Golden Star Resources Ltd v Keryn Beatrice Rosel
[2009] QSC 444
•3 June 2009
SUPREME COURT OF QUEENSLAND
CITATION:
Golden Star Resources Ltd & Anor v Keryn Beatrice Rosel [2009] QSC 444
PARTIES:
GOLDEN STAR RESOURCES LTD
(first applicant/first plaintiff)
GOLDEN STAR (BOGOSO/PRESTEA) LTD (FORMERLY KNOWN AS BOGOSO GOLD LTD)
(second applicant/second plaintiff)
v
KERYN BEATRICE ROSEL(respondent/defendant)
FILE NO/S:
BS 8032 of 2007
DIVISION:
Trial Division
PROCEEDING:
Application on the papers
ORIGINATING COURT:
Supreme Court Brisbane
DELIVERED ON:
3 June 2009
DELIVERED AT:
Brisbane
JUDGE:
White J
ORDER:
1. Sub-paragraph 10(d)(iii) of the order of the Court in this proceeding dated 25 February 2009 (Order) be corrected to include the words “including the receivers’ remuneration” at the end of that sub- paragraph pursuant to rule 388 of the Uniform Civil Procedure Rules 1999.
2. Pursuant to r 272 of the Uniform Civil Procedure Rules 1999, that the receivers appointed to the QLD Property (as defined in the amended claim and statement of claim in this proceeding) pursuant to the Order (Receivers) are entitled to receive any rental income payable in relation to that property from the date of the Order, and that such rental income be paid to the Receivers.
3. The defendant pay the plaintiffs’ costs of and incidental to the proceedings, including this application, fixed in the sum of $146,208.61.
CATCHWORDS:
Uniform Civil Procedure Rules, r 687(2)
Beach Petroleum NL v Johnson (1995) 57 FCR 119
Harrison v Schipp (2002) 54 NSWLR 738
Sony Entertainment (Australia) Ltd v Smith (2005) 215 ALR 788; [2005] FCA 228
COUNSEL:
Mr M Brady for the applicants/plaintiffs
No appearance for the respondent/defendant
SOLICITORS:
Blake Dawson for the applicants/plaintiffs
No appearance for the respondent/defendant
On 25 February 2009 I made certain declarations that the defendant, Ms Rosel, engaged in fraudulent misrepresentations and breaches of fiduciary duty owed to the plaintiffs, her former employer and its controlling entity. Ms Rosel’s conduct is discussed fully in the reasons given on 25 February 2009. It involved the preparation of fraudulent invoices in the names of contractors to the first plaintiff and arranging for monies to be paid by the first plaintiff into accounts which were actually conducted by Ms Rosel.
Part of the monies after deposit into those accounts were used by Ms Rosel to purchase property in Queensland and New South Wales. Declarations were made that she held that property on trust in favour of the plaintiffs subject to the interest of the mortgagee.
The orders of the court included that Ms Rosel pay to the plaintiffs the sum of $1,041,940 plus interest of $260,537.30 to the date of judgment, being a total of $1,302,477.30. She was also ordered to pay to the second plaintiff the sum of $491,670 plus interest of $109,987.62 to the date of judgment, being a total of $601,657.62.
The court ordered that the plaintiffs were entitled to trace the sum of $98,146.49 which had been paid to Ms Rosel by reason of her fraudulent misrepresentations and breaches of fiduciary duty into the Queensland property and similarly were entitled to trace the sum of $944,435.17 into the New South Wales property. The court appointed John Richard Park and David John Winterbottom as joint and several receivers of the Queensland and New South Wales properties and made the usual orders relating to the receivers’ powers.
Costs
Ms Rosel was ordered to pay the plaintiffs’ costs of and incidental to the proceedings on the indemnity basis.
As noted in the reasons on 25 February 2009 the plaintiffs were desirous of putting before the court affidavit material supporting the quantum of the costs sought with the intent that the court might be disposed to make a lump sum assessment rather than referring the costs for assessment. By my direction the plaintiffs have applied to have that part of their proceedings dealt with on the papers without oral hearing in order to minimise further the costs. The plaintiffs have taken the opportunity to seek slight amendments to the orders made on 25 February.
Ms Rosel has been served with a sealed order made on 25 February 2009 by sending her a copy by ordinary pre-paid post to her several addresses in the United Arab Emirates. The affidavit of Lucy Chambers, the solicitor for the plaintiffs in Brisbane who has the carriage of this matter sets out in detail the process of service and that the orders were also sent by email to Ms Rosel.
Subsequently Ms Chambers caused a copy of the affidavit of Drew Broadfoot, the lawyer employed by Blake Dawson in Western Australia for the plaintiffs, providing an estimate of the plaintiffs’ recoverable costs on the indemnity basis to Ms Rosel. In a covering letter Ms Chambers sought a response from Ms Rosel as to whether she accepted the application for a lump sum assessment by the court and the quantum. Ms Rosel has responded in a manner which indicates that she is aware of the orders of the court. She did not respond to Ms Chambers request about her attitude to the costs application.
By r 687(2) of the Uniform Civil Procedure Rules instead of ordering that costs be assessed, a court may order a party to pay another party and amount for costs fixed by the court.[1] There is no limitation on the power conferred to award lump sum costs apart from the requirement that it be exercised judicially. In Beach Petroleum NL v Johnson[2] von Doussa J observed[3] that the purpose of such a rule is to avoid the expense, delay and aggravation arising out of taxation.
[1]Practice Direction 3 of 2007 – Fixed Costs Orders.
[2](1995) 57 FCR 119.
[3]At 120.
There are a number of reasons why it is appropriate to make a fixed sum costs order in this case. Ms Rosel resides abroad and, since she has not participated in the principal proceedings, it is most unlikely that she would participate in any assessment of the plaintiffs’ costs. The plaintiffs would therefore be put to the great financial burden of conducting an assessment for which they would be unlikely to recover anything. As the principal reasons indicate, the total amount of misappropriated funds invested into the New South Wales and Queensland properties in 2006 was well in excess of $1,000,000. It is unlikely that the plaintiffs will recover any sum approaching the total sum misappropriated as the mortgagees have priority followed by the costs of sale and the receivers’ costs. There is no other source of funds in Australia to meet any costs order.
The plaintiffs seek professional costs and disbursements in the sum of $146,208.61. In Sony Entertainment (Australia) Ltd v Smith[4] Jacobson J said:[5]
“There are a number of authorities on the question of assessment of costs, and the effect of them is that the exercise of the rule contemplates a much broader brush than would be applied on taxation. The gross sum can only be fixed broadly having regard to the information before the court: Beach Petroleum at FCR 124; ALR 166; Harrison at [22] and Hadid at [27].”
His Honour referred to observations by Giles JA in Harrison v Schipp[6] that of its nature specification of a gross sum for costs is not the result of a process of taxation or assessment of costs. The approach must be to estimate costs on a logical, fair and reasonable basis.
[4][2005] FCA 228; 215 ALR 788.
[5]At [197].
[6](2002) 54 NSWLR 738.
Mr Broadfoot’s affidavit deals with the work undertaken and accounts rendered to the plaintiffs. His affidavit demonstrates that so far as the pre-proceedings costs are concerned considerable restraint has been exercised in the claim for costs. He refers to the drafting and settling the claim and statement of claim and the amended claim and statement of claim; procuring the service of the originating process on the defendant in Dubai including professional fees liaising with lawyers in Dubai in order to verify the correct method of service in Dubai, an affidavit of service taken by an appropriate person in Dubai together with disbursements for paying the professional fees of lawyers in Dubai.
Costs were also incurred drafting and settling the application for default judgment and taking detailed evidence from Mr Palmer in support of the application for summary judgment. Having heard the application I am satisfied that the meticulous work carried out by the solicitors for the plaintiffs was appropriate and necessary.
Prior to commencing proceedings it was necessary to obtain pre-action discovery in the Supreme Court of Western Australia in order to identify Ms Rosel’s bank accounts and link them to the orders for payment of the false contractors’ invoices against the plaintiffs’ funds. Disbursements associated with obtaining those documents from Westpac were principally professional fees paid to the solicitors for Westpac in connection with the production of those documents. The costs of
pre-action discovery have not otherwise been claimed.
There was also a need for property searches to determine Ms Rosel’s ownership of the Queensland and New South Wales properties and drafting and lodging caveats against those properties. Further work was undertaken by the solicitors for the plaintiffs while investigating Ms Rosel’s conduct for which costs are not thought to be recoverable and have not been included in the estimates.
Mr Broadfoot has caused a number of reports to be created from the solicitors’ practice management information system which show the total professional costs and disbursements incurred by the plaintiffs. Mr Broadfoot has reviewed the narrations and added together the professional costs and disbursements attributable to the various activities to which reference has been made.
The plaintiffs have incurred professional costs in the amount of $123,107.15 and disbursements in the sum of $23,101.46.
I am satisfied that there should be a fixed costs order in the total amount of $146,208.61.
Clarification of the order
The plaintiffs seek clarification or slight amendment of the order made on 25 February 2009 that the receivers’ remuneration should be paid from the proceeds of the sale of the properties prior to the discharge of the plaintiffs’ interests in them. The amendment clarifies that position.
And to remove any doubt the order will be amended to include an entitlement in the receivers to receive the rental income from the Queensland property.
The orders are:
1. Sub-paragraph 10(d)(iii) of the order of the Court in this proceeding dated 25 February 2009 (Order) be corrected to include the words “including the receivers’ remuneration” at the end of that sub-paragraph pursuant to rule 388 of the Uniform Civil Procedure Rules 1999.
2. Pursuant to r 272 of the Uniform Civil Procedure Rules 1999, that the receivers appointed to the QLD Property (as defined in the amended claim and statement of claim in this proceeding) pursuant to the Order (Receivers) are entitled to receive any rental income payable in relation to that property from the date of the Order, and that such rental income be paid to the Receivers.
3. The defendant pay the plaintiffs’ costs of and incidental to the proceedings, including this application, fixed in the sum of $146,208.61.
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