Dracoma Pty Ltd v Changela (No 3)

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Dracoma Pty Ltd v Changela (No 3) [2025] NSWSC 303
Hearing dates: On the papers; written submissions 21 and 28 March 2025
Date of orders: 1 April 2025
Decision date: 01 April 2025
Jurisdiction: Equity - Commercial List
Before: Stevenson J
Decision:
Second, fourth, fifth, sixth, and seventh defendants to pay the plaintiff’s costs of the proceedings; no order as to costs of the first and third defendants.

Catchwords:
COSTS – party/party – general rule that costs follow the event – application of the rule and discretion – where plaintiff had mixed success on multiplicity of issues – where plaintiff failed against first and third defendants, but no order made as to costs because of role played by those defendants

Cases Cited:
Dracoma Pty Ltd v Changela [2025] NSWSC 83
Dracoma Pty Ltd v Changela (No 2) [2025] NSWSC 216

Category: Costs
Parties: Dracoma Pty Ltd (Plaintiff)
Radhika Rajan Changela (First Defendant)
Sweta Prashant Changela (Second Defendant)
Vijay Chandrashanker Pandya (Third Defendant)
Prashant Girishbhai Changela (Fourth Defendant)
Rajan Girishbhai Changela (Fifth Defendant)
Changela Food Pty Ltd (Sixth Defendant)
Vijay Pandya Pty Ltd (Seventh Defendant)
Representation:
Counsel:
G Laughton SC / J Hynes (Plaintiff)
Dr A J Greinke (Defendants)
Solicitors:
William James (Plaintiff)
Lodhia Lawyers (Defendants)

File Number(s): 2023/298052

JUDGMENT

I gave judgment in this matter on 21 February 2025. [1] I published a short supplementary judgment on 17 March 2025. [2]
1. Dracoma Pty Ltd v Changela [2025] NSWSC 83.
2. Dracoma Pty Ltd v Changela (No 2) [2025] NSWSC 216.
I am now dealing with the costs of the proceedings.
I shall use the same abbreviations as in my earlier judgments.
The parties had mixed success on the multiplicity of issues in the proceedings. Dracoma succeeded in relation to its voidable transaction claim, apart from its claim against Prashant for the $614,000 sent to India.
It failed in relation to a number of issues but, ultimately, obtained the following judgments:

that Sweta and Prashant pay it $400,502.53, including interest of $43,884.53;

that Prashant and Rajan pay it $217,179.11, including interest of $23,797.11;

that Changela Food Pty Ltd pay it $67,383.45, including interest of $7,383.45; and

that Vijay Pandya Pty Ltd pay it $1,151,133.97, including interest of $126,133.97.

Dracoma obtained no relief against Radhika and Dr Pandya himself, and its claims against those two individuals was dismissed.
There is no dispute that Sweta, Prashant, Rajan, Changela Food Pty Ltd and Vijay Pandya Pty Ltd should pay Dracoma’s costs of the proceedings.
Dracoma seeks an order for indemnity costs in relation to Sweta and Rajan on the basis of offers of compromise served on those individuals on 31 July 2024. Those offers, in effect, invited those parties to capitulate and do not, in my opinion, provide a basis upon which an order for indemnity costs should be made.
As Dracoma failed against each of Radhika and Dr Pandya, on the face of things, it should pay their costs.
However, in relation to both individuals, my conclusion is that there should be no order as to costs.
As to Radhika, she was at all times a director of the Company. Although she received no payments, she also played no significant role in the proceedings and was in any event represented by lawyers who acted for the other defendants.
As to Dr Pandya, he came to court disputing that he was in fact a director of the Company, However, in the circumstances I set out at [41]-[49] of my 21 February 2025 judgment, Dr Pandya ultimately accepted that he had acted as director of the Company.
Dr Pandya was one of the controlling minds of the Company and was obviously involved in decisions of his own company, Vijay Pandya Pty Ltd, to enter the transactions that led to Dracoma having its greatest success, in dollar terms, in the proceedings.
In those circumstances, my orders are:

the second, fourth, fifth, sixth and seventh defendants pay the plaintiff’s costs of the proceedings; and

there be no order as to the costs of the first and third defendants.

**********

Endnotes

Amendments

02 April 2025 - Typographical error corrected at [5(a)].

The case of Dracoma Pty Ltd v Changela (No 3) involved a complex dispute where the plaintiff sought to enforce various contractual obligations against the defendants. The court was tasked with determining whether the plaintiff was entitled to costs under the general rule that costs follow the event. The plaintiff, Dracoma Pty Ltd, had mixed success on a multiplicity of issues, succeeding against the second defendant but failing against the first and third defendants. Despite the mixed outcome, the court considered the role played by the first and third defendants and determined that no order should be made as to costs against them.

The primary legal issues before the court were whether the plaintiff was entitled to costs given the mixed outcome of the litigation, and the extent to which the court should exercise its discretion in determining costs. The court had to weigh the principle that costs generally follow the event against the specific circumstances of the case, including the conduct of the parties and the role played by the defendants. The court also considered the impact of the litigation on the defendants, particularly the first and third, who were found to have played a limited role in the proceedings.

The court held that while the general rule was that costs follow the event, the exercise of discretion was necessary to ensure that the outcome of the litigation was just and equitable. The court found that the first and third defendants had played a minimal role in the proceedings, and that making an order for costs against them would not be appropriate. The court emphasised the importance of considering the conduct of all parties and the broader context of the litigation when exercising discretion. Consequently, the court decided not to make any order as to costs against the first and third defendants.

In light of the above, the court made no order as to costs against the first and third defendants, reflecting the limited role they played in the proceedings. The court's decision underscores the importance of discretion in the allocation of costs, particularly in cases where parties have had varying levels of involvement. The outcome highlights the need for a balanced approach when determining costs, taking into account all relevant factors and the specific circumstances of each case.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

Medium Neutral Citation:	Dracoma Pty Ltd v Changela (No 3) [2025] NSWSC 303
Hearing dates:	On the papers; written submissions 21 and 28 March 2025
Date of orders:	1 April 2025
Decision date:	01 April 2025
Jurisdiction:	Equity - Commercial List
Before:	Stevenson J
Decision:	Second, fourth, fifth, sixth, and seventh defendants to pay the plaintiff’s costs of the proceedings; no order as to costs of the first and third defendants.
Catchwords:	COSTS – party/party – general rule that costs follow the event – application of the rule and discretion – where plaintiff had mixed success on multiplicity of issues – where plaintiff failed against first and third defendants, but no order made as to costs because of role played by those defendants
Cases Cited:	Dracoma Pty Ltd v Changela [2025] NSWSC 83 Dracoma Pty Ltd v Changela (No 2) [2025] NSWSC 216
Category:	Costs
Parties:	Dracoma Pty Ltd (Plaintiff) Radhika Rajan Changela (First Defendant) Sweta Prashant Changela (Second Defendant) Vijay Chandrashanker Pandya (Third Defendant) Prashant Girishbhai Changela (Fourth Defendant) Rajan Girishbhai Changela (Fifth Defendant) Changela Food Pty Ltd (Sixth Defendant) Vijay Pandya Pty Ltd (Seventh Defendant)
Representation:	Counsel: G Laughton SC / J Hynes (Plaintiff) Dr A J Greinke (Defendants) Solicitors: William James (Plaintiff) Lodhia Lawyers (Defendants)
File Number(s):	2023/298052