FEDERAL COURT OF AUSTRALIA

Potato Marketing Corporation of Western Australia v Galati Nominees Pty Ltd

(ACN 009 320 503) [2004] FCA 1216

COSTS – discontinuance – motion for leave to discontinue – whether costs should be ordered – application by statutory authority – discontinuance on basis of proposed legislative change rendering application moot – legislative change speculative – costs to follow event – applicant to pay respondent’s costs.

Marketing of Potatoes Act 1946

POTATO MARKETING CORPORATION OF WESTERN AUSTRALIA v GALATI NOMINEES PTY LTD (ACN 009 320 503)

W54 OF 2004

FRENCH J

1 SEPTEMBER 2004

PERTH

THE COURT ORDERS THAT:

1.         Leave to the Applicant to discontinue the proceedings.

2.         The Applicant pay the Respondent’s costs of the application.

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

REASONS FOR JUDGMENT

1                     These proceedings were commenced by the Applicant, then plaintiff, in the Supreme Court of Western Australia in October 2003.  They were transferred to this Court by order of Miller J on 21 January 2004.  A motion for leave to discontinue the proceedings with no order as to costs was filed on 16 August 2004, at a point at which pleadings had been filed and various directions given.

2                     The basis upon which that motion was filed was the publication on 1 July 2004 of a report on a review of the Marketing of Potatoes Act 1946 foreshadowing or recommending legislative change, apparently accepted by the State Government which would, in the view of the Applicant, make the present proceedings academic.

3                     According to an affidavit sworn by Mr Perrott, the chief executive officer of the Applicant, the terms and conditions which the Applicant sought, in its claim for relief, that the Respondent execute were intended to have prospective effect.  The proposed changes to the Act referred to in the Minister's statement would vary the terms and conditions applying to agents and would, in the view of the Applicant, supersede the operation of the terms and conditions which are the subject of the litigation.  Mr Perrott said:

‘Whilst the proposed amendments have not yet been enacted, the announcement on 1 July 2004 of the acceptance of the recommendations of the Review Report, and subsequent directions by the Minister deposed to in paragraph 18 above, make the contemplated enactment sufficiently likely so as to cause the Corporation to consider the litigation of such limited utility that it is futile to proceed.’

Mr Perrott went on to say in his affidavit that the Applicant consulted with its solicitors.  A without prejudice proposal was made and not accepted and the Applicant then instructed its solicitors to prepare the present motion seeking leave to discontinue with no order as to costs.

4                     Although I have no doubt that there are practical considerations of an entirely legitimate character which have impacted on the Applicant's decision, the decision turns upon a prognosis about the introduction of legislation which at this stage, giving due respect to the intention of the Executive to introduce it into the Parliament, is somewhat speculative.  It does not appear that a Bill has yet been drafted or introduced into the Parliament.

5                     In the circumstances, I think the present position is fairly close to one in which the proceedings were commenced and in which the proceedings are now to be discontinued, without any fault on the part of the Respondent, which has been required to incur legal costs in connection with the defence of those proceedings. 

6                     The decision of the Applicant is no doubt based upon its own judgment and prognosis, but its character is essentially speculative, having regard to the uncertainties of the legislative process and, as is pointed out in submissions made on behalf of the Respondent, the sometimes contentious character of this area of industry regulation.

7                     In the circumstances, I can think of no good reason why the costs should not follow the effective event of these proceedings. I give leave to discontinue upon the condition that the Applicant pays the Respondent’s costs of the proceedings.

Associate:

Dated:              1 September 2004