Royal Caribbean Cruises Ltd v Reed

Introduction 1 The final hearing in this matter, in which the applicants principally seek an anti-suit injunction against the respondents preventing them from pursuing proceedings on foot against the first applicant in Florida, was listed to commence on Monday, 7 June 2021. During the course of the morning on Friday, 4 June 2021, the parties requested a listing of the matter on that day to deal with an issue, at that time unidentified, that was said to possibly affect the listing of the final hearing. The matter was then listed to deal with the unidentified issue at 2.00 pm on 4 June. 2 On the matter being called, the applicants made an application from the Bar that they have leave to file a notice of discontinuance of the proceeding under r 26.12(2)(c) of the Federal Court Rules 2011 (Cth) on the conditions that the applicants pay the respondents' costs of the proceeding and that an earlier costs order against the respondents be vacated. It was explained that in the respondents' proceeding against the first applicant in Florida, the first applicant had back in March brought an application to stay the proceeding in reliance on the same exclusive jurisdiction clause that the applicants seek to rely on in this proceeding. It was not explained to me why the applicants have chosen to litigate the point in the Florida proceeding rather than in this proceeding, but they have made that choice and there is on the face of it little purpose in the same issue being litigated in both proceedings. 3 In response to the application, the respondents submitted that leave should not be granted to discontinue this proceeding but that if I was minded to grant such leave, then it should be on the condition that the applicants not be able to assert in any proceedings anywhere that the respondents were party to a contract of carriage with the second applicant with respect to the voyage in question and, if they were, that it was subject to a choice of law or exclusive jurisdiction clause in favour of New South Wales. 4 Alternatively, the respondents submitted that I should grant leave to them to file a cross-claim in which they seek negative declarations in respect of the exclusive jurisdiction clause and the choice of law clause relied on by the applicants. The notice of cross-claim, which had in fact been filed earlier in the day without leave notwithstanding that leave was clearly required, sought relief in the following terms: 1. A declaration that it was not a term of any contract of carriage between the Second Cross-respondent and each of the First and Second Cross-claimants in relation to the voyage aboard M/V "Ovation of the Seas" departing Sydney on 4 December 2019 ("Alleged Reed Contract") that the applicable law of the Alleged Reed Contract was the law of New South Wales. 2. A declaration that it was not a term of any Alleged Reed Contract between the parties would be subject to the exclusive jurisdiction of the Courts of New South Wales. [sic] 3. Costs. [Emphasis in the original.] 5 It was explained on behalf of the respondents that they have come to the eve of the hearing in this Court with all the evidence being on and lengthy submissions having been filed and that it would be an injustice to them to lose that "forensic advantage" and "the fruits of the litigation" by the Court either granting leave to the applicants to discontinue or, if such leave were granted, not granting them leave to file their cross-claim; having come this far they want the issues between the parties determined on the merits. They submitted that I was to infer that the applicants see some forensic disadvantage in continuing this proceeding rather than relying on the first applicant's stay application in the Florida proceeding, and that that disadvantage is in turn a corresponding advantage in favour of the respondents that they should not be denied, especially so late in the piece. 6 After hearing the submissions of the parties on both applications I made orders granting leave to the applicants to file a notice of discontinuance on certain conditions and I dismissed the respondents' application for leave to file a cross-claim. These are my reasons for those orders. 7 Neither side of the case put any evidence before me in support of their applications. I was informed of a number of factual matters from the Bar table to which neither side took objection. I was, however, not informed of the stage at which the stay application in the Florida proceeding has reached or how far off it is from being decided, other than that the docket judge in that proceeding has apparently retired and the parties are awaiting the matter being re-docketed. I was also not informed, with reference to expert evidence or otherwise, of what regard the Florida court would have to findings made in this Court on the questions on which the respondents wish to have findings made, namely whether they were party to any contract of carriage with the second respondent and, if they were, whether such a contract incorporated choice of law and exclusive jurisdiction clauses in favour of New South Wales.

Discontinuance 8 Dealing first with the question of leave to file a notice of discontinuance and, if so, the terms on which such leave should be granted, some relevant principles should be identified. It is well-established that the relevant rule confers a broad discretion on the court to grant a party leave to discontinue at any stage of a proceeding prior to judgment. Ordinarily, a court will allow the claiming party to discontinue if it wants to, provided that no injustice will be caused to the opponent. Courts are mindful that parties should not be compelled to litigate against their will, and this is a factor that is relevant to the exercise of the discretion under the rule. See Thunder Studios Inc (California) v Kazal (No 11) [2020] FCA 1656 at [13] per Rares J. 9 The respondents relied on Thunder Studios (at [14]-[20]) for the proposition that the court will rarely grant leave to a party to discontinue their action once the final hearing of the proceeding has commenced. That proposition can be accepted, but it is inapplicable here because the hearing has not commenced. The underlying proposition, however, is applicable. As already identified, it is that a plaintiff should not be compelled to litigate against its will and that the court should therefore grant leave to discontinue, if it can, without injustice to the defendant: SCI Operations Pty Ltd v Trade Practices Commission (1984) 2 FCR 113 per Sweeney J at 142 and Lockhart J at 161. Sheppard J, in the same case (at 182), said that if a party seeks to discontinue proceedings, a court should lean towards giving leave to do so unless that would cause "manifest injustice" to the opponent. 10 The real question, then, is what injustice will be suffered by the respondents if I grant leave to the applicants to discontinue the proceeding, and if there is such injustice can it be avoided by the leave being subject to conditions. If not, then leave should be refused. 11 The respondents identified no particular injustice that they will face other than what they refer to as the fruits of the proceeding. It might be thought to be an injustice to them, having prepared the case to the point it has reached, it if were to be discontinued and for them to have to face the same case again in Australia. Related to that, the respondents also referred to Thunder Studios (at [16], quoting Sheppard J in SCI Operations at 182) for the principle that the parties should not be left in an uncertain state as to what further litigation concerning the same subject matter may be brought by one or other of them in the future. However, the respondents are already facing that case in Florida, so there in little uncertainty in that regard such that there would be no basis for me to make the leave subject to a condition that the applicants not be able to bring that case anywhere. The applicants were content to commit to not bringing it in Australia, and for that reason I was prepared to impose a condition to that effect. It is not the case that leave to discontinue should ordinarily be made subject to a condition that the same claims are not asserted again: Greaves v CGU Insurance Ltd [2004] NSWSC 912 per Bergin J. 12 Wickham v Bells Security Pty Ltd [2006] QSC 167, relied on by the respondents, is different because there was the consideration in that case that to allow the discontinuance without a condition that the case could not be brought again would delay the winding up of an investment scheme in which many elderly people had invested their retirement income (at [22]). There are no third party interests at stake in the present case such as to justify insisting that the case go on now or not ever, anywhere. 13 Another possible disadvantage, or injustice, in the present case would be if there is something that the applicants have said in their evidence or documents filed in this proceeding which is to the respondents' benefit and which they were then prevented from relying on in the Florida proceeding. For that reason I proposed, and the applicants accepted, a condition that the respondents be released, to the extent necessary, from their Harman undertaking not to use such evidence and documents in the Florida proceeding. 14 There is no basis for me to infer that the applicants wish to discontinue because they have concluded that they cannot succeed; it is at least equally probable that they have made the decision for other reasons. See Trade Practices Commission v Manfal Pty Ltd (in liq) (No 3) [1991] FCA 831; 33 FCR 382 at 383 per Lee J. 15 In the absence of identified injustice, as opposed to frustration, I was content to grant leave to the applicants to discontinue the proceeding.

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