properly advised the plaintiffs should have known that fact (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397; Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Dal Pont, G E, Law of Costs (2nd ed, Butterworths, 2009) pp 539-540). 14 It will be seen from Keynes (No 4) that important factors in terms of my decision not to set aside the judgments were the importance of the principle of finality of litigation, the weaknesses of the New Arrangement Claim and the absence of a clear and satisfactory explanation as to why the material was not brought forward before or on the application for summary judgment (see [37], [38] and [56]). The absence of an explanation was also a reason I refused leave to introduce the Basis Contract PDS Claim (see [59]). 15 On the application for indemnity costs the plaintiffs sought to debate again the question of whether they had put forward a clear and satisfactory explanation as to why the material was not brought forward before or on the application for summary judgment. In large measure their submissions repeated what they had put on their application for orders setting aside the judgment. Nothing the plaintiffs said causes me to alter the conclusions I reached in Keynes (No 4). 16 The plaintiffs faced a difficult task in persuading a Court to set aside judgments entered after argument and confirmed on appeal. I think the plaintiffs' failure to advance a clear and satisfactory explanation as to why the material was not brought forward before or on the application for summary judgment means their application had no prospect of success and that this ought to have been known to them. In the circumstances the third defendant's costs should be taxed and paid on an indemnity basis. 17 Furthermore, I think that the third defendant's costs should be taxed and paid forthwith. The power to make such an order is contained in Order 62 Rule 3(2) of the Federal Court Rules. I considered the relevant principles in Rafferty v Time 2000 West Pty Limited (No 3) [2009] FCA 727 at [19]-[24]. This is an appropriate case for costs to be taxed and paid forthwith because of the nature of the interlocutory application and the likely delay between now and resolution by Court proceedings (should that be necessary) of the claim with respect to the ABB Grain basis contract. The judgments given in favour of the third defendant resolved those claims against it. I made an order on that application that the third defendant's costs be taxed and paid forthwith. The position now is even stronger because the application in question was an unsuccessful one to set aside the judgments.

The order sought by the Fourth Defendant 18 For the same reasons I think the fourth defendant is entitled to an order that its costs be taxed and paid on an indemnity basis. In the circumstances, it is not necessary for me to consider an alternative basis for such an order put forward by the fourth defendant. That was that the fourth defendant had made an offer to settle its claim against the plaintiffs in a letter dated 30 November 2010. There is an obvious difficulty with that argument in that the claim which is the subject of the letter is not a claim that the fourth defendant makes against the plaintiffs in this proceeding.

Conclusion 19 I will make the following orders: 1. The plaintiffs pay the third defendant's costs of and incidental to the plaintiffs' Amended Notice of Motion filed on 22 December 2010 (dismissed by the Court on 1 April 2011), and its predecessor Notice of Motion filed on 7 December 2010 on an indemnity basis, to be taxed and paid forthwith. 2. The third defendant's application for an order that the plaintiffs' proceeding against it be dismissed be adjourned to a date to be fixed. 3. The plaintiffs pay the fourth defendant's costs of and incidental to the plaintiffs' Amended Notice of Motion filed on 22 December 2010 (dismissed by the Court on 1 April 2011), and its predecessor Notice of Motion filed on 7 December 2010 on an indemnity basis. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.