Combis and Staatz as Joint and Several Liquidators of RB Hospitality Holdings Pty Limited (In Liquidation) v Lee (No. 2)

[2020] NSWSC 1828

Supreme Court

New South Wales

Medium Neutral Citation:

Combis and Staatz as Joint and Several Liquidators of RB Hospitality Holdings Pty Limited (In Liquidation) v Lee (No. 2) [2020] NSWSC 1828

Hearing dates:

On the papers

Date of orders:

16 December 2020

Decision date:

16 December 2020

Jurisdiction:

Common Law

Before:

Johnson J

Decision:

Refer [17] of judgment.

Catchwords:

COSTS – consideration of appropriate costs order after answers given to separate questions pursuant to order under Rule 28.2 Uniform Civil Procedure Rules 2005 – costs should follow that event

Legislation Cited:

Civil Procedure Act 2005

Uniform Civil Procedure Rules 2005

Cases Cited:

Doppstadt Australia Pty Ltd v Lovick & Sons Developments Pty Ltd (No. 2) [2014] NSWCA 219

Combis and Staatz as Joint and Several Liquidators of RB Hospitality Holdings Pty Limited (In Liquidation) v Lee [2020] NSWSC 1727

Texts Cited:

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Category:

Costs

Parties:

Nick Combis and Steven Staatz as joint and several liquidators of RB Hospitality Holdings Pty Ltd (In Liquidation) (Plaintiffs)
Richard Andrew John Lee (Defendant)

Representation:

Counsel:
Mr DK Smith (Plaintiffs)
Mr M Bennett (Defendant)

Solicitors:
Patane Lawyers (Plaintiffs)
Navado Lawyers and Solicitors (Defendant)

File Number(s):

2018/391580

Publication restriction:

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Judgment

1. JOHNSON J: On 3 December 2020, I gave judgment in these proceedings in which answers were given to separate questions which had been framed pursuant to an order under Rule 28.2 Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”): Combis and Staatz as Joint and Several Liquidators of RB Hospitality Holdings Pty Limited (In Liquidation) v Lee [2020] NSWSC 1727.

2. In that judgment, at [107]-[108], I gave directions for the parties to make submissions concerning costs and outstanding procedural issues in light of the answers given by the Court to the separate questions.

3. Counsel for the Plaintiffs and the Defendant have furnished written submissions on costs and outstanding procedural issues.

Submissions of the Plaintiffs

4. Mr Smith, counsel for the Plaintiffs, submitted that his clients had succeeded on every point in the Court’s judgment and that costs should follow the event.

5. It was submitted that the Defendant should be ordered to pay the Plaintiffs’ costs of the Defendant’s Notice of Motion filed on 10 June 2020 (which gave rise to the order made by Davies J on 29 July 2020 for the hearing of separate questions) together with the costs of the separate questions hearing before me on 16 November 2020.

6. The Plaintiffs submitted that the “event” is the practical outcome of the motion: Doppstadt Australia Pty Ltd v Lovick & Sons Developments Pty Ltd (No. 2) [2014] NSWCA 219 at [15]. The practical outcome of the separate questions hearing was that the separate questions were resolved in favour of the Plaintiffs.

7. The Plaintiffs noted that Davies J had reserved costs of the separate questions application on 29 July 2020.

8. With respect to the future course of the proceedings, counsel for the Plaintiffs noted that the Defendant had filed a Notice of Motion on 13 March 2020 which sought reference to a referee under Rule 20.14 UCPR for inquiry into the quantum of the Plaintiffs’ fees incurred as liquidators and the missing funds/cash surplus. It was submitted that, in light of the Court’s answers to the separate questions, quantification of the cash surplus remains live through the Defendant’s position on the reference motion and is now uncertain. It was submitted that the Defendant should now clarify its position on the reference motion with directions to be given in that respect.

Submissions for the Defendant

9. Mr Bennett, counsel for the Defendant, submitted that there had been no final event and the Court’s discretion as to costs should be exercised to protect the Plaintiffs’ costs should they succeed, but not to pay them until they succeed.

10. In this respect, counsel for the Defendant submitted that by succeeding on the separate questions, the Plaintiffs have not been shut out of the relief sought in the Statement of Claim and may move to the next stage of the proceedings.

11. In those circumstances, it was submitted that the appropriate order is that the Plaintiffs’ costs of and incidental to the separate questions hearing be reserved pending success on the final hearing of the matter.

12. In the alternative, if the Court took the view that costs should be ordered, it was submitted that costs should be ordered only on the ordinary basis as agreed or assessed: Rule 42.2 UCPR.

Decision

13. By Notice of Motion filed 10 June 2020, the Defendant sought the hearing of separate questions, which met some initial resistance at least from the Plaintiffs. During the course of the hearing before Davies J, the parties agreed as to the evidentiary material to be presented at the separate questions hearing. In effect, the Defendant succeeded on the separate questions application in relation to which Davies J reserved costs. I do not think that the Defendant should be ordered to pay the Plaintiffs’ costs of that application in relation to which the Defendant achieved what has turned out to be a temporary success. There should be no order as to costs with respect to that application.

14. The Plaintiffs succeeded entirely on the separate questions hearing before me on 16 November 2020, with all questions being answered in their favour. I am satisfied that the appropriate order with respect to the hearing before me is that costs should follow the event with the Defendant being ordered to pay the Plaintiffs’ costs or that hearing. The order for costs will be made on the ordinary basis as agreed or assessed.

15. With respect to the future course of the proceedings, it is appropriate that the solicitors for the Defendant inform the solicitors for the Plaintiffs in writing concerning the Defendant’s intention with respect to the Notice of Motion filed on 13 March 2020 concerning the unpaid money/cash surplus.

16. I will direct the Defendant to inform the Plaintiffs of the position in that respect by 25 January 2021 with the matter to be listed for further directions before the me at 9.00 am on 8 February 2021. Depending upon what occurs on that day, it may be appropriate to refer the matter to Davies J, the Possession List Judge.

Orders

17. I make the following orders:

1. the Defendant is to pay the Plaintiffs’ costs of the separate questions hearing on 16 November 2020 on the ordinary basis as agreed or assessed;

2. I make no order as to costs with respect to the separate questions application determined by Davies J on 29 July 2020;

3. the Defendant is to inform the Plaintiffs in writing by 25 January 2021 of the Defendant’s intention with respect to the Notice of Motion filed 13 March 2020 seeking reference to a referee under Rule 20.14 UCPR;

4. the proceedings are listed for further directions before me at 9.00 am on 8 February 2021.

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Decision last updated: 16 December 2020