Hooke v Bux Global Ltd (No 8) - [2019] FCA 671

FEDERAL COURT OF AUSTRALIA
Hooke v Bux Global Limited (No 8) [2019] FCA 671

File number: WAD 644 of 2017

Judge: COLVIN J

Date of judgment: 16 May 2019

Catchwords: COSTS - application for indemnity costs on a lump-sum basis for winding up proceedings - application that directors be jointly and severally liable for costs - s 466 of the Corporations Act 2001 (Cth) considered - consideration of the priority afforded under s 556(1)(b) of the Corporations Act - where winding up proceedings were defended in the personal interests of the directors - application allowed - indemnity costs on lump-sum basis awarded

Legislation:
Corporations Act 2001 (Cth) ss 461, 466, 556

Federal Court Rules 2011 (Cth) r 40.02(b)

Cases cited:
China v Smith [No 4] [2014] WASC 140

Colgate-Palmolive Company v Cussons Pty Limited [1993] FCA 801; (1993) 46 FCR 225

Fewin Pty Ltd v Burke (No 3) [2017] FCA 693

Hooke v Bux Global Limited (No 6) [2018] FCA 1545

Hooke v Bux Global Ltd (No 4) [2018] FCA 1210

Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178

Mansfield v Thousand Angeles Island Pty Ltd, in the matter of Thousand Angeles Island Pty Ltd [2019] FCA 376

Re bCode Pty Ltd and bCode Middle East Africa Holdings Ltd [2012] NSWSC 1530

Sandalwood Properties Ltd (Subject to a Deed of Company Arrangement) v Huntley Management Ltd (No 2) [2019] FCA 647

Taylor v Pace Developments Ltd [1991] BCC 406

Vanguard 2017 Pty Limited, in the matter of Modena Properties Pty Limited v Modena Properties Pty Limited (No 2) [2018] FCA 1461

Xat Ky v Australvic Property Management Pty Ltd (No 2) [2007] FCA 1785

Yates v Boland [2000] FCA 1895

Date of hearing: 16 April 2019

Registry: Western Australia

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: Corporations and Corporate Insolvency

Category: Catchwords

Number of paragraphs: 57

Counsel for the Plaintiffs: Mr S Penrose with Ms C Spencer

Solicitor for the Plaintiffs: Tottle Partners

Counsel for the Defendant: The Defendant did not appear

Counsel for the Interested Persons: Mr P Lafferty

Solicitor for the Interested Persons: Armeli & Molony Lawyers

ORDERS

WAD 644 of 2017

BETWEEN:
PETER JAMES HOOKE & CLAIRE ELIZABETH HOOKE

First Plaintiff

PETER JAMES HOOKE & BRICE JAMES HOOKE AS TRUSTEES FOR THE HOOKE SUPERANNUATION FUND

Second Plaintiff

JOHN CORRAN CRAWFORD

Third Plaintiff

AND:
BUX GLOBAL LIMITED (ACN 613 313 616)

Defendant

JUDGE:

COLVIN J

DATE OF ORDER:

16 MAY 2019

THE COURT ORDERS THAT:
1.Andrew Joseph Webber, Raymond James Webber and Christopher Mark Webber pay the plaintiffs' costs of these proceedings on an indemnity basis.
2.Liability under these orders be joint and several.
3.The costs payable under these orders be assessed in the sum of $535,016 (inclusive of GST).

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
COLVIN J:

On 11 October 2018, I made orders winding up Bux Global Limited on the just and…

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.

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Details

Case: [2019] FCA 671
Decision Date: 16 May 2019

CaseChat Overview and Summary

The case of Hooke v Bux Global Ltd (No 8) involved the plaintiffs seeking indemnity costs on a lump-sum basis following winding up proceedings. The defendants were Bux Global Ltd and its directors, Andrew Joseph Webber, Raymond James Webber, and Christopher Mark Webber. The plaintiffs sought an order that the directors be jointly and severally liable for the costs, in accordance with section 466 of the Corporations Act 2001 (Cth). The proceedings were defended in the personal interests of the directors, which was a relevant factor under section 556(1)(b) of the Corporations Act.

The court was required to determine whether the defendants should be held jointly and severally liable for the costs and if the costs should be assessed on a lump-sum basis. The court considered the circumstances in which the winding up proceedings were defended and the statutory provisions that might apply. The court found that the defendants should be held jointly and severally liable for the costs and that the lump-sum basis was appropriate. The court also noted that the costs claimed by the plaintiffs did not include an additional amount for the costs of the present application, and so it made no other adjustment to the amount claimed.

The court concluded that there should be an order for the costs of the winding up proceedings to be paid on an indemnity basis by each of the Webbers jointly and severally. The court further ordered that the costs payable under these orders be assessed in the sum of $535,016, inclusive of GST. This decision was based on the statutory provisions and the specific circumstances of the case, including the manner in which the proceedings were defended. The court's reasoning was clear and provided a detailed explanation of the factors that led to the final orders.

Orders

Orders of the court

1. Andrew Joseph Webber, Raymond James Webber and Christopher Mark Webber pay the plaintiffs' costs of these proceedings on an indemnity basis.

2. Liability under these orders be joint and several.

3. The costs payable under these orders be assessed in the sum of $535,016 (inclusive of GST).

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

I note that the costs claimed by the plaintiffs do not include an additional amount for the costs of the present application. Taking that amount into account as a form of modest discount that applies to the overall costs to be paid, I would make no other adjustment to the amount claimed.Conclusion For the reasons I have given, there should be an order for the costs of the winding up proceedings to be paid on an indemnity basis by each of the Webbers jointly and severally. There should be a further order assessing those costs on a lump‑sum basis in the amount of $535,016.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number:	WAD 644 of 2017
Judge:	COLVIN J
Date of judgment:	16 May 2019
Catchwords:	COSTS - application for indemnity costs on a lump-sum basis for winding up proceedings - application that directors be jointly and severally liable for costs - s 466 of the Corporations Act 2001 (Cth) considered - consideration of the priority afforded under s 556(1)(b) of the Corporations Act - where winding up proceedings were defended in the personal interests of the directors - application allowed - indemnity costs on lump-sum basis awarded
Legislation:	Corporations Act 2001 (Cth) ss 461, 466, 556 Federal Court Rules 2011 (Cth) r 40.02(b)
Cases cited:	China v Smith [No 4] [2014] WASC 140 Colgate-Palmolive Company v Cussons Pty Limited [1993] FCA 801; (1993) 46 FCR 225 Fewin Pty Ltd v Burke (No 3) [2017] FCA 693 Hooke v Bux Global Limited (No 6) [2018] FCA 1545 Hooke v Bux Global Ltd (No 4) [2018] FCA 1210 Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178 Mansfield v Thousand Angeles Island Pty Ltd, in the matter of Thousand Angeles Island Pty Ltd [2019] FCA 376 Re bCode Pty Ltd and bCode Middle East Africa Holdings Ltd [2012] NSWSC 1530 Sandalwood Properties Ltd (Subject to a Deed of Company Arrangement) v Huntley Management Ltd (No 2) [2019] FCA 647 Taylor v Pace Developments Ltd [1991] BCC 406 Vanguard 2017 Pty Limited, in the matter of Modena Properties Pty Limited v Modena Properties Pty Limited (No 2) [2018] FCA 1461 Xat Ky v Australvic Property Management Pty Ltd (No 2) [2007] FCA 1785 Yates v Boland [2000] FCA 1895
Date of hearing:	16 April 2019
Registry:	Western Australia
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Category:	Catchwords
Number of paragraphs:	57
Counsel for the Plaintiffs:	Mr S Penrose with Ms C Spencer
Solicitor for the Plaintiffs:	Tottle Partners
Counsel for the Defendant:	The Defendant did not appear
Counsel for the Interested Persons:	Mr P Lafferty
Solicitor for the Interested Persons:	Armeli & Molony Lawyers