Suzlon Energy Ltd v Bangad

Federal Court of Australia|2011-08-12|Before: Rares J

Pursuant to r 1.04(3) of the Federal Court Rules 2011 (Cth) the Federal Court Rules as in force immediately before 1 August 2011 (the old Rules) apply to the determination of the motions filed by Credit Suisse Group SA, named as the fifteenth second cross defendant, on 19 July 2011 and the second cross claimants (the Suzlon parties) on 1 August 2011 (including in respect of taxation of any costs).
Pursuant to O 13 r 2(4) of the old Rules the name of the fifteenth second cross defendant be amended by deleting the name "Credit Suisse Group SA" and substituting the name "Credit Suisse AG".
The notice of motion filed by Credit Suisse Group SA on 19 July 2011 be dismissed with no order as to costs.
The Suzlon parties pay the costs of Credit Suisse Group SA thrown away by reason of its misnomer as fifteenth second cross defendant, to be taxed in accordance with the considerations referred to in the reasons for judgment given today and on the basis that its appearance at the hearing was not necessary. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA in admiralty NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1670 of 2008

SECOND CROSS CLAIM BETWEEN: SUZLON ENERGY LTD AND OTHERS NAMED IN THE SCHEDULE

AND: SANJEEV BANGAD AND OTHERS NAMED IN THE SCHEDULE

JUDGE: RARES J DATE: 12 AUGUST 2011 PLACE: SYDNEY

REASONS FOR JUDGMENT 1 On 4 March 2011, I granted the second cross claimants (the Suzlon parties) leave to serve Credit Swisse Group SA (CS Group) with the fourth further amended second cross-application and the third further amended cross-claim (the cross-claim) (the new pleadings) in Switzerland under O 8A of the Federal Court Rules 1979 (Cth) (as in force immediately before 1 August 2011) (the old Rules), namely, in accordance with the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters 1965 (the Hague Convention): Beluga Shipping GmbH & Co KS "Beluga Fantastic" v Suzlon Energy Ltd (No 5) (2011) 278 ALR 56.

Issues 2 CS Group contends, and the Suzlon parties accept, that it was named as a party to the new pleadings in error. The Suzlon parties want to substitute a wholly owned subsidiary of CS Group, Credit Suisse AG, as the fifteenth second cross defendant. CS Group filed a notice of motion on 19 July 2011 seeking orders discharging the leave I granted to serve it in Switzerland, setting aside its joinder as a party and indemnity costs. The Suzlon parties filed a motion on 1 August 2011 seeking to substitute Credit Suisse AG by reason of their misnomer of CS Group. They assert that there should be no order as to costs. The substantive issues raised for decision now are, first, whether the mistake in naming CS Group was a misnomer or a misjoinder and, secondly, what the costs consequences are that flow if a person, such as CS Group, has been named as a party to proceedings in error.

Background 3 At the ex parte hearing on 1 February 2011, the Suzlon parties sought and later obtained leave to join CS Group and then serve it in Switzerland (see Beluga (No 5) 278 ALR at 73 [83]) on the basis identified in paragraph 14C of the cross-claim, namely: "At all material times, the Fifteenth Second Cross Defendant (Credit Suisse) was a banking company incorporated in Switzerland whose business units or division included Credit Suisse Private Banking and Credit Suisse Trust Limited." 4 On 29 June 2011, CS Group refused to accept service of the new pleadings by the Supreme Court of the Canton of Zurich, as an authority for the purposes of the Hague Convention, because they and other documents were not accompanied by translations into German. A certificate to this effect by the Zurich Court dated 30 June 2011 was filed in this Court on 12 July 2011. The evidence before me is that, under Swiss law for the purposes of the Hague Convention, it is not necessary to serve a translation of a document unless the party to be served refuses to accept service of the untranslated document without an accompanying translation, as happened here. 5 On 1 July 2011, two days after CS Group had written to the Zurich Court refusing to accept service, its Australian solicitors, Mallesons Stephen Jaques wrote to the Suzlon parties' solicitors, HWL Ebsworth, asserting that CS Group was not a proper party to the new pleadings "… as it does not operate a banking or trading business and has no client accounts or client relationships of any kind with any person". The letter claimed that CS Group had been joined incorrectly. It insisted that the Suzlon parties file a notice of discontinuance against CS Group by 8 July 2011, failing which it would file a notice of motion seeking orders to set aside the orders for its joinder and service made on 1 February and 4 March 2011 and for indemnity costs. 6 On 4 July, HWL Ebsworth replied saying that they had understood that Credit Suisse Private Banking, Zurich, for which Ms Lea Klee had worked, was a division of CS Group, adding a request that, if this were incorrect, CS Group identify her employer at the relevant time and the entity that conducted the business of Credit Suisse Private Banking, Zurich division. Mallesons Stephen Jaques replied on 6 July repeating its earlier assertion that CS Group did not operate any banking business and stating that they had no instructions as to Ms Klee's employer other than that she was never employed by CS Group. They again insisted that the Suzlon parties file a notice of discontinuance. 7 By 7 July, Joseph Hurley of HWL Ebsworth, the Suzlon parties' solicitor, had made further enquiries about CS Group's legal structure. Mr Hurley deposed in his affidavit of 29 July 2011 that, at the time of the application for joinder: he had believed that the entity described as CS Group was the relevant Credit Suisse entity that had a business division named Credit Suisse Private Banking and that it employed Ms Klee; he understood that an entity with the name Credit Suisse Group AG also had an office in Sydney but that it was not the same as the Swiss entity CS Group that he believed was Ms Klee's employer. 8 Mr Hurley deposed that on 7 July 2011 he conducted an internet search that showed that Walter Berchtold was "the Chief Executive Officer, Private Banking", employed by Credit Suisse AG. Based on this search Mr Hurley said he now believed that Credit Suisse AG was Ms Klee's employer and that it was the entity with which Credit Suisse Private Banking maintained the bank accounts referred to in the new pleadings. 9 On 7 July, HWL Ebsworth wrote to Mallesons Stephen Jaques in response to their letter of 6 July. HWL Ebsworth maintained that it was not clear from Credit Suisse's website that there was any difference in the entities CS Group, Credit Suisse Group AG and Credit Suisse Group Limited and that the directors appeared the same. The letter made no mention of Credit Suisse AG or Mr Berchtold, but again asked about which Credit Suisse entity had employed Ms Klee and was the proper cross defendant. It asserted that if there had been a misnomer or misjoinder, the Court could order correction under: O 13 r 2 of the old Rules (sub-rules (4) and (5) allowed an order correcting the name of a party where there had been a mistake in the name or identity of a party notwithstanding that this may have the effect of substituting another person as a party); O 6 rr 7 and 8 of the old Rules (that provide that proceedings would not be defeated by reason of misjoinder of a party (O 6 r 7) and that the Court may make an order for the joinder of a person who ought to have been joined (O 6 r 8)). 10 Mallesons Stephen Jaques replied the next day confirming that CS Group, Credit Suisse Group AG and Credit Suisse Group Limited were the same entity and that it did not have a private banking business. They said that the Suzlon parties had purported to make out a prima facie case against CS Group and that this was misconceived. They denied that there was any misnomer of CS Group and asserted that it was the victim of a misjoinder citing Davies v Elsby Brothers Ltd [1961] 1 WLR 170; [1960] 3 All ER 672. The letter argued that any amendment to correct the name CS Group to some other name would necessarily have the effect of removing it as a party and substituting another person. Thus, it contended, CS Group was not a proper party and the Suzlon parties ought to discontinue their cross claim against it. 11 In his affidavit, Mr Hurley noted that the 2010 annual report of CS Group stated that Credit Suisse AG was, first, "… the Swiss bank subsidiary of the Group [and] is substantially similar to the Group" and, secondly, a wholly owned subsidiary of CS Group with identical directors and registered offices. The report stated that the expression "the Group" was a reference to CS Group itself and its consolidated subsidiaries. 12 On 19 July, CS Group filed a notice of motion seeking orders that the order of 4 March 2011 granting leave to serve it in Switzerland be discharged or alternatively set aside (under O 9 r 7(1)(d) or (a) of the old Rules) and for the Suzlon parties to pay its costs on an indemnity basis. Next, on 21 July, CS Group offered to settle on a without prejudice except as to costs basis if the Suzlon parties consented to the orders it sought and paid $11,500 in costs, assessed on a party/party basis. The offer was to remain open until 4 August 2011. The letter claimed that the CS Group had incurred $19,000 in costs up to the date of the letter. 13 On 1 August 2011, the Suzlon parties filed a notice of motion seeking leave to amend the asserted misnomer of the fifteenth second cross defendant to "Credit Suisse AG" under O 13 r 2(4) or to correct the misjoinder of CS Group under O 6 r 7. The motion also sought confirmation of service on the fifteenth second cross defendant. Also on that day, Mallesons Stephen Jaques wrote to HWL Ebsworth noting that the new motion amounted to a concession that the Suzlon parties had proceeded against CS Group incorrectly. This letter repeated the offer made on 21 July. 14 On 2 August 2011, Credit Suisse AG was served at its registered office in Sydney with the Suzlon parties' notice of motion. However, it did not appear on 5 or 8 August 2011 when both CS Group's and the Suzlon parties' motions were returned. Accordingly, I have proceeded ex parte in respect of Credit Suisse AG on the Suzlon parties' motion. Next, on 3 August, HWL Ebsworth replied to Malleson Stephen Jaques' letter of 1 August. This asserted that the nomination of CS Group in the new proceedings was a misnomer based on Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231. The letter sought consent for an order to be made substituting Credit Suisse AG under O 13 r 2. 15 That offer was rejected on 4 August. Mallesons Stephen Jaques noted that it was now apparent that the Suzlon parties no longer contended that they had a prima facie case against CS Group. They asserted that CS Group's nomination "could not possibly constitute a misnomer" and was a misjoinder, calling in aid Bridge Shipping 173 CLR at 251, 261-262 and an earlier decision of Giles J in John R Quality Meats Pty Ltd v Cains (NSWSC 23 May 1988 unreported). The letter said that if there were a misnomer, CS Group was not able to consent to a substitution of a subsidiary because it had never been a party.

The applicable rules and legislation 16 The Federal Court Rules 2011 (the new Rules) commenced on 1 August 2011 and applied to the motion filed by the Suzlon parties despite their invocation of the old Rules (r 1.04(2)). The Court can order that the old Rules, with or without modification, apply to a step in the proceedings, such as a motion (r 1.04(3)). 17 Under the old Rules, the Court had power to order that a party have leave to amend any document filed in a proceeding under O 13 r 2(1). In addition, O 13 r 2(4) and (5) provided: "(4) Where there has been a mistake in the name or identity of a party, an amendment to correct the name of the party may be made notwithstanding that the effect of the amendment is to substitute another person as a party. (5) Where an order to correct a mistake in the name of a party has the effect of substituting another person as a party, the proceeding shall be taken to have commenced with respect to that person on the day the proceeding commenced." (emphasis added) 18 Relevantly, the new Rules provide that: a party may apply for an order that a person be joined as a party to a proceeding if that person ought to have been joined (r 9.05(1)(a)); a proceeding will not be defeated only because a party has been improperly or unnecessarily joined or a person ought to have, but has not, been joined as a party (r 9.07); if a new party is substituted for an existing party, anything done, or any action taken, in the proceeding before the substitution has the same effect in relation to the new party as it did to the then existing party (r 9.11(a)); a cross claimant may apply to amend its notice of cross claim for any reason including to correct a mistake in the name, or to correct the identity, of a party to the proceeding (r 15.15(1)(c) and (d)) or to substitute a person for a party to the proceeding (r 15.15(1)(f)); a party may apply for leave to amend a pleading if the party has already amended it with the leave of the Court (rr 16.51(2), 16.53). 19 Importantly, s 37N(1) of the Federal Court of Australia Act 1976 (Cth) provides that each party to a civil proceeding in the Court must conduct the proceeding, including negotiations for settlement of the dispute to which it relates, in a way that is consistent with the overarching purpose of the Rules. That purpose is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible (s 37M(1)). Lawyers acting for a party must take account of the duty imposed on the party for which they act by s 37N(1) and assist that party to comply with that duty (s 37N(2)). The Court can take account of any failure to comply with the duty imposed by s 37N(1) in exercising its discretion to award costs by force of s 37N(4).

The parties' submissions 20 As the above account of the correspondence exchanged between the parties reveals, CS Group argued that it should never have been named as a party and that the proceedings should have been discontinued against it immediately on or after 1 July 2011. It contended that it should never have had to file its motion and that it was entitled to an indemnity costs order. It argued that the Suzlon parties never conceded that they had made any error until their motion had been served. And, CS Group also contended that the request that it consent to Credit Suisse AG being substituted was misconceived because, if CS Group were nominated as a party by reason of a misnomer, then in reality, it was not a party at all. CS Group said that if the Suzlon parties had accepted the true position on or after 1 July and before serving their motion, it would have ceased to incur costs. It contended that the Suzlon parties' motion was an unreasonable attempt by them to solve their problem and so defeat CS Group's claim for its costs. 21 The Suzlon parties argued that their nomination of CS Group was a misnomer and that they were entitled to an order confirming service on Credit Suisse AG. However, they were unable to indicate, when pressed to identify it, the occasion of service that they sought be confirmed and this claim can be ignored. CS Group had refused to accept service on 29 June 2011 and, on the evidence, Credit Suisse AG had been served with the Suzlon parties' motion in Sydney on 2 August 2011. The Suzlon parties did not seek costs against CS Group but asserted that they should not have to pay any costs, relying on the decisions of White J in Austin Australia Pty Ltd (In Liq) v A & G Scaffolding & Rigging Service Pty Ltd (2007) 25 ACLC 1363 and Maamary v Pepsico Australia Pty Ltd [2001] NSWCA 375 at [51]-[54], [60]-[63] per Giles JA, with whom Mason P and Studdert J agreed.

Consideration - Misnomer or misjoinder 22 Each of O 13 r 2(4) and (5) of the old Rules and rr 9.05(1)(a), 9.11(a) and 15.15(1)(c), (d) and (f) of the new Rules is a remedial provision and should be given a beneficial interpretation. That interpretation should be the widest that the language of each rule will permit: Bridge Shipping 173 CLR at 260-261 per McHugh J with whom Brennan and Deane JJ agreed; s 37M of the Act. I am of opinion that O 13 r 2(4) and (5) and r 15.15(1)(c), (d) and (f) serve substantially the same purposes. They enable the Court to substitute a party as a respondent (or cross defendant) where the applicant (or cross claimant) who was intending to sue a person that it identified by a particular description, was mistaken as to the name of the person who answered that description: Bridge Shipping 173 CLR at 261. The decision in John R Quality Meats (NSWSC 23 May 1988 unreported) antedates the High Court's exposition of the principles for construction of more modern rules such as O 13 r 2(4) and (5) and their analogues, deals with different legislation in a criminal proceeding and does not assist on the present issues. 23 It is appropriate to apply the old Rules to the resolution of the present motions, pursuant to r 1.04(3). This is because the essential dispute between the Suzlon parties and CS Group concerned the application of the old Rules and arose before the new Rules came into effect. 24 I reject CS Group's argument that this is a case of misjoinder rather than misnomer. The Suzlon parties intended to sue the legal person that conducted one or both businesses described in par 14C of the cross claim, namely, Credit Suisse Private Banking or Credit Suisse Trust Limited. They mistakenly thought that that person was CS Group. The cross claim did not identify any other capacity in which the Suzlon parties sought to make a claim against the person identified as being legally responsible for those business units or divisions forming part of its corporate activities. Indeed, the thrust of CS Group's solicitors' correspondence was that CS Group did not have any private banking function as part of its business and so it had been wrongly sued. This demonstrated that its assertion of a misjoinder rather than misnomer was untenable having regard to the principles in Bridge Shipping 173 CLR 231. The Suzlon parties intended to sue the person that their pleading had described as the entity that conducted the business of, and was legally responsible for, Credit Suisse Private Banking. 25 An amendment to correct a mistake in the name or identity of a party was permitted by O 13 r 2(4) notwithstanding that the effect of the amendment was to substitute a new party. Indeed, the consequence of a substitution will often result from such an amendment. As McHugh J held in Bridge Shipping 173 CLR at 259-260, the purpose of the rule was to overcome the injustice caused by the decision in Davies 1 WLR 170. That decision had been relied on by CS Group's solicitors in their early correspondence. His Honour held that an analogue of O 13 r 2(4) permitted a party to amend where it was mistaken as to the name of the person it had nominated as the defendant (or respondent) regardless of whether the cause of the mistake were an error in the name or an error because the person actually named in the pleading did not in fact answer or have the characteristics of the person who was described as the party intended to be sued. 26 In Bridge Shipping 173 CLR at 262 McHugh J determined that the appeal should be dismissed because the plaintiff there had sued the defendant in its capacity as owner of a ship in respect of damage caused to cargo on board, when a demise charterer was in possession of the ship at the time of the damage. Since the demise charterer was not the owner, it could not be substituted after a time bar had expired, because to do so would have changed the capacity in which the defendant had been sued and the demise charterer would not correspond with the description of the person intended to be sued. Accordingly, the majority held that there had not been a misnomer or mistake within the meaning of the analogue of O 13 r 2(4) because the plaintiff had not sued the defendant in its capacity as a person in possession of the cargo, but had sued it only as owner of the ship. 27 Here, it is pellucid that Suzlon parties intended to sue the person, Credit Suisse AG, identified by CS Group in its annual report as having a business "substantially similar to [CS Group]". The purpose of O 13 r 2(4) will be given effect by ordering that Credit Suisse AG be substituted for CS Group as the fifteenth second cross defendant. Then, by force of O 13 r 2(5), the substitution will take effect from 1 February 2011.

Costs 28 On 29 June 2011, CS Group had refused to accept service in Switzerland for want of being provided with a German translation of the documents that were sent to it. That was its right under Swiss law. Here, it engaged in correspondence through its solicitors immediately after that refusal, asserting that it had been erroneously named and seeking peremptorily that the Suzlon parties discontinue against it. 29 From 7 July, both CS Group and the Suzlon parties appreciated that CS Group had been nominated as a party in error and that the correct party was some other entity within the corporate group of which CS Group was the holding company. The solicitors' correspondence was unhelpful. CS Group refused to identify its subsidiary that conducted the business of Credit Suisse Private Banking in Switzerland in answer to the Suzlon parties' enquiries. In light of what its own publicly available annual report showed, it is difficult to see why, consistent with s 37N of the Federal Court of Australia Act, CS Group and its solicitors refused to identify Credit Suisse AG as the relevant party and simultaneously insisted that the Suzlon parties make a decision in a very short time as to how they wished to proceed. 30 It is even more difficult to understand how CS Group incurred $19,000 in legal costs by 21 July. Had it negotiated with the Suzlon parties that, for example, they would undertake not to further proceed against CS Group and have the intended party substituted for it, CS Group's position would have been protected. Instead, CS Group argued, for no apparent purpose, that its nomination as a party was not a misnomer but a misjoinder. CS Group itself would have suffered no prejudice if an order for substitution of another member of its corporate group were made. The issue of misnomer or misjoinder would not play any necessary role in CS Group's extrication from the proceedings, which is all that both sides ultimately sought should occur. 31 On the other hand, on Mr Hurley's evidence, the Suzlon parties understood by 7 July that, at the very least, the chief executive officer of the private banking business was an employee of Credit Suisse AG and, hence, that company was likely to have been the correct party for them to have sued. There does not appear to have been any reason why Mr Hurley would not have been able to find out on that day, or shortly afterwards, the other information from the internet on which the Suzlon parties now seek an order that Credit Suisse AG be substituted for CS Group as a party. Again, consistently with s 37N, the Suzlon parties ought to have informed CS Group promptly after 7 July that they would seek to substitute Credit Suisse AG as the fifteenth second cross defendant and take no further steps against CS Group. 32 In my opinion, CS Group's motion was unnecessary. It had not been served and had made its point that it was not the party intended to be sued as conducting the private bank. Until CS Group were served with a German translation of the relevant Court documents, it could not be served in Switzerland. Its solicitors persisted with their wrong assertions that its nomination was not a misnomer, when in substance, this issue was of no concern to CS Group at all, if it had been named as a party in error. CS Group must have appreciated that the correction of the name of the party conducting the private bank would remove CS Group from the proceedings and not involve it in incurring any significant costs since it had not been served. Nor was there any realistic prospect that the Suzlon parties, having been apprised of their error, would have persisted against CS Group, although they should have communicated this sooner than they did. 33 In addition, although CS Group could not consent to the substitution of Credit Suisse AG for it, it could consent to its own removal as a named party as a consequence of some other person being substituted for it as a party. It resisted this course, in my opinion, without justification. This problem had a simple, practical answer which CS Group resisted by raising its misconceived argument about misjoinder and discontinuance. The answer was that once Credit Suissse AG was substituted, CS Group would have no liability or role in the proceeding. That is what, eventually, the Suzlon parties proposed and CS Group unreasonably opposed.

Consideration - Costs 34 So the argument has now come down to the somewhat sterile issue of costs. The only relevant decision that the Suzlon parties referred to in order to justify their contention that no order be made as to costs was Austin Australia 25 ACLC at 1370 [40]. There, White J simply ordered that the costs of the interlocutory process to effect a substitution by reason of a misnomer be the plaintiffs' costs in the proceedings. His Honour did not explain any principle on which he exercised his discretion or say whether the wrongly named party had sought costs. The decision is of no assistance in the present dispute. Nor did the decision in Maamary [2001] NSWCA 375 discuss any relevant question of principle. 35 Subsequently to the hearing, CS Group's counsel made further submissions, with leave, on the costs issue and, without leave, on the misnomer issue. I have taken both into account. No relevant principle on which the costs of the party named by mistake are to be awarded emerged from the cases cited by the present parties. 36 There was no evidence from CS Group as to why it pressed the Suzlon parties or brought its motion. Yet, it claimed an order that its costs be paid on an indemnity basis for what effectively amounted to the whole of the period since it had refused to be served under Swiss law. CS Group relied on the non-acceptance of its offers to settle as entitling it to indemnity costs. 37 The principles upon which costs are awarded on an indemnity basis based on the non-acceptance of a Calderbank offer (Calderbank v Calderbank [1976] Fam 93) are well settled. Moore, Finn and Jessup JJ recently said in CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Ltd [2008] FCAFC 173 at [75]: "From the tenor of claims which have come before the court in recent years, there appears to be a view abroad that the failure of a party who has rejected a Calderbank offer ultimately to achieve a better outcome than provided for in the offer leads to a presumptive entitlement to indemnity costs with respect to the period subsequent to the offer. Such a view would be mistaken. Where a moving party (including a cross-claimant) offers to settle for a sum which is less than he or she eventually achieves at trial, there is a presumptive entitlement to indemnity costs under O 23 r 11(4) of the Federal Court Rules. However, where recourse is not had to the O 23, but reliance is placed upon the court's general discretion, it is necessary for the party seeking indemnity costs to demonstrate that the other party's refusal of the Calderbank offer was unreasonable: Black v Lipovac (1998) 217 ALR 386, 432; Maniotis v JH Lever & Co Pty Ltd (No 2) [2006] FCAFC 28. It is not sufficient that the offer was a reasonable one: Alpine Hardwoods (Aust) Pty Ltd v Hardys Pty Ltd (No 2) (2002) 190 ALR 121, 128 [35]; Dais Studio Pty Ltd v Bullet Creative Pty Ltd [2008] FCA 42, [11]. In considering this question in a particular case, the matter of unreasonableness will be judged by reference to the circumstances facing the offeree at the time of the offer. While the eventual outcome in the case may go part of the way in this regard, there is no presumption that ultimate success in the proceeding for the offeror necessarily renders the offeree's rejection unreasonable." (emphasis added) 38 I am of opinion that it would be inappropriate to apply some general principle or rule as to the award of costs in cases where a party has been named or joined in error. The circumstances of each individual case will vary, including the particular contexts in which the mistake was made originally and was later exposed. The general and unfettered discretion to make appropriate orders for costs conferred by s 43(2) of the Federal Court of Australia Act should not be circumscribed: see Probiotec Ltd v University of Melbourne (2008) 166 FCR 30 at 42-44 [45]-[52] where I discussed the principles with which Finn J and Besanko J agreed. 39 Here, the Suzlon parties' error was immediately obvious to CS Group. The error was capable of quick resolution which should have occurred. There was no need for CS Group to bring its motion and it has not explained why it did so. Once the Suzlon parties filed their motion, CS Group knew that it need not press its motion. It did so, not just on the issue of costs but because it had made unreasonable, peremptory demands that the Suzlon parties discontinue the proceedings against it while also asserting, based on Davies [1961] 1 WLR 170, that they could not substitute a, then, unidentified subsidiary that conducted the private banking business of its group. Since the identity of Credit Suisse AG was so easily publicly available, CS Group's silence about this was contrary to its duty, including in negotiating a resolution, under s 37N. 40 CS Group could not have expected that the Suzlon parties would abandon their claim by discontinuance when the remedy of substitution of a new party which answered the description in par 14C of the cross claim under O 13 r 2(4) was so obviously available without any prejudice to CS Group itself, which had not been served. In this context, it was not unreasonable for the Suzlon parties to take no action on CS Group's misconceived Calderbank offers. There is no basis to make an order for indemnity costs. 41 I am satisfied that CS Group will be sufficiently compensated by an order for its costs thrown away by reason of the amendment, that I will grant, to substitute Credit Suisse AG for it. Those costs would involve a brief perusal of the new pleadings and my reasons for granting leave to serve CS Group in Switzerland sufficient for it to see, as it did immediately, that the Suzlon parties had named it in error. The subsequent conduct of both CS Group and the Suzlon parties was not calculated to discharge their duties under s 37N to facilitate the just resolution of their dispute (as to the misnomer) as quickly, inexpensively and efficiently as possible. The mistake in CS Group's nomination was obvious to both of them by 7 July. All that needed to occur was for CS Group to agree to, rather than resist, being removed as a party by an order that one of its subsidiaries be substituted for it as a party.

Conclusion 42 I have not considered at all and I do not express any view as to whether Credit Suisse AG is liable on any basis claimed. The only issue that I have considered is whether it appears to answer the description, and has the characteristics, of the party that the cross claim pleaded conducted the private banking business of "Credit Suisse". 43 For these reasons I will allow the substitution of Credit Suisse AG as a party in place of CS Group. I will order that the Suzlon parties pay the costs of CS Group thrown away by reason of the amendment that I would estimate at $5,000. That should have been sufficient to cover the cost of the work I described in [41] above and of progressing the matter to resolution inexpensively and efficiently. I will not make an order to fix that sum since the parties have not addressed me on that basis. I refuse to grant an order in favour of CS Group for the costs of its motion. The parties should otherwise bear their own costs. I certify that the preceding forty-three (43) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

Associate: Dated: 12 August 2011 SCHEDULE SECOND CROSS CLAIM

SUZLON INFRASTRUCTURE LIMITED (NOW KNOWN AS SYNEFRA ENGINEERING & CONSTRUCTION LTD)

FRANKFURTER BANKGESELLSCHAFT (SCHWEIZ) AG (A SWISS COMPANY)

Federal Court Rules 1979(Cth)

Federal Court of Australia Act 1976(Cth)ss 37M(1), 37N(1), (2)

At a glance

Court

Decision date

Before

Source

Judgment (17 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (10)