In the matter of Bias Boating Pty Limited (receivers and managers appointed) (in liquidation)

[2019] NSWSC 107

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of Bias Boating Pty Limited (receivers and managers appointed) (in liquidation) [2019] NSWSC 107
Hearing dates:	21 November 2018 (last submissions as to costs of costs application 13 February 2019)
Decision date:	18 February 2019
Jurisdiction:	Equity - Corporations List
Before:	Black J
Decision:	Order that the First, Second, Third, Eleventh, Thirteenth, Sixteenth and Seventeenth Defendants pay the Plaintiffs’ costs of and incidental to the determination of costs of the separate question. Order that the First and Thirteenth Defendants pay the Plaintiffs’ costs of and incidental to the Plaintiffs’ further submissions dated 12 February 2019, as agreed or as assessed.
Catchwords:	COSTS – determination of costs incidental to costs submissions
Cases Cited:	- In the matter of Bias Boating Pty Limited (recs and mgrs apptd) (in liq) [2018] NSWSC 1977 - In the matter of Bias Boating Pty Limited (recs and mgrs apptd) (in liq) [2019] NSWSC 47
Category:	Costs
Parties:	Ian James Purchas in his capacity as liquidator of Bias Boating Pty Limited (receivers and managers appointed) (in liquidation) (First Plaintiff) Bias Boating Pty Limited (receivers and managers appointed) (in liquidation) (Second Plaintiff) Navico Australia Pty Limited (First Defendant) Supercharge Batteries Pty Ltd (Second Defendant) R W Basham Pty Limited t/as RWB Marine (Third Defendant) Commissioner of State Revenue (Qld) (Eleventh Defendant) Lalizas Marine Australia Pty Ltd t/as Oceansouth Pty Ltd (Thirteenth Defendant) Littler Investment Company Pty Ltd t/as Boating Lifestyle Adventure (Sixteenth Defendant) RFD (Australia) Pty Ltd (Seventeenth Defendant)
Representation:	Determined on the papers
File Number(s):	2017/255627

Judgment

1. By my judgment delivered on 18 December 2018 ([2018] NSWSC 1977), I determined a separate question as to whether Bias Boating Pty Ltd (recs and mgrs apptd) (in liq) (“Company”) was continuously insolvent between 25 February 2014 and 25 August 2014, and held the insolvency of the Company in that period was established. By my further judgment delivered on 6 February 2019 ([2019] NSWSC 47) (“Costs Judgment”), I ordered that the First, Second, Third, Eleventh, Thirteenth, Sixteenth and Seventeenth Defendants should pay the costs of and incidental to the hearing of the separate question. I also ordered that the parties bring in agreed short minutes of order as to the costs of that application or, if there was no agreement, their respective short minutes of order and short submissions as to the differences between them.

2. The Plaintiffs and each of the Second, Third, Eleventh, Sixteenth and Seventeenth Defendants have agreed orders to give effect to the Costs Judgment, which provide that each of the First, Second, Third, Eleventh, Thirteenth and Sixteenth and Seventeenth Defendants pay the Plaintiffs’ costs of the application for costs of the separate question regarding the solvency of the Second Plaintiff, as agreed or as assessed. The First and Thirteenth Defendants resist that order so far as it provides for costs against them. The Plaintiffs respond that:

“As the successful party on the Application, the plaintiffs have a reasonable expectation that they will be awarded the costs of the Application, and there is no reason to depart from the general rule that costs should follow the event (the plaintiffs rely on the authorities cited in the Costs Judgment at [5]).”

3. There is no doubt of the Plaintiffs’ success in the costs application, including as against the First and Thirteenth Defendants. In paragraph 12 of the Costs Judgment I observed that:

“The First and Thirteenth Defendants submit that, on 16 November 2018, they notified the Plaintiffs that they “did not oppose and implicitly conceded” the insolvency of the Company. That submission is not correct, since the email on which the First and Thirteenth Defendants rely did not admit insolvency or accept that it need not be proved, and expressly reserved the question whether the First and Thirteenth Defendants would have consented to orders disposing of the separate question, if other parties did so. That position was calculated to preserve any (remote) prospect that insolvency might not be established, if other Defendants contested it. It was therefore necessary for the Plaintiffs to establish insolvency, as against the First and Thirteenth Defendants. That supports a conclusion that the First and Thirteenth Defendants should pay the costs of the Plaintiffs having done so. The First and Thirteenth Defendants go further to submit that their solicitor appeared at the hearing and indicated to the Court that they “did not oppose the question of insolvency” of the Company and “admitted to the Plaintiffs’ position regarding the insolvency” of the Company. Their submission is also incorrect. There was, to the contrary, no such admission at the hearing before me and the First and Thirteenth Defendants did not then accept that the separate question could be resolved in favour of the Plaintiffs as against them.” (emphasis added)

4. The orders that I made (Costs Judgment [31]) in turn required, inter alia, the First and Thirteenth Defendants to pay the costs of and incidental to the hearing of the separate question. Specifically, I ordered that:

“1   The separate question of whether the Second Plaintiff was continuously insolvent between 25 February 2014 and 25 August 2014 be answered in the affirmative.

2   The First, Second, Third, Eleventh, Thirteenth, Sixteenth and Seventeenth Defendants pay the costs of and incidental to the hearing of the separate question in order 1, as agreed or as assessed.” (emphasis added)

5. However, the position now taken by the First and Thirteen Defendants has exposed an inconsistent usage of the defined term “Remaining Defendants” in other parts of the Costs Judgment. That defined term did not, in terms, extend to the First and Thirteenth Defendants. However, on occasion I used that phrase in a wider manner to refer to those Defendants who remained in the proceedings, for example, in rejecting the submission of several Defendants (including the First and Thirteenth Defendants) that Defendants other than themselves were responsible for the costs incurred in the hearing of the separate question. I also used that phrase in that wider manner in paragraph 30 of the Costs Judgment where I observed that:

“In these circumstances, an order for costs of the separate hearing as against each of the Remaining Defendants is amply justified. My preliminary view is that each of the Remaining Defendants should be ordered to pay the costs of this costs application.”

6. On one view, the fact that these observations extended to the First and Thirteenth Defendants, despite the use of the defined term, should have been apparent from the observations in the judgment that explained why a costs order against them was justified and from the fact that I made an order for the costs of the separate hearing against them. There would be no rational basis for the First and Thirteenth Defendants to be treated differently from other Defendants who had unsuccessfully opposed an order for costs in respect of the separate question. However, the First and Thirteenth Defendants now seek to take advantage of that inconsistency of usage to submit that an order should be made, against the “Remaining Defendants” as defined, and not including them.

7. That submission cannot succeed. The Plaintiffs sought the costs of the separate question against several Defendants, including the First and Thirteenth Defendants, who resisted that order. The Plaintiffs were successful and the several Defendants, including the First and Thirteenth Defendants were unsuccessful in opposing that application, and costs should follow the event in that application.

8. The position adopted by the First and Thirteenth Defendants in this further costs application was without merit, where they had acknowledged the risk that a costs order might be made against them when they appeared at, and then withdrew from, the separate hearing; they had then resisted a costs order against them and their submissions in respect of that costs order had failed; and a costs order was made against them over their opposition. They should also pay the costs of and incidental to the Plaintiffs’ further submissions dated 12 February 2019, as agreed or as assessed.

9. I make the following orders:

1   The First, Second, Third, Eleventh, Thirteenth, Sixteenth and Seventeenth Defendants pay the Plaintiffs’ costs of the application for costs of the separate question regarding the solvency of the Second Plaintiff, as agreed or as assessed.

2   The First and Thirteenth Defendants pay the Plaintiffs’ costs of and incidental to the Plaintiffs’ further submissions dated 12 February 2019, as agreed or as assessed.

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Decision last updated: 27 February 2019