Lendlease Funds Management Ltd as trustee of Joondalup Trust v Packapigs Pty Ltd

[2020] WASC 82

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

CITATION:   LENDLEASE FUNDS MANAGEMENT LTD AS TRUSTEE OF JOONDALUP TRUST  -v- PACKAPIGS PTY LTD [2020] WASC 82

CORAM:   ACTING MASTER WHITBY

HEARD:   ON THE PAPERS

DELIVERED          :   11 MARCH 2020

FILE NO/S:   COR 1 of 2020

BETWEEN:   LENDLEASE FUNDS MANAGEMENT LTD AS TRUSTEE OF JOONDALUP TRUST

Plaintiff

AND

PACKAPIGS PTY LTD

Defendant

Catchwords:

Winding up application pursuant to s 459A of the Corporations Act 2001 (Cth) - Supporting creditor's costs of the application - s 466(2) and s 467(1)(c) of the Corporations Act 2001

Legislation:

Corporations Act 2001 (Cth)

Result:

Application by supporting creditor for costs of the application for winding up granted

Category:    B

Representation:

Counsel:

Plaintiff	:	No appearance
Defendant	:	No appearance

Solicitors:

Plaintiff	:	Minter Ellison
Defendant	:	In Person

Case(s) referred to in decision(s):

ACP Syme Magazines Pty Ltd v Tri Automotive Components Pty Ltd (1997) 74 FCR 372

ACTING MASTER WHITBY:

1. On 20 February 2020, upon the application of the plaintiff by Originating Summons dated 8 January 2020, and upon hearing counsel for the plaintiff and counsel for Tribe Workforce Solutions Pty Ltd, a supporting creditor (Supporting Creditor), I made the following orders:

   (1)Strict compliance with r 5.6(2)(b)(i) of the Supreme Court (Corporations) (WA) Rules 2004 be waived to allow the plaintiff to comply by filing the notice of this winding up application on the ASIC Insolvency Notices website one day after the originating process and affidavit in support were served on the defendant.

   (2)The defendant, Packapigs Pty Ltd ACN 107 817 827 (Company) be wound up in insolvency pursuant to the provisions of the Corporations Act 2001 (Cth) (Act).

   (3)Ian Francis of FTI Consulting, Level 47 Central Park, 152 ‑ 158 St Georges Terrace, Perth, in the State of Western Australia, official liquidator, be appointed to act as liquidator of the Company.

   (4)The plaintiff's costs of the application be fixed in the sum of $7,478.00 and be reimbursed in accordance with s 466(2) of the Act.

2. Following that hearing, I received written submissions from the solicitors for the Supporting Creditor seeking an order that the Supporting Creditor's costs of, and incidental to, the application be costs in the winding up (assessed or otherwise agreed with the liquidator).  The Supporting Creditor also provided a Short Bill of Costs in support of its application.  The Supporting Creditor is seeking to have its costs fixed in the sum of $1,750.

3. The plaintiff does not consent to such an order and has provided written submissions (by way of an email) in opposition.

4. I indicated to the parties that I would decide the issue of the Supporting Creditor's costs on the papers.

5. The Supporting Creditor seeks its costs pursuant to s 466(2) of the Act. Section 466(2) of the Act provides:

   [Reimbursement by liquidator] The liquidator must, unless the Court orders otherwise, reimburse the applicant out of the property of the company the taxed costs incurred by the applicant in such proceedings.

6. In the case of ACP Syme Magazines Pty Ltd v Tri Automotive Components Pty Ltd (1997) 74 FCR 372, Spender J, on page 382, made an order that both the substitute applicant's (ACP) and the supporting creditor's (FAI) costs be 'taxed and reimbursed out of the Property of the Company in accordance with s 466(2) of the Corporations Law'[1] (emphasis added).  In relation to the role that the supporting creditor played in the application, Spender J said, at [20]:

   It may be that if there had been no supporting creditor or information concerning the extent of the nature of the insolvency of TRI Automotive, I would not, in the exercise of the discretion, have made a winding-up order.  But on the totality of the evidence before me here, the company is not only presumed to be insolvent, but on the evidence before me is insolvent.

   [1] s 466(2) of the Corporations Law is reflected in s 466(2) of the Act.

7. The supporting creditor (FAI) in the ACP Syme Magazines case did not step into the shoes of the applicant to complete the winding up proceeding.  However, it was instrumental in providing evidence which moved the court to exercise its discretion in favour of winding up the company.

8. I am satisfied that s 466(2) of the Act gives me the discretion to award costs to a supporting creditor, in circumstances where that supporting creditor supports the application for winding up.

9. Even if I am wrong about that, s 467(1)(c) of the Act provides that 'on hearing a winding up application the Court may make any interim order it thinks fit.'  The discretion to make an order for costs in favour of a supporting creditor is a wide discretion.

10. Having decided that I do have discretion to make a costs order in favour of a supporting creditor, the question is whether I should exercise that discretion in these circumstances.

11. The Supporting Creditor filed a Minute of Proposed Orders, Submissions and Affidavit of Hannah Morris in support of the plaintiff's application for winding up.

12. The plaintiff submits that it had consistently indicated to the Supporting Creditor, right up until the day before the hearing, that it would be proceeding with its application for winding up.

13. In circumstances where the Supporting Creditor could not be certain of the outcome of the hearing of the application, it is my view that it was reasonable and appropriate for the Supporting Creditor to file the material that it did in support of the application and for counsel for the Supporting Creditor to attend the hearing of the application.  The amount of costs sought by the Supporting Creditor in the short form Bill of Costs, $1,750, is reasonable.

14. Accordingly, I exercise my discretion in favour of awarding costs of the application to the Supporting Creditor.  I will make an order as follows:

    The supporting creditor's, Tribe Workforce Solutions Pty Ltd ACN 155 858 825, costs of and incidental to the application be costs in the winding up fixed in the sum of $1,750.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

IW
Associate to Master Sanderson

11 MARCH 2020