Gemi 169 Pty Ltd v Suria Global (L) Pty Ltd (No 7)

[2024] NSWSC 1187

Supreme Court

New South Wales

Medium Neutral Citation:

GEMI 169 Pty Ltd v Suria Global (L) Pty Ltd (No 7) [2024] NSWSC 1187

Hearing dates:

On the papers; written submissions 19 August, 30 August and 3 September 2024

Date of orders:

19 September 2024

Decision date:

19 September 2024

Jurisdiction:

Equity - Commercial List

Before:

Stevenson J

Decision:

Plaintiffs pay the third and fourth defendants’ costs of the contempt application; costs be assessed and payable forthwith

Catchwords:

COSTS – party/party – costs orders in interlocutory proceedings – where plaintiffs’ contempt application against third and fourth defendants failed – where no reason why plaintiffs should not pay third and fourth defendants’ costs of the application

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Cases Cited:

Gemi 169 Pty Ltd v Suria Global (L) Pty Ltd (No 5) [2024] NSWSC 951

Gemi 169 Pty Ltd v Suria Global (L) Pty Ltd (No 6) [2024] NSWSC 1007

Category:

Costs

Parties:

GEMI 169 Pty Ltd (First Plaintiff/Applicant)
GI 214 Pty Ltd (Second Plaintiff/Applicant)
F & L Violi Pty Ltd (Third Defendant/First Respondent)
Frank Paul Violi (Fourth Defendant/Second Respondent)

Representation:

Counsel:
H W Somerville / D Meyerowitz-Katz (Plaintiffs/Applicants)
S M Golledge SC / D Edney (Third and Fourth Defendants/First and Second Respondents)

Solicitors:
Summer Lawyers (Plaintiffs/Applicants)
Aqua Law (Third and Fourth Defendants/First and Second Respondents)

File Number(s):

2022/181916

JUDGMENT

1. The background to this matter is set out in my judgments of 5 August 2024,^[1] and 14 August 2024. ^[2]

   1. GEMI 169 Pty Ltd v Suria Global (L) Pty Ltd (No 5) [2024] NSWSC 951.

   2. GEMI 169 Pty Ltd v Suria Global (L) Pty Ltd (No 6) [2024] NSWSC 1007.

2. I shall use the same abbreviations here.

3. The Lenders sought orders that FLV and Mr Violi be found guilty of contempt for the reasons set forth in the Statement of Charge.

4. There were five charges in the Statement of Charge.

5. Charge 4 was, at the last moment, not pressed.

6. I found that FLV and Mr Violi had no case to answer in relation to charges 2, 3 and 5. ^[3] I dismissed charge 1. ^[4]

   3. The 5 August 2024 judgment: Gemi 169 Pty Ltd v Suria Global (L) Pty Ltd (No 5) (supra).

   4. The 14 August 2024 judgment: Gemi 169 Pty Ltd v Suria Global (L) Pty Ltd (No 6) (supra).

7. FLV and Mr Violi seek an order that the Lenders pay their costs of the contempt application and that such costs be assessed and payable forthwith.

8. I see no reason why I should not make those orders.

9. In particular, I do not see the fact that the respondents to the application were in breach of consent orders made at their own instigation, nor the fact that “the respondents elected not to disclose the defences until the last possible moment”, as submitted by Mr Sommerville and Mr Meyerowitz-Katz on behalf of the Lenders, to be reasons not to make the orders sought.

10. I accept the following submissions made on behalf of FLV and Mr Violi by Mr Golledge SC and Mr Edney:

“The [Lenders] were not compelled to bring a contempt application. Accepting there was a breach of paragraph 9(d) of the 15 July 2022 orders in respect of the insurance policy, (being the order the subject of charge numbers 2 and 5), that was a matter of which the [the Lenders] were aware by 29 July 2022. It was open to the [Lenders], at that time, to take the simpler remedial approach of re-listing the proceeding, bringing any allegation of breach to the attention of the Court, and, if appropriate, seeking the reinstatement of the receivers or other suitable relief.

Rather than take that course, the [Lenders], almost 2 years after they must have become aware of the matters of which they subsequently complained, filed an application for contempt seeking, inter alia, that Mr Violi be arrested and imprisoned. Presumably, that step reflected a considered choice by the [Lenders] as to which approach, a relisting versus an application for contempt, was to their (perceived) greatest strategic advantage. However, that decision carried with it the consequence that the [Lenders] had voluntarily undertaken the burden of establishing beyond reasonable doubt that the specified charges would and could be made out on the evidence they led and in accordance with the normal rules of procedure which attend criminal or quasi criminal prosecutions. Having done so, it is of no relevance to plead, by way of mitigation, that [FLV and Mr Violi], acting as they were entitled to do, kept their cards ‘close to their chest’ and relied upon both procedural and substantive flaws in the Plaintiffs’ case by way of defence. None of that would have been relevant had a less oppressive approach been taken back in 2022 when any concern about insurance or lack of disclosure in respect of the dealings with rent receipts could have been raised quickly and cheaply by a re-listing.” (Footnote omitted.)

11. In my reasons of 14 August 2024, I made some observations about the role played by the solicitor then acting for FLV and Mr Violi, Mr Lyne.

12. I invited submissions as to what course, if any, the Court should take in relation to Mr Lyne’s involvement.

13. On behalf of the Lenders, Mr Somerville and Mr Meyerowitz-Katz submitted:

“The Court found at [53] of its 14 August 2023 [sic] reasons that Mr Lyne may have given an undertaking without instructions. If that is correct then Mr Lyne is responsible for charge 1 being brought. In the [Lenders’] submission, the Court should issue a notice to Mr Lyne inviting him to explain why the Court should not make an order pursuant to s 99 of the Civil Procedure Act 2005 [(NSW)] that he pay the [Lenders’] and the [FLV’s and Mr Violi’s] costs of that charge.”

14. I do not think it is appropriate that I take that course.

15. If the Lenders wish to seek a third party costs order against Mr Lyne, they should bring a motion seeking that relief.

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Endnotes

Decision last updated: 19 September 2024