Maroon v Aquamore Credit Equity Pty Limited

[2025] NSWSC 657

Supreme Court

New South Wales

Medium Neutral Citation:

Maroon v Aquamore Credit Equity Pty Limited [2025] NSWSC 657

Hearing dates:

16 May 2025

Date of orders:

16 May 2025

Decision date:

16 May 2025

Jurisdiction:

Equity - Applications List

Before:

Brereton J

Decision:

(1) Proceedings against the second defendant be dismissed pursuant to r 12.7 of the Uniform Civil Procedure Rules 2005 (NSW).

(2) The first, second and third plaintiff pay the second defendant’s costs of the proceedings.

(3) There be no order as to costs against the fourth plaintiff.

Catchwords:

CIVIL PROCEDURE – where trustee in bankruptcy appointed for plaintiffs – where proceedings were dismissed by consent except as against second defendant - where second defendant served a notice of action on trustee – where trustee is deemed to have abandoned action – where proceedings were not prosecuted with due despatch – where fourth plaintiff sought to make submissions as to costs due to sufficient interest – where fourth plaintiff made no claim for relief against second defendant – where there was no hearing on the merits – proceedings against second defendant dismissed – no costs order against fourth plaintiff – application by third plaintiff to make a claim after reasons delivered – application by third plaintiff after reasons delivered to revisit orders – orders unchanged

Legislation Cited:

Bankruptcy Act 1966 (Cth)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304

Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44

Mahommed v Unicomb [2021] NSWCA 108

McNamara v San [2010] NSWSC 809

Re Lofthouse (In the matter of Guss) (2001) 107 FCR 151; [2001] FCA 25

Want v Moss (1889) 10 LR (NSW) 274; (1889) 6 WN (NSW) 102

Williamson v Debney [2023] NSWSC 783

Texts Cited:

N.A.

Category:

Procedural rulings

Parties:

Christopher Arthur Maroon (first plaintiff)
Allan John Maroon (second plaintiff)
Michael John Maroon (third plaintiff)
Nadia Maroon (fourth plaintiff)
Aquamore Credit Equity Pty Ltd as trustee for the Spring Park Unit Trust (first defendant)
Berhero Pty Ltd (second defendant)
Juris Australia Lawyers Pty Ltd (third defendant)
Ejaz Ur Rehman Khan (fourth defendant)
Baltej Kaur (fifth defendant)

Representation:

Counsel:
D Levi (16 May 2025); N J Olson (submissions dated 27 May 2025) (fourth plaintiff)
F Beams (second defendant)
No other appearances

Solicitors:
ClarkeKann Lawyers (second defendant)

File Number(s):

2021/293487

Publication restriction:

N.A.

Judgment EX TEMPORE – REVISED FROM TRANSCRIPT

1. By way of background, on 15 October 2021, the plaintiffs filed a statement of claim commencing the proceedings against the defendants, including the second defendant. The plaintiffs amended their statement of claim a total of four times between 15 October 2021 and 5 July 2023.

2. On 13 November 2023, a sequestration order was made against the plaintiffs. Mr Sean Wengel was appointed as the trustee of the property of the first, second and third plaintiff. On 16 January 2024, Mr Wengel was also appointed, by sequestration order, as the trustee of the property of the fourth plaintiff.

3. On 11 February 2025, the proceedings against each defendant, other than the second defendant, were dismissed, with each party to bear their own costs. Those orders were made by consent.

4. On 14 February 2025, the second defendant served a notice of action on the trustee, requiring the trustee to make an election within 28 days either to prosecute or to discontinue the proceedings. On 26 February 2025, the trustee wrote indicating that he is not a party to the proceedings and that it is a matter for the second defendant as to whether it seeks its costs of the proceedings.

5. All rights of action in the proceedings vested in the trustee when the plaintiffs were made bankrupt: see s 58 of the Bankruptcy Act1966 (Cth) and ReLofthouse (In the matter of Guss) (2001) 107 FCR 151; [2001] FCA 25.

6. The fourth plaintiff appeared through counsel at the hearing today. The second defendant contended that the fourth plaintiff did not have standing to do so, relying on Williamson v Debney [2023] NSWSC 783 at [29] and Want v Moss (1889) 10 LR (NSW) 274 at 279. I agree that the fourth plaintiff has no standing to sue the second defendant. However, it was submitted that any costs order made today against the fourth plaintiff will not be discharged by her bankruptcy, and that she will be personally liable for those costs. I accept that this gives the fourth plaintiff a sufficient interest to make submissions on the question of costs and that the decisions in Williamson v Debney and Want v Moss can relevantly be distinguished on that basis.

7. The plaintiffs’ actions were stayed when they became bankrupt, by virtue of s 60(2) of the Bankruptcy Act, until the trustee made an election to prosecute or discontinue the action. The trustee did not make an election within 28 days after the notice of action was served on the trustee on 14 February 2025. It follows that the trustee is deemed to have abandoned the action: see s 60(3) of the Bankruptcy Act.

8. The second defendant seeks an order under r 12.7 of the Uniform Civil Procedure Rules 2005 (NSW). That rule relevantly provides that if a plaintiff does not prosecute the proceedings with due despatch, the Court may order that the proceedings be dismissed or make such other order as the Court thinks fit. I am satisfied that these proceedings have not been prosecuted with due despatch, and that they have been abandoned. I am satisfied that it is appropriate that they be dismissed under r 12.7.

9. I do not propose to make a separate order that pursuant to s 60(3) of the Bankruptcy Act, the trustee is deemed to have abandoned the action. That will occur as a matter of law. I do not think that it is necessary or appropriate that there be a declaration or order to that effect.

10. I do propose to make orders that pursuant to r 12.7 of the UCPR the proceedings against the second defendant be dismissed.

11. As to costs, if I do not “otherwise order”, the effect of r 42.20 is that the plaintiffs must pay the defendants’ costs of the proceedings to the extent to which they have been dismissed. Rule 42.20 relevantly provides:

(1)     If the court makes an order for the dismissal of proceedings, either generally or in relation to a particular cause of action or in relation to the whole or part of any claim, then, unless the court orders otherwise, the plaintiff must pay the defendant’s costs of the proceedings to the extent to which they have been dismissed.

12. The fourth plaintiff submits that I should make no order as to costs against her. She essentially relies on two matters. The first is that she makes no claim for relief against the second defendant in the proceedings. The second is that there has been no determination on the merits. Ms Levi, who appeared for the fourth plaintiff, relied on the decision of Hallen AsJ in McNamara v San [2010] NSWSC 809. His Honour observed at [12(c)] as follows:

Rule 42.20 of the UCPR does not give rise to a presumption that costs will be ordered against the Plaintiff: Fordyce v Fordham [2006] NSWCA 274; (2006) 67 NSWLR 497; Foukkare v Angreb Pty Limited [2006] NSWCA 335 at [65]; Pentroth Pty Ltd v Kirschild Pty Ltd (2006) 96 SASR 129; Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365 at [53]; Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32. However, the rule does create a starting point by requiring “… the plaintiff must pay the defendant's costs of the proceedings …” unless that outcome is displaced by a discretionary decision (“unless the court otherwise orders”).

13. I accept that there is no presumption that costs will be ordered against the plaintiffs. But I also proceed on the basis that the starting point is that the fourth plaintiff must pay the defendants’ costs.

14. Mr Beams for the second defendant relied on Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304. The Court dealt in that decision with the principles governing the making of an order as to costs. One of the observations made by the Court at [38] was as follows:

Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported).

15. I do not think this addresses the circumstance where one plaintiff does not make a claim against a particular defendant. In this case, there is no real controversy between the fourth plaintiff and the second defendant.

16. It is true, as Mr Beams points out, that the claim for relief in the statement of claim makes a general claim for costs. I do not think that that elevates matters such that it can be said that it is a matter of substance.

17. The fourth plaintiff seeks no substantive relief against the second defendant. In circumstances where the fourth plaintiff does not make a claim against the second defendant, apart from a general claim for costs, and given that there has been no hearing on the merits, I consider that it is appropriate to depart from the starting point.

18. In this matter I make orders as follows:

1. Proceedings against the second defendant be dismissed pursuant to r 12.7 of the Uniform Civil Procedure Rules 2005 (NSW).

2. The first, second and third plaintiff pay the second defendant’s costs of the proceedings.

3. There be no order as to costs against the fourth plaintiff.

Addendum:

19. After I delivered reasons and made orders orally at the conclusion of the hearing, the third plaintiff stood from the bar table and said that he was in the same position as the fourth plaintiff (his mother) and sought the same outcome. He was not at the bar table during the course of argument but was in Court.

20. I gave the second defendant an opportunity to provide a short note indicating its position on this late application.

21. The second defendant made some written submissions that indicated that the third plaintiff is in the same position as the fourth plaintiff. However, the second defendant went on to submit that it has identified material that is relevant to the position of both the third and fourth plaintiff and submitted that, based on that material, there should be a costs order that the third and fourth plaintiff pay 50% of the second defendant’s costs of the proceedings.

22. In response, the fourth plaintiff made submissions that the second defendant had effectively made an application to re-open the case, which should not be permitted – relying on Mahommed v Unicomb [2021] NSWCA 108 at [7] and Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at [46]–[47]. The fourth plaintiff also submitted that the new contentions would not affect the result in any event.

23. There were some short submissions from the second defendant in reply.

24. What all of this reveals, in my view, is that I should not accede to the third plaintiff’s oral application inviting me to revisit my orders. The third plaintiff was present in Court during the course of argument. Even allowing for the fact that he is self-represented, the third plaintiff made his application too late. He sat by during the course of argument and did not take any steps until after I gave my reasons and made orders, which included an order that he pay the second defendant’s costs.

25. If I was to allow the third plaintiff to make the late application, I would also allow the second defendant to rely on additional evidence and argument to address that application. But as against the fourth plaintiff, that evidence and argument comes too late – it is not new material which could not reasonably have been put before the Court on the hearing of the original application. There was some suggestion that the second defendant was caught by surprise at the hearing. If a party considers that it has been caught by surprise, it should do something about that before judgment is delivered.

26. The late application by the third plaintiff throws up some of the serious problems that can arise if a party seeks to agitate matters after reasons are delivered without good reason. It should not be permitted.

27. The fourth plaintiff contended that I should dismiss the (informal) application by the second defendant to re-open its case with costs. It seems to me that the matters that arose after 16 May 2025 were triggered by the late application by the third plaintiff. I do not think that any fresh orders as to costs should be made.

28. For these reasons, there will be no change to the orders I made on 16 May 2025 and no fresh orders.

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Decision last updated: 24 June 2025