Leader Computers P/L v Johnson & Ors And Synnex Australia P/L v Johnson & Ors (No 3)

[2014] SADC 71

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil)

LEADER COMPUTERS P/L v JOHNSON & ORS AND SYNNEX AUSTRALIA P/L v JOHNSON & ORS (No 3)

[2014] SADC 71

Judgment of Her Honour Judge Davey

1 May 2014

PROCEDURE - COSTS

INTEREST - RECOVERABILITY OF INTEREST - IN GENERAL

Dispute as to the terms of final orders.

LEADER COMPUTERS P/L v JOHNSON & ORS AND SYNNEX AUSTRALIA P/L v JOHNSON & ORS (No 3)
[2014] SADC 71

1. In this matter the stage has been reached when final orders are to be made.

2. On 28 March 2014 I received draft orders from each of the plaintiffs. After consideration by the defendants, there was only dispute as to two issues arising from the proposed orders; and one of those issues had more than one aspect to it.

3. The first issue concerned the proposed order for interest sought by Leader Computers and particularly at paragraph 4.2 (of the draft orders provided by Leader Computers). There was no dispute with the proposed orders that Leader Computers obtain judgment in the amount of $225,136.46 as well as the interest accrued pursuant to the contract of guarantee and indemnity made by the first defendant. But, in addition to that, in paragraph 4.2, Leader Computers seeks an order for interest pursuant to Rule 261 on the total judgment sum including interest previously accrued.

4. I decline to make those orders sought by Leader Computers. I agree that it is inappropriate to order interest to accrue on previous interest agreed. I have a discretion in this matter. I have had regard to all the matters put on behalf of Leader Computers and I decline to make the order in terms of paragraph 4.2. The interest pursuant to Rule 261 should only accrue on the amount of $225,136.46 and the order in paragraph 4.2 will be in those terms.

5. The other issue which is disputed is the appropriate orders for costs in respect of each plaintiff’s claim for costs in respect of the arguments which took place, briefly in May 2013, and then on 8, 9, 12, 13, 15 and 16 August 2013 which led to my judgment which was delivered on 14 February 2014.

6. The first matter is whether both the first and second defendants should be liable for the costs of and incidental to that hearing, with the exception of the argument where Leader Computers was unsuccessful. (That is the claim for solicitor and client costs and that that be included in the charge. See [48]-[64] of my judgment of 14 February 2014.

7. It was submitted that most of the second stage of the proceedings, as I will describe them, concerned the first defendant, Mr Johnson, and that no orders for costs should be made against the second defendant, Mrs Johnson. It was later conceded in argument that Mrs Johnson was a party to the argument as to the orders sought to sell the Hove property.

8. In my view, both the first and second defendants are liable for the costs of the second stage of the proceedings subject to the exception of Leader Computers’ unsuccessful argument. As I observed in my first judgment of 24 May 2013, Mr and Mrs Johnson are married, have joint financial interests, they shared the proceeds of the business when A&R Computers operated and had a joint personal bank account. The separation of their financial interests was for reasons of ‘tax effectiveness’ rather than, in truth, separate financial interests. As I have previously found, Mr Johnson transferred his interest in the Hove property with intent to defraud creditors and Mrs Johnson had notice of the intent. Those matters are some of the background to the decision that I will make.

9. Mr and Mrs Johnson have jointly resisted all claims. They are represented by one solicitor, by one counsel. They did not file separate defences nor contribution notices. The arguments put have not been separately put in respect of Mr and Mrs Johnson, although I agree that there has been different emphasis. I note the different aspects of the arguments before me that were heard in August 2013.

10. Accordingly, I am of the view that, generally speaking, both the first and second defendants should be liable for the costs of those proceedings and my orders are to reflect that. As to the issue of costs for Leader Computers and the unsuccessful aspect of their claim, I propose to adopt a clear approach with a view to avoiding further dispute. I also bear in mind that Leader Computers is liable to the first and second defendants for costs for their unsuccessful argument. I note that the arguments that were made before me in August 2013 were lengthy and complex and difficult for an assessment and apportionment in a timely, efficient fashion. The arguments between the parties and between issues shifted, sometimes within a short time-span. I am anxious to adopt an approach which avoids further dispute in the taxing process and further costs to any of the parties.

11. Therefore, I determine that the liability for costs by the first and second defendants should be reduced by the equivalent of fees for counsel, court fees and auxiliary costs for the period of one day. I do not need to nominate which day.

12. Having regard to the fact that there was a lack of success on behalf of the first and second defendants, the actual arguments, the complexity of them and the length of the arguments which occurred on more than one day, I have determined that a fair and reasonable approach is to reduce the liability for costs by the first and second defendants to Leader Computers by one day. If there needs to be any further clarification of that determination, then I will hear the parties.

13. As to the order sought by Leader Computers for the second defendant to pay costs for the proceedings in the Federal Court, I decline to make an order.