_! f JUDGMENT No. b2e/. 21. CATCHWORDS PRACTICE AND PROCEDURE - Application to vacate two week hearing - Basis for last minute application was late service of claim for damages - New factual field of enquiry exposed and not contested - Application for costs of and arising out of adjournment - Both parties' casual approach to directions of the Court - Purpose of directions hearing CARTIGNY. PTY. LIMITED v BORDEN AUSTRALIA PTY. LIMITED No. VG 171 of 1985 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION CORAM: PLACE: DATE: No. VG 171 of 1985 Between: CARTIGNY PTY. LIMITED Applicant And: BORDEN AUSTRALIA PTY. LIMITED Respondent Einfeld J. Sydney 18 September 1987 MINUTE OF ORDERS No order as to the costs of and arising out of the adjournment. Stood over to 9.30 am 14 December 1987 to receive an assurance from counsel expected to appear in the matter that 1t will be ready to proceed on the hearing date. The matter is fixed for hearing before me at 10.15 am 21 March 1988 to continue until completion, unless there is filed before 4 pm on 25 September 1987 a consent order fixing 2 May 1988 as the hearing date signed by an authorised officer of both parties and their legal representatives. Such consent order 'is also to be given to my associate. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. VG 171 of 1985 dd GENERAL DIVISION Between: CARTIGNY PTY. LIMITED Applicant And: BORDEN AUSTRALIA PTY. LIMITED Respondent CORAM: Einfeld J. PLACE: Sydney DATE: 18 September 1987 REASONS FOR JUDGMENT This matter has had a long history. There have been a total of 15 directions hearings (seven of which took place in Melbourne before the matter was transferred to Sydney) dealing with the interlocutory steps needed to prepare this matter for hearing. On 4 December 1986 Justice Wilcox gave the parties leave to approach the Registrar for a hearing date. On the basis of the parties' estimate that the case would take two weeks, the matter was fixed for hearing to commence on Monday 22 June 1987 and proceed for each of the five days of that and the following week. The Court notified the parties by letter on 5 January 1987 of these hearing dates. On Friday 19 June, without prior notice, the parties asked for an appointment in Chambers for the purpose of an application being made by counsel for the respondent for an adjournment of the hearing. When that hearing took place, the application was made on the basis that at 3 00 pm on Thursday 18 June, his side of the record had been served by the applicant with what was described as "a completely new claim for damages" of which they had not previously had notice, which in fact caught them by surprise, and which they were not ready to meet at the hearing set for the following week. The applicant conceded that the new claim substantially increased the damages being sought but the respondent's main argument was that the new claim opened what was described as a "vast new factual field of enquiry". The parties also agreed that the case was now likely to take substantially more time than had been originally envisaged and than was available to the Court to allocate at this time on the basis of a continuing hearing day after day. That meant that if the hearing were to commence on 22 June and continue for the ten available days, there would have to be an adjournment part heard for several months. It followed that the case was unlikely to be completed much before the end of the year, if then. The application for the adjournment was therefore made on Friday 19 June, so as to relieve the parties of the need to prepare the case over the weekend before the hearing in the event that the hearing was not to proceed on some basis in the week commencing 22 June. The applicant's counsel explained the circumstances which led up to the change in his client's case on the issue of damages. Although the applicant wished the hearing to proceed, it recognised the practical difficulties which the respondent and the Court now faced in the matter. After argument, I indicated that an adjournment would be granted when the matter was called on Monday 22 June. When counsel for the respondent said he would be applying for costs, I raised the question as to whether it was appropriate that if costs were awarded against the applicant, they should be paid by the applicant itself or by the solicitors for the applicant who may have borne some or a major part of the responsibility for the adjournment having been rendered necessary. For this reason, I suggested that it would be appropriate that the question of costs should be argued on affidavit evidence rather than merely from the bar table. In order to give the parties time for the appropriate evidence to be prepared, I listed the costs argument for Tuesday 23 June. On that day, I ordered that the hearing be adjourned. Thereupon the respondent applied for three matters under the heading of costs: 1. The costs of the application for the adjournment on Friday 19 June. 2. The costs of 23 June when the argument was taking place. 3. The costs thrown away by the need for the adjournment. Despite requests of counsel for an explanation, I do not know what is embraced by this claim. This case concerns the manufacture and marketing by the applicant within Australia of the product known in the community as "Clingwrap" under what are known and recognised as generic brands. As I understand the position, it is agreed that the respondent was at the relevant time the sole Australian supplier of the raw material, and the applicant's business relied on the respondent accordingly. Part of the claim turns on an assertion by the applicant that the commercial benefit to 1t of an alleged contractual right to use and take other advantage of the respondent's basic product monopoly was reduced or removed by a pricing policy pursued by the respondent which rendered the applicant's end product uncompetitive in the market place. On the application for costs, the respondent pointed to the fact that the applicant had over a long period been using the interlocutory procedures of the court and any other available mechanism to ascertain the respondent's cost of manufacture but had continually resisted any examination of its own costing structures and their relevance to the applicant's commercial competitiveness. In substance, the respondent's claim was that the applicant was denying to the respondent any access to its own records, documents or other information by which an assessment would become possible of the contribution of the applicant's own conduct and efficiency to any loss of competitiveness during the term of the alleged agreement. The respondent submitted that the new or reconstructed claim for damages, which the applicant puts as an alternative to the claim hitherto made, was another step being taken to: resist the relevance to the litigation of an examination of the competence, efficiency and financial management of the applicant itself. In reply, the applicant's counsel submitted that in fact the new damages claim did not raise new or seriously new factual issues, but merely brought the damages claim into line with the amended statement of claim. He said that ail the respondent had been told on the previous Thursday was a new method of calculating the applicant's claim for loss of competitiveness. The applicant's counsel further submitted " that the respondent would not have been under any misapprehension as to the principles of the damages claim, but merely as to how they were calculated. The applicant pointed to the fact that the respondent had supplied its interrogatories only three days before the hearing, namely, on Wednesday 16 June, although the applicant agreed that its additional lateness in supplying particulars of damage was not caused by the respondent's lateness in answering the administered interrogatories. The applicant claimed, however, that some failure in the respondent's discovery of documents resulted in a late revelation to the applicant on Thursday 17 June of file notes in respect of which the applicant would like to interrogate further. As I understand this assertion, there were other documents in a similar category. Counsel for the applicant also said that certain material, including the late particulars of damages, were supplied directly on his advice on his first detailed consideration of the evidence and all the available material. He suggested that the appropriate order for the costs sought was either that each party pay its own costs, or that they should be made costs in the cause. It igs not necessary for me here to indicate or expound on the way in which the case for damages was changed by the late supply of particulars. It will suffice for present purposes to say that I am satisfied, and was satisfied at the time when I indicated that the adjournment would be granted, that the late particulars did in fact considerably change the basis of the applicant's claim, and did so in principle and not simply on some mechanical or mathematical basis. By itself, the fact that the late particulars substantially increased the amount of the applicant's claim would not necessarily call for an adjournment, but it is clear, and the applicant did not submit to the contrary, that the respondent could not have been expected to be aware of, still less be prepared to answer, the claim as now conceptually framed. For these reasons, I ordered on 23 June that the hearing be adjourned to a date which I would f1x after certain other interlocutory disputes between the parties had been resolved. It seems clear to me that were it not for the change in the applicant's case on damages, the case would have been able to proceed on the appointed hearing date of June 22. That it did not do so seems, in immediate terms, to be the fault of the applicant's side of the record. I am not at all persuaded, however, that the applicant itself could or should be held responsible for such costs, because it does not seem that the applicant's case in substance has changed virtually from the commencement of the litigation. What seems to have changed is the perception or assessment of the case and its presentation by the applicant's legal advisers. The several directions hearings to which I have referred were, as usual, held for the purposes of enabling the parties to clarify all the relevant issues between them and enabling the Court to assess and permit the appropriate interlocutory steps needed to prepare the matter for hearing. Directions hearings are primarily to permit the interests of litigants to be protected fairly and advanced speedily and efficiently. Due, it seems, to the parties' failure either to know or to tell the court frankly what matters were outstanding from the respective viewpoints of the two litigants, the system did not function as intended in this case. In particular, the legal advisers at and between directions hearings do not seem to have given that degree of attention to the elucidation and definition of the appropriate issues and particularisation of the case as are to he expected iN serious litigation. While the applicant's advisers (not the counsel now appearing), as those immediately responsible for the adjournment, bear the primary burden for this state of affairs, the respondent's actions have only been marginally better. This was a case where issue was clearly joined between the parties. With a minimum of imagination and a _ proper application to the pleadings and other information exchanged between the parties, it would have been clear precisely what the applicant was claiming, even if the mathematics were not entirely understood. It was incumbent upon the respondent to require of the applicant as a condition precedent to the fixing of the matter for hearing not only to define its case fully , but to exclude other possible ways of approaching the case. The respondent also ignored directions and orders of the court given at directions hearings without any serious effort to explain why they were ignored and what caused any failure to comply with them. Once again, it seems to me that directions hearings were treated in a far more cavalier fashion than in my opinion they warrant and than are clearly intended. It is not satisfactory that parties come before the Court having not complied with or having ignored the Court's orders and directions and proffer no or no satisfactory explanation for this casual approach to what are supposed to be serious obligations undertaken by the parties - and their lawyers as officers of the Court. It 1s made worse in this case by the fact that, as is customary, timetables and directions generally were fixed not by the respective presiding Judges unilaterally, but after consultation with and usually at the suggestion of the parties. In this particular case, it seems to me that' the first problem was caused by the fact that the parties jointly informed the court that the matter was ready for hearing and obtained a hearing date at a time when it had far from reached that stage. In the intervening six to seven months, inadequate attention was given to the preparation and assessment of the case for the hearing. In addition, the parties' estimate of the time required for the hearing was, on their own admissions at this time, substantially inadequate, with resulting inconvenience to the Court and costs and delays to the litigants. In these circumstances, it seems to me appropriate that each party should bear its own costs brought about by these events. The question as to whether the parties themselves should be responsible for their own costs to their lawyers is ultimately a matter between them both. On the material before me, I can see nothing which indicates that the parties themselves bore any or any serious responsibility for the extraordinary and abnormal events that have occurred. Apparently through no fault of their own, they have been delayed in obtaining a hearing of their case, apparently for several months. The case commenced in 1985. It will not now be determined until 1988. Regardless of the ultimate result in the action, both in respect of the applicant's claim and of the respondent's cross claim, both litigants have been subject to delayed justice in circumstances apparently not contributed to by them or relevantly by the Court. I should be surprised if the parties' legal advisers saw fit to impose upon their clients the costs concerned. For my part, I make no order as to the costs of and arising out of the adjournment. On 19 August 1987, I heard argument and ruled on certain disputes between the parties over interrogatories and was then informed that there are no other interlocutory steps desired or necessary. The applicant's foreshadowed further interrogation on documents supplied late by the respondent, to which I earlier referred, has not materialised. It therefore seems appropriate that the matter be again listed for hearing. The lawyers for the parties do not seek a date in 1987, although the case could be heard this year from the Court's point of view. Although previously I was asked to fix a date in March 1988 when I would be able to hear the matter myself, the parties have by letter to the List Clerk now sought the first two weeks of February. This is not convenient' to the Court, and in any event I am not satisfied that the matter will be completed in two weeks. I therefore fix the hearing for 21 March 1988 before me to continue until completed. As I have been advised that at least one of the present counsel involved will not be available at any other time for a hearing exceeding two weeks, a consent order may be filed before 4 pm on Friday 25 September fixing 2 May 1988 as_ the hearing date, provided it contains the signed express approval of an authorised officer of each of the corporate parties themselves, in addition to their legal representatives. I direct that tthe matter be listed for directions at 9.30 am on 14 December 1987 to receive assurances from the counsel for both parties expected to appear at the trial that the matter will be ready to proceed on the appointed hearing day. Counsel for the Counsel for the Date of Date of and solicitors Applicant and solicitors Respondent Hearing Judgment Mr. A.J. Sullivan instructed by Corrs Pavey Whiting & Byrne solicitors. Mr. J.C. Campbell instructed by Minter Ellison 23 July 1987 18 September 1987