JM Kelly Buildings Pty Ltd v Murphy

SUPREME COURT OF QUEENSLAND

CITATION:

JM Kelly Buildings Pty Ltd v Murphy [2023] QSC 23

PARTIES:

JM KELLY BUILDERS PTY LTD (IN LIQUIDATION)

(first plaintiff)

AND

KAWANA JOINERY CO. PTY LTD (IN LIQUIDATION)

(second plaintiff)
AND

BURNS & TWIGG PTY LTD (IN LIQUIDATION)
(third plaintiff)

AND

BPM COWLRICK PTY LTD (IN LIQUDATION)
(fourth plaintiff)

v
JOHN GEOFFREY MURPHY

(first defendant)

AND

ELIZABETH GABRIEL MURPHY

(second defendant)

FILE NO/S:

BS 8977 of 2019

DIVISION:

Trial

PROCEEDING:

SRL Case Review

ORIGINATING COURT:

Supreme Court

DELIVERED ON:

17 February 2023

DELIVERED AT:

Brisbane

HEARING DATE:

On the papers

JUDGE:

Freeburn J

ORDER:

The plaintiffs pay the defendants costs thrown away by the amendments of the claim and statement of claim on 5 May 2020 and 7 October 2022.

CATCHWORDS:

COSTS – COSTS RESERVED – COSTS “THROWN AWAY” BY AMENDMENTS TO STATEMENT OF CLAIM  – INDEMNITY COSTS – STANDARD COSTS – where the second defendant seeks an order that the plaintiff pay costs during a period where the statement of claim was amended multiple times – where the second defendant seeks indemnity costs on the basis that the costs during that period were “thrown away” – whether the costs during the relevant period were wasted – whether costs can be awarded on an indemnity basis when the matter is still in an interlocutory stage

COUNSEL:

CA Wilkins and AG Psaltis for the plaintiffs

SOLICITORS:

Clayton Utz Lawyers for the plaintiffs

REASONS

1. Ms Murphy, the second defendant, seeks an order that the plaintiff pay all of her costs of the proceeding for the period between 23 August 2019 and 24 August 2020.  She seeks those costs on an indemnity basis.

2. It is necessary to set out some of the background.

Background

1. On 17 October 2018, Mr Vickers and Mr Owen were appointed as voluntary administrators of the first and second plaintiffs and liquidators of the third and fourth plaintiffs.  On 21 November 2018, Mr Vickers and Mr Owen were appointed liquidators of the first and second plaintiffs so that from that point onwards they were liquidators of all four plaintiff companies.

2. In August and October 2019, Ms Murphy was publicly examined over the course of six days before a Registrar of the Federal Court.

3. On 23 August 2019 – that is during the course of her public examination – the first and second plaintiffs brought these proceedings against Mr and Ms Murphy.  Essentially, Mr and Ms Murphy were sued for breaches of their corporate duties as officers of the plaintiff companies.

4. The statement of claim was a significant document.  It had been settled by counsel and, as against Ms Murphy, seeks compensation of $7.8m.  Filed at the same time was an affidavit of Mr Vickers which runs to many thousands of pages.  On the same day, Boddice J made orders freezing the assets of Mr and Ms Murphy.  Those freezing orders have continued.

5. On 12 February 2020, the first and second plaintiffs applied to have Ms Murphy dealt with for contempt of court for failure…