Allco Funds Management Limited (Receivers and Managers Appointed) (In Liquidation) v Trust Company (Re Services) Limited (in its capacity as responsible entity and trustee of the Australian Wholesale Property Fund)

[2014] NSWSC 1296

Supreme Court

New South Wales

Medium Neutral Citation:	Allco Funds Management Limited (Receivers and Managers Appointed) (In Liquidation) -v- Trust Company (RE Services) Limited (in its capacity as responsible entity and trustee of the Australian Wholesale Property Fund) [2014] NSWSC 1296
Hearing dates:	Written Submissions
Decision date:	19 September 2014
Jurisdiction:	Equity Division - Commercial List
Before:	Hammerschlag J
Decision:	Defendant to pay the plaintiff's costs of the proceedings
Catchwords:	COSTS - no order as to principle
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW)
Category:	Procedural and other rulings
Parties:	Allco Funds Management Limited (Receivers and Managers Appointed) (In Liquidation) - Plaintiff Trust Company (RE Services) Limited (in its capacity as responsible entity and trustee of the Australian Wholesale Property Fund) - Defendant
Representation:	Counsel: J.C. Hewitt with Z. Hillman - Plaintiff I.R Pike SC with C.R. Brown - Defendant Solicitors: Corrs Chambers Westgarth - Plaintiff M & K Lawyers - Defendant
File Number(s):	2012/228908

Judgment

1. HIS HONOUR: This Judgment deals with the costs of these proceedings. I have had the benefit of written submissions from both sides.

1. AFML has elected to have the remedy that the Loan Agreement, the Deed of Amendment and the redemption of its Funding Units be rescinded ab initio.

1. AFML seeks its costs of the proceedings.

1. Unless it appears to the Court that some other order should be made as to the whole or any part of the costs, the Court is to order that costs follow the event; see Uniform Civil Procedure Rules (UCPR) Pt 42 r 42.1. AFML has succeeded. The starting point is thus that it is entitled to its costs.

1. TCL, however, puts that AFML should pay its costs in relation to the unconscionable conduct claim and that it otherwise pay fifty per cent of AFML's costs (excluding AFML's costs in relation to the unconscionable conduct claim) because, it says, while AFML has had "some measure of success, "it has not obtained the relief which it sought (meaning repayment of the loan amount) and it "failed completely" in the claims for unconscionable conduct which TCL says were discreet and required it to incur substantial costs.

1. Usually, the Court does not attempt to differentiate the issues on which a party was successful and those on which it failed. An apportionment can, however, properly be made where there are matters upon which the ultimately successful party failed and which took up a significant portion of the trial or where a particular issue or group of issues is dominant or separable.

1. I do not think that this is a case in which that should be done.

1. AFML, after strenuous opposition by TCL, has succeeded in recovering its equity in the fund. Although from a commercial point of view, it might have preferred an outcome where it became a lender with a fixed repayment date, the result it has achieved cannot be described as anything other than success. TCL made AFML fight every inch of the way for this.

1. Secondly, the factual substratum concerning the unconscionability claim was relevant not exclusively to that aspect. Amongst others, that material was relevant to TCL's contention, ultimately not pressed, that relief was precluded. It was relevant as well to the remedy to which AFML was ultimately entitled, and it was also pertinent to the claims of breach of statutory duty, as indicating the nature of the disadvantage ultimately suffered by AFML. In any event, I do not think that the unconscionability aspect is practically or appropriately susceptible to separation from everything else.

1. I do not consider this to be a case in which departure from the usual position is warranted.

1. I make the following orders.

(1)   The Loan Agreement executed on 15 December 2006 between the plaintiff and Record Funds Management Limited, the Deed of Amendment executed between the plaintiff and Record Funds Management Limited on 1 February 2007 and the redemption of the plaintiff's Units in the Australian Wholesale Property Fund are simul ac semel set aside ab initio.

(2)   The defendant is to pay the plaintiff's costs of the proceedings.

(3)   The defendant is to reinstate the plaintiff to the Register of Unit Holders by recording the plaintiff as the holder of 90,854,072 Funding Units.

PS After the orders were made his Honour granted a stay for twenty-eight days on conditions.

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Decision last updated: 19 September 2014