McCa Asset Management Ltd v Kamata Homes Pty Ltd (Admins Appointed) (No 2)
[2019] VSC 842
•19 December 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S ECI 2019 03305
| MCCA ASSET MANAGEMENT LTD (ACN 113 728 706) (Trading as the MCCA PROPERTY TRUST FUND (ARSN 116 851 980) & ORS (according to the Schedule attached) | Plaintiffs |
| v | |
| KAMATA HOMES PTY LTD (ACN 130 155 305) (Administrators appointed) & ORS (according to the Schedule attached) | Defendants |
---
JUDGE: | McDonald J |
WHERE HELD: | Melbourne |
WRITTEN SUBMISSIONS FILED: | 25 and 29 November 2019 and 6 December 2019 |
DATE OF JUDGMENT: | 19 December 2019 |
CASE MAY BE CITED AS: | MCCA ASSET MANAGEMENT LTD v KAMATA HOMES PTY LTD (Admins Appointed) (No 2) |
MEDIUM NEUTRAL CITATION: | [2019] VSC 842 |
---
COSTS – Conduct by the plaintiffs resulting in waste of Court time – Breach of overarching obligations to co-operate with other parties and the Court in connection with the conduct of the proceedings – Plaintiffs ordered to pay defendants’ costs of and incidental to three wasted days on an indemnity basis – Plaintiffs ordered to pay administrators’ costs and expenses in connection with the further meeting of creditors –Civil Procedure Act 2010 (Vic) ss 20 and 29 – Corporations Act 2001 (Cth) ss 445D(1), 499(2D) – Evidence Act 2008 (Vic) s 38.
HIS HONOUR:
Following a five day trial, judgment was delivered on 15 November 2019 (‘principal judgment’).[1] This judgment deals with three issues:
[1]See MCCA Asset Management Ltd & Ors v Kamata Homes Pty Ltd (administrators appointed) & Ors [2019] VSC 742.
(i) the liability of the parties to pay costs, including indemnity costs;
(ii) whether the plaintiffs should be ordered pursuant to s 29 of the Civil Procedure Act 2010 (Vic) (‘Civil Procedure Act‘)to pay costs incurred by the administrators related to a further meeting of creditors which was held on 11 September 2019; and
(iii) whether the plaintiffs’ nominee should be appointed liquidators of Kamata Homes Pty Ltd.
The plaintiffs have succeeded in:
(a) obtaining an interlocutory order on 25 July 2019,[2] which restrained the administrators from giving effect to the deed of company arrangement executed on 17 July 2019 (‘the deed’) pending the final determination of the plaintiffs’ application for termination of the deed; and
(b) establishing at trial the grounds for termination of the deed prescribed in s 445D(1)(c) and (g) of the Corporations Act 2001 (Cth) (‘Act’).
[2]See MCCA Asset Management Ltd v Kamata Homes Pty Ltd & Ors [2019] VSC 512; Orders of the Honourable Justice McDonald dated 25 July 2019.
Notwithstanding the plaintiffs’ success at both interlocutory and final hearing, the present proceeding is not one where costs should follow the event.
The trial was listed for three days commencing 19 August 2019. The principal judgment sets out the course of the litigation post 19 August 2019. On 19 August 2019, with the agreement of all parties, the trial was adjourned to allow the administrators to convene a further meeting of creditors. On 27 August 2019, the Court ordered that, prior to that meeting, creditors were to be provided with a Court approved circular[3] containing additional information to be presented to creditors limited to three matters:
[3]The Court approved circular was annexed to those orders.
(a) that the properties securing the director’s contribution were ‘on the market’ at the time of the creditors meeting on 26 June 2019;
(b) the terms of clause 4 of the general security agreement; and
(c) the further potential voidable transaction claims identified by the administrators following the second meeting.[4]
[4]Annexure A to the Orders of the Honourable Justice McDonald dated 27 August 2019.
When the trial commenced on 19 August 2019, no evidence had been filed by any party which addressed the issue of whether any of the 57 creditors who voted in favour of the deed would have voted differently if they were aware that the properties securing the director’s contribution were on the market.
On 19 August 2019 counsel for the plaintiffs accepted that if the Court concluded that the information which had not been provided to creditors was a material omission, this would not automatically translate into a winding up order. Counsel accepted that under s 445D of the Act there is a residual discretion conferred upon the Court to refrain from terminating a deed if satisfied that it would not be in the interest of creditors to do so.[5]
[5]Transcript of proceedings 19 August 2019 T 21 l 19 – T 23 l 21.
Counsel for the plaintiffs ‘completely agree[d]’ that it would be unlikely that the Court would exercise the residual discretion under s 445D if a majority of creditors maintained support for the deed, having been provided with updated information regarding the marketing and sale of properties which provided security for the director’s contribution to the deed fund.[6]
[6]Ibid T 43 l 30.
Having accepted that evidence of the voting intentions of creditors in light of the updated information would be relevant to the exercise of the residual discretion, counsel for the plaintiffs asked for the proceeding to be stood down whilst he sought instructions as to whether to seek an adjournment.[7] Following a short adjournment, counsel informed the Court that he was instructed to seek an adjournment ‘for a reasonably short period, during which time [he would] file and serve affidavit material from creditors in which they will give evidence as to how knowledge of these facts that we now know would have affected their vote.’[8]
[7]Ibid T 26 l 14–18.
[8]Ibid 2019 T 37 l 22–27.
Following the plaintiffs’ request for an adjournment an exchange took place during which the Court raised the possibility of the administrators convening a further meeting of creditors prior to which the creditors would be provided with a Court approved circular setting out additional information which had not been provided prior to the meeting on 26 June 2019 at which 57 creditors had voted in favour of the deed, 10 against with two abstentions.[9]
[9]Ibid 2019 T 40, l 6-10, T 49 l 23 – T 50 l 10.
Ultimately, it was agreed between the parties that, rather than adjourning the proceeding to allow the plaintiffs to file further affidavits, the proceeding would be adjourned to enable the administrators to convene a further meeting and that prior to the meeting creditors would be provided with a Court approved circular. In this regard, I stated:
…I want to avoid a situation where there’s unnecessary disputation regarding the accuracy of the information which has been provided to the meeting.[10]
[10]Ibid T 45 l 8–11.
I stated that the advantage of providing a Court approved circular to creditors ‘is capacity for control of the process’.[11] Counsel for the plaintiffs stated that an additional advantage was the ‘objectivity of information’.[12]
[11]Ibid T 46 l 20–21.
[12]Ibid T 46 l 22.
I stated that the Court would not be assisted:
… if in due course this proposal just simply translates into further sort of satellite litigation involving disputation about what’s been said and what hasn’t been said at a further meeting.[13]
[13]Ibid T 52 l 1–5.
Counsel for the plaintiffs raised the issue of whether the plaintiffs should have the right to provide an addendum to the administrators’ circular. In response I stated:
… I don’t have in mind that your client will be sending anything out in writing. But I certainly would anticipate that your client would have an opportunity, and no doubt they will be given that, to address the meeting in relation to those issues that are going to be canvassed in the further report.[14]
[14]Ibid T 64 l 1–7.
Counsel for the plaintiffs gave no indication that, as subsequently occurred, the plaintiffs would independently write to creditors. To the contrary, counsel indicated that the plaintiffs’ preference was ‘very much…for a circular’.[15] In the context of the exchange which took place on 19 August 2019, this submission could only be understood as an acceptance by the plaintiffs that creditors would be provided with a Court approved circular, with that document being the only information provided to creditors prior to the further meeting.
[15]Ibid T 64 l 8–11.
Following the hearing on the morning of 19 August 2019 there were extensive discussions between the parties which ultimately resulted in agreement on the terms of a Court approved circular. That circular was annexed to the order of the Court made on 27 August 2019.[16]
[16]Annexure A to the Orders of the Honourable Justice McDonald dated 27 August 2019.
The further meeting was convened on 11 September 2019. During the period 27 August and 11 September 2019 the plaintiffs engaged a call centre to contact creditors. The plaintiffs ‘targeted’ approximately 150 of 210 known creditors.[17] These were creditors who the plaintiffs believed would ‘welcome such an approach’.[18] The overwhelming majority of the creditors targeted by the plaintiffs had not previously voted for the deed.[19]
[17]Transcript of proceedings 11 October 2019 T 242 l 31 – T 243 l 1, T 263 l 8–9, T 264 l 3-4.
[18]Ibid T 264 l 13-18; Third Further Affidavit of John Goulding sworn 8 October 2019, [289].
[19]Transcript of proceedings 11 October 2019 T 265 l 25–29; Third Further Affidavit of John Goulding sworn 8 October 2019, [291].
As set out in the principal judgment at [18], call centre staff engaged by the plaintiffs made statements to several creditors which were false. In addition to engaging a call centre, the plaintiffs forwarded a letter to approximately 150 creditors on or about 31 August 2019. The letter, which was tendered in the proceedings,[20] is mistakenly dated 31 September 2019. However, it is clear that it was forwarded to creditors prior to the meeting on 11 September 2019. The letter includes the following:
MCCA is a major creditor in relation to the voluntary administration of Kamata and voted against the DOCA, believing that investigations available under liquidation would reveal a significantly higher dividend than the estimated 3 cents in the dollar available under the DOCA.
MCCA believes that an estimated 3 cent return on the dollar under the DOCA is unacceptably low and may not even be realised given the security offered to secure this.
Liquidation enables a much more detailed investigation and review into the activities of Kamata and potentially the Director. This will include investigations into any voidable transactions and preferential payments, currently identified by the administrators to be approximately $2 million plus in value.[21]
[20]Exhibit APS–6 to the Third Affidavit of Andrew Peter Schwartz sworn 17 September 2019.
[21]Ibid 184.
Attached to the letter was an “appointment of proxy” form appointing a representative of the plaintiffs as a proxy at the meeting on 11 September. Forty of the 45 creditors who voted against the deed at the further meeting did so by completing the pro-forma proxy form attached to the letter.
The conduct of the plaintiffs in forwarding the letter to creditors was inconsistent with the clear understanding reached on 19 August 2019 that the only additional information to be provided to creditors would be the Court approved circular. Further, the letter contained statements inconsistent with the contents of the Court approved circular. As to the estimated returns under the deed, the Court approved circular identified the ‘high’ return at 4.3 cents in the dollar and the ‘low’ return as three cents in the dollar.[22] As to the value of voidable transactions and preferential payments, the circular identified the gross value of potential voidable transaction claims as $872,214 and the estimated legal and liquidation costs at $450,000, resulting in a net value of voidable transaction recoveries of $422,214. The letter forwarded to the creditors by the plaintiffs ignored the administrators’ “high” estimate. It also made no reference to the administrators’ estimate of the net value of voidable transaction recoveries.
[22]Exhibit APS–6 to the third affidavit of Andrew Schwartz sworn 17 September 2019, [45], [47].
As set out in the principal judgment,[23] I accepted the submissions advanced on behalf of the second defendants that:
[23]The principal judgment at [21].
(a) by reason of the inaccurate information provided to creditors by the call centre engaged on behalf of the plaintiffs; and
(b) the content of the letter forwarded to creditors by the plaintiff
the Court could not safely rely on the 40 votes creditors who provided the plaintiffs with proxies voting against the deed at the further meeting. The plaintiffs’ conduct between 21 August and 11 September 2019 undermined the rationale for convening the further meeting; i.e. to ascertain whether creditors who had previously supported the deed would continue to do so in light of the information contained in the Court approved circular.
The plaintiffs’ conduct in engaging a call centre to canvas creditors and forwarding a letter directly to creditors generated the type of satellite litigation which the Court had been at pains to avoid. The hearing on 11 October 2019 was taken up largely with examination and cross–examination of Mr John Goulding, a consultant to the plaintiffs. Mr Goulding attempted to justify, through his evidence, the conduct which had been engaged in by the plaintiffs. Further, he was cross–examined at length regarding the accuracy of statements made by call centre staff, and the accuracy of the letter forwarded to creditors by the plaintiffs prior to the further meeting on 11 September 2019.
If the plaintiffs had foreshadowed on 19 August 2019 their intention to engage a call centre to canvas creditors who had not voted at the meeting on 26 June 2019, as well as their intention to write directly to those creditors, the proceeding would not have been adjourned. Rather, the plaintiffs would have been required to proceed with their application on that day. In all likelihood the proceeding would have concluded in two days. As a direct consequence of the plaintiffs’ conduct a proceeding, which should have finished within two days, ran for five days. The additional cost to the parties as well as the waste of judicial resources arising from the three extra days of trial is directly attributable to the conduct of the plaintiffs. As set out in the principal judgment, the plaintiffs’ conduct was ill–conceived and opportunistic.[24] For the reasons set out below it constitutes a breach of the Civil Procedure Act.
[24]MCCA Asset Management Ltd & Ors v Kamata Homes Pty Ltd (administrators appointed) & Ors [2019] VSC 742, [22].
The plaintiffs should bear the costs of the second and third defendants of the hearings on 19 and 21 August and 11 October 2019. It is appropriate that the plaintiffs pay these costs on an indemnity basis. Conduct of a party which results in a loss of time to the Court and to other parties is a special circumstance which may justify the award of indemnity costs.[25] The plaintiffs’ conduct directly resulted in loss of Court time on 19 and 21 August and 11 October 2019.
[25]Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189, [7]; Pandolfo v Finadri (Costs) [2018] VSC 655, [16].
The second defendants apply pursuant to s 29(1) of the Civil Procedure Act for an order that the plaintiffs pay the administrators’ costs in respect of the preparation of the Court ordered circular and costs relating to the convening of the further meeting on 11 September 2019. The power conferred by s 29(1) is not confined to legal costs but extends to ‘other costs or expenses arising from the contravention’. The plaintiffs breached the overarching obligation prescribed by s 20 of the Civil Procedure Act to cooperate with the other parties to the proceeding and the Court in connection with the conduct of the proceeding.
The plaintiffs’ conduct between 21 August and 11 September 2019 had the result that the Court could not safely rely on the votes of the 40 creditors who provided proxies to the plaintiffs prior to the meeting on 11 September. The conduct undermined the rationale for convening the further meeting of ascertaining the voting intentions of creditors in light of the information contained in the Court approved circular. The plaintiffs’ conduct meant that 3 days of Court time were wasted and generated the type of satellite litigation which Court had been at pains to avoid. The administrators incurred costs in relation to the preparation of the Court ordered circular. In addition, the administrators incurred costs relating to their preparation for and attendance at the further meeting on 11 September 2019. These costs have been wasted as a direct consequence of the conduct of the plaintiffs. It is therefore appropriate that the plaintiffs be ordered to pay these costs.
I turn now to consider the question of the costs of the balance of the proceeding, namely the interlocutory application heard on 23 and 24 July 2019 and the two days of hearing on 14 and 15 October 2019.
The administrators contend that no costs order should be made against them because no final relief was obtained against them and they conducted themselves entirely appropriately at all times.[26]
[26]Second defendants’ written submissions filed 29 November 2019, [10].
The administrators accept that, consistent with the judgment in Cresvale,[27] the normal costs order against a deed administrator as unsuccessful defendant is an order that the administrator pay the successful party’s costs.[28] However, the administrators submit, relying on the judgment of Brereton J in Mirembe Pty Ltd v Craig Dangar[29] that the principle in Cresvale only applies where the administrator can properly be characterised as an unsuccessful party.[30] The administrators submit that, absent any final orders against them, they cannot be characterised as unsuccessful parties in the litigation.[31] I reject this submission.
[27]Cresvale Far East v Cresvale Securities (No 2) 2001 39 ACSR 622.
[28]Ibid 634 [64] (overturned on appeal but not on this point: see Kirwan v Cresvale Far East Ltd (in liquidation) & Ors (2002) 44 ACSR 21, [254]–[259] per Giles JA).
[29][2010] NSWSC 679.
[30]Ibid [4].
[31]See the second defendants’ written submissions filed 29 November 2019, [9]-[10].
The interlocutory injunction granted on 25 July 2019 restrained the administrators from giving effect to the deed. The administrators opposed the making of the orders sought by the plaintiff. The administrators are properly characterised as an unsuccessful party in respect of the interlocutory application.
During the trial of the proceeding, the administrators opposed the termination of the deed. The termination of the deed pursuant to s 445D of the Act does not require an order directed at the administrators. However, the termination of the deed has direct consequences for the administrators. As a result of the termination they are no longer entitled to exercise the rights conferred upon them by the deed. As the administrators opposed the termination of the deed, they are properly characterised as unsuccessful parties in the litigation. Shortly stated, the outcome of the litigation is inconsistent with the outcome for which they contended.
There remains the question of whether the liability of the administrators to pay the plaintiffs’ costs of the interlocutory application together with the costs of the hearing on 14 and 15 October 2019 should be shared with the third defendant.
The third defendant was represented at the hearing of the interlocutory application on 23 and 24 July 2019 by a solicitor, Ms Flanagan. Ms Flanagan submitted that the orders sought by the plaintiffs were misconceived and that the plaintiffs had failed to establish any urgency or reasonable apprehension of adverse consequences if the injunction was not granted.[32] The third defendant was unsuccessful in opposing the injunction sought by the plaintiffs. It is appropriate that the third defendant be jointly and severally liable with the second defendant in paying the plaintiffs’ costs of and incidental to the summons filed 22 July 2019. There remains the question of whether the third defendant should bear any liability in respect of the costs of the hearing on 14 and 15 October 2019.
[32]Transcript of proceedings 24 July 2019 T 70 l 6–11.
The administrators submit that the third defendant should pay their costs post 11 October 2019. They submit that the third defendant was the proponent of the deed and that, ultimately, it was his conduct which led the Court to set aside the deed. They further submit that the third defendant was the unsuccessful party in the proceeding. I reject this submission.
During the cross–examination of the third defendant on the final day of the trial, evidence was given by the third defendant which underpinned the Court’s finding that, prima facie, the third defendant is indebted to Kamata Homes Pty Ltd in the sum of $900,000. This represents the sum expended by the company building the third defendant’s family home. It is correct that this evidence underpinned the Court’s conclusion that the plaintiffs established the ground for termination of the deed prescribed by s 445D(1)(g). It does not follow, however, that the third defendant was the only unsuccessful party in the litigation. For the reasons set out above, the administrators are also unsuccessful parties in the litigation. I reject the second defendants’ submission that the third defendant should pay their costs post 11 October 2019.
The third defendant submits that no order for costs should be made against him. He submits that he did not oppose the setting aside of the deed and did not cause any other party to incur costs in the litigation.
The third defendant was called as a witness by the plaintiffs. Leave was granted to the plaintiffs pursuant to s 38 of the Evidence Act 2008 (Vic) (‘Evidence Act’) to cross examine the third defendant. The plaintiffs tendered five affidavits which had been affirmed by the third defendant. I granted leave for the plaintiffs to cross examine the third defendant on the basis that the totality of the third defendant’s evidence was unfavourable to the plaintiffs because it supported non–termination of the deed.[33]
[33]Transcript of proceedings 14 October 2019 T 351 l 24-27.
Counsel for the second defendant accepted that the third defendant’s evidence was unfavourable to the plaintiffs and did not oppose the grant of leave pursuant to s 38 of the Evidence Act.[34] Counsel for the third defendant advanced no submission opposing the grant of leave to the plaintiffs to cross examine the third defendant.
[34]Ibid T 351 l 22–23.
I reject the third defendant’s submission that he did not oppose the application to terminate the deed.[35] First, the third defendant opposed the grant of an interlocutory injunction restraining the administrators from giving effect to the deed.[36] Second, the totality of the five affidavits affirmed by the third defendant supported the maintenance of the deed.[37] For example, the affidavits addressed the nature and quality of the security which the third defendant proffered in respect of his $1 million contribution under the deed. This included details of:
[35]The third defendant’s written submissions filed 29 November 2019, 3 [16].
[36]Transcript of proceedings 28 July 2019 T 70 l 6-11.
[37]Affidavit of Hisham Khartabil affirmed 24 July 2019; Affidavit of Hisham Khartabil affirmed 8 August 2019; Affidavit of Hisham Khartabil 23 August 2019; Affidavit of Hisham Khartabil affirmed 16 September 2019; Affidavit of Hisham Khartabil affirmed 14 October 2019.
(iv) the real property assets of Capital K Pty Ltd and H&M Pty Ltd and the marketing and sale of such properties;[38] and
(v) whether the National Australia Bank had the right to sell the third defendant’s family home.[39]
[38]Affidavit of Hisham Khartabil affirmed 24 July 2019, [5]-[7]; Affidavit of Hisham Khartabil affirmed 8 August 2019, [5]-[8], [10]-[12]; Exhibits HK-8 and HK-9 to the Affidavit of Hisham Khartabil affirmed 23 August 2019.
[39]Affidavit of Hisham Khartabil affirmed 14 October 2019, [4]-[8].
This evidence supported a finding that the third defendant was proffering valuable security for his $1 million contribution to the deed fund. If accepted, this evidence favoured the continuation of the deed.
The third defendant submits that no order for costs should be made against him because he had ‘no real role to play’ in opposing the plaintiffs’ application.[40] I reject this submission. In fact, the third defendant played an active role, together with the administrators, in opposing the termination of the deed. It is therefore appropriate that the third defendant be jointly and severally liable with the second defendant for the plaintiffs’ costs of and incidental to the hearing on 14 and 15 October 2019, as well as the costs of the interlocutory application heard on 23 and 24 July 2019.
[40]The third defendant’s written submissions filed 29 November 2019, [26].
The plaintiffs seek an order that the second and third defendants pay their costs on an indemnity basis. I do not consider that the manner in which the litigation has been conducted by and on behalf of the second and third defendants justifies an indemnity costs order.
The plaintiffs seek an order pursuant to s 499(2D)(a) of the Act appointing Robert Scott Ditrich and Daniel Mathew Bryant of PriceWaterhouseCoopers as liquidators (‘PWC nominees’). If no appointment is made pursuant to s 499(2D)(a), the second defendants will be appointed liquidators by virtue of s 499(2D)(b).
The power to make an order under s 499(2D)(a) is discretionary. I decline to exercise the discretion for the following reasons. First, as set out in the principal judgment at paragraph [40], at all material times the administrators have acted appropriately and in the best interest of creditors. There is no evidence which calls into question the administrators’ independence or integrity. The commercial morality considerations which underpinned the Court’s satisfaction that the deed should be terminated do not reflect adversely upon the administrators. The evidence of the director’s prima facie indebtedness to the company in the sum of approximately $900,000 only emerged during the cross–examination of the director on 15 October 2019. I am satisfied that, as liquidators, the administrators will continue to act in the best interest of creditors.
Second, to date the administrators have undertaken a substantial amount of work investigating the affairs of the company. If the PWC nominees are appointed, it is likely they would have to undertake a considerable amount of work at significant expense familiarising themselves with work already undertaken by the administrators. Further, the PWC nominees have a charge–out rate of $720 per hour compared to $420 per hour for the administrators.[41] Costs considerations favour the appointment of the administrators as liquidators.
[41]Exhibit RH-2 to the affidavit of Richard Hapgood sworn 25 November 2019 and exhibit APS-5 to the affidavit of Andrew Peter Schwartz affirmed 8 August 2019, 126.
The plaintiffs, citing the judgment of Brereton J in Glenwood Village Pty Ltd v Glen Alpine Constructions Pty Ltd,[42] submit that it is the usual practice that, all things being equal, the Court will appoint the plaintiffs’ nominee as liquidator where there is a contest as to the identity of the appropriate appointee and there is nothing to be said between the competing nominees as to their respective fitness, qualification or cost. In the present proceeding there is a significant difference in the charge out rates between the PWC nominees and the administrators. Further, the fact that the administrators have done considerable work investigating the affairs of the company weighs in favour of their appointment.[43]
[42][2009] NSWSC 516.
[43]See Workers Compensation Nominal Insurer v Perfume Empire Pty Ltd [2011] NSWSC 380 at [8]-[10]; Hurst v Bar Machiavelli Pty Ltd [2018] NSWSC 1549 at [10].
I shall not make an order appointing the PWC nominees as liquidators. As a result, upon the making of formal orders terminating the deed, the second defendants will become the liquidators of the company by virtue of s 499(2D)(b) of the Act. On 15 October 2019 the plaintiffs made an offer in Court to fund further enquiries, preparation of an investigating report and general liquidation activities up to the amount of $100,000. The offer was conditional upon the deed being set aside by Court order and lapses 14 days after delivery of final judgment. By virtue of this judgment and the orders made today, the plaintiffs’ offer remains open for acceptance by the liquidators until 2 January 2020.
I propose to make the following orders:
1. Pursuant to s 445D of the Corporations Act 2001 (Cth), the deed of company arrangement dated 17 July 2019 be terminated effective from the date of this order.
2. Orders 2 and 3 of the orders made on 25 July 2019 (as amended on 1 August 2019) be vacated.
3. The plaintiffs pay the second and third defendants’ cost of and incidental to the proceeding from the commencement of the hearing on 19 August 2019 to 11 October 2019 (inclusive) on an indemnity basis with such costs to be taxed in default of agreement.
4. Pursuant to s 29(1) of the Civil Procedure Act 2010 (Vic), the plaintiffs pay the second defendants’ expenses and remuneration incurred in the period between 19 August 2019 and 11 October 2019 (inclusive) in connection with the calling, conduct and consequences of the further meeting of creditors held on 11 September 2019, with such amount to be determined by an Associate Judge or Registrar of the Court in default of agreement.
5. The second and third defendants are jointly and severally liable for:
(vi) the plaintiffs’ costs of and incidental to the plaintiffs’ summons filed on 22 July 2019; and
(vii) The plaintiffs’ costs of the hearing on 14 and 15 October 2019,
such costs to be paid on a standard basis to be taxed in default of agreement.
6. The costs, remuneration and expenses incurred by the second defendants in connection with the proceeding, including any unrecoverable costs and expenses the subject of Orders 3 and 4 above, be costs, remuneration and expenses payable in the liquidation of the first defendant.
SCHEDULE OF PARTIES
S ECI 2019 03305
BETWEEN:
| MCCA ASSET MANAGEMENT LIMITED | First Plaintiff |
| SANDHURST TRUSTEES LIMITED (ACN 004 030 737) AS CUSTODIAN FOR THE MCCA PROPERTY FUND | Second Plaintiff |
| SANDHUSRT NOMINEES (VICTORIA) LIMITED (ACN 092 352 442) AS CUSTODIAN FOR THE MCCA PROPERTY FUND | Third Plaintiff |
- and -
| KAMATA HOMES PTY LTD | First Defendant |
| ANDREW SCHWARZ AND BENJAMIN CONRAD IN THEIR CAPACITIES AS JOINT AND SEVERAL ADMINISTRATORS OF KAMATA HOMES PTY LTD (ACN 130 155 305) (ADMINISTRATORS APPOINTED) | Second Defendant |
| HISHAM KHARTABIL | Third Defendant |
2
8
0