Madden v Connell

[2001] NSWSC 1051

CITATION:	Madden as Official Liquidator of Aquanaut Constructions Pty Ltd (In Liq) [2001] NSWSC 1051
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	SC 3630/01
HEARING DATE(S):	7 November 2001
JUDGMENT DATE:	13 November 2001
PARTIES :	Martin Madden (P) Keith Stevens McConnell (Applicant) Judith Burnette (Applicant)
JUDGMENT OF:	Hamilton J

COUNSEL :	C R Newlinds (P) P M Wood (K S McConnell) C Bilinsky, Solicitor (Judith Burnette)
SOLICITORS:	Andersen Legal (P) McConnell Jaffray (K S McConnell) Horowitz & Bilinsky (Judith Burnette)
CATCHWORDS:	PROCEDURE [573] - Costs - Departing from the general rule - Powers of court - Relevant principle - Whether claims distinct.
LEGISLATION CITED:	Supreme Court Rules 1970 Part 36 r 12
CASES CITED:	Cumming v Sands [2001] NSWSC 507 Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 Domino Hire Pty Ltd v Pioneer Park Pty Ltd (In Liq) [2000] NSWSC 313 Ell v Cisera [2000] NSWSC 961 Hughes v Western Australian Cricket Association (1986) ATPR 40-748 JDM Investments Pty Ltd v Todbern Pty Ltd [2000] NSWSC 432 Madden as liquidator of Aquanaut Constructions Pty Ltd (In Liquidation) [2001] NSWSC 966 Ronnoc Finance Ltd v Spectrum Network Systems Ltd 19 November 1997 NSWSC Santow J unreported Waters v P C Henderson (Australia) Pty Ltd 6 July 1994 NSWCA unreported
DECISION:	Liquidator ordered to pay applicant's costs.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

TUESDAY, 13 NOVEMBER 2001

3630/01 MARTIN MADDEN in his capacity as Official Liquidator of AQUANAUT CONSTRUCTIONS PTY LTD (In Liquidation)

JUDGMENT

1 HIS HONOUR: Before me is the question of the costs of the notice of motion by Keith Stevens McConnell filed 6 August 2001 to set aside the whole or part of an order for production made against Mr McConnell by a Registrar on 18 July 2001 under Part 36 r 12 of the Supreme Court Rules 1970 (“the SCR”) as ancillary to the order for an examination of Mr McConnell under s 596B of the Corporations Act 2001 (Cth) in respect of the affairs of Aquanaut Constructions Pty Ltd (In Liquidation) (“the company”). I delivered judgment on the notice of motion on 29 October 2001: Madden as liquidator of Aquanaut Constructions Pty Ltd (In Liquidation) [2001] NSWSC 966. Mr McConnell was successful but not wholly successful in his motion.

2 There were two questions dealt with in the considerable debate which was had on the hearing of the notice of motion. One related to whether there was subsisting legal professional privilege in many (the bulk) of the documents. If the privilege were upheld, production would be useless as access would not be granted. In relation to the other requisitions of the order, the argument was that they were beyond the proper ambit of a s 596B examination and related solely to what should be taken to be the private affairs of the Burnettes (the directors of the company) and thus were beyond the valid reach of an order for production. Mr McConnell succeeded on the privilege argument but failed on the other argument. This led to six of the nine requisitions of the order being set aside.

3 On interlocutory proceedings as well as in final proceedings the general rule is that costs follow the event. This rule will be departed from only for good reason. In general terms, the fact that the moving party obtains only some of the relief originally sought does not detract from the proposition that the event is in the moving party's favour, albeit it fails on other issues. There is a rule, however, that, where there are quite discrete issues and the time taken on each at the hearing can be identified or realistically estimated, then the costs may flow in opposite ways according to the different events and an order may be made which will encompass those opposing flows: see generally Supreme Court Rules 1970 Part 52A r 11; Hughes v Western Australian Cricket Association (1986) ATPR 40-748; Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261; Waters v P C Henderson (Australia) Pty Ltd 6 July 1994 NSWCA unreported; Ronnoc Finance Ltd v Spectrum Network Systems Ltd 19 November 1997 NSWSC Santow J unreported; and my own decisions in Domino Hire Pty Ltd v Pioneer Park Pty Ltd (In Liq) [2000] NSWSC 313; JDM Investments Pty Ltd v Todbern Pty Ltd [2000] NSWSC 432; Ell v Cisera [2000] NSWSC 961; and Cumming v Sands [2001] NSWSC 507.

4 The argument put by Mr Newlinds, of counsel for the liquidator, that there were separate issues in this case is not without some attraction. However, considering the whole of the material that was before me, I have come to the view that there was substantial overlap between the two sets of issues and that it is difficult to sort out or estimate what parts of the hearing were spent on each. That the event overall was in Mr McConnell's favour cannot be doubted. He did not succeed in having the order set aside. However, his notice of motion contained a separate alternative prayer for the setting aside of seven of the nine requisitions and for the limitation of production in respect of the remaining two. In the last portion he failed, but he did succeed in having six of the seven nominated requisitions set aside as prayed for. I do not think there is any sufficiently clear indication in this matter to depart from the usual rule and I propose to order that the liquidator pay Mr McConnell's costs of the notice of motion.

5 I make orders in accordance with short minutes initialled by me and placed with the papers. Order 1 in those short minutes encapsulates the judgment that I have just delivered in respect of costs. The other orders are made by consent to dispose of other aspects of the proceedings, including two notices of motion in relation to other orders for production which were not argued before me, but which the parties were agreed would be determined in accordance with my rulings upon Mr McConnell's notice of motion.

************************

Last Modified: 12/06/2001