George Aubrey Lopez (in His Capacity as Liquidator of Swan Concrete Products Pty Ltd (in Liq)) v Harvey
[2015] WASC 292 (S)
•27 OCTOBER 2015
GEORGE AUBREY LOPEZ (IN HIS CAPACITY AS LIQUIDATOR OF SWAN CONCRETE PRODUCTS PTY LTD (IN LIQ)) -v- HARVEY [2015] WASC 292 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 292 (S) | |
| Case No: | CIV:2410/2014 | ON THE PAPERS | |
| Coram: | CHANEY J | 27/10/15 | |
| 5 | Judgment Part: | 1 of 1 | |
| Result: | First defendant ordered to pay 50% of plaintiff's costs | ||
| B | |||
| PDF Version |
| Parties: | GEORGE AUBREY LOPEZ (IN HIS CAPACITY AS LIQUIDATOR OF SWAN CONCRETE PRODUCTS PTY LTD (IN LIQ)) BRADLEY EDWARD HARVEY COMMONWEALTH BANK OF AUSTRALIA |
Catchwords: | Costs Summary judgment application partially successful Turns on own facts |
Legislation: | Corporations Act 2001 (Cth), s 588FA, s 588FDA, s 588FE |
Case References: | George Aubrey Lopez (In his Capacity as Liquidator of Swan Concrete Products Pty Ltd (In Liq)) v Harvey [2015] WASC 292 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
BRADLEY EDWARD HARVEY
First Defendant
COMMONWEALTH BANK OF AUSTRALIA
Second Defendant
Catchwords:
Costs - Summary judgment application partially successful - Turns on own facts
Legislation:
Corporations Act 2001 (Cth), s 588FA, s 588FDA, s 588FE
Result:
First defendant ordered to pay 50% of plaintiff's costs
Category: B
Representation:
Counsel:
Plaintiff : No appearance
First Defendant : No appearance
Second Defendant : No appearance
Solicitors:
Plaintiff : Arns & Associates
First Defendant : Kitto & Kitto
Second Defendant : No appearance
Case(s) referred to in judgment(s):
George Aubrey Lopez (In his Capacity as Liquidator of Swan Concrete Products Pty Ltd (In Liq)) v Harvey [2015] WASC 292
1 CHANEY J: On 14 August 2015 I delivered reasons for decision on the plaintiff's application for summary judgment against the first defendant (see George Aubrey Lopez (In his Capacity as Liquidator of Swan Concrete Products Pty Ltd (In Liq))v Harvey [2015] WASC 292). The plaintiff sought summary judgment in the sum of $141,007.15 together with interest. Judgment was granted in the sum of $27,797.40, and the first defendant was given leave to defend as to the balance of the claim. The plaintiff now seeks his costs of the summary judgment application. The first defendant resists that application on the basis that the plaintiff was only successful in respect to approximately one-fifth of his claim, and on the basis that the defendant incurred costs in relation to an issue which was raised in the pleadings, but not ultimately pursued in the summary judgment application. The defendant's submission is that, for pragmatic reasons, the appropriate order is simply that the costs of the summary judgment application should be reserved to trial.
Background to the summary judgment application
2 The writ was issued on 9 October 2014. The original claim was for $93,725.03 on the basis that that amount of money had been received by the first defendant for the plaintiff's use. At the same time as the issue of the writ, the plaintiff sought a freezing order and ancillary orders. Those orders were granted on 10 October 2014, the ancillary order requiring the second defendant to provide a statement of a bank account for the purposes of enabling the plaintiff to better understand transactions relevant to, and more accurately formulate, his claim against the first defendant.
3 On 1 December 2014, an amended writ of summons was filed. The amendment increased the amount of the claim to $141,007.15, and added a further cause of action being that certain transactions were unreasonable director related transactions pursuant to s 588FDA of the Corporations Act 2001 (Cth) and were voidable pursuant to s 588FE of that Act (unreasonable director related transactions claim). A statement of claim was also filed on 1 December 2014.
4 On 14 January 2015 the plaintiff filed his motion for summary judgment together with supporting affidavits and a minute of proposed directions in relation to the summary judgment application. On 15 January 2015 I made directions for the filing of affidavits and submissions. The motion for judgment did not identify, or distinguish between, the causes of action in respect of which judgment was sought.
5 In accordance with the directions made, the first defendant filed affidavits in defence of the summary judgment application. Those affidavits contained considerable material going to the unreasonable director related transactions claim.
6 On 26 February 2015, the plaintiff filed an amended statement of claim. The effect of the amendment was to introduce a further alternative cause of action, namely that the transactions which formed the basis of the existing causes of action constituted unfair preference payments within the meaning of s 588FA of the Corporations Act and were voidable on that basis pursuant to s 588FE (unfair preferences claim). A further affidavit of the plaintiff was filed in support of the application for summary judgment, essentially directed to the unfair preferences claim.
7 On 5 March 2015, I made further directions programming the matter to its hearing on 12 June 2015. At the hearing at which those directions were made, counsel for the plaintiff indicated that summary judgment was to be sought in relation to both of the causes of action under the Corporations Act.
8 On 19 March 2015, the plaintiff filed a supplementary outline of submissions in which it was made clear that, for the purposes of the summary judgment application, the plaintiff was relying only on the unfair preferences claim.
9 On 22 April 2015, the first defendant filed an outline of submissions. Those submissions noted the plaintiff's supplementary submissions of 19 March 2015 limiting the basis of the claim for summary judgment. However, 'out of abundance of caution' the first defendant's submissions proceeded to deal with both of the causes of action under the Corporations Act raised by the plaintiff in the statement of claim. The first five pages of the first defendant's submissions dealt with the unreasonable director related transactions claim. One and a half pages were devoted to the unfair preferences claim, and the final four pages dealt primarily with the question of costs on the summary judgment application.
Costs thrown away
10 The first defendant contends that the plaintiff should be held liable to account for his costs thrown away as a result of the indication at the directions hearing on 5 March 2015 that both Corporations Act causes of actions would be pursued in the summary judgment application. I do not accept that submission. The first defendant's submissions were filed over a month after the plaintiff had unequivocally identified, in its submissions of 19 March 2015, that the summary judgment application was to proceed purely on the basis of the unfair preferences claim. To the extent that costs were incurred in compiling the written submissions, that work was unnecessary for the purpose of the summary judgment application. To the extent that the work consisted of research and advice to the client in relation to the unreasonable director related transactions, those costs are not thrown away. That is because the cause of action remains live to be dealt with if and when the matter ultimately goes to trial.
Plaintiff's cost of summary judgment application
11 As noted, the plaintiff sought summary judgment for the full amount of $141,007.15. It succeeded only in relation to approximately 20% of that claim. Much of the argument at the hearing centred on whether the first defendant had an arguable case for the application of s 588FA(3) of the Corporations Act. The first defendant was successful in relation to that issue, at least for the purpose of resisting summary judgment. Success on that issue resulted in leave to defend being granted in relation to the majority of the claim, at least in terms of money.
12 Having regard to the only partial success by the plaintiff in relation to the summary judgment application, I consider that the appropriate order is that the first defendant should pay 50% of the plaintiff's costs of the summary judgment application. There will be an order accordingly.
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