International Alpaca Management Pty Ltd v Ensor, B.K.E. & Ors [1995] FCA 541

CATCHWORDS COSTS: Application that successful respondents be restricted to one half of their taxed costs - whether issues unnecessarily litigated - whether applicants' success on some issues sufficient to displace usual rule that costs follow the event. Sale of Goods Act 1923 No. 1 INTERNATIONAL ALPACA MANAGEMENT PTY LIMITED & ORS v BEN K E ENSOR & ORS No G690 of 1992 Beazley J 28 July 1995 Sydney

IN THE FEDERAL COURT OF AUSTRALIA ) ) No. G690 OF 1992 NEW SOUTH WALES DISTRICT REGISTRY ) ) GENERAL DIVISION ) BETWEEN: INTERNATIONAL ALPACA MANAGEMENT PTY LIMITED First Applicant TEXTILE FINANCE LIMITED Second Applicant COOLAROO ALPACA GENERAL PARTNER PTY LIMITED Third Applicant AND: BEN K E ENSOR First Respondent GARRYMERE FARMS LIMITED Second Respondent DEPARTMENT OF PRIMARY INDUSTRY AND ENERGY Third Respondent CORAM: BEAZLEY J PLACE: SYDNEY DATE: 28 July 1995 MINUTES OF ORDER THE COURT ORDERS THAT: 1. The applicants pay the respondents costs of the proceedings, including the interlocutory application before Foster J, and the costs of this application in relation to costs.

IN THE FEDERAL COURT OF AUSTRALIA ) ) No. G690 OF 1992 NEW SOUTH WALES DISTRICT REGISTRY ) ) GENERAL DIVISION ) BETWEEN: INTERNATIONAL ALPACA MANAGEMENT PTY LIMITED First Applicant TEXTILE FINANCE LIMITED Second Applicant COOLAROO ALPACA GENERAL PARTNER PTY LIMITED Third Applicant AND: BEN K E ENSOR First Respondent GARRYMERE FARMS LIMITED Second Respondent DEPARTMENT OF PRIMARY INDUSTRY AND ENERGY Third Respondent CORAM: BEAZLEY J PLACE: SYDNEY DATE: 28 July 1995 REASONS FOR JUDGMENT BEAZLEY J: The applicants brought proceedings against the respondents claiming title to 100 alpaca, then stationed in quarantine on the Cocos Islands. The claim to the alpaca was based in contract. However, numerous issues arose in the proceedings, including the validity of the respondents' title to 45 alpaca based on the reserved contract with ACL and to their claim for possessory title to the alpaca. It is necessary to refer to the various issues to determine whether the respondents should be deprived of any portion of the costs, which in the ordinary course, would follow the event. I delivered judgment in the matter on 7 April 1995, the effect of which was that the applicants were unsuccessful in their claim. Notwithstanding that their claim failed, the applicants contend that the respondents ought only have one half of their taxed costs, as the real issues in contention were the reserved contract and notice of prior dealings, which only went to establish title to 45 alpaca. It was also contended that the possessory claim to 55 alpaca (or alternatively 100 alpaca, if the claim on the reserved contract failed) depended upon uncontroversial facts as to possession. It was submitted that notwithstanding the true ambit of the claim, the respondents maintained a claim to 100 animals as a matter of title, with the consequence that "the applicants had to attack a series of false issues and issues on which the respondents wholly failed, in order to bring the case back to its proper proposition which was a dispute as to the advocacy of the reserve contract and questions of notice". It was submitted that other issues ought not be litigated. I do not agree with these submissions. It is true that there was some confusion in Mr Ensor's evidence as to the basis upon which he thought he was entitled to 100 alpaca. It was also apparent as I stated in my reasons for judgment that Mr Ensor had a tendency to get himself "entangled in legal terminology and concepts". It was obvious he did not always understand the legal concepts about which he was cross examined. Counsel for the applicant chose to pursue those issues with Mr Ensor. The overall result, as I also stated in my Reasons for Judgment, was that the cross-examination was "exhaustive and exhausting" and, at times, confusing. However, there was never any confusion in the way senior counsel for the respondents put the claim. It was always on the basis that the reserved contract went to 45 of the alpaca only, and that the claim to the balance of the 55 alpaca was based on possessory title and in unjust enrichment. The claim to possession was first contained in the Second Further Amended Defence and Cross Claim. That position was maintained throughout the proceedings. The second submission is also misconceived. It was submitted that the claim to 55 animals, other than a claim in possession, had no possible foundation and ought never have been made. However, the claim was put on two bases. The first was that the respondents are entitled in possession to the 55 alpaca, as against the applicants. The second was that they be entitled to those alpaca on the basis of unjust enrichment. The respondents were successful on the possession claim. They were unsuccessful on the unjust enrichment claim. However, to approach the matter in the way the applicants have, for the purposes of the cost application, is to look at the matter in reverse. Being the applicants in the proceedings, they had to establish their claim. That involved determining the legal basis, if any, by which they were entitled to the 100 alpaca. That involved a consideration of the various contractual arrangements between the parties. The parties were variously successful in different aspects of the issues which arose out of those contractual arrangements. However, as the respondents were not successful on all issues, it is necessary to refer to the determination of the issues to see if there should be any impact on costs. Proper law of the Contracts I found that each of the relevant contracts, ie, the first purchase agreement, the second purchase agreement, and the reserved contract, were governed by the provisions of Australian law. Ensor's Purchase Agreement Two issues arose in relation to this agreement. The first was whether, as a matter of construction, clause 8.1 imposed an obligation on Ensor to permit CAM5 to be used for the importation of 100 alpaca. The question of construction brought the parties' pre-contractual obligations into consideration. The cross examination on these negotiations included extensive cross examination on credit. The respondents were unsuccessful on this issue. However, I found that Mr Morales had waived the requirements of clause 8.1 and thus found against the applicants on this issue. A consideration of the waiver issue also involved extensive factual issues, both arising out of the affidavit and oral evidence of Mr Morales, and out of the extensive documentary evidence in the case. The ACL/Inglis Agreement Three issues arose in relation to this agreement. First, whether any such agreement existed and if so, whether its terms were reflected in the written document relied upon by the applicants. Secondly, whether, and if so when, property in the alpaca had passed. Thirdly, what payments had been made under the agreement. The respondents conceded in submissions that the agreement existed. However, I do not consider they should be penalised for having contested the existence of the agreement. The concession was made at an earlier point in the respondents' submissions. The arrangements between the various entities involved in this matter were not always implemented in a straightforward or obvious manner. This agreement fell into the category which was not straightforward. However, I found in IAM's favour in relation to the question whether the terms of the agreement were reflected in the written document of 15 February. The next issue related to the passing of property. That question involved the construction of the agreement. I found against the construction contended for by the applicants. The third issue was whether all payments due under the contract had been made. This was a factual matter. I found against the contentions of the applicants. The First and Second Purchase Agreements An initial question arose as to which agreement governed the relationship between the parties. Neither party took a particularly strong position either way and the question needed to be resolved in the overall context of the proceedings. The respondents should therefore have the benefit of costs involved in relation to that issue. Having determined that the second purchase agreement was the operative agreement, the question arose whether Morales was under any obligation under that agreement. For the most part, that issue involved the proper construction of the contract. I found that, save in relation to the provisions of clause 7.2, Morales did not have any obligations under the contract. That was the alternative construction of the contract for which the respondents had contended. They were therefore successful on that issue. There was a further issue as to when title passed under the agreement. This involved a question of construction of the agreement and was resolved in the applicants' favour. Reserved Contract The applicants contend, for the purposes of the cost application that this was the substantive issue in the proceedings. I do not agree that that was solely the case, as the issues arising under the other agreements were also important issues in the case. There is no doubt however, that the reserved contract was a substantial issue. Six issues arose in relation to the reserved contract: (i) whether properly construed, it constituted a contract at all; (ii) whether ACL/Morales adopted its terms; (iii) whether it was supported by consideration; (iv) whether it was a binding contract as a matter of Chilean law; (v) the question of which contract, as between the Inglis/IAM agreement and the reserved contract, had priority; (vi) whether title had passed as a matter of Chilean law. These matters involved substantial factual and legal issues as well as a detailed examination of the terms of the contract. The respondents were successful on all issues. Sale of Goods Act, 1923: s 28