Just Right Foods Pty Ltd v Inghams Enterprises Pty Ltd [1998] FCA 362

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VG 3333 of 1997

BETWEEN: JUST RIGHT FOODS PTY LTD

Applicant

AND: INGHAMS ENTERPRISES PTY Ltd

Respondent

judicial registrar: MILLANE

DATE: 15 APRIL 1998

PLACE: MELBOURNE

ORDER ON APPLICATION FOR COSTS

On 10 March 1998 I handed down judgment in the abovementioned proceedings dismissing the applicant's application to set aside the respondent's statutory demand. Although notification of the delivery of judgment was given to both parties representatives the solicitors on the record representing the applicant, Byrne and Clark, did not attend Court to receive judgment. On 10 March 1998 the successful respondent's representative indicated to the Court that it sought to make an application for costs and, as the applicant's representative was not in Court an order was made reserving liberty to each party to apply on the question of costs by filing written submissions within seven days. The applicant availed itself of the opportunity provided and has filed a written submission seeking an order for the payment of its costs including reserved costs and further seeking that such costs be paid on a solicitor-client basis. An additional application is made to the Court to set off against any amount of costs awarded by the Court in favour of the respondent, the costs the respondent was ordered by the Court on 5 February 1998 to pay to the applicant following the adjournment of the application to set aside the statutory demand from that date to 24 February 1998 at the respondent's request. That adjournment was sought to allow the respondent to file further affidavit material and consent orders were made, including an order that the respondent pay the applicant's costs of that day to be taxed in default of agreement. With regard to the application for costs this is a case where the respondent has successfully defended the setting aside application. I accept the accuracy of its submission that in accordance with the general practice costs follow the event, and an order for costs including any reserve costs should be made in its favour. However, I am not satisfied on the submissions made that this is a proper case for ordering payment of the costs on a solicitor-client basis. My reasons for judgment indicate that, the alleged defamatory statements referred to in the pleadings filed by the applicant in the Federal Court proceeding may be capable of founding an actionable slander and there was, therefore, a basis for saying that a cause of action was alleged, notwithstanding the fact that the alleged maker of the defamatory statements denied doing so. As can be seen from the reasons for judgment in all the circumstances the applicant did not satisfy me that there was a genuine offsetting claim in the sense in which that expression is used in section 459G and H of the Corporations Law. The application to set off the costs payable by the respondent to the applicant pursuant to the consent orders made by me on 5 February 1998 is not supported by any authorities, nor has the respondent proffered reasons for the Court to take this step. Obviously, in proceedings in which the winding up provisions are relied on it may be in the respondent's interests to obtain such an order, however, to do so may override the interests of those who have reason to expect the benefit of the consent order made in February this year. In these circumstances, I am not satisfied that it is appropriate to make the further order sought. THE COURT ORDERS THAT: 1. The applicant pay the respondent's costs including reserve costs of the setting aside application as taxed. I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of Judicial Registrar Millane.