LYNN -v- MOORE DEMO AND CIVIL [2025] WASC 113 | Case summary

Supreme Court of WA|2025-04-09|Before: Hill J

(This judgment was delivered extemporaneously and has been edited from the transcript to include references, headings and to correct matters of grammar and expression.)

On 22 January 2025, the plaintiff filed an originating process in this court, together with a minute of proposed orders, an affidavit in support of the originating process, and a certificate of urgency.
The originating process stated that the application was made under s 482 of the Corporations Act 2001 (Cth) and sought orders to set aside winding up orders made in relation to Ricon Super Pty Ltd (Company). The minute of proposed orders that was filed at the same time sought significantly wider relief, including the payment of various amounts by the defendant to the trustee of the Ricon Superannuation Fund (which amounts were described as both costs and damages), as well as amounts to the plaintiff personally.
The defendant filed a notice of appearance on 31 January 2025.
Since 4 February 2025, the plaintiff has filed various documents attempting to discontinue the proceedings. On 20 February 2025, a chamber summons for leave to discontinue these proceedings was filed. Shortly prior to this being filed, the defendant filed a minute of proposed orders, which sought to program a foreshadowed summary judgment application.

Should the discontinuance be subject to any conditions?

The first issue for consideration by the court is whether the plaintiff's discontinuance of proceedings should be subject to any conditions.
Order 23 r 2(3) of the Rules of the Supreme Court 1971 (WA) provides that:

Save as in this Rule otherwise provided, it shall not be competent for the plaintiff to withdraw the record or discontinue the action without leave of the Court, but the Court may before, or at, or after the hearing or trial, upon such terms as to costs, and as to any other action, and otherwise, as may be just, order the action to be discontinued, or any part of the alleged cause of complaint to be struck out.

As a general proposition, the defendant accepts that the plaintiff should not be compelled to litigate against her will.
In considering whether or not to impose a condition on the granting of leave to discontinue, the court will consider whether it should require the plaintiff to undertake not to bring another action. The reason that this condition is often imposed is 'because it is undesirable that the parties be left in an uncertain state as to what further litigation concerning the same subject matter may be brought in the future'.[1]
In Heartlink Ltd v Jones As Liquidator of HL Diagnostics Proprietary Ltd (in liq), Martin CJ considered the power of the court to impose conditions.[2] His Honour expressed the view that the question to be determined, if and when an application for leave to discontinue is made, is whether any particular terms or conditions should be imposed in order to prevent manifest injustice to or the loss of some advantage by the defendants.
In this case, in submissions to the court, counsel for the defendant did not identify any manifest injustice or loss of advantage that it would suffer if the plaintiff were given leave to discontinue the application. The only matters that were referred to by the defendant's counsel was the defendant's confidence that an application for summary judgment would have been successful if heard, and the undesirability of being left in an uncertain state as to whether proceedings might be commenced in the future.
While I accept that the defendant would prefer to know once and for all what the position is, for four primary reasons I consider that in the circumstances of this case, it is appropriate to grant leave to discontinue the proceedings without any condition being imposed.
First, the plaintiffs sought to discontinue the proceedings less than two weeks after the filing of the originating process. In my view, it is not in the interests of justice to force the plaintiff to litigate against her will or for any further time or resources of the court, which is a publicly funded resource, to be expended on this matter.
Second, at the time the discontinuance was foreshadowed, the only step that had been taken by the defendant in the proceedings was to file a memorandum of appearance. As a result, I do not consider that the defendant has gained any advantage during the continuation of these proceedings.
Third, the primary objection of the defendant is in relation to the orders that are set out in the minute of proposed orders that were filed by the plaintiff. As discussed with counsel for the defendant, these orders go significantly beyond the scope of the originating process, which seeks orders for the termination of the winding up of the Company. In my view, there is a real question as to whether any of these orders could have been made on the originating process. Given this, I do not consider it would be appropriate to make orders referring to the minute as the basis of the grant of leave to discontinue these proceedings.
Fourth, the Company remains in liquidation. It is possible that there could be circumstances in the future in which the plaintiff could seek orders for the winding up to be terminated. I do not consider it would be appropriate to prevent any such application being made by the plaintiff at this time.

I turn then to the question as to the appropriate costs order. The starting point in relation to costs is s 37 of the Supreme Court Act 1935 (WA), which confers a broad discretion on the court in respect of orders as to costs.
Where a proceeding or application has been discontinued, the legal principles that govern the exercise of the discretion as to the appropriate costs orders can be summarised as follows.

(a) The underlying policy of the Rules of the Supreme Court 1971 (WA) in relation to a discontinuance of an application is that the discontinuing party should be liable for the costs of the other party, unless the court orders otherwise.[3]

(b) The conduct of the parties and the reasons for the discontinuance can bear heavily on the exercise of the discretion.[4]

(c) In determining whether or not costs should be borne by the discontinuing party, the court does not engage on a trial of a hypothetical action between the parties.[5]

(d) Where the discontinuance 'can be said to be an acknowledgement by an applicant of likely defeat, or where no objective circumstance provides reason for the discontinuance, a costs order in favour of the other party will ordinarily be made'.[6]

(e) It is relevant, in considering what costs order should be made, to consider whether there has been a supervening act in the proceedings which has rendered the application futile.[7]

The only evidence before the court as to the reason for the plaintiff's discontinuance of the proceedings is the plaintiff's inability to fund the proceedings. There is nothing to suggest that this was a matter that arose in the two weeks between the commencement of the proceedings, and the application for leave to discontinue the proceedings being filed.
In fact, as noted in my exchange with the plaintiff, the evidence before the court is that it is the amount of costs that was in issue between the parties, not the proposal that the plaintiff be liable for any costs at all.
In my view, there is nothing on the evidence before me that suggests the court should depart from the underlying principle that the plaintiff, as the discontinuing party, should be liable for the defendant's costs.
There remains the question as to what the appropriate cost order in relation to the application for leave to discontinue is.
In my view, while the plaintiff should pay a portion of the defendant's costs of the application for leave to discontinue on the basis that it was necessary for an application to be brought, which has rendered an appearance by the defendant necessary, at least part of the reason for the opposition or the submissions filed by the defendant was its request that the application for leave be subject to a condition. For the reasons that I have given, I do not consider that it is appropriate in the circumstances of this case for any such condition to be imposed.
For this reason, I consider that the plaintiff should pay 70% of the defendant's costs of the application for leave to be discontinued to be taxed if not agreed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Civil Procedure in Western Australia [23.2.9].

[2] Heartlink Ltd v Jones as liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 [45] ‑ [48].

[3] Kevin Ernest Judge As Liquidator of Citystyle Enterprises Pty Ltd v Trifield Corporation Pty Ltd [2011] WASC 122 [22], [39] (Citystyle Enterprises).

[4] Clark v Richards [2003] WASC 5 [27], [78].

[5] Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622, 624.

[6] O'Neill v Mann [2000] FCA 1680 [13].

LYNN -v- MOORE DEMO AND CIVIL [2025] WASC 113 (9 April 2025)

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