In the matter of Leone Holdings Pty Ltd, JW Kirkwood Pty Ltd and J W Kirkwood Nominees Pty Ltd

[2024] NSWSC 414

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Leone Holdings Pty Ltd, JW Kirkwood Pty Ltd and J W Kirkwood Nominees Pty Ltd [2024] NSWSC 414

Hearing dates:

On the papers, last submission 8 April 2024

Date of orders:

18 April 2024

Decision date:

18 April 2024

Jurisdiction:

Equity - Corporations List

Before:

Black J

Decision:

The Plaintiff pay the costs thrown away by the amendments permitted by Order 6 made on 25 March 2024

Catchwords:

COSTS – Order for costs thrown away by amendments.

Cases Cited:

- Alphena Pty Ltd (in liq) v PS Securities Pty Ltd atf Joseph Family Trust [2012] NSWSC 304

- Mudgee Dolomite & Lime Pty Ltd v Murdoch [2019] NSWSC 192

Category:

Costs

Parties:

Maureen Anne Leone (Plaintiff)
Leone Holdings Pty Ltd (Second Defendant)
J W Kirkwood Pty Ltd (Third Defendant)
J W Kirkwood Nominees Pty Ltd as Trustee for the Leone Unit Trust (Fourth Defendant)

Representation:

Counsel:
A Harding, M Youssef (Plaintiff)
J Simpkins (Second-Fourth Defendants)

Solicitors:
Blackwell Short (Plaintiff)
Frank Law + Advisory (Second-Fourth Defendants)

File Number(s):

2022/284627

Judgment

1. On 25 March 2024, I made orders, in respect of oppression proceedings, granting leave to the Plaintiff to file and serve a Second Further Amended Originating Process and an Amended Statement of Claim (“ASOC”) in a form served on the Defendants on 15 March 2024 and, at the parties’ request, reserved the question of the costs of the amendment to be determined on the papers. The Plaintiff, Ms Leone, now submits that the appropriate order is that she pay the Defendants’ costs thrown away by reason of the amendment up to and including 8 December 2022. The Defendants seek the usual order that the Plaintiff pay costs thrown away by the amendment, without a date limitation.

2. Mr Harding, with whom Mr Youssef appears for Ms Leone, submits that the relevant amendment concerned paragraph 71 of the ASOC and a schedule to the ASOC which identifies transactions which are challenged in the proceedings. Mr Harding points out that the amendment reduced the scope of the transactions challenged in the proceedings from 115 transactions involving twelve recipients to 26 transactions involving five recipients. He submits that, although the Defendants’ Defence had identified several categories of transaction that they contended were proper transactions, the Defendants had not provided further particulars requested by Ms Leone indicating which of the 115 challenged transactions was said to be justified on which basis and that the Defendants first addressed that matter in their affidavit evidence. Mr Harding contends that the Defendants should have provided the requested particulars to allow the identification of the real issues in dispute before incurring the costs of leading evidence as to the relevant transactions. On that basis, he contends that any costs thrown away after 8 December 2022 were a consequence of the Defendants’ conduct.

3. Mr Simpkins, who appears for the Second-Fourth Defendants, responds that the usual order should be made that Ms Leone pay the Defendants’ costs thrown away by the amendments, without limitation as to date. He refers to my observation in Alphena Pty Ltd (in liq) v PS Securities Pty Ltd atf Joseph Family Trust [2012] NSWSC 304 at [12] that:

“the grant of an amendment is an indulgence which normally comes at the price that, even if a party is not ordered to pay costs by reason of any fault on its part, it may be ordered to pay costs thrown away by reason of an amendment to compensate the other party for the costs to which it will be put by reason of the amendment.”

4. Mr Simpkins also refers to my observation in Mudgee Dolomite & Lime Pty Ltd v Murdoch [2019] NSWSC 192 at [4] that the usual order on a grant of leave to amend is that the amending party pay the other party’s costs thrown away by reason of the amendment and that:

“[w]hat falls within that concept will be a matter for an assessor, at the end of the proceedings, if the parties ultimately consider it worth investing the costs of determining that question, after they have incurred substantial costs which will ultimately be incurred in a substantial hearing”.

5. Mr Simpkins submits that, so far as Ms Leone complains as to whether the Defendants had provided particulars of their Defence, she had not raised any complaint as to any lack of particulars before the Court. I note that, perhaps more significantly, she had also not raised any difficulty in identifying the scope of the transactions which she challenged or the nature of the Defendants’ justifications of those transactions with the Court. Mr Simpkins also challenges any assumption that, if the Defendants had responded individually to each of the 115 challenged transactions rather than indicating their justification by category, Ms Leonie would have amended her claim at any earlier point to abandon a significant number of the challenges to those transactions.

6. It seems to me that, in substance, the Plaintiff’s application for a time limitation on the order as to costs thrown away seeks to pre-empt the process of assessment of the costs thrown away by the amendment. It will be a matter for an assessor to determine what are the costs that are wasted by that amendment, and it will be open to Ms Leone to raise the issues which she has raised in this application in the assessment. In principle, the Court should not, in making a costs order which is in terms limited to wasted costs, impose a global time limit which pre-empts the conclusion which an assessor may reach as to which costs have been wasted. In the particular circumstances, it is also not appropriate to impose the time limit sought by Ms Leone, where, had the Second-Fourth Defendants taken the course which Ms Leone contends that they should have taken, they would likely have had to incur the costs of particularising specific defences to each of the 115 transactions then challenged by Ms Leone or allocating each of those transactions to one or more of the categories of justification on which they relied. It is not self-evident that the Defendants should not be allowed at least their costs incurred after 8 December 2022 in leading evidence to address transactions that are no longer challenged by Ms Leone, in an amount not exceeding the costs they would have incurred in further particularising their Defence in respect of those transactions. The time limitation sought by Ms Leone would wrongly prevent the recovery of those costs by the Defendants.

7. I am satisfied that the Court should make the usual order that Ms Leone pay the costs thrown away by the amendment and leave the determination of the question of the amount of those costs to the assessment process. It is, of course, possible that, by the time proceedings have concluded by judgment or by settlement, the parties will be able to reach agreement as to those matters without incurring the costs that may be involved in their determination in an assessment. For these reasons, I order that the Plaintiff pay the costs thrown away by the amendments permitted by Order 6 made on 25 March 2024.

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Decision last updated: 18 April 2024