Badenoch Integrated Logging Pty Ltd v Bryant
[2025] FCAFC 31
•21 March 2025
FEDERAL COURT OF AUSTRALIA
Badenoch Integrated Logging Pty Ltd v Bryant [2025] FCAFC 31
Appeal from: Bryant, in the matter of Gunns Limited (in liq) (receivers and managers appointed) v Badenoch Integrated Logging Pty Ltd [2024] FCA 97 File number(s): VID 189 of 2024
VID 280 of 2024Judgment of: O'CALLAGHAN, MCEVOY AND NESKOVCIN JJ Date of judgment: 21 March 2025 Catchwords: COSTS – where liquidators sought costs order in their favour and company sought orders that the costs of the appeals be costs in the winding up proceeding – order made for company to pay liquidators’ costs of the appeals Legislation: Corporations Act 2001 (Cth) Pt 5.4, s 459R(3)
Federal Court of Australia Act 1976 (Cth) s 43
Cases cited: Badenoch Integrated Logging Pty Ltd v Bryant & Anor [2024] FCAFC 167
Commissioner of Taxation v AusNet Transmission Group Pty Ltd (No 2) [2015] FCAFC 124
Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11
Queensland North Australia Pty Ltd v Takeovers Panel (No 2) (2015) 236 FCR 370; [2015] FCAFC 128
Ruddock v Vadarlis (No 2) (2001) 115 FCR 229; [2001] FCA 1865
The State of Victoria v Sportsbet Pty Ltd (No 2) [2012] FCAFC 174
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 9 Date of last submissions: 20 December 2024 Date of hearing Determined on the papers Counsel for the Appellant in VID189/2024 and Respondent in VID280/2024 M Gronow KC and M Black (written submissions) Solicitor for the Appellant in VID189/2024 and Respondent in VID280/2024 Scanlan Carroll Counsel for the Respondents VID189/2024 and Appellants in VID280/2024 B Gibson and M Tennant (written submissions) Solicitor for the Respondents in VID189/2024 and Appellants in VID280/2024 Johnson Winter Slattery ORDERS
VID 189 of 2024 BETWEEN: BADENOCH INTEGRATED LOGGING PTY LTD (ACN 097 956 995)
Appellant
AND: DANIEL MATHEW BRYANT AND CRAIG DAVID CROSBIE IN THEIR CAPACITIES AS JOINT AND SEVERAL LIQUIDATORS OF GUNNS LIMITED (IN LIQUIDATION) (RECIEVERS AND MANAGERS APPOINTED) (ACN 009 478 148) AND AUSPINE LTD (IN LIQUIDATION) (RECIEVERS AND MANAGERS APPOINTED) (ACN 004 289 730)
Respondents
ORDER MADE BY:
O'CALLAGHAN, MCEVOY AND NESKOVCIN JJ
DATE OF ORDER:
21 MARCH 2025
THE COURT ORDERS THAT:
1.The appellant pay the respondents’ costs of and incidental to the appeal, such costs to be taxed in default of agreement.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ORDERS
VID 280 of 2024 BETWEEN: DANIEL MATHEW BRYANT AND CRAIG DAVID CROSBIE IN THEIR CAPACITIES AS JOINT AND SEVERAL LIQUIDATORS OF GUNNS LIMITED (IN LIQUIDATION) (RECIEVERS AND MANAGERS APPOINTED) (ACN 009 478 148) AND AUSPINE LTD (IN LIQUIDATION) (RECIEVERS AND MANAGERS APPOINTED) (ACN 004 289 730)
Appellants
AND: BADENOCH INTEGRATED LOGGING PTY LTD (ACN 097 956 995)
Respondent
ORDER MADE BY:
O'CALLAGHAN, MCEVOY AND NESKOVCIN JJ
DATE OF ORDER:
21 MARCH 2025
THE COURT ORDERS THAT:
1.The respondent pay the appellants’ costs of and incidental to the appeal, such costs to be taxed in default of agreement.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
THE COURT:
On 16 December 2024, the Full Court made orders and delivered reasons for judgment in Badenoch Integrated Logging Pty Ltd v Bryant & Anor [2024] FCAFC 167 (Appeal Reasons). The Appeal Reasons relate to an appeal and cross-appeal from orders of the primary judge which dismissed an application by the Liquidators of Gunns Limited (in liquidation) to wind up Badenoch Integrated Logging Pty Ltd in insolvency pursuant to Pt 5.4 of the Corporations Act 2001 (Cth), finding that the application had been dismissed by operation of s 459R(3) of the Act.
The grounds of appeal concerned six principal issues across the appeal and the cross-appeal. Leave to appeal was granted, the Liquidators succeeded on the first ground of their appeal and the Liquidators’ appeal and Badenoch’s cross-appeal were otherwise dismissed: Appeal Reasons [4].
The final issue to be determined is the issue of costs. The Liquidators submitted that they were wholly successful and, as a result, the Court should make the usual order in both proceedings, that Badenoch pay the Liquidators’ costs of and incidental to the appeal, such costs to be taxed in default of agreement.
Badenoch submitted that, although both appeals were ultimately determined in favour of the Liquidators, both parties had some measure of success. Badenoch further submitted that the questions raised in the appeal and cross-appeal were substantial and, for those reasons, costs of both appeals should be costs in the winding up proceeding, which is continuing before the primary judge.
Section 43 of the Federal Court of Australia Act 1976 (Cth) gives the Court a broad discretion in awarding costs. The discretion must be exercised judicially, by reference only to considerations relevant to its exercise and upon facts connected with or leading up to the litigation: Northern Territory v Sangare (2019) 265 CLR 164; [2019] HCA 25 at [24] (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ).
While not a rigid rule, usually the discretion to award costs is exercised in favour of a successful party: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [35] (Gaudron and Gummow JJ), [67] (McHugh J) and [134] (Kirby J); Sangare at [25] (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ). Where an appellant is successful on appeal, the Court would ordinarily order the unsuccessful respondent to pay the costs of the appeal and the proceeding at first instance unless there are special circumstances that warrant another order: Commissioner of Taxation v AusNet Transmission Group Pty Ltd (No 2) [2015] FCAFC 124 at [10] (Kenny, Edmonds and Greenwood JJ).
As Badenoch submitted, a successful party may be deprived of a proportion of its costs, or even required to pay costs to the other party, if the successful party succeeded only upon a portion of its claim, or failed on issues that were not reasonably pursued, or where the result of the litigation might be described as mixed: Ruddock v Vadarlis (No 2) (2001) 115 FCR 229; [2001] FCA 1865 at [11] (Black CJ and French J); Queensland North Australia Pty Ltd v Takeovers Panel (No 2) (2015) 236 FCR 370; [2015] FCAFC 128 at [11] (Dowsett, Middleton and Gilmour JJ). However, the mere fact that a court does not accept all of a successful party’s arguments does not make it appropriate to apportion costs on an issue by issue basis: The State of Victoria v Sportsbet Pty Ltd (No 2) [2012] FCAFC 174 at [8] (Emmett, Kenny and Middleton JJ).
This is not a case where it may be said that the event of success is contestable by reference to how separate issues have been determined. Badenoch succeeded on issue two, regarding the “slip rule”: Appeal Reasons at [72]. That issue was a relatively minor and discrete issue that was only relevant in the event the Liquidators failed in relation to their primary grounds of the appeal. There were no other circumstances about this case that warrant a departure from the general rule that the Liquidators, as the successful party, should have their costs.
For those reasons, the costs should follow the outcome of the appeals. There will be an order in both proceedings that Badenoch pay the Liquidators’ costs of and incidental to the appeal, such costs to be taxed in default of agreement.
I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices O'Callaghan, McEvoy and Neskovcin. Associate:
Dated: 21 March 2025
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