Austcorp Finance & Leasing Pty Ltd v Thomas & Anor [1991] QSC 236

IN THE SUPREME COURT OF QUEENSLAND No. 1420 of 1990 BETWEEN: AND: AUSTCORP FINANCE AND LEASING PTY. LTD. GEOFFREY ALAN THOMAS TOWNSFORD FINANCE PTY. LTD. trading as NORTHERN BROKERAGE Plaintiff First Defendant Second Defendant REASONS FOR JUDGMENT - MASTER WHITE Delivered the Twenty-third day of August, 1991 CATCHWORDS: COUNSEL: SOLICITORS: 0.91 r.16 - 0.30 r.2 - action not to proceed - by whom ought the costs be paid. Mr. P. Hack for applicant/plaintiff. Mr. P. Freeburn for respondent/first defendant. Lyons for the applicant/plaintiff. Morris Fletcher & Cross respondent/first defendant. for the HEARING DATE: 25th July, 1991 -- 1 of 11 -- IN THE SUPREME COURT OF QUEENSLAND No. 1420 of 1990 BETWEEN: AND: AUSTCORP FINANCE AND LEASING PTY. LTD. GEOFFREY ALAN THOMAS TOWNSFORD FINANCE PTY. LTD. trading as NORTHERN BROKERAGE Plaintiff First Defendant Second Defendant REASONS FOR JUDGMENT - MASTER WHITE Delivered the Twenty-third day of August, 1991 The plaintiff has brought a summons to determine by whom the costs of and incidental to the within action should be paid pursuant to O. 91 r. 1 6 of the Rules. Mr. Hack, who appears for the plaintiff/applicant, seeks to have the action discontinued against the defendants. 0.91 r.16 provides:- "When for any reason the further prosecution of any cause or matter becomes unnecessary except for the purpose of determining by whom the costs of the cause or matter should be paid, any party may apply to the Court or Judge to determine such question, and thereupon the Court or Judge may make such order as may be just." O. 30 r. 2 relates to discontinuance in the circumstances of this action and provides as follows:- "Save as in this Order provided, it shall not be competent for a plaintiff to withdraw the record or discontinue the action without leave of the Court or a Judge: But the Court or Judge may, before, or at, or after, the hearing or trial, upon such terms as to costs, and as to bringing any other action or otherwise, as may -- 2 of 11 -- be just, order the action to be discontinued, or any part of the alleged cause of action to be struck out." A notice of motion was issued on the 7th September, 1990 by the plaintiff seeking injunctive relief against the defendants in the following terms:- "1 . 2. A permanent injunction restraining the Defendants and each of them by themselves any of their servants or agents form knowingly inducing or procuring employees of the Plaintiff to breach their several contracts of employment with the Plaintiff. " The writ issued on that day sought the same injunctive relief and in addition an interlocutory injunction pending the trial in terms of the notice of motion and further:- "an order that the First Defendant do deliver up to the Plaintiff any documents, including copies thereof, in his possession, custody or control that he has wrongfully obtained from the Plaintiff. Damages for wrongful inducement of breaches of contract. Damages for wrongful use of confidential information." The defendants were given little prior notice of the motion which was heard on 7th September, 1990. The defendants were presented by their respective solicitors. Upon the plaintiff's undertaking as to damages McPherson J. granted an interim injunction until the 12th September, 1990 (or earlier order) restraining the defendants from:- "1 . making use concerning: of or disclosing any information (a) monthly trading results of Plaintiff's business during period from January 1990 recorded in any accounts or other documents supplied to obtained by the First Defendant in the course of his employment with the Plaintiff. ( b) commission rates and interest payments payable to/by the Plaintiff to any finance companies with which it has dealt in the twelve months -- 3 of 11 -- prior to the 3rd September 1990 and deriving directly or indirectly from plans/copies thereof or other information supplied/obtained by the First Defendant in the course of his employment with the Plaintiff. 2. Causing/procuring the employees of the Plaintiff herein specified any one or more of them from terminating their contracts of employment with the Plaintiff other than with the consent of the Plaintiff after due notice given under the contracts of employment with the· Plaintiff. The employees specified are as listed ... " On the 12th September upon the first defendant giving undertakings to the Court the motion was dismissed. undertakings were as follows:- Those 11 (a) that he by himself his servants agents or otherwise will refrain from causing/procuring the employees of the Plaintiff specified herein and any one or more of them from terminating their contracts of employment with the Plaintiff other than on the basis that any such employee will give not less than 14 days notice of termination to the Plaintiff. Specified employees ... ( b) that he will make and solicitors by 4.00 p.m. 1990 an affidavit: serve on the Plaintiff's on Friday 1 4th September, (a) ( b) ( C) listing the documents remaining in his possession or power received from the Plaintiff or delivered to him by Michelle Martin relating to the affairs of the Plaintiff; specifying to which if any of those documents he claims to be entitled; saying whether there are any documents or any documents he the Plaintiff in his possession copies of such has returned toor power." It was further ordered on 12th September that the plaintiff pay the second defendant's costs of and incidental to the motion including reserved costs to be taxed. The costs between the plaintiff and the first defendant and the costs ordered to be paid by the plaintiff to the second defendant as -- 4 of 11 -- i between the plaintiff and the first defendant were reserved. The first defendant carried out his undertakings. By letter from its solicitors dated 28th November, 1990 to the solicitors for the first defendant, the plaintiff indicated that there were no further matters which it wished to pursue against the first defendant by the action and sought its costs from the first defendant on the ground that it had acted reasonably in bringing the action. The first defendant's solicitors disputed the plaintiff's reasonableness in bringing the action and in not seeking undertakings from the first defendant prior to instituting proceedings. Nothing apparently has occurred with respect to the action nor to its discontinuance since then. It is necessary to mak.e some reference to the allegations found in the affidavit material giving rise to the action. The plaintiff has never delivered a statement of claim to the action. The plaintiff is a member of the Byrne Ford group of companies and is described by Elizabeth Anne Byrne Henderson (described as Mrs. Byrne in other affidavits and so I shall do so) in her affidavit as "the finance arm of the group". She is the governing director of the group. The first defendant was, until the 3rd September, 1990 the managing director of the plaintiff. On that day the first defendant's employment with the plaintiff was terminated by Mrs. Byrne. The reason is immaterial for this application but in brief Mrs. Byrne deposes to it being due to personal differences. Much of what follows is in dispute between the parties. There are a number of conflicting affidavits from various employees or former -- 5 of 11 -- ~ employees of the plaintiff. What is reasonably clear is that the first defendant left the plaintiff's employment on Monday, 3rd September, 1990 and did not return to the plaintiff's business premises where his office was situated thereafter. It is not alleged that he personally took the documents in question. Michelle Maree Martin, the first defendant's secretary during his employment with the plaintiff deposed to being requested by Mrs. Byrne to clear out the first defendant's office on the 3rd September after he had left and to send to him his files and personal belongings. Mrs. Byrne deposes that she instructed Miss Martin to send only his personal papers. Whatever was said Miss Martin swears that she removed many documents from the delivered them in boxes to his home. plaintiff's office and It is not disputed that amongst those papers were some the property of the plaintiff. On the 6th September, 1990 after a conversation with an employee of the plaintiff Mrs. Byrne formed the view that the first defendant was seeking to harm the business of the first defendant by inducing employees to leave the plaintiff's employment and intended to use information confidential to the plaintiff to that end. After noting that certain documents which she knew to belong to the plaintiff were no longer in the first defendant's office and that Miss Martin had tendered her resignation on the 7th September, 1990 Mrs. Byrne deposes to deciding to seek the injunction with only very short notice to the first defendant and without demand "so as to avoid giving him an opportunity to defeat any order that might be made". In the affidavit material filed in support of the -- 6 of 11 -- Q injunction the plaintiff alleged through its directors Mrs. Byrne and Peter Byrne that the first defendant sought to induce other employees of the plaintiff to leave their employment ( they were on 14 day notice contracts) . They alleged that they feared that the first defendant would make use of confidential information obtained by him in the course of his employment relating to dealership plans. They alleged further that he had wrongfully obtained and retained numerous confidential documents belonging to the plaintiff relating to the plaintiff's business. The first defendant did not, according to his affidavit, examine the contents of the boxes delivered to him containing what he understood to be his personal papers until the 11 th September, 1990. He deposes that had the plaintiff requested it or had he become aware that the plaintiff's documents had been delivered with his personal papers he would have returned them to the plaintiff. As can be readily seen this is an action in which credit would play a significant part as to its outcome. Mr. Hack submitted that I should make an order similar to that made by Ryan J. in Liddle v. Kooralbyn Pty. Limited (No.3280 of 1987) unreported decision of the 9th October, 1987. In that case a dispute existed between the parties as to the lease of certain land. A writ of summons was issued seeking injunctive relief and after the issue of the writ certain steps were taken by the defendant which in effect resolved the dispute and the necessity to seek an injunction. The plaintiff sought the costs of the application and that the defendant pay the plaintiff's costs of the action. It was submitted to his -- 7 of 11 -- l Honour that there was no basis for assuming that the interlocutory injunction or the action was bound to be successful. His Honour proceeded on the basis that 0.91 r.16 applied. He accepted that it was arguable that if the matter had proceeded to trial it was not inevitable that the plaintiffs would have been successful. However, he held:- "They were however, led to institute the action in order to assert the rights which they claim were infringed, and the defendant had disputed their entitlement. The defendant has subsequently adopted a course which makes the further prosecution by the plaintiffs of their cause unnecessary. I consider that in these circumstances the plaintiff should not be confined to an order that the costs of the application should be the plaintiff's costs in the cause, but are entitled to the costs of the application, including reserved costs, to be taxed." That was quite a different situation from the present. The first defendant was given no opportunity to return the documents sought nor to give any undertakings. The plaintiff did give undertakings on the hearing on the 12th September, 1990 but it was against the background of a denial that he had done or intended to do any of the impugned matters for which relief was sought both by way of injunctive relief and by way of damages. I was also referred to the decision of R. v. Gold Coast City Council, ex parte Raysun Pty. Ltd. [1971] Q.W.N. 13, a decision of the Full Court where a prosecutor obtained an order nisi calling upon the respondent council to show cause why a writ of mandamus should not issue commanding the council to hear, determine and deal with an application for approval of certain plans relating to the subdivision of land and why the council should not pay the costs of the application. After the order nisi had been obtained and served the council considered and dealt with the plans as -- 8 of 11 -- requested but declined to pay the prosecutor's costs. On the return of the order nisi the matter of the prosecutor's right to the order absolute was argued with a view to determining liability for costs. The Full Court held, per Matthews J. at p. 29, that it is not necessary to determine the merits of the matter as a condition precedent to an order for costs and considered that the appropriate course was to make an application pursuant to O. 91 r. 16 of the Rules. His Honour went on to hold that the prosecutor had reasonable grounds for complaint upon the attitude taken by the council and an arguable case to support the issue of the writ up to the point when the council did do what was requested. that:- He concluded "Although it was not conceded that the Council's change of attitude resulted from service upon it of the order nisi, the prosecutor should have its costs up to the time it was informed of such change of attitude but that there should be no other order as to costs." Again it can be seen that that is a different case from the present. It appears that the prosecutor was required to litigate to get the relief which it sought. Mr. Hack referred me to the decision of Cooke v. Wilkey Q.L.R. No. 9 of 1991 (O.S.C. No.3/90) where I made an order that the reserved costs of the action which was no longer proceeding be paid by the respondent/defendant pursuant to 0.91 r.16. In that case no facts were in issue. Closer to the present case is a decision of the Court of Appeal in J.T. Stratford & Son Ltd. v. Lindley & Ors. (No.2) [1969] 1 W.L.R. 1547. The plaintiffs were barge owners and repairers and they had issued a writ claiming damages for intimidation and conspiracy and an -- 9 of 11 -- injunction restraining the defendants who were trade union officials from enforcing an embargo on the plaintiff's barges. An interlocutory injunction was granted making the costs "costs in the cause". The Court of Appeal reversed that decision and ordered that the costs of the appeal were to be the defendants' "costs in any event". The plaintiff appealed to the House of Lords which allowed the appeal and granted an interim injunction and the costs order was that the costs in the Court of Appeal and in the House of Lords be "costs in the cause". The action never came to trial and since neither party wished to pay the costs of the other the matters came on again on two summonses, one to dismiss the action for want of prosecution and the other for leave to discontinue the action. On appeal to the Court of Appeal from the order of the Chamber Judge Lord Denning M.R. held, at p.1554, in relation to the equivalent of 0.30 r.2:- "In -the new situation, we should deal with costs as if they had been "costs reserved". Finding that neither side wishes to go on with this action, I think the Master and the Judge exercised their discretion wisely in giving leave to discontinue on the footing that each side is to bear its own costs including costs in the cause. The order should be that the action be discontinued, each side paying its own costs, including the costs in the cause." Winn L.J. agreed and added:- "I agree with all that has been said by my Lord about the impracticability of any assessment of theoretical prospects of success had the parties gone to trial .... " That is the approach which I propose to take in relation to this matter. It cannot be said that the plaintiff was driven to litigate by ,the attitude of the first defendant. He was given no opportunity to return the documents nor to give -- 10 of 11 -- 1Q undertakings. There are significant issues of credit outstanding which make impossible any assessment of the plaintiff's prospects of success. The orders are that - 1. The plaintiff have leave to discontinue its action; 2. There be no order as to the costs of the action including the costs reserved on the 7th and 12th September, 1990 respectively. 3. Further ordered that the applicant/plaintiff pay the respondent/first defendant's costs of and incidental to the application. -- 11 of 11 --