Beers, T.R. v Kern Corporation Ltd
[1992] FCA 671
•27 Aug 1992
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JUDGMENT NO. .....w*n-r -u-
IN THE FEDERAL COURT OF AUSTRALIA ) No. QG 6 of 1992 QUEENSLAND DISTRICT REGISTRY ) GENERAL DIVISION )
Applicants
AND: KERN CORPORATION LIMITED (A.C.N. 010 339
321) (IN LIOUIDATIONL
MINUTES OF ORDERS C
JUDGE MAKING ORDER: Drummond J DATE OF ORDER: 27 August, 1992 WHERE MADE: Brisbane THE COURT ORDERS THAT:
1. Upon the receivers and managers of Kern Corporation Limited (A.C.N. 010 339 321) (in liquidation), by their solicitor undertaking to file forthwith a notice of change of solicitors, the applicants have leave to amend the application by adding after the name of the respondent the words "(Receivers and Managers appointed)".
proceedings. The costs of today as between the applicants and the respondent are costs in the proceedings.
The respondent pay the costs incurred to date by the liquidators of Kern Corporation Limited (in liquidation), to be taxed on a solicitor and own client basis.
The liquidators of Kern Corporation Limited (in liquidation) have leave to withdraw from these
L
BY CONSENT THE COURT ORDERS THAT:
Pursuant to Order 10 rule 1(2)(g) of the Federal court Rules, the proceedings be referred to a mediator.
THE COURT DIRECTS THAT:
The matter is adjourned for further directions to Tuesday, 24 November, 1992 at 9.15 a.m..
2. All parties have liberty to apply on four days' notice to the other for any further directions that may be necessary.
BY CONSENT THE COURT DIRECTS THAT:
The District Registrar nominate Mr. P. Cavanagh as mediator.
m: Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA ) No. QG 19 of 1992 QUEENSLAND DISTRICT REGISTRY 1 GENERAL DIVISION )
BETWEEN: BRIAN LESLIE MATTHEWS
Applicant:
AND : KERN CORPORATION LIMITED (A.C.N. 010 339
321) (IN LIOUIDATION)Respondent
MINUTES OF ORDERS
JUDGE MAKING ORDER: Drummond J DATE OF ORDER: 27 August, 1992 WHERE MADE: Brisbane THE COURT ORDERS THAT:
1. Upon the receivers and managers of Kern Corporation Limited (A.C.N. 010 339 321) (in liquidation), by their solicitor undertaking to file forthwith a notice of change of solicitors, the applicant has leave to amend the application by adding after the name of the respondent the words "(Receivers and Managers appointed)".
The costs of today as between the applicant and the respondent are costs in the proceedings. The respondent pay the costs incurred to date by the liquidators of Kern Corporation Limited (in liquidation), to be taxed on a solicitor and own client basis.
The liquidators of Kern Corporation Limited (in liquidation) have leave to withdraw from these proceedings.
BY CONSENT THE COURT ORDERS THAT:
Pursuant to Order 10 rule 1(2)(g) of the Federal court Rules, the proceedings be referred to a mediator.
THE COURT DIRECTS THAT:
1. The matter is adjourned for further directions to Tuesday, 24 November, 1992 at 9.15 a.m..
Both parties have liberty to apply on four days' notice to the other for any further directions that may be necessary.
BY CONSENT THE COURT DIRECTS THAT:
1. The District Registrar nominate Mr. P. Cavanagh as mediator.
NOTE: Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALnIA ) DUEENSLAND DISTRICT REGISTRY ) GENERAL DIVISION 1
No. QG 19 of 1992
BETWEEN: BRIAN LESLIE MATTHEWS
Applicant
AND: KERN CORPORATION LIMITED (A.C.N. 010 339 321) (IN LIOUIDATIONL Respondent
No. QG 6 of 1992
BETWEEN: TREVOR RAYMOND BEERS, COLIN DANIEL CRANE, FVAN JOHN HARTLEY, BRIAN LESLIE MATTHEWS, JOHN SAVIGE PALMER, MALCOLM JOHN RAWARD, ALEXANDER HENRY SMITH and ROBERT SWAN
Applicants
AND : KERN CORPORATION LIMITED (A.C.N. 010 339 321) (IN LIOUIDATIONL Respondent
Coram: Drummond J Date -. 27 August, 1992
Place: Brisbane
EX TEMPORE REASONS FOR JUDGMENT
By consent, the receivers and managers of certain of the assets of the respondent company have, in effect, come into these two actions in place of the liquidators of the company. That has been achieved by giving leave to the solicitors for the liquidators to withdraw and by taking an undertaking from the solicitors for the receivers and managers to forthwith file a notice of change of solicitors.
The point remaining, however, is that the liquidators say that the substitution should be on terms as to costs, in that the receivers and managers should be required to pay the costs incurred by the liquidators in these two actions to date. It is apparent from the material filed on behalf of the liquidators that a deal of work has been done by them in connection with defending the claims made on the company in these actions.
The history of the matter is that when these two proceedings first came before me in January of this year, in order to ensure that there was a proper opponent to the applicants I, in effect, required the liquidators to conduct the proceedings in defence of the claims. However, it was recognised that the receivers and managers might well be the parties with the real claim to the moneys owing by the
employee share incentive scheme. applicants in respect of shares which they took up under an Accordingly, on 9 March I gave a direction in related action QG 4 of 1992 requiring the applicants to give notice to the receivers and managers so that they would be able to decide whether or not they should, in effect, take over the conduct of the defence from the liquidators. That direction was complied with on 18 March, 1992.
By letter dated 21 May, 1992 the receivers and managers informed the liquidators that they would take over the defence to both actions. The material before me indicates that the liquidators have, for some time, attempted to obtain from the receivers and managers a decision as to whether or not they would do just that. They were unsuccessful for a considerable period in getting any response from the receivers and managers who now assert that it is they, rather than the company, who effectively are entitled to any moneys payable by the applicants in respect of the shares issued to them.
It seems to me that the position which arises is therefore this: the liquidators reluctantly have incurred costs in preparing for the defence to the applicants' claims in actions QG 6 of 1992 and QG 19 of 1992. It is appaxent, in view of the claim by the receivers and managers, that that work could never have been of any benefit to the liquidators. It would never have produced a situation where, even though there are no cross-claims, decisions would have resulted in
the company being entitled to moneys owing by the applicants in respect of the shares. It is apparent that all that could have been achieved would have been for the Court to have made certain declarations resulting in a situation where the receivers and managers would have been able to recoup moneys owing by the applicants in these two proceedings in respect of shares. The work done by the liquidators can thus be seen to be work done entirely for the benefit of the receivers and managers.
In these circumstances, it seems to me appropriate that I should now order, as a condition of the receivers and managers being allowed to take over the conduct of the proceedings in these two actions, that they pay the costs incurred by the liquidators in the actions to date, and it seems to me that the appropriate basis of taxation is a solicitor and own client taxation, which I so order.
I certify that this and the
preceding three pages is a
true copy of the reasons for
judgment herein of the
Honourable Mr. Justice Drummond.Associate:
Date : 27 August, 1992
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