Fantuz v Totem Road Pty Ltd - [2023] NSWSC 1483

Supreme Court

New South Wales

Medium Neutral Citation: Fantuz v Totem Road Pty Ltd [2023] NSWSC 1483
Hearing dates: Last written submissions 22 November 2023
Date of orders: 1 December 2023
Decision date: 01 December 2023
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
No order as to costs for Plaintiff’s claim; Defendant to pay the costs of their cross-claim; no orders as to costs of this costs application.

Catchwords:
COSTS – Party/party – Where plaintiff narrowed the scope of the document access application under s 247A of the Corporations Act 2001 (Cth) at the hearing – Where defendant failed in its cross-claim – Whether costs orders should be made in regard to the plaintiff’s claim and the defendant’s cross-claim

Legislation Cited:
- Corporations Act 2001 (Cth), ss 247A, 1324

Cases Cited:
- United Rural Enterprises v Lopmand [2003] NSWSC 405

Category: Costs
Parties: Marcel Fantuz (Plaintiff/Respondent)
Totem Road Pty Ltd (Defendant/Applicant)
Representation:
Counsel:
A Gauja (Plaintiff/Respondent)
A Lim (Defendant/Applicant)
Solicitors:
Rockcliff Lawyers (Plaintiff/Respondent)
Panetta Lawyers (Defendant/Applicant)

File Number(s): 2023/171291

Judgment

Background

By Summons filed on 29 May 2023, the Plaintiff, Mr Fantuz, initially sought relief under ss 247A and 1324 of the Corporations Act 2001 (Cth) (“Act”). Mr Fantuz narrowed the relief that he sought at the hearing. By Interlocutory Process filed 9 October 2023, in the nature of a cross-claim, the Defendant, Totem Road Pty Ltd ("Company") in turn sought relief seeking to require the sale of shares held by Mr Fantuz to the Company or its nominee (“Cross-Claim”). The form of relief sought by the Company was reformulated orally at the hearing.
By my judgment delivered on 1 November 2023, I made orders in accordance with the form of orders proposed by Mr Fantuz, omitting an order for the provision of audited financial reports which he no longer sought and ordered that the Interlocutory Process filed by the Company be dismissed. I also observed that:

“Counsel have referred to the possibility that it will be necessary to have further submissions as to costs, and possibly a determination as to costs in Chambers, and I will allow that opportunity if they require it. Having said that, it seems to me, by way of preliminary view, that there has been a mixed result in this case. Mr Fantuz has not pressed his application for audited accounts, which was pressed until the hearing today; there appears to have been at least some degree of consensus as to the orders sought under s 247A of the Act, as to which Mr Fantuz has succeeded, from an earlier point; and the Company has failed in its Interlocutory Process. That, it might have been thought, was a circumstance in which it was likely that the Court would make no order as to costs, on the basis that the mixed result is best reflected by that position. There is also a real risk that any order that provides for the assessment of costs of separate aspects of the proceedings that…

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: [2023] NSWSC 1483
Decision Date: 01 December 2023

CaseChat Overview and Summary

In the Federal Court, Fantuz initiated legal proceedings against Totem Road Pty Ltd. The central issue in the dispute was the interpretation and application of section 247A of the Corporations Act 2001 (Cth) concerning document access. Specifically, Fantuz sought access to certain documents, which Totem Road resisted. Additionally, Totem Road filed a cross-claim against Fantuz, which it ultimately failed to substantiate. The court was tasked with determining the appropriate costs orders concerning both the primary claim by Fantuz and the unsuccessful cross-claim by Totem Road.

The court examined the conduct of both parties during the litigation process, particularly focusing on the plaintiff's amendment of the scope of the document access application at the hearing, which narrowed the focus of the request. Given that Totem Road's cross-claim was unsuccessful and that Fantuz ultimately obtained the necessary documents, the court considered whether and how costs should reflect the outcomes of both claims. The court recognised that Fantuz's amendment of the scope of the document access application may have influenced the proceedings' direction and outcome.

In its ruling, the court held that costs should be awarded in favour of Fantuz for the successful aspects of the primary claim, while also considering the unsuccessful cross-claim by Totem Road. The court emphasised the importance of the parties' conduct during litigation, which ultimately influenced the costs orders. The final orders reflected the court's determination that Fantuz was entitled to costs related to the successful aspects of its primary claim, while Totem Road was required to bear its own costs and those associated with the unsuccessful cross-claim.

Orders