Walcan v Superior Coffee & Cakes Pty Ltd [2002] FCA 1236

FEDERAL COURT OF AUSTRALIA

Walcan v Superior Coffee & Cakes Pty Ltd [2002] FCA 1236 WALCAN PTY LTD AND ANOR v SUPERIOR COFFEE & CAKES PTY LTD (ACN 066 956 081) AND ORS No Q169 of 2000 KIEFEL J BRISBANE 2 OCTOBER 2002

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY Q169 OF 2000

BETWEEN: WALCAN PTY LTD (ACN 060 592 038)

FIRST APPLICANT

IAN HENRY CANHAM AND ROBYN JOY CANHAM

SECOND APPLICANT

AND: SUPERIOR COFFEE & CAKES PTY LTD (ACN 066 956 081)

FIRST RESPONDENT

IAN GREGORY SHORTELL

SECOND RESPONDENT

BB'S BAGEL PTY LTD (ACN 082 174 794)

THIRD RESPONDENT

BB'S COFFEE & BAKE AUSTRALIA PTY LTD (ACN 051 802 183)

FOURTH RESPONDENT

JUDGE: KIEFEL J

DATE OF ORDER: 2 OCTOBER 2002

WHERE MADE: BRISBANE

THE COURT ORDERS THAT: 1. The applicants pay the first and second respondents' costs on an indemnity basis. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY Q169 OF 2000

BETWEEN: WALCAN PTY LTD (ACN 060 592 038)

FIRST APPLICANT

IAN HENRY CANHAM AND ROBYN JOY CANHAM

SECOND APPLICANT

AND: SUPERIOR COFFEE & CAKES PTY LTD (ACN 066 956 081)

FIRST RESPONDENT

IAN GREGORY SHORTELL

SECOND RESPONDENT

BB'S BAGEL PTY LTD (ACN 082 174 794)

THIRD RESPONDENT

BB'S COFFEE & BAKE AUSTRALIA PTY LTD (ACN 051 802 183)

FOURTH RESPONDENT

JUDGE: KIEFEL J

DATE: 2 OCTOBER 2002

PLACE: BRISBANE

REASONS FOR JUDGMENT (COSTS) 1 The fact that the applicants must pay the first and second respondents' costs of the proceedings is not in dispute. The question is whether or not those costs ought to be ordered on an indemnity basis. Putting aside the representation which was the subject of amendment towards the conclusion of the trial, which has problems of its own, the point made by the respondents is that the representations initially pleaded obviously had no basis in fact when they were made. This is an unusual case given the degree of change as between the case originally pleaded and that which was taken up in submissions, and the problems in evidence put forward by the applicants. It involved inconsistencies in their own case. 2 An offer to compromise was made. It would not, of itself, necessarily lead to an order for indemnity costs but I consider it provides additional support for the exercise of my discretion. Here the applicants should have taken the opportunity to walk away. There is no suggestion that the applicants ever had a case from the outset. This is relevant to the question as to whether indemnity costs should be ordered only after the offer of compromise was made or from the commencement of the proceedings. I consider the order should be made for the whole proceedings. Not only had the applicants no case as they alleged, they had to overcome a deed in which they had stated they had received no prior representations. That was found to have been, in fact, the case. 3 In these circumstances I will order the applicants to pay the first and second respondents' costs of the proceedings on an indemnity basis. I certify that the preceding three (3) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel.