Federal Court of Australia

Gold Coast Marine Aquaculture Pty Ltd v HTC Trading Pty Ltd [2020] FCA 1324

ORDERS

THE COURT ORDERS THAT:

1.    The time for compliance with paragraphs 3 and 6 of the orders made by Justice Anastassiou on 5 December 2019 is extended to 12 October 2020.

2.    The time for compliance with paragraph 2 of the orders made by Justice Anastassiou on 20 May 2020 is extended to 12 October 2020.

3.    The Prospective Applicant pay the costs of and incidental to the interlocutory application filed on 18 August 2020 of each of the Prospective Respondents.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

ANASTASSIOU J

Background

1    The Prospective Applicant, Gold Coast Marine Aquaculture Pty Ltd, conducts business farming black tiger prawns at a number of location in Australia. The Prospective Applicant alleges that the First to Third Prospective Respondents – HTC Trading Pty Ltd, Oriental Merchant Pty Ltd and Aqua Star Pty Ltd – may be responsible for an outbreak of White Spot Syndrome Virus which caused it loss or damage. The Prospective Applicant further alleges that the Fourth Prospective Respondent – the Department of Agriculture and Water Resources – may have caused or contributed to the outbreak by failing to properly discharge its duties pursuant to the Biosecurity Act 2015 (Cth).

2    On 21 May 2019, 23 May 2019, 5 December 2019 and 20 May 2020, I made orders (the earlier orders) requiring, among other things, that each of the Prospective Respondents give preliminary discovery. Those previous orders provided that if the Prospective Applicant did not commence proceedings within specified time periods, the Prospective Respondents would be entitled to the costs of making preliminary discovery as well as the costs of and incidental to the application for preliminary discovery.

3    The 21 May 2019 and 23 May 2019 orders, which related to the application for preliminary discovery from the Second and Third Respondents, were made by consent. By paragraph 2 of the respective orders, the Prospective Applicant was liable to pay the Second and Third Prospective Respondents’ costs for collating, reviewing and providing the discovered documents (subject to paragraph 3). By paragraph 3 of the respective orders, the costs referred to in paragraph 2, as well as costs of and incidental to the application for preliminary discovery, would be costs in the substantive proceedings if the Prospective Applicant commenced substantive proceedings within 3 months of the date of the orders.

4    The 5 December 2019 and 20 May 2020 orders were made following my judgments on 27 November 2019 (Gold Coast Marine Aquaculture Pty Ltd v HTC Trading Pty Ltd [2019] FCA 1995) and 20 May 2020 (Gold Coast Marine Aquaculture Pty Ltd v HTC Trading Pty Ltd [2020] FCA 684). In summary, the 5 December 2019 orders provided that the First and Fourth Prospective Respondents were entitled to the costs of collating, reviewing and providing discovered documents unless the Prospective Applicant commenced a proceeding within five months of the date of the orders (i.e. by 5 May 2020) for the Fourth Prospective Respondent or 6 months of the date of the orders (i.e. by 5 June 2020) for the First Prospective Respondent. The 20 May 2020 orders dealt with the separate issue of the costs of and incidental to the preliminary discovery application. Paragraph 1 of those orders provided that the costs of the preliminary discovery application were costs in the cause in any proceeding commenced by the Prospective Applicant. However, if no such proceeding was commenced within three months of the date of the order (i.e. by 20 August 2020), the First and Fourth Prospective Respondents were entitled to half of their costs of and incidental to the application.

5    By an interlocutory application filed on 18 August 2020, the Prospective Applicant seeks an extension of time to 12 October 2020 by which it may file an originating application and accompanying statement of claim without being liable for any of the costs in the previous orders (this application). The Application is supported by an affidavit of Stuart Graeme Walter dated 18 August 2020 (Walter Affidavit) and written submissions filed by the Prospective Applicant on 9 September 2020. Each of the First to Fourth Prospective Respondents opposed the Application and filed written submissions in that respect on 2 September 2020.

6    For the reasons that follow, I shall grant the extension of time in respect of the First and Fourth Prospective Respondents, extending the time for compliance in the 5 December 2019 and 20 May 2020 orders until 12 October 2020. The extension is for a reasonable duration, with a justifiable explanation, and I am not persuaded that there would be any prejudice to those Prospective Respondents. However, I am not satisfied that there is a reason to vary the orders made by consent on 21 May 2019 and 23 May 2019 in respect of the Second and Third Respondents. I shall also make an order that the costs of and incidental to this application are to be paid by the Prospective Applicant in respect of each of the Prospective Respondents. In my view this is appropriate as although this application has been successful in respect of the First and Fourth Prospective Respondents, the Prospective Applicant nonetheless seeks an indulgence in relation to the time limited by the relevant earlier orders.

Jurisdiction & Relevant principles

7    In determining this application, I rely on the power in r 1.39 of the Federal Court Rules 2011 (Cth), which provides that the Court may extend a time fixed by order of the Court, before or after that time expires, and irrespective of whether the application for an extension of time is made before the time provided for in the order expires or after the order has taken effect. I do not invoke the Court’s power under r 39.05 of the Rules to vary or set aside an order after it has been entered, as that power reflects the Court’s inherent power to correct an error in a judgement or order: see Flint v Richard Busuttil & Co Pty Ltd [2013] FCA 925 at [43] (Katzmann J).

8    The principles relevant to the discretion to grant an extension of time under r 1.39 are settled: see e.g. Skinner v Commonwealth of Australia [2012] FCA 1194 at [9]-[14] (Flick J). Most relevantly, the power of the Court to extend time for compliance with an order is a discretionary power, which is to be exercised judicially and by reference to the facts and circumstances of each particular case: Skinner at [10]-[11]. It is also an established principle that the Court has the power to extend time to avoid an injustice: Nucoorilma Clan of the Gamilaaroy Aboriginal People v NSW Minister for Land & Water Conservation [2009] FCA 1043 at [22] (Buchanan J) and Pfizer Ireland Pharmaceuticals v Samsung Bioepis Au Pty Ltd [2017] FCA 573 at [9] (Nicholas J).

9    Where, as in the present case, the extension of time is sought in relation to an order for which the time provided for compliance has passed, the making of the order requires the Court to be satisfied that it is in the interests of justice to grant the extension and that there is a reasonable explanation for the failure to comply: Skinner at [9]-[10] citing FAI General Insurance Company Limited v Southern Cross Exploration NL (1988) 165 CLR 268 at 283-284 (Wilson J). While the discretion is broad, such an order should be granted cautiously and with ‘due regard to the necessity for maintaining the principle that orders are made to be complied with and not to be ignored’: Yum! Restaurants Australia Pty Ltd v Full Bench of Fair Work Australia (No 2) [2012] FCA 419 at [10] (Cowdroy J).

10    Relevant factors that the Court may consider in determining whether to exercise the discretionary power include: the nature of the order which has not been complied with; the reasons for non-compliance with that order; the history of the proceeding (including any previous delays or non-compliance with orders); the duration of the extension sought; the prejudice that may be suffered by the party seeking the extension of time; and the prejudice that may be suffered by an opposing party: Pfizer at [4]; Skinner at [11]. Ultimately, in exercising the power, the Court is required to balance the different, and often competing, interests of the parties: Skinner at [13].

Consideration

11    I am not satisfied that it is appropriate to grant an extension of time in respect of the Second and Third Prospective Respondents in circumstances where those orders were made by consent. However, there are compelling reasons to grant the extension of time for compliance with the earlier orders for the First and Fourth Prospective Respondents.

12    Firstly, I am satisfied that the Prospective Applicant has generally conducted the litigation in an efficient manner, consistent with the overarching purpose in s 37M of the Federal Court of Australia Act 1976 (Cth). This matter raises potentially complex legal and factual issues, and the ‘deliberative’ approach adopted by the Prospective Applicant is appropriate in the circumstances. I have had regard to – but do not accept – the submission that the Prospective Applicant has had ample time to commence proceedings and that to grant the extension in relation to costs would be contrary to the modern imperative to conduct litigation in an efficient manner.

13    Second, I accept that there is a reasonable explanation for the failure to commence proceedings by an earlier date, which justifies granting the extension of time in respect of the First and Fourth Prospective Respondents. Those are as follows.

(a)    At [26]-[28] of the Walter Affidavit, the Prospective Applicant deposes that there was a further outbreak of the white spot disease in the Logan River region in April 2020. This means that the Prospective Applicant was no longer able to assume that white spot disease had been eradicated and, as a result, had to instruct its loss and damage expert to revise his assessment. While this information may not be directly relevant to the Prospective Applicant’s cause of action, I consider it may nevertheless be of importance in informing their decision as to whether it is appropriate to commence proceedings for a myriad of reasons.

(b)    At [29]-[30] of the Walter Affidavit, the Prospective Applicant indicates that although it received documents from the Fourth Prospective Respondent on 18 March 2020 it was not able to consider such materials until 13 May 2020 due to agreed confidentiality arrangements. Those documents had to be reviewed by the Prospective Applicant and its instructing solicitors, and it was only at that point that the Prospective Applicant could properly consider whether to commence proceedings against at least the Fourth Prospective Respondent.

(c)    At [31]-[32] of the Walter Affidavit, the Prospective Applicant deposes that junior counsel was unexpectedly unavailable for a period of eight weeks commencing in or around mid-May 2020. In conjunction with other circumstances, especially those identified in (b) and (d), it is understandable that this might have delayed the progress of the Prospective Applicant in reviewing the materials provided through preliminary discovery or in formulating a legal claim.

(d)    At [33] of the Walter Affidavit, the Prospective Applicant explains that stage 3 and stage 4 lockdown restrictions in Melbourne, in place to varying degrees since March 2020, have hampered its ability to prepare the claim. I accept that these circumstances have imposed material and practical impediments, many of which were not readily foreseeable or predictable at the time of making the earlier orders.

I also accept that the present circumstances are distinguishable from those in Pro-Pac Packaging (Aust) Pty Ltd v Penn (No 2) [2020] FCA 710, in which Burley J refused to grant a one month extension and observed as follows [at 13]:

It is in the interests of the administration of justice that a prospective applicant commence proceedings expeditiously upon compliance with the orders made. One means of encouraging that outcome is to provide a reasonable, but not overly generous time frame for the prospective applicant to commence proceedings, failing which it should bear the costs of the application.

The most significant factual difference is that in Pro-Pac only one document was produced to the Prospective Applicant, albeit a document that was 300 pages in length, and that document was discovered two months prior to the application. By contrast, the Prospective Applicant in this instance had to consider a greater volume of preliminary discovery materials as well as an extensive body of materials including legislation, government policy documents, scientific papers and other third party documents (totalling many thousands of pages). Moreover, I accept that the current restrictions in Victoria are likely far more restrictive than those experienced by the practitioners in Pro-Pac.

14    Third, the duration of the extension sought in relation to the First and Fourth Prospective Respondents, is between four to five months for the 5 December 2019 orders and two months for the 20 May 2020 orders. While this is a considerable extension of time in the context of the original orders, it is reasonable in circumstances where the First and Fourth Prospective Respondents have not identified any real or specific prejudice that would arise from the extension being granted.

15    Fourth, it is apparent that the Prospective Applicant may suffer prejudice if the application is refused. The Prospective Applicant identified that prejudice as being that if proceedings are commenced against the Prospective Respondents – and those proceedings are ultimately successful – it will have paid a portion of the unsuccessful parties’ costs. I agree that such prejudice ought to be avoided, particularly in the absence of a countervailing prejudice to the First and Fourth Prospective Respondents.

16    Fifth, and related to the preceding points, the First and Fourth Prospective Respondents have not identified any real or specific prejudice if the Court grants the extension of time. The Prospective Respondents directed attention to the overarching principle of finality in litigation and the fact that they are entitled to seek a resolution of the matter with relative expedition. I recognise the importance of this principle but maintain that the Prospective Applicant has acted consistently with such a pursuit and any prejudice is merely general in nature.

17    It follows that if the Prospective Applicant does not commence proceedings by 12 October 2020, it will be liable to pay the First and Fourth Prospective Respondents’ costs in accordance with the earlier orders. However, if the Prospective Applicant does commence proceedings by 12 October 2020, those costs will be costs in the cause.

18    In relation to Second and Third Prospective Respondents, there are material differences which mean I am not satisfied an extension of time is appropriate. Most relevantly, the orders dated 21 May 2019 and 23 May 2019 were made by consent between the parties. Further, the duration of the extension sought would be unreasonable, having regard to the limited number of documents discovered and the timeframe which has elapsed. It follows that the orders made in respect of the Second and Third Prospective Respondents should not be disturbed.

19    The Prospective Applicant sought to justify an extension to the consent orders on the basis that it contemplated issuing only one proceeding and accordingly the time limited by the consent orders should be extended to correlate to the orders in relation to the First and Fourth Prospective Respondents. I do not accept that submission. Firstly, the time limited by the consent orders had expired prior to the orders made in respect of the First and Fourth Respondents. Second, the Prospective Applicant could have issued a proceeding and applied to defer filing a statement of claim until it was in a position to decide whether to issue a proceeding against the First and Fourth Prospective Respondents. Third, the orders in respect of the First and Fourth Prospective Respondents were plainly and explicitly relevant only to the position of those Prospective Respondents. In these circumstances I am not persuaded that the time limited by the consent orders should be extended.

20    Finally, for the avoidance of doubt I note that the orders in question relate solely to the cost consequences of the application for, and costs of, preliminary discovery. They do not relate to the time in which the Prospective Applicant may bring a proceeding against any of the Prospective Respondents. Any such time limits are to be determined by reference to relevant statutory provisions or common law principles relating to limitations of actions.

Disposition

21    For the reasons set out above, I make orders extending time for compliance with the earlier orders in respect of the First and Fourth Prospective Respondents. I do not make the orders sought in the application in respect of the Second and Third Prospective Respondents. The Prospective Applicant is required to pay the costs of each of the Prospective Respondents in respect of this application.

Associate:

Dated:    15 September 2020

SCHEDULE OF PARTIES