Energex Ltd v Elkington - [2003] QSC 34

SUPREME COURT OF QUEENSLAND

CITATION:

Energex Ltd v Elkington & Ors [2003] QSC 034

PARTIES:

ENERGEX LIMITED (ACN 078 849 055)
(applicant)
v
GORDON BRADLEY ELKINGTON AND OTHERS/ being persons identified in Schedule A of the Originating Application
(respondent)

FILE NO/S:

SC3973 of 2001

DIVISION:

Trial Division

PROCEEDING:

Costs Order

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

25 February 2003

DELIVERED AT:

Brisbane

HEARING DATE:

8 November 2002

JUDGE:

Mackenzie J

ORDER:

I order the applicant to pay to each of the first and twenty-sixth respondents 1/3 of their costs of and incidental to the application to be assessed on a standard basis;1.

2.          I make no order as to costs of the application for a stay of proceedings.

CATCHWORDS:

PROCEDURE – COSTS - RECOVERY OF COSTS – where the applicant was the 90% holder of securities covered by compulsory acquisition – whether the applicant was required to bear all costs of the proceedings – whether the prima facie rule in s 664F(4) of the Corporations Act (2001) (Cth) should be departed from – whether the respondents’ had acted improperly, vexatiously or otherwise unreasonably – whether an application for stay of proceedings to allow a decision as to whether to lodge an appeal falls within s 664F legal proceedings

Corporations Act 2001 (Cth), s 664F(4)

Re: NRMA Insurance Ltd (No 1) (2000) 33 ACSR 595. considered
Winpar Holdings Limited v Goldfields Kalgoorlie Limited [2000] NSWSC 855, considered

COUNSEL:

J McKenna for the applicant
C Francis for the 26^th respondent
G Elkington for himself

SOLICITORS:

Clayton Utz, Lawyers for the applicant
Stephen Blanks & Associates for the 26^th respondent

MACKENZIE J: Judgment was given in this application on 8 November 2002. Submissions concerning costs were invited in the event that it was to be asserted that the prima facie rule in s 664F(4) of the Corporations Act 2001 (Cth) should be departed from. Section 664F(4) provides as follows:

“The 90% holder must bear the costs that a person incurs in legal proceedings in relation to the application unless the court is satisfied that the person acted improperly, vexatiously or otherwise unreasonably. The 90% holder must bear their own costs.”

To justify departure from the obligation to bear the costs of an application of this kind, the applicant 90% holder must satisfy the court positively that the respondent acted “improperly, vexatiously or otherwise unreasonably”. The twenty-sixth respondent submits that there is a clear legislative policy of encouraging respondents to participate in proceedings where they do not accept the price offered. Where the issue becomes whether the price represents “fair value” it is of assistance to the court to have the applicant’s material tested by ordinary forensic processes and to have the assistance of any contrary views advanced by the respondents.

That may be so in a general way but the propositions must be subject to the limitation that if the conduct of the case for the respondent is shown to involve the respondent acting improperly, vexatiously…

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.

Continue reading Energex Ltd v Elkington

Details

AGLC: Energex Ltd v Elkington [2003] QSC 34
Case: [2003] QSC 34
Decision Date: 25 February 2003

CaseChat Overview and Summary

In the Federal Court of Australia, Energex Ltd, as the majority holder of securities, sought to recover costs incurred in proceedings against various respondents. The compulsory acquisition of the securities led to a dispute over who should bear the costs of the proceedings. Energex, holding 90% of the securities, argued it should not bear all the costs, citing potential impropriety or unreasonable behaviour by the respondents. The court was tasked with determining whether Energex should be held responsible for all costs, if the rule in section 664F(4) of the Corporations Act 2001 (Cth) should be departed from, and whether the respondents had acted improperly, vexatiously, or unreasonably.

The court considered whether the statutory rule requiring the applicant to bear all costs should be applied strictly or if there were exceptional circumstances justifying a departure. The court assessed the actions of the respondents to determine if they had acted improperly, vexatiously, or unreasonably. The decision hinged on whether the respondents' actions warranted a deviation from the prima facie rule and if Energex's financial burden was justified given the circumstances. The court concluded that the respondents had not acted in a manner warranting a departure from the statutory requirement.

The Federal Court ruled that Energex Ltd must bear the costs of the proceedings, but it did not require Energex to pay all costs. Instead, the court ordered Energex to pay one-third of the costs of the first and twenty-sixth respondents, with these costs to be assessed on a standard basis. The court made no order regarding the costs of the application for a stay of proceedings. This decision reflects the court's consideration of the statutory framework and the conduct of the parties involved, balancing the statutory requirements with the need to address potential improprieties or unreasonable behaviour.

Orders

Orders of the court

I order the applicant to pay to each of the first and twenty-sixth respondents 1/3 of their costs of and incidental to the application to be assessed on a standard basis;1.

2. I make no order as to costs of the application for a stay of proceedings.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Energex Ltd v Elkington & Ors [2003] QSC 034
PARTIES:	ENERGEX LIMITED (ACN 078 849 055) (applicant) v GORDON BRADLEY ELKINGTON AND OTHERS/ being persons identified in Schedule A of the Originating Application (respondent)
FILE NO/S:	SC3973 of 2001
DIVISION:	Trial Division
PROCEEDING:	Costs Order
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	25 February 2003
DELIVERED AT:	Brisbane
HEARING DATE:	8 November 2002
JUDGE:	Mackenzie J
ORDER:	I order the applicant to pay to each of the first and twenty-sixth respondents 1/3 of their costs of and incidental to the application to be assessed on a standard basis;1. 2. I make no order as to costs of the application for a stay of proceedings.
CATCHWORDS:	PROCEDURE – COSTS - RECOVERY OF COSTS – where the applicant was the 90% holder of securities covered by compulsory acquisition – whether the applicant was required to bear all costs of the proceedings – whether the prima facie rule in s 664F(4) of the Corporations Act (2001) (Cth) should be departed from – whether the respondents’ had acted improperly, vexatiously or otherwise unreasonably – whether an application for stay of proceedings to allow a decision as to whether to lodge an appeal falls within s 664F legal proceedings Corporations Act 2001 (Cth), s 664F(4) Re: NRMA Insurance Ltd (No 1) (2000) 33 ACSR 595. considered Winpar Holdings Limited v Goldfields Kalgoorlie Limited [2000] NSWSC 855, considered
COUNSEL:	J McKenna for the applicant C Francis for the 26^th respondent G Elkington for himself
SOLICITORS:	Clayton Utz, Lawyers for the applicant Stephen Blanks & Associates for the 26^th respondent