\ NOT SUITABLE TOP REPORTING FOR LIMITED DISTRIBUTION JUDGMENT No. 4:341..38...m CATCHWORDS PRACTICE AND PROCEDURE - Costs - whether general principle that costs follow the event applicable - factors relevant to exercise of Court's discretion - Ritter v Godfrey [1920] 2 K.B. 47 - whether order for possession should be stayed pending appeal. 0.52 r©.17 Federal Court Rules CHENOA PTY. LTD. v_ THE SHELL COMPANY OF AUSTRALIA LIMITED No. VG 273 of 1985 Ryan J Melbourne 15 April 1988 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY No. VG 273 OF 1985 GENERAL DIVISION ee ee Coram: Date: Place: BETWEEN: CHENOA PTY. LTD (Applicant) AND: THE SHELL COMPANY OF AUSTRALIA LIMITED (Respondent ) Ryan J. 15 April 1988 Melbourne MINUTES OF ORDER THE COURT ORDERS: 1. That the application be dismissed with costs including any reserved costs other than the costs of and incidental to the respondent's motion on notice dated 13 December 1985 including the hearing on 6 March 1986 such costs to be taxed and paid by the respondent or set off against the orders contained herein for costs in favour of the respondent. That on the cross-claim the respondent' recover possession of the premises known as and situate at 542 Footscray Road West Melbourne and that the applicant pay the respondent costs of the cross-claim. NOTE: That directions for the conduct of an inquiry into damages (if any) suffered by the Shell Company of Australia as a result of the injunction granted by Woodward J on 22 August 1986 be given on a date and time to be fixed after the hearing and determination of any appeal by Chenoa Pty. Ltd. against the orders contained in paras. 1 and 2 hereof, or in the absence of any such appeal after the expiration of 21 days from the date hereof. That execution of the order for possession in para. 2 hereof be stayed until the expiration of 21 days from this day or further order. That upon the applicant undertaking, by its counsel, to pay any party adversely affected, such compensation, if any, as the Court thinks just, in such manner as the Court directs, the respondent be restrained until the expiration of 21 days from the date of this order from varying the rates of commission allowed and paid by the respondent to the applicant from those applying between the parties in June 1986. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY No. VG 273 OF 1985 ~~~ SY GENERAL DIVISION BETWEEN: CHENOA PTY. LTD (Applicant) AND: THE SHELL COMPANY OF AUSTRALIA LIMITED {Respondent ) Coram: Ryan J. Date: 15 April 1988 Place: Melbourne EX TEMPORE REASONS FOR JUDGMENT In this matter I have already indicated in reasons for judgment given on 10 March 1988 and 13 April 1988 that the application must be dismissed and that there should be an order on the cross-claim that the respondent have possession of the premises at 542 Footscray Road, West Melbourne. Mr Parker Q.C., who again appeared with Mr Blackburn-Hart for the applicant ("Chenoa"), argued that the respondent ("Shell"), should, contrary to the general principle that costs should follow the event, pay the costs of Chenoa up to 6 March 1986 when, so it was said, it became apparent for the first time that Shell was placing no reliance on a notice served by it, purportedly pursuant to s.6(1E) of the Petroleum Retail Marketing Franchise Act 1980 (as amended) (the "Franchise Act"). Reference was made to the principles enunciated by Atkin L.J. in Ritter v Godfrey [1920] 2 K.B. 47 at 60 where his Lordship observed:- "It is not easy to deduce from these authorities what the precise principles are that are to guide a judge in exercising his discretion over costs. And yet as the discretion is only to be exercised where there are materials upon which to exercise it, it seems important to ascertain the principles upon which a judge is to discern whether the necessary materials exist. In the case of a wholly successful defendant, in my opinion the judge must give the defendant his costs unless there is evidence that the defendant (1.) brought about the litigation, or (2.) has done something connected with the institution or the conduct of the suit calculated to occasion unnecessary litigation and expense, or (3.) has done some wrongful act in the course of the transaction of which the plaintiff complains." That statement was invoked in the light of Chenoa's contention, to which I have just referred, that it was only after 6 March 1986 that it became apparent that Shell was no longer placing any reliance on the notice issued by it under s.6(1E) of the Franchise Act. I am not disposed to accept that submission, although it is clear that the notice under s.6(1E) was one of the factors in the course of events which led to the institution of this litigation. However, it was pleaded by paragraph 11 in the statement of claim as originally filed with the application:- "By a notice dated 29th of August 1985 from Shell to Chenoa, Shell purported to give notice of termination of the Distributor Agreement to take effect on three clear months from the date of the notice." That, it will be recalled from the reasons which I have already given, was the first notice of termination of the consignment distributor agreement served by Shell. By a subsequent amendment to the statement of claim, paragraph 11A was inserted in these terms:- "By Notice dated 5th September, 1985 from Shell to Chenoa, Shell purported to give further Notice of Termination of the Distributor Agreement." It is therefore clear that Chenoa found it necessary well before 6 March 1986 to put in issue the efficacy of the notice of termination on which Shell was ultimately successful in relying in its claim for possession of the premises. Accordingly, I do not consider that' the circumstances bring the case within the first exception identified by Atkin L.J. in the passage from Ritter v Godfrey which I have just cited. It was then argued that the matter came within the third of those exceptions and that Shell had been required to obtain the indulgence of the Court in order to preserve its right to rely on the statement containing what were conceded by Mr Shaw Q.C. on behalf of Shell to be blemishes as bringing it within s.6(1D) of the Franchise Act. I disagree with the contention that Shell was required, or sought in these proceedings, to obtain any indulgence or exculpatory relief from this Court. Rather, Chenoa by its reply, assumed the burden of showing that those blemishes, as they were called, were fatal to the efficacy of the statement relied on by Shell as having been lodged under s.11 of the Petroleum Retail Marketing Sites Act 1980 ("the Sites Act") Chenoa failed to discharge that burden. Nor do I consider that, by perpetrating those "blemishes" in its statement lodged under s.11 of the Sites Act, Shell had been guilty of conduct of the kind described by Atkin L.J. in Ritter v Godfrey (supra) when he referred to the need for evidence that the defendant "has done some wrongful act in the course of the transaction of which the plaintiff complains". It was argued in the alternative on behalf of Chenoa that, in this case, relatively novel legislation had to be examined and that s.6(1D) on which the judgment of the court ultimately rested had been poorly drafted. However, I do not consider that this case was in any sense a test case. It was argued and decided on facts peculiar to Chenoa and its occupation of the site in question. It is true that the resolution of the case required interpretation of provisions in legislation which had not previously received judicial attention, but it raised nothing like the constitutional issues which weighed with the New South Wales Court of Appeal when it departed from the general principle that costs follow Ay the event in University of Woolongong v_ Metwally [1985] 1 N.S.W.L.R. 722. It was further said that the cross-claim, although it was in the nature of an action in ejectment, was essentially concerned with accrued rights sought to be relied on by Chenoa as having been conferred on it by the Franchise Act. However, since, for the reasons which I have already given, I am not disposed (except in one respect which I will mention shortly) to depart from the general principle in dealing with the costs of the claim, it follows that I must take a similar course in relation to the costs of the cross-claim. The exception which I make is in respect of the costs of Shell's motion on notice dated 13 December 1985 by which Shell unsuccessfully sought to strike out Chenoa's statement of claim in this matter. In my view, Shell failed in the prosecution of that motion. Although, as Woodward J. pointed out, some procedural benefits were achieved after that failure became apparent, I do not regard them as sufficient to displace the application of the general principle to that part of the litigation. Accordingly, for these reasons and for the reasons which I have already indicated in my earlier reasons for judgment, the order of the Court will be:- That the application be dismissed with costs including any reserved costs other than the costs of and incidental to the respondent's motion on notice dated 13 December 1985 including the hearing on 6 March 1986 such costs to be taxed and paid by the respondent or set off against the orders contained herein for costs in favour of the respondent. That on the cross-claim the respondent' recover possession of the premises known as and situate at 542 Footscray Road, West Melbourne, and that the applicant pay the respondent's taxed costs of the cross-claim. I will also order:- That directions for the conduct of an inquiry into damages (if any) suffered by the Shell Company of Australia as a result of the injunction granted by Woodward J. on 22 August 1986 be given on a date and time to be fixed after the hearing and determination of any appeal by Chenoa Pty. Ltd. against the orders contained in paras. 1 and 2 hereof, or in the absence of any such appeal after the expiration of 21 days from the date hereof. Application has been made by motion on notice issued this day for a stay of the orders which I have just pronounced. I have abridged the time for service of that notice of motion to enable it to be heard this day. I deal with it now on the undertaking of counsel for Chenoa to institute as soon as practicable an appeal against the orders which I have just pronounced and to prosecute that appeal with due diligence. Attention has been drawn to the nature of this litigation and the consequences which will flow from the order for possession which I have just announced if that order be not disturbed on appeal. In all of the circumstances I am persuaded that a stay should be granted at least for the limited purpose of enabling the appeal to be instituted and further material to be put before the Court or a judge of the Court on the question of whether the stay which I propose to grant should be continued until the hearing and determination of the appeal and, of course, as Mr Middleton who appeared today for Shell has pointed out, one of the factors which might ultimately weigh in the exercise of that discretion will be the date which can be assigned for the hearing of the appeal. In the circumstances, the only order which I propose to make today by way of a stay is an order that execution of the order for possession be stayed until the expiration of 21 days from the date of this order or further order. I certify that this and the six (6) preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice Ryan. Associate Dated: "Sire C 9h