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KF Capital v Davison

KF Capital v Davison

Case [2020] NSWSC 1595 13 November 2020

Costs

Limitation Periods

Bankruptcy

Civil Litigation & Procedure

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: KF Capital v Davison [2020] NSWSC 1595
Hearing dates: 9 November 2020
Date of orders: 13 November 2020
Decision date: 13 November 2020
Jurisdiction: Common Law
Before: Campbell J
Decision:
(1) The first defendant to pay the first plaintiff’s costs of its proceedings against him;
(2) The first defendant to pay the second plaintiff’s costs of its proceedings against him;
(3) The plaintiffs’ costs of the proceedings against the first defendant including the indemnity costs order made on 23 May 2019 are payable in a gross sum of $140,000 under s 98(4)(c) of the Civil Procedure Act 2005 (NSW);
(4) The sum specified in Order 3 is payable to the first plaintiff whose receipt whereof discharges the liability of the first defendant under orders 1 and 2.

Catchwords:
COSTS – application for gross sum costs order pursuant to s 98(4) Civil Procedure Act 2005 (NSW) – cost principles – where proceedings stayed by force of the Bankruptcy Act – where plaintiffs’ seeks gross sum cost order following the defendant filing for bankruptcy – where plaintiff’s bankruptcy petition evidenced capitulation in relation to the plaintiffs’ claim - quantification of the appropriate specific gross sum to be awarded – gross sum cost order made

Legislation Cited:
Civil Procedure Act 2005 (NSW) s 98
Bankruptcy Act 1966 (Cth) ss 58(3), 82, 102 (3), 102(5)
Corporations Act 2001 (Cth) s 471B

Cases Cited:
Chapman v Luminis Pty Ltd [2003] FCA 162
Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52; [2007] HCA 56
Muhibbah Engineering (M) BHD & Anor v Trust Company Limited & Anor [2009] NSWCA 205
Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84
ONE.TEL Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548; [2000] FCA 270
Re Minister for Immigration and Ethnic Affairs, ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6
Tzaneros Investments Pty Ltd v Walker Group Constructions Pty Ltd (No 4) [2018] NSWSC 431

Category: Procedural and other rulings
Parties: KF Capital Limited (First Plaintiff)
Endeavour Timber Pty Ltd (receivers and managers appointed) (Second Plaintiff)
Brett William Davison (First Defendant)
Representation:
Counsel:
J Hogan-Doran SC (First and Second Plaintiffs)
Brett William Davison (Self Represented)
Solicitors:
W Advisers (First and Second Plaintiffs)

File Number(s): 2017/379454

Judgment

By Notice of Motion filed on 21 August 2020 the plaintiffs seek orders for costs against the first and fifth defendants. The application against the fifth defendant was resolved by agreement prior to the commencement of the hearing and I entered consent orders in chambers. It is unnecessary to set out these orders or to refer to the fifth defendant’s somewhat limited involvement in these proceedings for the purposes of these reasons.
The relief against the first defendant sought in the Notice of Motion was refined somewhat by reference to a form of order “handed up” by email prior to the commencement of the remote hearing by Mr J. Hogan-Doran SC, who appeared…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading KF Capital v Davison

Details

AGLC: KF Capital v Davison [2020] NSWSC 1595
Case: [2020] NSWSC 1595
Decision Date: 13 November 2020

CaseChat Overview and Summary

In the case of KF Capital v Davison, the plaintiffs, KF Capital, sought a gross sum costs order against the defendant, Mr Davison, pursuant to section 98(4) of the Civil Procedure Act 2005 (NSW). The dispute between the parties was centred around a financial claim, where the proceedings were stayed by force of the Bankruptcy Act. Mr Davison subsequently filed for bankruptcy, and the plaintiffs sought a gross sum cost order following this event. The central legal issue for the court was to determine the appropriate quantum of costs to be awarded under the specific circumstances of the case, particularly given the defendant's bankruptcy and the plaintiffs' assertion that this event represented a capitulation in relation to their claim.

The court considered the principles of costs and the context in which the defendant had filed for bankruptcy. It was noted that the Bankruptcy Act did not preclude the plaintiffs from seeking a gross sum costs order, even though the proceedings had been stayed. The court examined the evidence of the bankruptcy petition, which was presented by the plaintiffs as demonstrating Mr Davison's inability to pay the costs of the proceedings. The court also evaluated the specific circumstances of the case, including the nature and complexity of the claim, the conduct of the parties, and the extent to which the defendant's bankruptcy was a relevant factor in determining the appropriate costs order.

In its reasoning, the court held that the plaintiffs were entitled to a gross sum costs order. The court quantified the specific gross sum to be awarded, taking into account the evidence presented and the relevant cost principles. The court concluded that the appropriate costs to be awarded were reflective of the nature and complexity of the proceedings, as well as the circumstances surrounding the defendant's bankruptcy. The court made a gross sum costs order in favour of the plaintiffs, awarding them the specific sum that it had determined to be appropriate under the circumstances.

The court did not make any further orders beyond the gross sum costs order. The decision affirmed the plaintiffs' entitlement to recover costs from the defendant, despite the stay of the proceedings and the defendant's subsequent bankruptcy. The outcome of the case provides guidance for future cases involving similar circumstances, where parties may seek a gross sum costs order following a defendant's bankruptcy.

Orders