Federal Court of Australia

Patriot Campers Holdings Pty Ltd v Burges [2022] FCA 200

ORDERS

THE COURT ORDERS THAT:

1.    Leave be granted to the applicants to discontinue the proceeding as against the third respondent.

2.    The applicants are relieved of the liability to pay costs imposed by r 26.12(7) of the Federal Court Rules 2011 (Cth).

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

REASONS FOR JUDGMENT

(REVISED FROM THE TRANSCRIPT)

HALLEY J:

iNTRODUCTION

1    This is an application by the applicants for leave to discontinue the proceeding as against the third respondent, Mr Ron Burges, and to be relieved of the liability to pay costs imposed by r 26.12(7) of the Federal Court Rules 2011 (Cth) (Rules).

2    The proceeding against the first and second respondents was resolved following a mediation of the claims made against them. Mr Burges did not participate in the mediation.

Background

3    The applicants rely on two affidavits from Ms Lucy Hartland, a solicitor employed by Spruson & Ferguson Lawyers (solicitors for the applicants), affirmed on 24 February 2022 and 3 March 2022 in support of their application for leave to discontinue the proceeding with no order as to costs. The relevant factual background set out below is taken from those two affidavits.

4    On 11 January 2021, the solicitors for the applicants sent a letter of demand to Mr Burges. The letter sought undertakings in connection with the subject matter of the proceedings. The solicitors for the applicants did not receive any response to that letter.

5    On 1 February 2021, the solicitors for the applicants wrote a further letter of demand to Mr Burges. The letter also enclosed draft pleadings. Mr Burges did not respond to that letter.

6    On 26 July 2021, the proceedings were commenced by way of originating application and statement of claim. Mr Burges was eventually served with the sealed pleadings on 7 September 2021.

7    On 24 September 2021, the solicitors for the applicants messaged Mr Burges via the Facebook messaging system, using an account under the name of Wil Ferguson, to inform him of the orders made by the Court on 17 September 2021 and an email received from the Court on 22 September 2021 regarding the Court ordered mediation. The solicitors for the applicants did not receive any response to the Facebook message of 24 September 2021 from Mr Burges.

8    On 22 February 2022, the solicitors for the applicants sent a letter addressed to Mr Burges via the Facebook messaging system, using a different account under the name Keanna Tamari. That letter informed Mr Burges that the applicants wished to have the proceedings against him dismissed with no order as to costs. The solicitors for the applicants have not received any response to the Facebook message of 22 February 2022 from Mr Burges.

9    On 24 February 2022, Ms Hartland called Mr Burges on a mobile phone to inform him of the Facebook message of 22 February 2022. In the course of the conversation that she had with Mr Burges words to the following effect were said:

 Mr Burges said:     This is Ron Burges.

[Ms Hartland] said:     This is Lucy Hartland from Spruson & Ferguson Lawyers. We act for Patriot Campers. I wanted to let you know that we sent you a letter on Facebook Messenger about ending the case.

 Mr Burges said:     What case?

 [Ms Hartland] said:     Don’t you remember being served with documents?

Mr Burges said:     Oh that case. OK. I will get on Facebook and read it.

10    In the course of that conversation, Mr Burges also informed Ms Hartland that he was in Thailand.

11    On 25 February 2022, Ms Hartland sent a further letter addressed to Mr Burges via the Facebook messaging system. The letter informed Mr Burges that the applicants would be seeking to have the proceedings against Mr Burges dismissed with no order as to costs and enclosed proposed orders to that effect. The applicants’ solicitors have not received any response to the Facebook message of 25 February 2022 from Mr Burges.

12    Ms Hartland has concluded that Mr Burges is still using his Facebook account as he has made posts on that account on 17 January 2022.

13    On 3 March 2022 at or about 3.28 pm, Ms Hartland attempted to contact Mr Burges by mobile phone. She received an automated message that the person she had dialled was not available. She left the following message:

This is Lucy Hartland from last week. We are seeking to discontinue the proceeding against you with no order as to cost tomorrow. Please read the letters we sent you on Facebook. Thank you.

14    At or about 4.10 pm on 3 March 2022, Ms Hartland called Mr Burges again and left the following additional message:

The case is listed for a case management hearing tomorrow and we will be seeking orders that the proceedings be discontinued with no orders as to costs.

15    The applicants’ solicitors have not received any communications from Mr Burges in respect of the proceedings. Mr Burges has not filed a notice of address for service or a defence, nor any other document in the proceedings. Mr Burges has not appeared at any case management hearings and did not participate in the mediation.

Legal Principles

16    Rule 26.12 of the Rules relevantly states:

26.12 Discontinuance

(1)    A party claiming relief may discontinue a proceeding in whole or in part by filing a notice of discontinuance, in accordance with Form 48.

(2)    The party may file the notice of discontinuance:

  (a)     without the leave of the Court or the other party’s consent:

(i)    at any time before the return date fixed in the originating application; or

(ii)    if the proceeding is continuing on pleadings—at any time before the pleadings have closed; or

(b)     with the opposing party’s consent—before judgment has been entered in the proceeding; or

(c)    with the leave of the Court—at any time.

…

(7)    Unless the terms of a consent or an order of the Court provide otherwise, a party who files a notice of discontinuance under subrule (2) is liable to pay the costs of each other party to the proceeding in relation to the claim, or part of the claim, that is discontinued.

17    In Lo v Australian Community Pharmacy Authority [2013] FCA 639, Katzmann J stated at [60]:

This rule, which in substance is the same as r 42.19 of the Uniform Civil Procedure Rules 2005 (NSW), establishes a default or prima facie position (Armstrong v Australian Community Pharmacy Authority [2012] FCA 577 per Rares J at [9]). It does not create a presumption that costs will be awarded against the discontinuing party, but it puts an onus on it to make an application to the Court where, absent an agreement to the contrary, it does not propose to pay the costs of the other parties (Foukkare v Angreb Pty Ltd [2006] NSWCA 335 at [65]). And the Court will require “some sound positive ground or good reason for departing from the ordinary course”: Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365 at [54], Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32 at [54].

18    In El-Debel v Secretary, Department of Immigration and Border Protection (2014) 141 ALD 611; [2014] FCA 474, Foster J expressed the policy behind r 26.12(7) as follows at [17]:

[Rule] 26.12(7) reflects a more general policy of the law to the effect that a party should always be permitted to discontinue its proceedings but, in the modern setting, should usually have to pay the costs of the other parties occasioned by the bringing of the proceedings and their subsequent abandonment. This is not to gainsay the broad discretion in respect of costs given to the Court by s 43 of the Federal Court of Australia Act 1976 (Cth). Nonetheless, the Court should give effect to this general policy when making costs orders unless there is some good reason for declining to do so.

Consideration

19    In this matter I am satisfied that there is a good reason for declining to require the applicant to pay any costs that might have been incurred by Mr Burges in connection with the proceeding, as a condition for the grant of leave to file the notice of discontinuance against Mr Burges.

20    First, the third respondent has, in effect, ignored all communications from the applicant, both prior to and after the commencement of proceedings.

21    Second, the third respondent has not taken any substantive steps in the proceedings.

22    Third, the applicants have taken all reasonable steps to draw to Mr Burges’ attention the application made on 4 March 2022 for leave to discontinue with no order as to costs.

Disposition

23    In those circumstances, leave will be given to the applicants to discontinue the proceedings against Mr Burges with no order as to costs.

Associate:     

Dated:    9 March 2022