In the matter of Metal Storm Ltd (subject to Deed of Company Arrangement)
[2014] NSWSC 1458
•24 October 2014
Supreme Court
New South Wales
Medium Neutral Citation: In the matter of Metal Storm Ltd (subject to Deed of Company Arrangement) [2014] NSWSC 1458 Hearing dates: 27 - 29 May 2014, 23 July 2014 (submissions as to orders 8 September 2014) Decision date: 24 October 2014 Jurisdiction: Equity Division - Corporations List Before: Black J Decision: Declarations made that first defendant was and is not required to comply with relevant directions. Declaration made that first defendant is entitled to vote at meetings of creditors of company in respect of debts arising from issuing of secured notes. Order made for dismissal of cross-claim. Orders made as to costs between relevant parties, and that costs of all issues relating to liens and indemnities be reserved.
Catchwords: PROCEDURE - judgments and orders - disputed issues remaining before orders can be made to give effect to primary judgment in proceedings - whether proposed amendments to particular form of orders as to costs should be made. Category: Consequential orders Parties: Adam Shepard (in his capacity as deed administrator of Metal Storm Ltd) (First Plaintiff)
Metal Storm Ltd (subject to a deed of company arrangement) (Second Plaintiff)
ANZ Trustees Ltd (formerly ANZ Executors & Trustee Company Ltd) (First Defendant)
The Australian Special Opportunity Fund, LP (Second Defendant)Representation: Counsel:
V R Gray (Plaintiffs)
C Scerri QC/H Austin/D Krochmalik (First Defendant)
M R Hall (Second Defendant)
C Brown (solicitor) (Proposed receivers)
Solicitors:
Somerset Ryckmans (Plaintiffs)
Ashurst Australia (First Defendant)
Squire Sanders (Second Defendant)
O'Neill Partners (Proposed Receivers)
File Number(s): 2013/377450
Judgment
On 19 June 2014, I delivered judgment in these proceedings ([2014] NSWSC 813) and directed the parties to bring in agreed Short Minutes of Order to give effect to the judgment within 14 days or, if there was no agreement between them, their respective draft orders and short submissions as to the differences between them and indicated that I would hear the parties as to costs.
The parties did not reach agreement as to the orders to be made; I heard submissions as to the matter on 23 July 2014; and, on 25 August 2014, I delivered a further judgment dealing with that matter ([2014] NSWSC 1170). In paragraph 65 of that judgment, I indicated that I proposed to make particular orders, including relatively complex orders as to costs. I indicated that I would allow the parties a further opportunity to make submissions as to the particular form of those orders within 14 days and noted that they should also advise within that time of any agreement they had reached as to a percentage of the costs of the First Defendant ("ANZ Trustees") to be paid by the Second Defendant ("ASOF") to avoid their incurring the costs of an issue by issue assessment of those costs.
On 8 September 2014, the solicitors for ANZ Trustees forwarded a marked-up draft of the orders as to costs proposed at paragraph 65 of my judgment, which they indicated reflected their client's suggested amendments to the orders foreshadowed in the judgment. They did not elaborate, by way of any submissions, as to why the suggested amendments should be made.
ANZ Trustees suggested that my proposed order 6, relating to the costs payable by ASOF to ANZ Trustees in respect of two specified issues, should be amended to refer to the costs "of the proceedings, including any reserved costs and the costs of the trial [namely the hearing on 27 - 29 May 2014] and the further hearing of the Proceeding on 23 July 2014" referable to the determination of those issues. I do not consider it necessary to amend this order to include the words "of the proceedings" since the costs order could scarcely relate to something else, and the amendment might incorrectly suggest that the costs ordered extended beyond the costs referable to the particular issues. I also do not consider that the amendment to extend the order to "any reserved costs and the costs of the trial" is necessary and it may cause confusion for the same reason. Costs are payable by ASOF under that order to the extent that they are referable to the particular issues and not otherwise, and neither all reserved costs nor all costs of the trial relate to those particular issues.
I also do not consider that ANZ Trustees' proposed amendment to extend order 6 to the costs of the further hearing as to orders and costs before me on 23 July 2014 should be made. As I noted above, my proposed order 6 was expressly limited to costs referable to discrete issues as to which ANZ Trustees was successful. I do not consider that the costs of the range of arguments agitated before me at the hearing before me on 23 July 2014, where the parties had mixed results, could properly be characterised as costs referable to the determination of the particular issues as to which ASOF is required to pay ANZ Trustees' costs.
I do not consider it necessary to amend order 7 to include the words "of the proceedings" for the reasons noted above. For consistency with order 6, I will delete the words "including any reserved costs and the costs of the trial" from that order, although ANZ Trustees had not sought that amendment, since neither all reserved costs nor all costs of the trial related to the determination of the ASOF Cross-Claim. I also do not consider that ANZ Trustees' proposed amendment to extend order 7 to the costs of the further hearing as to orders and costs before me on 23 July 2014 should be made, for the same reason that I have not made that amendment in respect of order 6. I will also insert the words "as agreed or as assessed" in order 7 for consistency.
ANZ Trustees also referred to the question of any agreement as to a percentage of its costs payable by ASOF, a matter which I had invited the parties to discuss, and indicated that ASOF's solicitors had advised they were awaiting confirmation of ASOF's instructions in respect of that matter. ASOF did not advise as to the outcome of that matter or make any submissions as to the form of orders to be made. After ASOF's solicitors inquired as to when orders would be made, I extended the time for the parties to make submissions to 17 October 2014, or such later date as was agreed between the parties. No further submissions were made by any party and I was advised of no agreement as to any extension of the time for submissions.
Accordingly, I make orders as follows:
1 Declare that, pursuant to section 283HA of the Corporations Act 2001 (Cth), the First Defendant was and is not required to comply with:
(a) the instrument dated 13 December 2013 headed "Metal Storm Limited ABN 99 064 270 006 ... Written Resolution of Noteholders Under Clause 15.12(a) of the Convertible Note Trust Deed dated 11 July 2006 (as amended) ... " ("December Direction") and signed by the Second Defendant being exhibit AS1 [Tab 15] to the affidavit sworn by Adam Shepard on 16 December 2013;
(b) the directions in paragraphs 8, 16 and as otherwise contained in the letter from the Second Defendant to the First Defendant dated 7 August 2013 ("August Direction"); and
(c) the instruction defined as the "Meeting Instructions" in a letter from the Second Defendant's solicitors dated 21 February 2014, being exhibit MB-55 to the third affidavit of Michael Budnow affirmed on 7 March 2014. ("February Direction")
2 Declare that, pursuant to section 283HA of the Corporations Act, the First Defendant is the creditor entitled to vote at meetings of creditors of the Second Plaintiff in respect of debts arising from the secured notes issued by the Second Plaintiff held by, amongst others, the Second Defendant, in the course of the administration or winding up of the Second Plaintiff.
3 The Cross-Claim dated 9 April 2014 ("ASOF Cross-Claim") filed by the Second Defendant be dismissed.
4 The costs of the Plaintiffs of and incidental to these proceedings, other than the costs payable under order 6, be costs in the deed administration of the Second Plaintiff.
5 The First Plaintiff pay the First Defendant's costs of the claim for repayment of monies to the Company, as agreed or as assessed, capped at a maximum of $10,000.
6 The Second Defendant pay the First Defendant's costs, as agreed or as assessed, referable to the determination of the issues as to:
(a) whether the First Defendant was obliged to act in accordance with the August 2013, December 2013 and February 2014 directions; and
(b) whether the administration of Metal Storm pursuant to a deed of company arrangement was an "enforcement" within the meaning of cl 6.1(c) of the Security Trust Deed.
7 The Second Defendant/Cross-Claimant pay the First Defendant/Cross-Defendant's costs, as agreed or as assessed, referable to the determination of the ASOF Cross-Claim.
8 The costs of all issues in respect of liens and indemnities be reserved.
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Decision last updated: 29 October 2014
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