Mackay Sugar Limited v Wilmar Sugar Australia Limited

1. The costs of the applicants of and incidental to the interlocutory application filed on 28 June 2016 be paid by the first respondent.
2. The costs of the second respondent of and incidental to the interlocutory application referred to in paragraph 1 be paid by the first respondent.
3. The costs of the third respondent of considering the material served upon it by the first respondent as applicant in the interlocutory application, taking legal advice and communicating to the Court its election to abide by the outcome of the interlocutory application, be paid by the first respondent.
4. Pursuant to s 23 and s 37P of the Federal Court of Australia Act 1976 (Cth), rule 1.32 and rule 1.36 of the Federal Court Rules 2011, these orders and the reasons for judgment in support of these orders are made and published from Chambers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

GREENWOOD J: 1 On 3 October 2016, the Court published the principal judgment in these proceedings: Mackay Sugar Limited v Wilmar Sugar Australia Limited (No 2) [2016] FCA 1179. The Court made orders that the applicants submit the form of a final declaration within 14 days for the further consideration of the Court. The cross-claim of the first respondent was dismissed and the first respondent was ordered to pay the costs of the applicants of and incidental to the proceedings. 2 On 31 October 2016, the Court made a declaration in the following terms: The resolution amending the Constitution of the Third Respondent (QSL) (described in item 1 of the notice of general meeting of members of QSL dated 13 June 2016) as passed at the general meeting of QSL members held on 5 July 2016 was not oppressive to, unfairly prejudicial to, or unfairly discriminatory against the First Respondent, within the meaning of section 232 of the Corporations Act 2001 (Cth). 3 On 28 June 2016, Wilmar Sugar Australia Limited ("Wilmar") sought an interlocutory injunction restraining the first, second and third applicants (the "BIM Mills") from putting particular resolutions contained in a notice of meeting dated 13 June 2016 to a vote of members of the third respondent, Queensland Sugar Limited ("QSL"), or from voting in favour of the resolutions. Wilmar also sought an interlocutory injunction restraining QSL from putting the resolutions to a vote of members of QSL. Wilmar also sought an interlocutory injunction requiring the BIM Mills and QSL to do all things reasonably necessary to adjourn the meeting scheduled for 5 July 2016 to a date after judgment in the proceedings. It also sought an order under s 1322(4)(d) of the Corporations Act 2001 (Cth) extending the date for holding the meeting required by the notice until 30 days after judgment in the proceedings. 4 On 4 July 2016, the Court published judgment in relation to the interlocutory application: Mackay Sugar Limited v Wilmar Sugar Australia Limited [2016] FCA 789. 5 The Court dismissed Wilmar's interlocutory application and reserved the costs of and incidental to the application for later determination. The parties were directed to put on short submissions as to the disposition of the costs of and incidental to the interlocutory application. 6 The parties filed written submissions. 7 Wilmar contended that the costs of the BIM Mills of and incidental to the interlocutory application ought to be their costs in the cause. As mentioned, Wilmar was unsuccessful in the principal proceedings, the BIM Mills obtained the declaration they sought, Wilmar's cross-claim was dismissed and Wilmar was ordered to pay the costs of the BIM Mills of and incidental to the proceeding. The costs of the BIM Mills of and incidental to the interlocutory application, reserved for later determination, are to be paid by Wilmar. 8 In its submissions, Wilmar also contends that because: no order was sought against the second respondent, MSF Sugar Limited ("MSF"); MSF served no evidence and made no written or oral submissions in relation to the issues as between Wilmar and the BIM Mills; and MSF did not support or oppose the relief sought by Wilmar, MSF need not have appeared on the hearing of the interlocutory application. Wilmar submits that in those circumstances, MSF ought not be entitled to recover from Wilmar any costs it incurred as a "bystander" to the conduct of the application. 9 MSF contends that it was required to attend the hearing as it was made a respondent to the application and had been served with the interlocutory application. It says it had a right to appear and its interests were affected. It says that the circumstance that it adopted a relatively "passive" role in relation to the application will, no doubt, be reflected in the modest level of costs incurred. I am satisfied that MSF ought to have its costs associated with properly discharging the relatively passive role it adopted in the proceeding. It was joined as a respondent by Wilmar and served with the application. It appeared for the purposes already identified. No unnecessary costs were incurred. It ought to have its costs of and incidental to the application. 10 As to QSL's costs, Wilmar says that QSL served no evidence and made no substantive submissions in respect of the issues in controversy between Wilmar and the BIM Mills. Wilmar says that that position was consistent with the notion that the interlocutory relief did not in any "substantive way" affect QSL. Also, QSL filed a submitting notice under r 12.01 of the Federal Court Rules 2011 by which it submitted to any order the Court might make (other than an order as to costs). Thus, QSL adopted a neutral position. Wilmar says that QSL ought not obtain an order for recovery of the costs it incurred in electing, unnecessarily, to appear at the hearing of the interlocutory application. 11 QSL says that by paras 2 and 3 of the interlocutory application, Wilmar sought orders restraining QSL from putting the resolutions to a vote of members and directing QSL to do all things reasonably necessary to adjourn the meeting. QSL says that prior to Wilmar filing its interlocutory application on 28 June 2016, QSL on 23 June 2016 wrote to Wilmar asserting that any proposed application to restrain the holding of the meeting of members requisitioned by other members of QSL would not succeed. QSL says that because the requisitioning members were acting as the primary contradictor of Wilmar's application, QSL appropriately took a neutral stance on the hearing of the application and did not cause the hearing to be prolonged or rendered more complicated. QSL says that because Wilmar was unsuccessful in its application and r 40.04 of the Federal Court Rules adopts a default position that costs follow the event, QSL ought to have its costs of and incidental to the application on a party and party basis. 12 Rule 40.04 of the Federal Court Rules 2011 operates on the footing, so far as an interlocutory application is concerned, that if no order for costs is made, the consequences at paras (a) or (b) of that Rule arise. Here, an order for costs was made reserving them for later determination. I accept that orders were sought against QSL by paras 2 and 3 of the application. Because QSL was made a respondent to the application which contemplated steps QSL might be required to take and the controversy engaged a dispute between members of the company concerning a requisitioned meeting, it was entirely appropriate for QSL to seek and obtain legal advice and representation as to the proper response it should make. It elected, properly, to abide by the Court's determination of the controversy between Wilmar and the BIM Mills on the interlocutory application. It needed to communicate that position to the Court as a respondent to the application. It ought to have its limited costs of and incidental to considering the material served upon it in relation to the application, taking advice and communicating to the Court its election to abide by the outcome of the interlocutory application. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.