Brien v Australasian Memory Pty Ltd

Case [2000] NSWSC 333


Reported Decision: [2000] 34 ACSR 158

New South Wales


Supreme Court

CITATION: Brien & 1 Ors v Australasian Memory & 1 Ors [2000] NSWSC 333
CURRENT JURISDICTION:
Equity
FILE NUMBER(S): SC 2933/97; 2945/97
HEARING DATE(S): 14/04/00
JUDGMENT DATE: 14 April 2000

PARTIES :


In the matter of Australasian Memory Pty Limited ACN 003 636 324 and the Corporations Law
Richard Campbell Brien (First Plaintiff)
Steven Nicols (Second Plaintiff)
Australasian Memory Pty Limited ACN 003 636 324 (First Defendant)
Barry Charles Amor
- and -
Barry Charles Amor (Plaintiff)
Australasian Memory Pty Ltd (Defendant)
JUDGMENT OF: Santow J
COUNSEL : G L Raffell (Plaintiffs)
J P Vohralik (Solicitor) (Defendants)
SOLICITORS: Barker Gosling Lawyers (Plaintiffs)
Gillis Delaney Brown (Defendants)
CATCHWORDS: CORPORATIONS — Cost orders in favour of administrators against the party resisting dispensation being given for holding the second creditors meeting eight days too early when dispensation only sought under s447A and s1322 of Corporations Law after the prematurely called meeting — Could have been sought before under s439A(6) of Corporations Law but that not fatal to cost recovery — Rule that party seeking dispensation usually pays the costs not universal but depends on circumstances — relevant circumstances include that no correlative duty owed to the party opposing the dispensation — Such person neither a creditor nor invoking the public interest but one who sought to resist statutory demand against associated company — This strenuously fought conventional litigation in which costs should follow the event — Orders suspended because of pendency of High Court appeal awaiting judgment.
CASES CITED: Golski v Kirk (1987) 14 FCR 143
Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344
DECISION: Costs orders made.

    REVISED — 18 April, 2000
    IN THE SUPREME COURT
    OF NEW SOUTH WALES
    IN EQUITY

    SANTOW J

    No. 2933/97
                In the matter of Australasian Memory Pty Limited ACN 003 636 324 and the Corporations Law

                Richard Campbell Brien
                First Plaintiff
                Steven Nicols
                Second Plaintiff

                Australasian Memory Pty Limited ACN 003 636 324
                First Defendant
                Barry Charles Amor
                Second Defendant


    No. 2945/97
                Barry Charles Amor
                Plaintiff

                Australasian Memory Pty Ltd.
                Defendant

    JUDGMENT — ex tempore
14 April 2000 1 What, if any, cost orders should now be made in relation to the Plaintiffs’ application? It was an application so far successful before myself as the trial judge and then before the Court of Appeal. It is presently the subject of a reserved judgment by the High Court, leave to appeal having been allowed on limited grounds. 2 I describe the application in general terms. It was for remedial orders under s447A and/or 1322 of the Corporations Law because the Plaintiffs, who were then administrators, had irregularly convened the second meeting of the creditors of the First Defendant Australasian Memory Pty Limited (in liq) ("the Company"). It was irregularly convened because that second meeting of creditors had been convened eight days earlier than that prescribed by s439A of the Corporations Law. That application necessarily embraced orders of a remedial character which had…

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Brien v Australasian Memory Pty Ltd [2000] NSWSC 333
Case
[2000] NSWSC 333
Decision Date

CaseChat Overview and Summary

The case of Brien v Australasian Memory Pty Ltd involved a dispute where the administrators of a company sought dispensation for holding a second creditors meeting eight days too early. The application for dispensation was made under sections 447A and 1322 of the Corporations Law, following the prematurely convened meeting. The relevant law provides that while dispensation could also have been sought under section 439A(6) of the Corporations Law prior to the meeting, this did not necessarily preclude the recovery of costs. The court needed to determine whether the rule that the party seeking dispensation typically bears the costs was absolute or if it depended on the specific circumstances of the case. Key factors considered included whether a correlative duty was owed to the party opposing the dispensation, and whether that party was a creditor or invoking the public interest, or merely resisting a statutory demand against an associated company.

The court examined the circumstances of this case, finding that the litigation was vigorously contested and conventional. It was held that costs should follow the event, which in this case was the successful application for dispensation by the administrators. The court emphasised that the rule regarding cost liability was not universally applicable but rather dependent on the specific circumstances. In this instance, the resisting party neither had a correlative duty nor was acting in the public interest, which influenced the decision on cost allocation. The administrators' costs were deemed appropriate to be borne by the party who strenuously opposed the dispensation application.

The Federal Court ultimately granted the application for dispensation and ordered the administrators to recover their costs from the opposing party. However, this order was suspended pending the outcome of a High Court appeal that was already in progress. The decision underscored that the rule regarding cost liability is flexible and context-dependent, reflecting the court's approach to ensuring that costs appropriately follow the event in contentious litigation.

Orders

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

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Ratio Decidendi

Legal Principle Established

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