Coal Projects Pty Ltd v Maicome Pty Ltd (No 2)
[2018] VCC 1803
•12 November 2018
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-13-05864
| COAL PROJECTS PTY LTD (ACN 153 272 612) (in liq) | Plaintiff |
| v | |
| MAICOME PTY LTD (ACN 111 961 712) | Defendant |
---
JUDGE: | HER HONOUR JUDGE A RYAN | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | On the papers | |
DATE OF RULING: | 12 November 2018 | |
CASE MAY BE CITED AS: | Coal Projects Pty Ltd v Maicome Pty Ltd (No 2) | |
MEDIUM NEUTRAL CITATION: | [2018] VCC 1803 | |
RULING ON COSTS
---
HER HONOUR:
1 On 30 October 2018, I provided reasons for ruling in respect of the plaintiff’s summons dated 31 July 2018 and the defendant’s summons dated 8 August 2018. [1] Terms used in this ruling have the meaning given in those reasons.
[1]Coal Projects Pty Ltd v Maicome Pty Ltd [2018] VCC 1730
2 The parties were directed to file written submissions on costs.
3 Coal filed written submissions on 2 November 2018. Coal seeks an order that costs be in the cause, or be reserved. The basis for seeking this is that until such time as an accounting is undertaken under s553C of the Corporations Act 2001 (Cth) (“the Act”), the real outcome of the summonses will not be known.
4 Coal points out that Maicome failed in its application to seek to set the judgment aside on the basis it was a nullity. Given the court determined that the stay should remain in place pending the determination under s553C of the Act, Coal argues this is akin to the granting of an interlocutory injunction maintaining the status quo until the final costs of the proceeding are determined. In this situation, Coal submits costs are reserved or costs in the cause.
5 Coal referred to an email that its solicitors sent to Maicome’s solicitors dated 31 October 2018. The email proposed that the order as to costs of the applications should be either costs in the cause or reserved without the necessity for further submissions taking up the court’s time. Coal says this offer was rejected.
6 By contrast, Maicome submits it has been successful on both summonses and that costs should follow the event. Maicome seeks an order that Coal pay Maicome’s costs of both summonses on the standard basis. Maicome points to the fact that the proposed form of stay set out in the reasons reflects an acceptance by the court of its submissions made at the hearing to the effect of s553C of the Act on the ability of Coal’s liquidators to seek to enforce the judgment. Consequently, it was submitted Coal failed in respect to the relief it sought, namely, to lift the stay to enable it to enforce the judgment.
7 Although Maicome was unsuccessful in relation to its primary relief sought in its summons, namely, the setting aside of the judgment as a nullity, it succeeded in its alternative claim. The alternative claim was a continuation of the stay. This order was made without Maicome having to provide further security.
8 Maicome relies upon a letter dated 1 November 2017,[2] from its solicitors to Coal’s solicitors, in which the effect and operation of s553C was specifically drawn to Coal’s attention. It was also pointed out the application by Coal was strictly unnecessary on the basis that the stay came into effect by operation of law. Maicome submits it was forced to seek an order in respect of the stay because the plaintiff’s liquidators were seeking to enforce the judgment, despite the automatic and immutable effect of s553C. Having failed in that quest, Maicome argues there should be a costs consequence for Coal.
[2]See pp127-132 of Exhibit GI-1 to the affidavit of George Iliov sworn 7 August 2018
Analysis
9 Coal’s application failed. It did not obtain an order that the stay ordered by Judge Anderson be lifted so it could enforce the judgment, nor did it succeed in its alternative application to have Maicome provide further security as a condition of any stay being granted.
10 Maicome did not succeed on the first ground of its application, namely, that the judgment be set aside as a nullity. Its alternative position, that there should be a stay was accepted by the court for the reasons identified in my earlier decision. Maicome says it acted, in a sense, defensively because Coal was seeking to lift the stay in which case it was necessary for Maicome to respond with its own application for a stay. But, on one view, it might be said that Maicome could have simply argued against the relief sought by Coal without necessarily having to bring its own application on that point. The nullity point was separate and did not arise in response to Coal’s application.
11 In the letter from its solicitors dated 1 November 2017, Maicome specifically drew to the attention of the solicitors acting for the liquidators of Coal the effect of s553C of the Act. Reference was also made in that letter to the application of the Facade[3] decision which prevents companies in liquidation from seeking to enforce interim judgments under the Building and Construction Industry Security of Payment Act 2002 (Vic). The letter was sent many months before Coal filed its summons on 31 July 2018. It must or should have been obvious to Coal that its prospects of succeeding in its application to enforce the judgment were negligible having regard to the state of the law as identified by Maicome’s solicitors. The prospect of Maicome being ordered to provide further security as a condition of any stay was not so obvious although this order was not granted.
[3]Façade Treating Engineering Pty Ltd (in liq) v Brookfield Multiplex Constructions Pty Ltd [2016] VSCA 247
12 Maicome did not succeed in its application to set aside the judgment as a nullity and therefore lost on that issue. It did succeed on the question of a further stay being ordered, which was the fall back position of each party, save that Coal wanted Maicome to provide further security.
13 Given all these matters, in the exercise of my discretion, I consider the appropriate order is that Coal should pay 75 percent of Maicome’s costs of both summonses on a standard basis.
14 Maicome agreed with the form of stay contained in paragraph 78 of the reasons. No submissions were made by Coal in respect of the form of the stay order.
15 I will therefore make the following orders:
(a) There be a stay on execution of the judgment entered on 28 November 2013, pending resolution by legal proceedings or by agreement of the amount payable by the plaintiff to the defendant or payable to the plaintiff by the defendant in accordance with s553C of the Corporations Act 2001 (Cth).
(b) The plaintiff pay 75 percent of the defendant’s costs of and incidental to the plaintiff’s summons filed 31 July 2018 and the defendant’s summons filed 8 August 2018, on the standard basis to be taxed in default of agreement.
0