New South Wales Supreme Court CITATION : Associated Food v Baxter [1999] NSWSC 361 CURRENT JURISDICTION : Equity FILE NUMBER(S) : 1039/97 HEARING DATE(S) : 15-18 & 31 March 1999 JUDGMENT DATE : 31 March 1999 Associated Food Technology Pty Ltd (P) PARTIES : v Robert Mervin Baxter & Ors (D) JUDGMENT OF : Austin J COUNSEL : D K L Raphael & A G Diethelm (P) SOLICITORS : Peta Bollinger (P) CATCHWORDS : Practice and procedure - discontinuation under Part 21 Rule 2 of the Rules of Supreme Court of New South Wales - when trial or hearing of proceedings begins. DECISION : Leave to discontinue granted. THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION AUSTIN J WEDNESDAY 31 MARCH 1999 1039/97 - ASSOCIATED FOOD TECHNOLOGY PTY LTD v ROBERT MERVIN BAXTER & ORS JUDGMENT (EX TEMPORE, REVISED ON 19 APRIL 1999) 1 In this matter there was a substantial contest between the five plaintiffs (namely Associated Food Technology Pty Ltd, Allan Johnson, AFI Management Pty Ltd, Associated Food International Pty Ltd, and Rockbid Pty Ltd) and certain of the defendants. The defendants involved in that substantial dispute were Robert Mervin Baxter, Dennis John Pickwell and Advanced Technology Systems Pty Ltd (the 'Active Defendants'). Additionally Hassan Kokab and Kokab Pty Ltd (the 'Kokab Interests') were generally interested in the substantial dispute but in the last analysis they did not separately appear at the hearing, although they filed a submitting appearance and consented to an amendment to the pleadings which removed them as plaintiffs and added them as defendants. 2 The substantial dispute between the plaintiffs and the Active Defendants concerned a number of issues relating to joint venture arrangements and in particular the true identity of a party to those arrangements. The case was heard by me during the period from 15 to 18 March 1999. However the substantial dispute was then settled by the consent of the plaintiffs, the Active Defendants and the Kokab Interests and on 19 March 1999 I made certain orders, having the effect of disposing of the statement of claim in the proceedings as against the Active Defendants and the Kokab Interests. 3 The proceedings also included a cross-claim and my orders of 19 March 1999 disposed of the cross claim by consent so far as it related to those same parties, and also the twelfth cross-defendant, Barbara Johnson (the wife of one of the plaintiffs) . What remained of the proceedings after my orders of 19 March 1999 were the statement of claim as it related to any dispute between the plaintiffs and the defendants other than the Active Defendants and the Kokab Interests, and the cross-claim as regards any dispute between the cross-claimants (Mr Pickwell and Advanced Technology Systems) and cross-defendants other than the plaintiffs, the Kokab Interests and the twelfth cross-defendant. 4 The other defendants (whom I shall call 'the Remaining Defendants') are Malcolm Henry Campbell, Abroron Pty Ltd, Maxwell John Strong, Advanced Biotechnology Corporation Pty Ltd and the Official Trustee in Bankruptcy. Abroron (a company associated with Mr Campbell) is in liquidation and Advanced Biotechnology Corporation (a company associated with Mr Strong) is subject to a deed of company arrangement. The Official Trustee has not been actively involved in the proceedings. I assume he filed his appearance in his capacity as trustee of the bankrupt estate of Mr Strong. The other cross-defendants are the Remaining Defendants other than Mr Campbell. 5 The plaintiffs come before me today to seek orders dealing finally with the statement of claim so far as it relates to the Remaining Defendants. As I have mentioned, the Official Trustee has filed a notice of appearance but has not otherwise participated during the course of the hearing. The other Remaining Defendants have not filed any notice of appearance or otherwise taken part in the hearing. Although there was a hearing of the matter, it is important, for reasons I shall indicate, to state that the hearing did not involve any appearance or contention by or behalf of any of the Remaining Defendants. 6 The order which the plaintiff seeks today is an order under Part 21 Rule 2 of the Supreme Court Rules that leave be granted to the plaintiffs to discontinue the proceedings in the statement of claim so far as they concern the Remaining Defendants. Rule 2 states: 'A party making a claim for relief may, before the beginning of the trial or hearing of the proceedings on the claim (but not otherwise) , discontinue the proceedings so far as concerns the whole or part of any claim for relief made by him [relevantly] with the leave of the court' [emphasis added]. 7 The effect of the rule appears to be that the court's power to grant leave to discontinue under the rule is excluded if the trial or hearing of the proceedings has begun. It may be that in such circumstances the Court also has some other inherent power to deal with an application to discontinue, but it is unnecessary for me to decide this point in the present case. The significant issue on the facts before me is that no trial or hearing of the proceedings has begun against the Remaining Defendants, since they were not in any way contestants in the dispute which was the subject of the hearing from 15 to 18 March 1999. 8 If I were to read Rule 2 in a strict and technical fashion and therefore were to conclude that a trial or hearing had begun and that leave to discontinue could not be granted under the rule, I would be failing to take into account the purpose of Rule 2 and the substantial merits of the present application. It appears to me that the purpose of the Rule is to require the Court to deal with the substantive claims for relief once the applicant for that relief has embarked on the process of proving an entitlement to the relief claimed. In the present case, so far as the Remaining Defendants are concerned, that process did not begin. I conclude, therefore, that I may grant leave under Part 21 Rule 2 to permit the plaintiffs to discontinue as against the Remaining Defendants, the statement of claim already having been disposed of as far as the Active Defendants are concerned. 9 I therefore grant leave to the plaintiffs to discontinue the whole of the proceedings in the statement of claim as against Messrs Campbell, Strong, Abroron, Advanced Biotechnology Corporation and the Official Trustee in Bankruptcy with no order as to costs. 10 That leaves the cross-claim undisposed of, except as regards the plaintiffs, the Active Defendants, the Kokab Interests and Barbara Johnson. I stand over generally the proceedings on the cross-claim so far as they have not already been disposed of by the Court's orders, noting that the Court's orders of 19 March 1999 disposed of the cross-claim except with respect to the 8th, 9th, 10th and 11th cross-defendants - namely, Mr Strong, Abroron Pty Ltd (in liq), Advanced Biotechnology Corporation Pty Ltd (subject to deed of company arrangement) and the Official Trustee in Bankruptcy. Last Modified: DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.