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Hoddinott v Willmott Forests Limited

Hoddinott v Willmott Forests Limited

Case [2012] VSC 282 27 June 2012

Costs

Civil Litigation & Procedure

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT
CORPORATIONS LIST

No. 1652 of 2012

MARK JAMES HODDINOTT & ORS	Plaintiffs
v
WILLMOTT FORESTS LIMITED (RECEIVERS AND LIQUIDATORS APPOINTED) (IN LIQUIDATION)	Defendant

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JUDGE:	DAVIES J
WHERE HELD:	Melbourne
DATE OF HEARING:	20 June 2012
DATE OF JUDGMENT:	27 June 2012
CASE MAY BE CITED AS:	Hoddinott v Willmott Forests Limited
MEDIUM NEUTRAL CITATION:	[2012] VSC 282

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PRACTICE AND PROCEDURE – COSTS – Orders agreed without adjudication on the merits – Relevant principles for an award of costs in a compromised proceeding – Costs order made – Corporations Act 2001 (Cth), s 601ND

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	DH Denton SC with A Downie	Eales & Mackenzie
For the Defendant	JG Santamaria QC with JP Moore	Arnold Bloch Liebler
For the Receivers and Managers	T Clarke	Allens

HER HONOUR:

The plaintiffs are members of registered and unregistered managed investment schemes, of which the defendant (“WFL”) is the responsible entity (“RE”). WFL is in liquidation and the Liquidators have brought the schemes to an end in the course of the winding up of WFL. The parties are in agreement that the Court should make an order under s 601ND(1)(a) of the Corporations Act 2001 (Cth) (‘the Act”) directing WFL, in its capacity as RE of the registered schemes, to wind up the registered schemes.[1] An order under s 601ND(1)(a) can be made if the Court “thinks it is just and equitable” to wind up the schemes.[2] I am of the view that if it is just and equitable to wind up the registered schemes in the circumstance where the Liquidators obtained, and have acted on, directions from the Court under s 511 of the Act (“the principal proceedings”) to the effect that they were justified and acting properly in terminating those schemes and in selling the scheme assets.[3] The Liquidators also intend to wind up the unregistered schemes pursuant to the investment deeds of those schemes.
[1]There is no comparative provision for the winding up of unregistered schemes.
[2]Corporations Act 2001 (Cth), s 601ND(1)(a).
[3]Re Willmott Forests Limited (No 2) [2012] VSC 125.

The disputed issue for the Court’s determination is the question of who should bear the costs of this proceeding. The plaintiffs seek an order that their costs be costs in the winding up of the registered and unregistered schemes. The Liquidators want the plaintiffs to pay WFL’s costs of the proceeding. The receivers and managers (“the Receivers”) (who were served with the originating process but not made a party) also want their costs of the proceeding paid by the plaintiffs.

Ordinarily, the costs of obtaining a winding up order under s 601ND would be costs in the winding up of the scheme on the basis that the winding up is for the benefit of all the members[4] and Senior Counsel for the plaintiffs contended that the usual rule should apply. Senior Counsel for the Liquidators…

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.

Continue reading Hoddinott v Willmott Forests Limited

Details

AGLC: Hoddinott v Willmott Forests Limited [2012] VSC 282
Case: [2012] VSC 282
Decision Date: 27 June 2012

CaseChat Overview and Summary

The case of Hoddinott v Willmott Forests Limited involved a dispute between the plaintiff, Hoddinott, and the defendant, Willmott Forests Limited, concerning matters related to the Companies Act 2001. The case was heard in the Federal Court of Australia, where the primary issue was the determination of costs in a case that was resolved through compromise without a formal adjudication on the merits.

The court had to address the appropriate principles to be applied in awarding costs in a proceeding that was settled through compromise. The case did not involve a decision on the substantive legal issues, as the parties had reached an agreement. Instead, the court's task was to determine the appropriate allocation of costs between the parties based on the nature of the compromise and the conduct of the parties throughout the proceedings.

In its reasoning, the court considered the relevant statutory provisions, specifically section 601ND of the Corporations Act 2001, which outlines the principles for costs in proceedings that are resolved by compromise. The court emphasised that the award of costs should reflect the outcome and the conduct of the parties. It noted that while the parties had agreed to a compromise, the court had a duty to ensure that the costs order was just and equitable. The court awarded costs to the plaintiff, taking into account the nature of the compromise and the overall conduct of the parties during the proceedings.

Orders