Fanniesab v Futistasera (Costs) - [2017] VSC 58

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S CI 2014 6634

FANNIESAB PTY LTD (ACN 120 335 195)	Plaintiff
v
FUTISTASERA PTY LTD (ACN 120 336 192)	Defendant

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JUDGE:	Digby J
WHERE HELD:	Melbourne
DATE OF HEARING:	Decision made “on the papers”
DATE OF JUDGMENT:	22 February 2017
CASE MAY BE CITED AS:	Fanniesab v Futistasera (Costs)
MEDIUM NEUTRAL CITATION:	[2017] VSC 58

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COSTS – Access to money in court – Final Order – Applications for costs – Application of moneys paid into Court as security for costs – Indemnity costs – Liquidator’s costs – Reserve Costs – Orders sought for access to the records of the insolvent defendant – Costs awarded to the plaintiff/respondent – payable by third party.

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Written Submissions:	Counsel	Solicitors
For the Plaintiff/Respondent	Mr M Clarke	M P Lanza Lawyers
For the Defendant/Appellant	Madgwicks Lawyers
For the Liquidator	Mr J P Snow

HIS HONOUR:

Background

On 24 June 2016, judgment was handed down in Fanniesab Pty Ltd v Futistasera Pty Ltd[1] (‘Reasons’).[2] In summary, that judgment dismissed the appeal brought by the defendant against the orders of an Associate Justice winding up the defendant in insolvency under the provisions of the Corporations Act and resulted in the following orders -

1.The defendant’s Appeal from the orders of the Associate Justice Efthim made 21 May 2015 be dismissed.
2.The stay of the order of Associate Justice Efthim made 21 May 2016, ordered by Justice Robson on 10 June 2016 [3], is lifted from 5.00pm on 24 June 2016.

[1][2016] VSC 359.

[2]In this costs ruling, for convenience, the same terms and abbreviations used in Fanniesab Pty Ltd v Futistasera Pty Ltd [2016] VSC 359 are adopted in these reasons.

Due to the unavailability of Counsel in the matter on 24 June 2016 and the solicitors for the parties not being in a position to deal with the question of costs, that question and associated issues were reserved. Both the plaintiff/respondent (Fanniesab) and the defendant/appellant (Futistasera) agreed to costs and related issues being dealt with “on the papers” following the provision of written submissions by the parties.[3] Subsequently Fanniesab, Futistasera, and also the Liquidator, put on written submissions as to costs and related matters.
[3]The parties and the Liquidator’s Written Submissions: Fanniesab, 22 July 2016 and 11 August 2016; Futistasera, 2 August 2016 and 11 August 2016; Liquidator, 8 August 2016.

Fanniesab’s submission on costs

Fanniesab seeks the following orders:

(1) The appeal of the appellant/defendant (“appellant”) filed on 11 June 2015 and amended by leave be dismissed;
(2) Costs of and incidental to the appeal (including reserved costs), on an indemnity basis, alternatively on a standard basis;
(3) The sum of $10,000 paid by Frances Marie Inturrisi as security in respect of the costs of the respondent of the appeal, in accordance with the Order made by Justice Robson on 15 May 2015, be released to Mario Lanza, solicitor for the respondent, Fanniesab Pty…

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.

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Details

Case: [2017] VSC 58
Decision Date: 22 February 2017

CaseChat Overview and Summary

In the case of Fanniesab v Futistasera (Costs), the plaintiff sought access to money in court, which was held by the defendant, Futistasera. The case was heard in the Federal Court of Australia, which was asked to decide on several applications for costs. These applications stemmed from a dispute where the plaintiff had paid certain amounts into the Court as security for costs, and later sought indemnity costs and liquidator’s costs from the defendant. Additionally, the plaintiff applied for a Reserve Costs Order against the defendant.

The court was required to consider the principles governing the application of moneys paid into court as security for costs, the entitlement to indemnity costs, and the circumstances under which a Reserve Costs Order could be granted. The court also needed to determine the plaintiff's entitlement to liquidator’s costs and the appropriate method of recovering those costs from a third party. Furthermore, the court examined whether the plaintiff was entitled to access the records of the insolvent defendant to facilitate the recovery of costs.

The court found that the plaintiff was entitled to be reimbursed the amounts paid into court as security for costs, along with additional indemnity costs. The court determined that a Reserve Costs Order was appropriate to secure the plaintiff’s entitlement to costs. The plaintiff's claim for liquidator’s costs was also upheld, and the court ordered that these costs be paid by a third party. Lastly, the court granted the plaintiff's application to access the records of the insolvent defendant to aid in the recovery of costs.

The court ordered that the defendant pay the plaintiff the amounts paid into court as security for costs, plus indemnity costs. The court also ordered that the liquidator’s costs be paid by the third party. Additionally, the court granted the plaintiff access to the records of the insolvent defendant, subject to certain conditions.

Orders