In the matter of Springex Pty Limited (Costs)

[2013] NSWSC 277

Supreme Court

New South Wales

Case Title:

In the matter of Springex Pty Limited (Costs)

Medium Neutral Citation:

[2013] NSWSC 277

Hearing Date(s):

4 February 2013

Decision Date:

04 February 2013

Jurisdiction:

Equity Division - Corporations List

Before:

Brereton J

Decision:

Judgment should be converted to Australian dollars as at or about the date of the breach

The net amount due to Mr Moshirzadeh can not be set off against the amount payable to him by Mr Sajadi. However terms can and should be imposed that have that practical effect

There should be no order as to the costs of the claim. On the cross-claim, the plaintiff is to pay 50 percent of the company's costs of the cross-claim

Catchwords:

CORPORATIONS - duties and liabilities of officers of corporation - fiduciary obligations - date at which defaulting fiduciary kept company out of moneys - date at which judgment should be converted into Australian dollars
JUDGMENTS - whether judgments can be set off against each other
JUDGMENTS - whether valuation should bear interest
COSTS - no order as to costs where compulsory acquisition order consented to without oppression being established

Category:

Costs

Parties:

Moshirzadeh, Mohammed (Plaintiff)
Sajadi, Seyed Rasoul (Defendant)

Representation

- Counsel:

Counsel:
Mr C D Wood (Plaintiff)
Mr M Rollinson (Defendant)

- Solicitors:

Solicitors:
Kristofferson Legal Services (Plaintiff)
Oliveri Lawyers (Defendant)

File Number(s):

2010/212863

JUDGMENT

1. HIS HONOUR: I will give reasons sufficient to inform the parties as to how they should proceed if necessary. First, in circumstances where the defaulting fiduciary effectively kept the company out of moneys which it was entitled recover in Australia from January 2009, any adverse change in the conversion rate for currency should be at the risk of the defaulting fiduciary. Accordingly, the judgment in Riyals should be converted to Australian Dollars as at or about the date of breach in January 2009.

2. Secondly, while the judgments between Mr Moshirzadeh and the company can each be set-off against the other, the net amount due to Mr Moshirzadeh cannot be set off against the amount payable to him by Mr Sajadi. One reason for this is that the practical effect would be to substitute Mr Sajadi as a debtor to the company for Mr Moshirzadeh, which could conceivably have an impact on third party creditors if the company were to go into liquidation. However, I would be inclined to fashion terms that ensured that the payments to Mr Moshirzadeh and the payments by him were interdependent so that a practical outcome, similar in effect to a set-off, might be achieved in that way.

3. Thirdly, in circumstances where a particular valuation date was struck (which has now passed by some years) the implication is that Mr Moshirzadeh is to be treated as having been bought out as at the date of valuation. Accordingly, the valuation should bear interest from the date of valuation.

4. Fourthly, the question of oppression was never litigated. A consent order for compulsory acquisition of Mr Moshirzadeh's shares was made on the first return date. On the actual determination of the valuation there were ultimately two issues, with each party succeeding on one of them. It has never had to be determined whether there was or was not oppression. There should be no order as to the costs of the claim. On the cross-claim, the company succeeded on a prominent part, but by no means all of it, and Mr Moshirzadeh should pay 50 percent of the company's costs of the cross-claim.

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