In the matter of Hawkesbury House Pty Ltd (in liquidation)

[2020] NSWSC 618

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of Hawkesbury House Pty Ltd (in liquidation) [2020] NSWSC 618
Hearing dates:	Written submissions 14 April 2020
Decision date:	22 May 2020
Jurisdiction:	Equity - Corporations List
Before:	Black J
Decision:	No order as to costs for Mr Fahey’s 12 February 2020 Interlocutory Process.
Catchwords:	COSTS – Costs order in interlocutory proceedings – where there has been no hearing on the merits – whether Court will make an order for costs.
Legislation Cited:	- Uniform Civil Procedure Rules 2005 (NSW), r 42.7(2)
Cases Cited:	- Cohen v Double Bay Bowling Club (No 2) [2019] NSWSC 1732 - G&S Engineering Services Pty Ltd v MACH Energy Australia Pty Ltd (No 2) [2019] NSWSC 463 - Re Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622
Category:	Costs
Parties:	Interlocutory Process filed 4.12.19 Bradley Tonks (Applicant)   Interlocutory Process filed 12.2.20 Brendan Peter Fahey (Applicant)
Representation:	Counsel: L Chapman (Liquidator) G Cussen (Solicitor) (Fahey Parties)   Solicitors: Marsdens Law Group (Liquidator) Cussen Advisory (Fahey Parties)
File Number(s):	2019/316608

Judgment

1. By my ex tempore judgment delivered on 6 April 2020, I determined a dispute as to the costs of contempt proceedings brought by the liquidator (“Liquidator”) of Hawkesbury House Pty Ltd (in liq) against Mr Fahey and Dr Fahey. I deferred dealing with the costs of an Interlocutory Process filed by Mr Fahey and the costs of the costs application in respect of the contempt proceedings, in the expectation that the parties would be able to resolve those matters with the benefit of my judgment. The parties agreed the second but not the first of those matters.

2. As to the first of those matters, the Liquidator submits that Mr Fahey and Dr Fahey should pay the costs of an Interlocutory Process filed by Mr Fahey on 12 February 2020, which he describes as the “Costs Inquiry Application” although it also dealt with other matters. The Liquidator also seeks a direction that those costs be payable forthwith, against the contingency that those costs otherwise could not be paid until the conclusion of the proceedings under r 42.7(2) of the Uniform Civil Procedure Rules 2005 (NSW) unless the Court ordered otherwise: G&S Engineering Services Pty Ltd v MACH Energy Australia Pty Ltd (No 2) [2019] NSWSC 463 at [7]; Cohen v Double Bay Bowling Club (No 2) [2019] NSWSC 1732 at [36]-[39]. The Liquidator relies on brief observations in an email sent to my Associate in lieu of submissions in support of that contention. Those brief observations identify the costs orders that the Liquidator seeks but do not advance any substantive submission as to why they should be made.

3. In their submissions as to costs, for the hearing before me on 6 April 2020, Mr Fahey and Dr Fahey submitted that Mr Fahey’s application was brought because the Liquidator did not agree to vary an order made by the Court on 10 February 2020, by consent, which Dr Fahey and Mr Fahey say was made in error. Mr Cussen there recognised that the Liquidator may assert that there was no event and should be no order as to costs, or that that application was dismissed so costs should follow the event in the Liquidator’s favour. Mr Cussen submitted that there were sufficient grounds to bring that application and for it to succeed in the circumstances. That submission, in effect, sought to have the Court determine the merits of the application, after it had not proceeded where orders were made by consent of the parties.

4. In this application, Mr Cussen, who appeared for Mr Fahey and Dr Fahey, also now relies on an email sent to my Associate in lieu of submissions, which repeats aspects of their earlier submission. Mr Cussen now submits that there should be no order as to the costs of Mr Fahey’s Interlocutory Process and that Mr Fahey and the Liquidator should each pay his own costs of that application. Mr Cussen submits that the determination of the costs of that application does not follow from the determination of the costs of the contempt application. He also submits that the primary relief sought in prayer 1 of Mr Fahey’s Interlocutory Process was to set aside or vary the order made on 10 February 2020 that affidavits from Mr Fahey and Dr Fahey be served, where that order had been made by consent due to an error by Mr Cussen; the evidence of Mr Fahey and Dr Fahey had already been prepared; and the liquidator did not agree to the variation or setting aside of that order. Mr Cussen also points out that only Mr Fahey, and not Dr Fahey, was the moving party on that Interlocutory Process and submits that an order for costs of that Interlocutory Process could not or should not be made against Dr Fahey.

5. The Court has not previously determined the merits of the Interlocutory Process filed by Mr Fahey on 12 February 2020, which was resolved by consent between the parties. The parties have not led evidence or made any substantive submissions that would allow a determination of those merits, and, in any event, it seems to me that the Court would not determine that matter on its merits in order to determine the question of costs: Re Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622.

6. There was no dispute as to the second of the matters in issue, the costs of the costs application in respect of the contempt proceedings, Mr Fahey and Dr Fahey accept that they should pay the costs of the hearing of that application on 6 April 2020 on an ordinary basis and that those costs should be assessed and payable forthwith.

7. For these reasons, I make orders substantially in the form proposed by Mr Fahey and Dr Fahey, as follows:

THE COURT NOTES THAT:

1.   On 24 February 2020, the Court dismissed, by consent:

(a)   the Liquidator’s Interlocutory Process filed on 18 December 2019; and

(b)   the Interlocutory Process filed by Mr Fahey on 12 February 2020.

THE COURT ORDERS THAT

2.   As to the Liquidator’s Interlocutory Process filed on 18 December 2019:

(a)   the application by Dr Fahey and Mr Fahey (Respondents) for costs of that application is dismissed;

(b)   the Respondents pay the Liquidator’s costs of the application on an ordinary basis, including the costs of the hearing before Black J on 6 April 2020 on an ordinary basis;

3.   As to the Interlocutory Process filed by Mr Fahey on 12 February 2020:

(a)   The application by each of the Liquidator and Mr Fahey for costs of that application are dismissed;

(b)   there be no order as to costs, with the intention that each party pay its own costs.

4.   Leave be granted to the Liquidator to have the costs ordered in paragraph 2(b) to be assessed forthwith and those costs be paid forthwith.

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Decision last updated: 26 May 2020