a NOT FOR DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NSW G.398 of 1986 ) ) GENERAL DIVISION BETWEEN: COOPERS ANIMAL HEALTH AUSTRALIA LIMITED Applicant AND: WESTERN STOCK DISTRIBUTORS PTY LIMITED, CETHANA NOMINEES PTY LIMITED and AUSTRALIAN STOCK DEVELOPMENTS LIMITED Respondents CORAM: WILCOX J ay, PLACE: SYDNEY f a : DATE: 16 MARCH 1987 4 or UNDERTAKING Ne ae as saD , THE COURT NOTES THAT: 1. Pending the disposal of the notice of motion, the respondents by their counsel undertake to the Court that they will take no action to enforce the order for costs made against the applicant on 22 August 1986 other than to tax those costs and to obtain and serve a certificate of taxation under 0.62 r.45(1) and (2) and, if necessary, a signed and sealed order under 0.62 r.45(3). NOT FOR DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NSW G.398 of 1986 ) ) GENERAL DIVISION BETWEEN: COOPERS ANIMAL HEALTH AUSTRALIA LIMITED Applicant AND: WESTERN STOCK DISTRIBUTORS PTY LIMITED, CETHANA NOMINEES PTY LIMITED and AUSTRALIAN STOCK DEVELOPMENTS LIMITED Respondents CORAM: WILCOX J PLACE: SYDNEY DATE: 16 MARCH 1987 EXTEMPORE REASONS FOR JUDGMENT On 22 August 1986 I delivered judgment ina proceeding brought by the present applicant Coopers Animal Health Australia Limited against the present respondents, Western Stock Distributors Pty Limited, Cethana Nominees Pty Limited and Australian Stock Developments Limited. For reasons which I gave on that day I dismissed the application and I ordered that the present applicant pay to the respondents their costs of the proceedings. Subsequently, a notice of appeal was filed. There was some delay in the index of the appeal papers being settled but I am informed that an amended index of appeal papers, which is now not controversial, was filed on 4 December 1986. Apparently by some oversight, 1t was not served upon the solicitors for the respondents. The matter was within the list of cases called over in December with a view to fixing hearing dates at the February sittings of the Full Court but, by common consent of the parties, a February date was not taken. Apparently there were problems on each side in obtaining the services of senior counsel. The present envisagement is that the matter will be heard in the June Full Court sittings. I am told that no difficulty 1s anticipated in having the appeal books ready for that time. Each party is apparently ready to proceed in June. In the meantime the solicitors for the respondents have prepared, filed and served bills of costs. The costs claimed on behalf of Western Stock Distributors Pty Limited come to almost $500,000. The separate costs claimed on behalf of the other two respondents amount to very small sums. There has apparently been some discussion between the parties in an endeavour to agree upon an amount of costs but so far these have been unsuccessful. The bills of costs were filed on 7 January 1987. I am informed by counsel, upon instructions from the solicitor who was concerned in the matter, that at that time a request was made of the Registry for the earliest available date for taxation, it being envisaged that taxation would occupy several days. A period in the last week of March was allocated and this has now been extended so as to include the whole of that week, that is to say, next week commencing Monday 23 March. The parties -- and certainly the respondents -- have been proceeding on the basis that taxation would occur at that time and arrangements have been made by Mr R J McCormack, the Perth solicitor of the respondents, to come to Sydney for the taxation. Mr McCormack has been intimately involved in the matter since its inception, On 3 March 1987 a notice of motion was filed by the present applicant seeking an order that the execution of proceedings under the judgment appealed from be stayed. The only order in relation to which any execution could be had would be the order for payment of costs. It has been explained to me today by counsel for the applicant that his client desires to stay the taxation of the costs next week and, aS a consequence, the enforcement of the order for costs. He submits that there is an arguable case in favour of the allowance of the appeal and that, if the appeal 1s allowed, the costs relating to the taxation next week would be thrown away. He further submits that, if as a result of the taxation the order for costs were enforced, there may be difficulties about his client recovering from the respondents the moneys which had been paid to them, Some evidence has been put on by the respondents as to their financial position. This evidence has been put on as a matter of urgency and it is incomplete. It is not suggested on behalf of the respondents that, at this stage, the Court could be satisfied that, if moneys were paid to the respondents, it would certainly be recoverable if the appeal were allowed. However, an opportunity is sought to supplement the material in that regard so that at a future date the Court could be satisfied that there would be no risk of the applicant not recovering any costs which it had paid. In the meantime, says counsel for the respondents, the taxation of costs should proceed. Firstly, he says that this is necessary in order to quantify the amount of the costs and thereby better enable the Court to deal with any question of repayment. Secondly, he puts this as a matter of legal right, pointing out that his clients had to wait for 2 1/2 months for a date for taxation and that, if the appeal is unsuccessful, they will in all probability be faced with a further significant wait before taxation and, therefore, before they are able to enforce the order for costs. Finally, he says that it would be wrong to assume that his clients would not be allowed to enforce the order for costs pending the determination of the appeal. He refers to the well-established principle that prima facie the successful litigant is entitled to enforce his order notwithstanding any appeal, and he says that the only real matter for the Court would be whether it was satisfied that repayment would be likely to be forthcoming if the appeal succeeded. The problem of the appropriate course to be taken is one which I think to be nicely balanced. On the one hand it seems most unfortunate if a course is taken which might lead to both the parties and the Deputy Registrar spending a number of days taxing a bill of costs when, in the end, the order for costs might be overthrown. It is not denied that the appeal is a genuine one and that the arguments which were put on behalf of the applicant at the trial, and which will no doubt be repeated on the appeal, were arguable matters. On the other hand I am concerned with the possible prejudice to the respondents 1f the appeal fails. Assuming that the appeal is in fact heard in June, it is, I think, likely, given the complexity of the matter and the probable length of the hearing, that 1t will be at least a couple of months before judgment could be delivered by the Full Court. At that stage, and having regard to the commitments of the Registry in the very busy period running up to Christmas, it is by no means certain that a period of five days could be found for the taxation of costs this year. It might well be early 1988 before the respondents were ina position to enforce the order for costs which I had pronounced in August 1986. It is true that they would recover interest at the rate of 15 per cent for such period as they had been postponed in recovering their costs. There has been some debate before me as to the effect of 0.62 r.45 of the Federal Court Rules. Sub-r.(4) of that rule provides: "Interest calculated in accordance with Order 35, rule 8 is payable from the date the order is pronounced." Order 35 r.8 refers to an interest rate of 15 per cent. It is not quite clear to me what is meant by "the date the order is pronounced". It is argued on behalf of the present applicant that this refers to a pronouncement by the taxing officer. I have some difficulties with this because it seems to me that the first step which the taxing officer takes is to issue a sealed certificate of taxation -- see sub-r.(1). If this is not paid, the second step is to sign and seal an order -- see sub-r.(3). There is no reference to the taxing officer, at any stage, pronouncing an order. On the other hand r.2 of 0.62 makes the provisions of 0.62 applicable to costs payable or to be taxed under any order of the Court. It 1s usual to refer to the Court pronouncing an order when such an order is orally made by the judge in open court. The word "pronounced" contrasts with the word "entered", a term applicable to the date upon which the formal order 1s taken out in the Registry. It is neither necessary nor appropriate for me to indicate any final view about the meaning of sub-r.(4) at this stage. If the view I have tentatively expressed is correct, there is no need for any undertaking by the present applicant. On that view, if the order for costs survives the appeal, interest will be payable as from 22 August 1986 on the amount of the taxed costs. If, on the other hand, that view is incorrect, and the date of activity of the taxing officer is relevant, then counsel for the applicant has offered an undertaking on behalf of his clients that, if the order for costs made by me is not set aside on appeal, his client will pay interest on the costs as eventually taxed or agreed between the parties from 1 May 1987 at the rate of 15 per cent per annum. Notwithstanding this offer, it seems to me that there would be a disadvantage to the respondent if I took a course which prevented the taxation proceeding next week and if the order for costs survived the appeal. The respondents would be postponed in collecting the costs for a number of months, and I do not think the eventual receipt of interest of 15 per cent removes this disadvantage. Both parties to this litigation are involved in business activities and I have no doubt that each of them would prefer to be in control of a capital sum than merely having a debt owing which 1s earning interest at 15 per cent. By present-day standards 15 per cent is a relatively low interest rate. On balance I think that the appropriate course is for me to allow the taxation to proceed next week; basically for each of the three reasons advanced by counsel for the respondent and to which I have already referred. On the other hand 1t would be inappropriate to take a course at this stage which would permit the respondents to enforce payment of the costs. If the costs are to be paid out to the respondents prior to the disposal of the appeal, then this ought to be allowed only after the Court 1s positively satisfied that there would be no risk of the applicant being unsuccessful in obtaining repayment of those costs. Counsel for the relevant, then counsel for the applicant has offered an undertaking on behalf of his clients that, if the order for costs made by me is not set aside on appeal, his client will pay interest on the costs as eventually taxed or agreed between the parties from 1 May 1987 at the rate of 15 per cent per annum. Notwithstanding this offer, it seems to me that there would be a disadvantage to the respondent if I took a course which prevented the taxation proceeding next week and if the order for costs survived the appeal. The respondents would be postponed in collecting the costs for a number of months, and I do not think the eventual receipt of interest of 15 per cent removes this disadvantage. Both parties to this litigation are involved in business activities and I have no doubt that each of them would prefer to be in control of a capital sum than merely having a debt owing which is earning interest at 15 per cent. By present-day standards 15 per cent is a relatively low interest rate. On balance I think that the appropriate course is for me to allow the taxation to proceed next week; basically for each of the three reasons advanced by counsel for the respondent and to which I have already referred. On the other hand it would be inappropriate to take a course at this stage which would permit the respondents to enforce payment of the costs. If the costs are to be paid out to the respondents prior to the disposal of the appeal, then this ought to be allowed only after the Court is positively satisfied that there would be no risk of the applicant being unsuccessful in obtaining repayment of those costs. Counsel for the respondents seeks an opportunity to supplement the present affidavits so as to demonstrate that payment could be made to its clients without any such risk. Given the fact that his clients have had only a few days' notice of this motion, I think I should accede to his request for further time in that regard. If it were necessary to do so, I would be prepared to make an order staying the enforcement of the order for costs, as distinct from taxation of costs. But I understand that counsel has instructions to offer to the Court an undertaking on behalf of his clients that they will not seek to enforce the order for costs pending disposal of the notice of motion. If that undertaking is offered, I will accept it rather than make a formal order. Upon the basis of such an undertaking I would propose to stand over the further hearing of the application to a date convenient to counsel in about one month's time. By that date the amount of the costs ought to be known and there will be opportunity for the respondents to put anything further as to their financial position. I note that the respondents by their counsel undertake to the Court pending the disposal of the notice of motion that they will take no action to enforce the order for costs made against the applicant on 22 August 1986 other than to tax those costs and to obtain and serve a certificate of taxation under 0.62 r.45(1) and (2) and, if necessary, a signed and sealed order under 0.62 r.45(3). Upon the basis of that undertaking I decline at this stage to make any further order. I propose to stand the matter over to a date which we will now discuss. I certify this and the eight (8) preceding pages to be a true copy of the Reasons for Judgment of his Honour Mr Justice Wilcox. pasociates eum Fh > . Date: 15 May 1987 Counsel for the Applicant: Mr D Catterns Solicitors for the Applicant: Mallesons Stephen Jacques Counsel for the Respondents: Mr J S Hilton Solicitors for the Respondents: Corser & Corser Date(s) of hearing: 16 March 1987