Consideration
13 Rule 26.12(2)(c) 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 he, she or 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.
14 However, it has long been the law that the court will rarely grant leave to a party to discontinue his, her or its action once the final hearing of the proceeding has commenced. In Stahlschmidt v Walford (1879) 4 QBD 217 at 219, Cockburn CJ and Mellor J, sitting as the Divisional Court, held that Field J had wrongly exercised his discretion to grant a plaintiff leave to discontinue on terms that no other action should be brought in respect of the subject matter of the proceeding, and that he should pay the costs of the action.
15 Cockburn CJ held that the defendant was entitled to be protected against the potential for future prejudice because of some possible use that the plaintiff, thereafter, might seek to make of the discontinued subject-matter of his claim. He said that the defendant was, in justice, entitled to the fruits of the proceeding. Mellor J, concurring, said that the discretion to grant leave to discontinue:
…must be exercised with certain limitations, and so as not to take away from the defendant any advantage to which he is fairly and reasonably entitled.
16 In In the matter of Mempoll Pty Ltd, Anankin Pty Ltd and Gold Kings Pty Ltd [2013] NSWSC 301 at [10], Brereton J applied that principle. He explained that, ordinarily, once the parties have defined their positions, prepared their cases and proceeded to a hearing, it will be unfair to deprive a party who has obtained a forensic advantage of that advantage by allowing the cause of action to remain unresolved: see too SCI Operations Pty Ltd v Trade Practices Commission (1984) 2 FCR 113 at 142-143 per Sweeney J, 161-163 per Lockhart J and 181-183 per Sheppard J. In SCI 2 FCR at 182, Sheppard J said:
I have embarked upon this discussion to provide a background for what I next say. It is, in my opinion, highly undesirable for courts in this day and age to leave parties to litigation which is to be terminated before a hearing in an uncertain state as to what further litigation concerning the same subject matter may be brought by one or the other in the future.
Whether the court is concerned with dismissal before a hearing on the merits or leave to discontinue, the rules direct its attention, and also that of the parties, to what is to be the future position in relation to further reliance on the same cause of action. Thus the court is empowered, in effect, to say whether there is to be cause of action estoppel or not. The fact that there is uncertainty concerning the creation of an issue estoppel where proceedings are dismissed seems to me to make it highly desirable for the court to provide, if it is able to do so, for whether any issue estoppel is to exist or not. It cannot do so directly and, in relation to dismissal, the provisions of O. 35, r. 6 are probably such as to prevent it doing so at all. But if a party, as has the Commission here, has made an application for leave to discontinue, then it seems to me that the court in deciding whether to grant leave and, if so, upon what terms that leave should be granted, has a wide discretion to do justice between the parties.
(emphasis added)
17 In Wickham v Bells Securities Pty Ltd [2006] QSC 167 at [27]-[28] Chesterman J allowed a plaintiff to discontinue on conditions, saying that he considered that those conditions would protect the defendant against disadvantage from the plaintiff's decision. He used two evocative phrases that might reflect Charif's position here, describing the plaintiff as having:
been brought to the ring but refuses to dance. He has expressly declined to litigate the causes of action which he brought against the second defendants but has been reluctant to prosecute for two years.
18 His Honour considered that it was hard to resist an inference that there was "an element of humbug in the plaintiff's case until the recent change of legal representation". That last qualification does not apply here because Charif has prosecuted this case with his current representation since September last year.
19 In my opinion, it would not be appropriate to grant leave to discontinue at this time in the trial having regard to the history of the parties in prior proceedings against one another, their obvious continuing conflict and my reasons in Thunder (No 8) [2018] FCA 1995 at [20]-[30]. It is necessary that the rights of the parties in respect of the subject matter of cross-claim be resolved once for all while the trial is taking place. If Charif chooses to call no evidence there will be a verdict and judgment that reflects that result: SCI 2 FCR at 182.
20 I do not think that the imposition of conditions, given the forensic history of disputation, would give sufficient protection to Mr David and Thunder from the potential that in some forum or another, the subject matter of the cross-claim might be revived. It is important that, at least, this proceeding put the controversy to rest so far as it deals with matters that were set down for this trial.
21 Mr David and Thunder wish, and are entitled, to have the allegations of their liability on the causes of action that Charif has pleaded against them in the cross-claim authoritatively determined.
22 In my opinion, the refusal of the application to discontinue is an appropriate means to achieve the overarching purpose of the civil practice and procedure provisions in s 37M(1) of the Federal Court of Australia Act 1976 (Cth) of achieving the just resolution of this dispute according to law, as quickly, inexpensively, and efficiently as possible.