IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 324 of 1993 GENERAL DIVISION ) Between: ARLONE PTY LIMITED & ORS Applicants And: TELLER PROPERTIES PTY LIMITED & ORS Respondents REASONS FOR JUDGMENT EINFELD J SYDNEY 4 NOVEMBER 1994 The Court convened this morning for the purpose of dealing with the consequence of a letter from the solicitors for the applicants dated 1 November to the solicitors for the second and fourth respondents stating that the applicants wished to discontinue against the first and third respondents and were proposing to seek the Court's leave to do so. The second and fourth respondents were asked to consent to the discontinuance and to state any terms that they would wish the Court to impose if leave was granted. When the matter came on for hearing this morning, there was filed in court by consent a motion which, amongst other things, sought leave to discontinue the application against the third respondent, not the first. The first respondent is a company of which the third respondent was the principal director and power. The motion also sought leave for the applicants to file a further amended statement of claim which deletes the claim against the third respondent but it also changes the claim against the first respondent from that contained in its predecessor. The applicant also sought leave to file an amended defence to the cross-claim of the first respondent. These documents plus the discontinuance against the third respondent change quite significantly, in legal terms, the nature of the applicants' dispute with the first respondent. So far as I can see, and counsel for the applicants confirms this from the bar table, the further pleadings sought to be filed do nothing to the nature of the dispute between the applicants and the second and fourth respondents. Whilst accepting the likelihood that leave will be given to discontinue against the third respondent and that the amended pleadings will be allowed to be filed, all respondents in substance seek that no orders be made today on the applicants' motion. The main reason for the postponement is that the respondents have only seen the amended pleadings today or very recently, and there may be flow-on consequences from their filing, especially tactical or forensic consequences or possibly consequences to the status of the cross-claims as part and parcel of a single proceeding in the court, which the respondents would like a little time to consider. Upon the hearing today, the second and fourth respondents sought an order that the cross-claims by the third respondent and by themselves should be heard separately to the remaining claims of the applicants. The reason for requesting that order was fairly complicated. It was firstly claimed that the cross-claims raise matters which have nothing to do with the trade practices nature of the applicants' main claims in these proceedings. It was then said that the cross-claims are really not seriously disputed although there may be arguments about the quantum of the amounts claimed. It was conceded, if that is the right word, that at the end of all this litigation it is quite likely that both the applicants and the second and fourth respondents will owe moneys to the first respondent so that the case will be about how much money and how it is to be calculated, including what set offs exist against the assertions made in the cross-claims. It was also argued, as a reason for separating the claims on the eve of the hearing, that the second and fourth respondents are prejudiced by the proposed discontinuance against the third respondent. The prejudice said to be suffered is that in the absence of the third respondent as a party to the trade practices claim, the second and fourth respondents may wish to call him as a witness in their own defence to the applicants' trade practices claim against them. They say that because of the late notice given, they have not had the opportunity to seek to interview him, to prepare an affidavit and, presumably, to arrange to call him to give oral testimony. It is quite clear that the third respondent, from whom affidavits have been filed in the proceedings, will be a witness in the two cross claims so that the second and fourth respondents will have the opportunity of cross‑examining him. On the other hand, they say that the evidence that they would wish him to give, or at least like to investigate in relation to the trade practices claim, would be evidence that is so far not covered by any affidavit material and would be irrelevant in the cross‑claims. They say that they should not have to cross-examine him, as it were, on the blind without knowing what evidence he could or could not give on the subject matters they wish to investigate. It does not seem to be disputed that the matter that the second and fourth respondents wish to investigate with the third respondent is quite unrelated to the first respondent's own cross-claim and to the first respondent's defence to the second respondent's cross-claim. In that event there is no reason at all that I can see why the third respondent should not be made available for interview today, if he is available, by the solicitors and counsel for the second and fourth respondents, even if the interview takes place in the presence of the third respondent's solicitor. There would seem to be no prejudice because no questions would be asked relating to the matters involved in the cross-claims. If, however, that should turn out not to be possible for one reason or another, whatever prejudice may be suffered seems to me to be quite slight. It is quite clear that if there are issues of credit between any of these parties they should be dealt with in one and the same proceeding. Whilst it is now true that the cross-claims have nothing to do with the Trade Practices Act, the subject matter of all the proceedings in terms of the basic substratum of facts is the same. I cannot imagine that the Court would lend itself to providing two separate hearings of such litigation in these circumstances. In an ideal world in which the pleadings were at the commencement of the case the same as they are now or are likely to be when the hearing commences, perhaps that might have been done, but in the realities of today's world it is simply impossible for the Court to provide that type of service to the parties. Nor would it be justified as a matter of fairness that people should be required to give evidence on two or even three separate occasions with all the paraphernalia attached to such proceedings in terms of legal costs, the presence of lawyers, court staff etc. The second and fourth respondents will have to do the best they can in the circumstances. Those parties are not entitled as of right to be heard on the application to discontinue which affects only the third respondent, and the third respondent does not even have a cross‑claim. In my opinion, terms ought not to be imposed on the motion for discontinuance which would have the result of forcing conditions on the first respondent who is not a party to the matter in which it was made. I do not see how the first respondent could be made subject to such conditions. At the same time it is obvious that the case should be conducted in the most sensible way to enable the trial judge to get hold of the issues and do justice between the parties. That requires sensible negotiations between counsel as to the order in which witnesses might be called. It is not something that would ordinarily be imposed by a judge who must, of necessity, have a limited knowledge of the issues and the tactics involved, and would be most reluctant, I should have thought, to become involved in such a matter. However, it is in the interests of all parties that the case be conducted in a sensible order, intelligently bringing to the trial judge's attention the issues that are sought to be decided and not to assert rights as to how witnesses might be called. The Court is flexible in this regard and the only real issue is what is the best way to do justice and what is fair to the parties and convenient to the witnesses concerned. Although it is likely that the motion will be granted -- no party can be forced to sue a party it does not wish to sue -- I think in the circumstances that the only orders I can make today is that the motion for discontinuance be adjourned to the trial on Monday. I would urge the parties to try to deal with the issues aired today so as not to have made today's proceedings completely useless, and even more importantly so as not to repeat them before the trial judge on Monday. It should be possible to deal with the problems that have been raised by commonsense negotiation. On the issue of costs I do not think that I can do justice in making orders today. It will not be possible until the trial starts to determine whether today's proceedings have had any benefit at all. The matter was listed at the instigation of the second and fourth respondents. The orders sought in the application made from the bar table on behalf of those parties have not been granted. On the other hand, the proceedings this morning may not have been useless because they may have helped to crystallise the issues and if the parties act sensibly, it seems to me that today's proceedings can be used to the benefit of the litigation and the overall interest of justice, particularly in limiting the issues in the trial. It seems clear that the Balog interests should receive their costs of today, but it is very difficult for me to determine who should pay them. On the one hand, the Balog interests are really here because they were originally to be the subject of a discontinuance for which leave was required but to which they were consenting. On the other hand, they could merely have consented to leave and not turned up at all were it not for the fact that the Hawcroft interests were seeking to have the cross-claims heard separately. In the event, only the third respondent himself is being dropped from the case. All this makes it very difficult for me to make a sensible order as to costs today, but the trial judge will be better able to do so, hopefully assisted by the short judgment that I have given to set out the facts and also assisted by what actually happens when the matter comes on for hearing and is litigated. I reserve to the trial the issue of costs of the motion for discontinuance and the oral application by the second and fourth respondents for a separate hearing of the cross-claims.