Gunns Finance Pty Ltd (Receivers and Managers Appointed)(in Liquidation) v Sithiravel (No 3)

[2018] NSWSC 1187

Supreme Court

New South Wales

Medium Neutral Citation:	Gunns Finance Pty Ltd (Receivers and Managers Appointed)(in Liquidation) v Sithiravel (No 3) [2018] NSWSC 1187
Hearing dates:	On the papers
Date of orders:	01 August 2018
Decision date:	01 August 2018
Jurisdiction:	Equity
Before:	Robb J
Decision:	See paragraph 13
Catchwords:	Costs – Indemnification of costs – Party is entitled to be indemnified by another for costs he has been ordered to pay as a consequence of a judgment in the proceedings
Legislation Cited:	Civil Procedure Rules 2005 (NSW)
Cases Cited:	Gunns Finance Pty Ltd (Receivers and Managers Appointed) (in Liquidation) v Sithiravel [2016] NSWSC 1543 Gunns Finance Pty Ltd v Sithiravel (No 2) [2017] NSWSC 1775
Category:	Costs
Parties:	Gunns Finance Pty Ltd (plaintiff/first cross defendant) Suthakaran Sithiravel (defendant/cross claimant) Guardian Royal Financial Services Pty Ltd (second cross defendant)
Representation:	Counsel: DC Price (plaintiff) R Perla (defendant/cross claimant)   Solicitors: Turks Legal (plaintiff) Richard Mitry Lawyers (defendant/cross claimant)
File Number(s):	2013/303465

Judgment

1. The principal judgment in this matter was delivered by the Court on 2 November 2016: Gunns Finance Pty Ltd (Receivers and Managers Appointed) (in Liquidation) v Sithiravel [2016] NSWSC 1543.

2. That judgment dealt with the claim by the plaintiff (Gunns Finance) against the defendant, Mr Sithiravel. Gunns Finance succeeded and obtained judgment on its claims in the statement of claim, and an order was made dismissing Mr Sithiravel's cross claim.

3. One consequence was that not only was Gunns Finance entitled to an order for its costs against Mr Sithiravel, but because of the terms of the transaction documents between the parties, it had a contractual right to be indemnified in respect of its costs.

4. For reasons that do not now require elaboration, the Court did not deal in the principal judgment with a cross claim made by Mr Sithiravel against Guardian Royal Financial Services Pty Ltd (Guardian). Put simply, Guardian was a company that had advised Mr Sithiravel in respect of the investments that he made that ultimately led to judgment being given in favour of Gunns Finance against Mr Sithiravel.

5. After certain further steps were taken on behalf of Mr Sithiravel to enable the Court to deal with his cross claim against Guardian, the Court on 15 December 2017 published a second judgment on that cross claim: Gunns Finance Pty Ltd v Sithiravel (No 2) [2017] NSWSC 1775.

6. In the judgment on Mr Sithiravel's cross claim, the Court made an order that judgment be entered in his favour against Guardian for the amount of $107,936.09. That was the amount that Mr Sithiravel had been ordered to pay to Gunns Finance as a result of the principal judgment.

7. The Court also ordered that Guardian pay Mr Sithiravel his costs of the cross claim in respect of the claim against Guardian.

8. The Court has now been informed that Mr Sithiravel has been served with a certificate of determination from a cost assessor in relation to Gunns Finance's costs claim against him, and on 24 May 2018 orders were entered in this Court against Mr Sithiravel in the sum of $132,288.62 in relation to the certificate.

9. That apparently brought to Mr Sithiravel's attention that this Court had not made an order sought by Mr Sithiravel against Guardian that it indemnify Mr Sithiravel in respect of the costs that Mr Sithiravel has been ordered to pay to Gunns Finance.

10. It has been brought to the attention of the Court that in pars 27 to 33 and par 36 of the submissions made on behalf of Mr Sithiravel on 13 June 2017 concerning his cross claim against Guardian, an order was sought that Guardian indemnify Mr Sithiravel in respect of the costs that he had been ordered to pay to Guardian.

11. I am satisfied on the basis of the submissions made that it is proper to order Guardian to indemnify Mr Sithiravel in the manner sought by him. It was Guardian's breach of duty that put Mr Sithiravel in the difficult position in which he found himself, and it was not unreasonable for him to defend the claim made against him by Gunns Finance. Mr Sithiravel acted reasonably, although ultimately he was unsuccessful. Guardian could have avoided the costs being incurred by accepting liability to Mr Sithiravel, and paying out Gunns Finance on his behalf.

12. I am satisfied that the failure to make the additional order sought by Mr Sithiravel was a slip on the Court's part and that it is appropriate now to make the order. This is not an application of the “slip rule” in r 36.17 of the Uniform Civil Procedure Rules 2005 (NSW). I will not be varying an order already made. The Court omitted to fully deal with the application that was before it. The orders made by the Court will not be complete until orders are made dealing with all of the claims that were before the Court.

13. Accordingly, the Court orders that, in addition to the amount payable by order 1 made on 15 December 2017, Guardian Royal Financial Services Pty Ltd pay to Mr Sithiravel the costs that he has been ordered to pay to Gunns Finance Pty Ltd (Receivers and Managers Appointed) (in Liquidation) as a consequence of the judgment delivered by the Court in these proceedings on 2 November 2016.

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Decision last updated: 06 August 2018