In the matter of Norman Nominees Pty Ltd (in liq) v Zervos Pty Ltd (No 2)

[2012] QSC 18

SUPREME COURT OF QUEENSLAND

CITATION:

In the matter of Norman Nominees Pty Ltd (in liq) & Ors v Zervos Pty Ltd & Ors (No 2) [2012] QSC 18

PARTIES:

IN THE MATTER OF NORMAN NOMINEES PTY LTD (IN LIQUIDATION) ACN 106 793 980

MICHAEL GRIFFIN AND RAJ KHATRI AS LIQUIDATORS OF NORMAN NOMINEES PTY LTD (IN LIQUIDATION) ACN 106 793 980
(first plaintiff)
and
NORMAN NOMINEES PTY LTD (IN LIQUIDATION) ACN 106 793 980
(second plaintiff)
v
ZERVOS PTY LTD ACN 111 842 703
(first defendant)
and
HOT DEV PTY LTD ACN 103 330 918
(second defendant)
and
DARYL JAMES FENNELL
(third defendant)
and
JOHN JOSEPH GEANEY
(fourth defendant)
and
LAKE MORPETH PTY LTD ACN 057 058 036
(fifth defendant)
and
KENNETH JOHN HARRIS
(sixth defendant)
and
JOHN HARRIS SECURITIES PTY LTD
ACN 010 100 535
(seventh defendant)

FILE NO/S:

10148 of 2009

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court, Brisbane

DELIVERED ON:

16 February 2012

DELIVERED AT:

Brisbane

HEARING DATE:

8 August 2011

JUDGE:

Dalton J

ORDER:

No order as to costs

CATCHWORDS:

Costs – discretionary factors – turns on own facts

COUNSEL:

PJ Davis with PA Looney for the plaintiffs
JW Peden for the first, second and third defendants

SOLICITORS:

Clarke Kann for the plaintiffs
Nicholsons for the first, second and third defendants

1. DALTON J:  On 8 August 2011 I heard an application by the plaintiffs in this matter for leave to amend their originating application and for leave to amend their statement of claim.  Counsel appeared acting for the first, second and third defendants who did not oppose either amendment.  Separately, counsel appeared for the fourth and fifth defendants to oppose some amendments sought.  In the result, counsel appearing for the fourth and fifth defendants was successful in opposing various of the amendments sought, and so far as the fourth and fifth defendants were concerned, costs followed that event.[1]

   [1][2011] QSC 320.

1. Counsel appearing for the first, second and third defendants made no submissions on the substantive applications but sought costs against the plaintiffs on the application and as to:

“the amendments to the sixth further amended statement of claim; and,
the amendments to the further amended originating application.”

1. An affidavit exhibiting some 120 pages of correspondence was filed. The correspondence shows that the application argued on 8 August 2011 was originally filed in February 2011 and set down to be heard in July 2011. It was adjourned until August. A costs order was made then in respect of the adjournment. The correspondence from the first, second and third defendants has a slightly quarrelsome flavour, but perhaps this is in response to the plaintiffs’ seeming inability to give precise and timely details as to their position. Nonetheless, a fair reading of the correspondence shows that the solicitors for the first, second and third defendants never revealed any intention to oppose the plaintiffs’ application. On 4 August 2011 they made that position express. The next day the plaintiffs offered to consent to an order making the first, second and third defendants’ costs of and incidental to their application costs in the cause and to treat costs thrown away by amendment to the sixth further amended statement of claim, and to the originating application, as if they were governed by r 386 of the UCPR. The plaintiffs’ offer was on the basis that it excluded the cost of appearance at the hearing.  The solicitors acting for the first, second and third defendants rejected that offer and counsel appeared on their behalf on the application, which lasted nearly three and one-half hours, for the sole purpose of arguing about the costs point between the plaintiffs and the first, second and third defendants.  The plaintiffs on the one hand, and the first, second and third defendants on the other, then made detailed written submissions as to this point of costs between them subsequent to the hearing on 8 August 2011.

1. The amendments to the sixth further amended statement of claim, so far as they affected the first, second and third defendants, were relatively minor. There were in substance two amendments sought. Each was to delete an allegation of breach of fiduciary duty owed by the third defendant. I doubt the deletion has any great significance as to costs, because the same facts as supported the deleted cause of action are relied upon to make out breaches of ss 180, 181 and 182 of the Corporations Act 2001.

1. It may be that there were more substantial costs incurred by the first, second and third defendants in relation to the amendments to the originating application.  Apart from matters of substance, I accept that there were procedural points to consider by reason of the plaintiffs’ earlier claims, and an earlier attempt (in 2010) to amend the originating application.  Nonetheless, the first, second and third defendants took the view that they would not oppose the amendments to the originating application sought by the plaintiffs.  In my opinion then, the plaintiffs’ offer as to costs was reasonable.  I cannot see that it was reasonable in the circumstances for the first, second and third defendants to appear on the application.  In the event, because of the first, second and third defendants’ insistence that they were entitled to more in the way of costs than the plaintiffs were prepared to offer, not inconsiderable costs have been incurred by both them, and the plaintiffs, in dealing with this costs application.

1. This matter is on a supervised case list and is regularly reviewed.  It was necessary for the plaintiffs to seek leave in relation to both their originating application and their statement of claim.  As a consequence, costs were necessarily incurred by the first, second and third defendants, but in my opinion the plaintiffs reasonably offered to compensate those defendants.  The defendants caused the plaintiffs to incur costs, unnecessarily in my view, arguing about the matter.  In the circumstances I decline to make any order as to costs, either in favour of the first, second and third defendants in relation to the amendments and their attendance on 8 August 2011, or in the plaintiffs’ favour for costs of this costs argument.