FEDERAL COURT OF AUSTRALIA

Banwell v Ship “The Sydney Sunset” [2002] FCA 271

PRACTICE AND PROCEDURE –  whether order was interlocutory – whether Registrar erred in proceeding to taxation – whether taxation of a bill of costs should be set aside – whether order for costs should be amended – whether solicitor acting for one or two parties

Lloyd Werft Bremerhaven GmbH v Owners of Ship “Zoya Kosmodemyanskaya” (1997) 79 FCR 71 distinguished

NEVILLE ROSS BANWELL v THE SHIP “THE SYDNEY SUNSET”

N 98 of 2001

TAMBERLIN J

SYDNEY

19 MARCH 2002

THE COURT ORDERS THAT:

1.         The Notice of Motion filed on 9 November 2001 to set aside the taxation of 26 October 2001 is dismissed but the application to stay the enforcement of the taxation pending final determination in the District Court is allowed.

2.         There is no order as to costs in the above application.

3.         The Notice of Motion filed on 30 January 2002 is dismissed with costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     Before me are two Notices of Motion.  The first Notice of Motion was filed on 9 November 2001, by Neville Ross Banwell objecting to an assessment of costs and seeking to set aside the taxation of a bill of costs, which was taxed by a Registrar of the Court in an amount of $12,138.54.  Mr Banwell does not complain about the quantum of the assessment.

2                     Objection was taken by Mr Banwell to the Registrar proceeding to taxation on the ground that the requirements of O 62 r 3 of the Federal Court Rules (“the FCR”) were not complied with.  That rule relevantly provides:

“3(1)   …

  (2)     Where the Court makes an order in any proceeding for the payment of costs the Court may require that the costs be paid forthwith notwithstanding that the proceeding is not concluded.

(3)               An order for costs of an interlocutory proceeding shall not, unless the Court otherwise orders, entitle a party to have a bill of costs taxed until the principal proceeding in which the interlocutory order was made is concluded or further order.”

3                     The objection on the basis of O 62 r 3 was rejected by the Registrar who proceeded to tax the bill of costs.  Mr Banwell seeks to review this taxation and stay any further action on it.

4                     The case advanced for Mr Banwell is that the judgment of the Court given by me on 9 March 2001 releasing the vessel (“The Sydney Sunset”) from arrest was interlocutory in character.  Accordingly, it is said that the Registrar erred in proceeding to tax the costs.

5                     I have been referred by counsel to a number of authorities on the question whether the judgment of 9 March was interlocutory.  The orders made on that date for release of the vessel did not finally dispose of the matter.  The proceedings were subsequently remitted by me to the District Court for determination as to the amount, if any, of any indebtedness between the parties.  The present case is to be distinguished from that considered by the Full Court in Lloyd Werft Bremerhaven GmbH v Owners of Ship “Zoya Kosmodemyanskaya” (1997) 79 FCR 71, because in that case the orders made set aside the writ in addition to releasing the ship.  As a consequence, the action was finally disposed of.  In the present case, the vessel has been released but the matter is not finally disposed of.

6                     Although the Registrar proceeded to taxation without leave of the Court having been obtained, I am not persuaded that I should set aside the taxation.  That would involve wasteful duplication and give rise to considerable expense, particularly in view of the fact that the quantum of the taxation is not in dispute for present purposes.

7                     In the circumstances I consider the appropriate course is not to set aside the taxation but to stay the enforcement of the taxation pending resolution of the substantive claim in the District Court.  For that purpose I grant liberty to apply to this Court upon completion of those proceedings for release of the stay.

8                     The second Notice of Motion was filed on 30 January 2002 and names the ship (“The Sydney Sunset”) as the defendant in the matter.  The Notice of Motion seeks an order that the costs awarded by the Court on 9 March 2001 to Mr Wolf, who was the defendant on behalf of the vessel seeking release, should be amended so that Mr Doran who was held to be the owner of the vessel, should have a costs order in his favour, rather than the existing order. 

9                     Other orders are sought, which in substance are in opposition to the first Motion referred to above and I have already given my reasons in relation to that Notice of Motion.

10                  The application now made is in effect to substitute Mr Doran for Mr Wolf as the beneficiary of the order for costs and this is opposed by Mr Banwell.

11                  The solicitor for Mr Doran and for Mr Wolf, on the in rem proceedings, Mr O’Reilly, said that at the time the order for costs was made on 9 March 2001, he was really acting for Mr Doran.  He said that he had been paid by Mr Doran and that is the reason why he seeks to have Mr Doran substituted as the beneficiary for the costs order rather than Mr Wolf.

12                  Mr Wolf who has the benefit of the costs order is not a party to this matter.  Nor was he present at the hearing before me on the Notice of Motion.  The order sought cannot be made unless Mr Wolf is joined and given an opportunity to present his case because he is directly and adversely affected by the orders sought.  To make an order in his absence would be a clear breach of natural justice.

13                  Mr O’Reilly has filed evidence that as at February 2001, he considered that Mr Wolf and Mr Doran were jointly and severally liable for his costs and billed them accordingly.  On 8 February 2001, both Mr Wolf and Mr Doran appeared.  Mr Wolf stated his relationship with the vessel, that he was a purchaser and agent of the vessel.  Mr Doran stated that he was the owner of the vessel.  The application for release was filed on 14 February 2001 and was made by Mr O’Reilly.  An appearance was also entered for the ship on 14 February 2001.  Both Mr Doran and Mr Wolf filed evidence on the application for release. 

14                  The application for release was heard on 8, 16 and 21 February 2001.  An order was made on 9 March 2001 that Mr Banwell pay Mr Wolf’s costs.  On 3 August 2001, I remitted further proceedings in the matter to the District Court of New South Wales.

15                  As at April 2001 there was evidence by way of correspondence between the parties in which Mr O’Reilly offers to settle the costs awarded on behalf of his client.  This reference to costs is of course reference to the costs order made in favour of Mr Wolf.  On 9 May 2001 Mr O’Reilly wrote to John Wolf and Brian Doran.

16                  On 29 May 2001 Mr O’Reilly again wrote to John Wolf and Brian Doran with an account for acting in the matter for the period 12 February 2001 to 28 May 2001, in an amount of $19,176.37 including disbursements and tax. 

17                  On 15 June 2001 Mr O’Reilly filed a Notice of Ceasing to Act for the defendant Mr Wolf.

18                  On 15 November 2001, Mr O’Reilly wrote to John Wolf and Brian Doran at Mr Doran’s address referring to further disbursements paid on “your behalf” in an amount of $1,349.30 in respect of the proceedings ‘Banwell v The Sydney Sunset’.

19                  In cross-examination Mr O’Reilly agreed that he had represented that he was acting for Mr Wolf in the period after costs had been awarded.  Having regard to his evidence in cross-examination and to the correspondence I am satisfied that Mr O’Reilly was acting at all relevant times up to June 2001 for Mr Wolf.  He may also have been acting for Mr Doran, but I think he was not clear as to who precisely he was acting for, although the evidence strongly points to the fact that he was at least to the end of May 2001, acting for both of them in relation to the release of the vessel and he did not want to act in the in personam proceedings in the District Court.

20                  This is not a case where the slip rule should be applied, particularly in view of the cross-examination of Mr O’Reilly.  I am satisfied that the costs order made in favour of Mr Wolf should not be varied so that it is changed in favour of Mr Doran.  This is a case in which there has obviously been a failure by Mr O’Reilly to obtain clear instructions as to precisely who Mr O’Reilly was acting for.  This should have been clarified by Mr O’Reilly.  It may be that there is some remedy available between Mr Wolf and Mr Doran as to the amount of the costs which have been apparently paid by Mr Doran.  Nevertheless, this does not impact on the outcome of this proceeding before me.

21                  Accordingly, in these circumstances, I dismiss the Notice of Motion filed on 30 January 2002 with costs.

Associate:

Dated:              19 March 2002