FEDERAL COURT OF AUSTRALIA

GMCA Pty Limited v Black & Decker Inc [2008] FCA 1508

GMCA PTY LTD v BLACK & DECKER INC and ANOR

VID 459 OF 2008

EMMETT J

2 OCTOBER 2008

SYDNEY

THE COURT ORDERS THAT:

1.                   The Notice of Appeal filed 24 June 2008 be dismissed as incompetent.

2.                   GMCA Pty Limited’s application for leave to appeal be dismissed for failure to comply with the directions made on 16 July 2008. 

3.                   GMCA Pty Limited pay the Respondents’ costs of the putative Notice of Appeal and the application for leave to appeal.

4.                   GMCA Pty Limited pay the Respondents’ costs of the Motion filed 16 September 2008 and the Respondents’ Notice to Produce.  

5.                   The Respondents inform GMCA Pty Limited of the terms of these orders and of the terms of s 25(2B)(bc) of the Federal Court of Australia Act 1976 (Cth) and O 35 r 7(2)(a) of the Federal Court Rules.

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

REASONS FOR JUDGMENT

1                     On 19 June 2008, Heerey J made final orders on the question of liability in a proceeding brought in the Court.  On 24 June 2008, GMCA Pty Limited (GMCA) filed a notice of appeal from those orders.  That notice of appeal was incompetent because the orders of Heerey J were interlocutory in nature.  Accordingly, on 10 July 2008, GMCA filed a notice of motion seeking leave to appeal from the orders made by Heerey J.  This proceeding has thereafter continued as an application for leave to appeal from those orders. 

2                     On 16 July 2008, a registrar of the Court gave directions for the provision of application books by GMCA by no later than 17 September 2008.  On 29 July 2008 the Chief Justice listed the application for hearing in the Full Court sittings commencing on 3 November 2008 in Melbourne.  On 1 September 2008 the parties were notified that the application had been listed for hearing on 11 and 12 November 2008. 

3                     Having notified GMCA of their intention to do so, the respondents, Black & Decker Inc and Black & Decker (Australia) Pty Limited, filed a notice of motion seeking security for costs on 16 September 2008.  On 17 September 2008 a registrar extended the time within which GMCA was to submit a draft application book to 24 September 2008.  On 29 September 2008, the parties were notified that the application for security for costs would be heard by me today. 

4                     However, on 30 September the solicitors for GMCA served notices of ceasing to act both in the principal proceeding and in relation to the leave application.  The parties were then informed that, if they were not able to proceed today, the matter would be dealt with today on the basis of a directions hearing.  On 1 October 2008, the solicitors for GMCA filed a formal notice of ceasing to act both in the principal proceeding and in relation to the leave application.  On the same day, a Mr Peter Hosking, purporting to be a director of GMCA, wrote to the Court indicating that representatives of GMCA would be unable to attend a directions hearing on 2 October.  Mr Hosking’s letter also stated that GMCA wished to withdraw very shortly.  The letter said that GMCA did not intend to instruct new solicitors and that GMCA wished to avoid unnecessary applications such as the notice of motion for security for costs.  Today an email communication was received by the Court, purportedly from Peter J Hosking, saying:

We want to formally withdraw from this appeal.  Can you send me the paperwork to do this?  It’s pointless for anyone to spend more money as there’s none to get.

5                     When the matter was called on for directions this morning, there was, not surprisingly, no appearance for GMCA.  In the circumstances, counsel for the Black & Decker parties applied for final resolution of the proceeding on one basis or another. 

6                     One possibility would be to treat the communications received by the Court purportedly from GMCA as notice of discontinuance.  There may be some question as to whether the rules dealing with discontinuance apply strictly to an application for leave to appeal.  I do not propose to express any view about that one way or the other. 

7                     It is clear that there has been failure by GMCA to comply with directions of the Court.  I am prepared to draw the inference from the material before me that the communications have, in fact, been received from persons authorised to give instructions on behalf of GMCA, although no leave has been given for any individual to appear for that company.  There would, therefore, be no injustice in ordering the summery dismissal of the application for leave on the basis of the failure to comply with the directions given on 16 July 2008. 

8                     In relation to the motion seeking leave to appeal and the purported notice of appeal, costs should follow the event.  The Black & Decker parties also ask for the costs of the motion for security for costs that was listed for directions today and of a notice to produce served on GMCA on 16 September 2008 in connection with the application for security for costs. 

9                     The Black & Decker parties’ solicitors wrote to the solicitors for GMCA on 23 July 2008 requesting that GMCA either satisfy the Black & Decker parties that GMCA was in a sound financial position or provide security for costs in the sum of $130,000.  On 28 July 2008 the solicitors for the Black & Decker parties provided details of how the amount of security was calculated.  On 30 July 2008 they received a letter from the solicitors for GMCA indicating that accounting information would be provided in relation to GMCA.  Some information was then provided, under cover of a letter dated 1 August 2008.

10                  However, on 7 August 2008, the solicitors for the Black & Decker parties wrote to the solicitors for GMCA raising a number of concerns about the financial information that had been provided.  The response to that was a letter of 7 August 2008, indicating that the solicitors for GMCA were taking instructions.  On 21 August 2008 a further letter was received from the solicitors for GMCA indicating that further instructions were being obtained.  On 2 September 2008, the solicitors for the Black & Decker parties wrote again to the solicitors for GMCA indicating that, since no meaningful response in relation to the issue of security for costs had been received, the application for security would be prepared.  On 10 September 2008, the Black & Decker parties’ solicitors wrote again to the solicitors for GMCA asking for documents relating to GMCA’s financial position.  There being no response, a notice to produce certain financial information was served on 16 September 2008. 

11                  In all of the circumstances it is clear that the making of the application for security was not unreasonable.  As I have said, there has been no appearance, for GMCA.  Accordingly, it is appropriate that GMCA also pay the costs of the notice of motion and the costs of the notice to produce of 16 September 2008.

Associate:

Dated:         21 October 2008