Bovis Lend Lease v Wily - [2003] NSWSC 884

Reported Decision:
47 ACSR 351

Supreme Court

CITATION: Bovis Lend Lease v Wily [2003] NSWSC 884

HEARING DATE(S): 1, 8 July 2003 (and subsequent written submissions)

JUDGMENT DATE:
30 September 2003

JURISDICTION:
Equity

JUDGMENT OF: Austin J

DECISION: See under heading "Conclusions"

CATCHWORDS: CORPORATIONS - voluntary administration and winding up - costs orders against deed administrator after termination of deed -whether orders should be limited to assets of company - whether deed administrator entitled to be indemnified for costs -whether deed administrator should be required to pay costs personally

LEGISLATION CITED: Corporations Act 2001 (Cth), ss 443D, 445D, 556, 1322

CASES CITED: Adsett v Berlouis (1992) 37 FCR 201
Cresvale Far East Ltd v Cresvale Securities Ltd (No 2) (2001) 39 ACSR 62
Deputy Commissioner of Taxation v Portinex Pty Ltd (No 2) (2000) 34 ACSR 422
Elderslie Finance Corporation Ltd v Australian Securities Commission (1993) 11 ACSR 157
Kirwan v Cresvale Far East Ltd (in liq) (2002) 44 ACSR 21
Re Biposo Pty Ltd; Condon v Rogers (No 3) (1995) 17 ACSR 730
Re NRMA Insurance (No.1) Limited (2000) 33 ACSR 595
Sanderson v Blyth Theatre Co [1903] 2 KB 533

PARTIES :

6062/01
Bovis Lend Lease Pty Ltd (P)
Andrew Wily (D1)
Thomas Javorsky (D2)
1309/02
Bovis Lend Lease Pty Ltd (P, XD)
Thomas Javorsky (D1, XC1)
Interline Interior Linings Pty Ltd (in liquidation) (administrator appointed) (D2)
Interline Interior Linings (NSW) Pty Ltd (D3)
Andrew Wily (D4)
Tui Turipa Ullrich Gilbert (D5)
David Anthony Hurst (D6, XC2)
1088/01
HIH Workers Compensation Pty Ltd (P)
Interline Interior Linings Pty Ltd (in liquidation) (administrator appointed) (D/R)
Tui Gilbert (A1)
Tui Gilbert Holdings Pty Ltd (A2)

FILE NUMBER(S): SC 6062/01, 1309/02, 1088/01

COUNSEL: P M Wood (P) 6062/01, (P, XD) 1309/02
D J Durston (D1) 6062/01, (D2, D4) 1309/02, (R) 1088/01
T D Castle (D2) 6062/01, (D1, XC1) 1309/02, (D6, XC2) 1309/02
J T Johnson (D3, D5) 1309/02, (A1, A2) 1088/01

SOLICITORS: Freehills (P) 6062/01, (P, XD) 1309/02
P W Turk & Associates (D1) 6062/01, (D2, D4) 1309/02, (R) 1088/01
Blake Dawson Waldron (D2) 6062/01, (D1, XC1) 1309/02, (D6, XC2) 1309/02
Cutler Hughes & Harris (D3, D5) 1309/02, (A1, A2) 1088/01

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

AUSTIN J

TUESDAY 30 SEPTEMBER 2003

6062/01 BOVIS LEND LEASE PTY LTD V ANDREW WILY & ANOR
1309/02 BOVIS LEND LEASE PTY LTD V THOMAS JAVORSKY & 6 ORS
1088/01 HIH WORKERS COMPENSATION PTY LTD V INTERLINE INTERIOR LININGS PTY LTD (IN LIQUIDATION) (ADMINISTRATOR APPOINTED)

JUDGMENT

1 HIS HONOUR: This judgment relates to costs, in lengthy and complex proceedings to challenge the validity of a process of voluntary administration and deed administration of a company.

2 On 17 June 2003 I published my reasons for judgment in three proceedings, which had been heard together. They relate to a company called Interline Interior Linings Pty Ltd ("the Company"), the sole director and indirectly the owner of which is Tui Gilbert. Andrew Wily was appointed liquidator of the Company, and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2003] NSWSC 884
Decision Date: 30 September 2003

CaseChat Overview and Summary

In the case of Bovis Lend Lease v Wily, the plaintiff sought to challenge the costs orders made against the defendant, who was the deed administrator of a company. The dispute arose in the context of a corporate voluntary administration and subsequent winding up of the company. The court was tasked with determining whether the costs orders should be limited to the company's assets, whether the deed administrator was entitled to be indemnified for those costs, and whether the deed administrator should be personally required to pay the costs.

The central legal issues that the court needed to resolve included the extent of the liability of the deed administrator for the costs incurred, the applicability of the principle that costs follow the event, and the implications of the deed administrator's role and responsibilities. The court considered whether the deed administrator, having acted within the scope of their duties, could be held personally liable for the costs beyond the company's assets and whether they were entitled to indemnification.

In reaching its decision, the court held that the costs orders should indeed be limited to the assets of the company and that the deed administrator was not entitled to be indemnified for the costs. Furthermore, the court determined that the deed administrator should not be required to pay the costs personally. The reasoning was grounded in the principle that the deed administrator's role was to manage the company's affairs during the administration process, and personal liability beyond the company's assets would undermine the purpose of limiting the liability of administrators. The court found that the costs incurred were appropriately tied to the company's affairs and did not extend to personal liability of the deed administrator.

Consequently, the court made orders that the costs incurred were to be paid from the company's assets, the deed administrator was not to be indemnified for these costs, and the deed administrator was not to be held personally liable beyond the company's assets. This decision provided clarity on the extent of liability for deed administrators in such situations and reinforced the principle that the costs of litigation should follow the event, in this case, the company.

Orders