In the matter of Tiaro Coal Limited (in liquidation) (ACN 127 936 412)
[2018] NSWSC 1099
•16 July 2018
Supreme Court
New South Wales
Medium Neutral Citation: In the matter of Tiaro Coal Limited (in liquidation) (ACN 127 936 412) [2018] NSWSC 1099 Hearing dates: 9 May 2018 (last submissions as to costs 2 July 2018) Decision date: 16 July 2018 Jurisdiction: Equity - Corporations List Before: Black J Decision: Orders as to costs made.
Catchwords: ORDERS – Determination as to form of orders. Legislation Cited: - Civil Procedure Act 2005 (NSW) s 98 Category: Costs Parties: Tiaro Coal Limited (in liquidation) (Plaintiff)
Peter Meers (First Defendant)
Francis Choy (Second Defendant)
Rado Jacob Rebek (Third Defendant)
Ibrahim Menudin (Fourth Defendant)
Wei Huang (Fifth Defendant)
Jianfei Wang (Sixth Defendant)
Hudson Resources Limited (Seventh Defendant)
Hudson Corporate Limited (Eighth Defendant)
Bundaberg Coal Pty Ltd (Ninth Defendant)Representation: Counsel:
Solicitors:
R A Dick SC/D R Sulan (Plaintiff)
M Pesman SC/N M Bender (Second, Fifth, Seventh and Eighth Defendants)
Bridges Lawyers (Plaintiff)
Baker & McKenzie (Second, Fifth, Seventh and Eighth Defendants)
File Number(s): 2017/137955
Judgment
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By my judgment delivered on 5 June 2018 ([2018] NSWSC 828), I dismissed an application brought by several Defendants in these proceedings seeking orders setting aside the Originating Process filed by the Plaintiff, for service of that Originating Process and consequential orders dismissing the proceedings. I there expressed the view that that the several Defendants should pay the Plaintiff’s costs of the application and should also pay the costs of and incidental to a Further Amended Interlocutory Process filed by the Plaintiff on 9 May 2018.
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Since the Plaintiff indicated that it wished to be heard further as to the basis of such a costs order, I allowed the parties a further opportunity for written submissions and delivered a further judgment as to costs on 6 July 2018 ([2018] NSWSC 1043) (“Costs Judgment”) and ordered that the several Defendants pay the costs of their application forthwith on the ordinary basis. I also gave the parties leave to make submissions as to whether costs payable by each Defendant should be reduced by a set-off of costs that were payable by the Plaintiff to that Defendant in respect of an earlier application to set aside a notice to produce. I directed the parties to bring in agreed orders to give effect to the Costs Judgment, and any submissions as to that set-off. There is now only limited agreement as to the form of an order as to costs.
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In its further submissions as to the orders to be made to give effect to the Costs Judgment (as distinct from its earlier submissions as to costs), the Plaintiff seeks to have its costs quantified in a gross sum basis, and seeks to have directions as to that application included in the orders to be made by the Court. The several Defendants opposed directions being made in respect of an application for gross sum costs, on the basis that such orders would not give effect to the Costs Judgment, where no issue concerning gross sum costs had previously been raised or was addressed in that judgment. I will make a direction for the Plaintiff to file and serve any application for such an order by a specified date, but will not make further orders where they would not reflect any matter raised in or addressed by the earlier judgments.
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The several Defendants also seek to have the orders make clear that they do not extend to questions of costs of matters previously heard before Brereton J, or any order for costs in respect of the parties’ previous submissions as to costs. I will include an order making that clear, for good order’s sake, except so far as I make a further order necessary to facilitate the set-off to which I refer below.
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The third order that I make below is directed to the question of set-off, where I noted in the Costs Judgment (at [18]) that:
“… I would be inclined, subject to hearing the parties, to order that the costs payable by each Defendant be reduced (by way of set off) by any amount that, as at the time that payment is demanded, has been assessed and is recoverable by that Defendant in respect of the Plaintiffs’ application to set aside the notice to produce.”
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The Plaintiff indicated that it did not, in principle, oppose a set-off of the costs payable by the Plaintiff to the several Defendants under order 1 made by Brereton J on 12 March 2018 against the costs payable by the several Defendants to the Plaintiff by reason of the Costs Judgment. The Plaintiff indicated that it was concerned that the quantification of such a set-off could have the practical effect of delaying the payment of costs to the Plaintiff forthwith, particularly if the several Defendants wished to avail themselves of the ordinary assessment regime where the Plaintiff sought its costs on a gross sum basis. The several Defendants responded that, as they had noted in their earlier submissions as to costs, there would be practical injustice if the Plaintiff could enforce its costs orders forthwith and the several Defendants could not enforce or set-off the costs orders made in their favour and against the Plaintiff. They point out that no question of set-off would arise if they were to delay in assessing their costs, under the form of order proposed by the Costs Judgment.
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I do not consider that any issue as to delay arises, because the form of order that I will make permits a set-off if, and only if, an amount has been assessed or determined (for example, by a gross sum costs order) in favour of a Defendant when the Plaintiff is entitled to and demands payment of its costs. If that Defendant’s claim for costs has not been assessed or determined by that point, then no question of set-off arises, and it will be entitled to pursue payment of its costs in the ordinary way. I also note that the third order below provides for set-off of the costs payable by the Plaintiff to each Defendant separately since the several Defendants brought separate applications and not a single application to set aside the Originating Process.
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The several Defendants proposed a reciprocal order that would allow the Plaintiff to set-off costs payable by it against costs payable to the several Defendants. I do not make that additional order, since the Plaintiff did not seek it, those costs did not arise in the hearing before me and that order may have a potential for double-counting in respect of the set-off order that I have made in the third order. I will reserve liberty to apply on 2 business days’ notice if the need for such an order arises.
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Accordingly, I make the following orders:
1. Order that the Second, Third, Fourth, Fifth, Seventh and Eighth Defendants pay the costs of the Plaintiff of:
(a) The Second, Fifth, Seventh and Eighth Defendants’ Amended Interlocutory Process filed 7 February 2018;
(b) The Third Defendant’s Amended Interlocutory Process filed 7 February 2018;
(c) The Fourth Defendant’s Amended Interlocutory Process filed 7 February 2018; and
(d) The Plaintiff’s Further Amended Interlocutory Process filed 9 May 2018,
(together, the “Costs in favour of the Plaintiff”) on an ordinary basis, as agreed or as assessed or as determined on a gross sum basis by the Court, such costs to be payable forthwith.
2. For the avoidance of doubt, the orders made in paragraph 1 do not include:
(a) The costs of the Plaintiff’s Interlocutory Process filed on 14 December 2017 that were reserved by the Court on 12 March 2018;
(b) The costs of the Plaintiff’s Amended Interlocutory Process filed on 9 March 2018 that were the subject of an order made by Brereton J on 12 March 2018 (“Costs in favour of the Defendants”); and
(c) Costs of and related to submissions concerning costs which were the subject of the Costs Judgment of Black J delivered on 6 July 2018.
3. The amount payable by any Defendant in respect of the Costs in favour of the Plaintiff may be reduced (by way of set-off) by any amount that has (as at the date on which a demand for payment is properly made by the Plaintiff) been assessed or determined and is recoverable by that Defendant in respect of the Costs in favour of the Defendants and remains unpaid.
4. The parties have liberty to apply on 2 business days’ notice in respect of the matter noted in paragraph 8 of this judgment.
5. The Plaintiff file and serve any Interlocutory Process seeking orders under s 98(4)(c) of the Civil Procedure Act 2005 (NSW) for a specified gross sum by 20 July 2018, such application to be returnable for directions in the Corporations Motions List on 27 July 2018.
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Decision last updated: 16 July 2018
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