Mead v Watson as Liquidator for Hypec Electronics [2005] NSWCA 133
HEARING DATE(S):
On the papers
JUDGMENT DATE:
28 April 2005
JUDGMENT OF:
Sheller JA; Ipp JA; Tobias JA
DECISION:
(1) Leave to appeal granted; (2) Appeal allowed; (3) Set aside Order 4 made by Justice Campbell on 13 August 2004 in proceedings No. 1268/02 and in lieu thereof order that David Patrick Watson pay the costs of the First Defendant in those proceedings, being costs of and incidental to claims made by the Plaintiff to recover the four properties, on an indemnity basis; (4) Set aside Order 5 made by Justice Campbell on 13 August 2004 in proceedings No. 1933/02 and in lieu thereof order that the costs of the applicant and of David Patrick Watson in proceedings begun by interlocutory process filed 13 December 2001, to the extent that that interlocutory process was heard together with proceedings No. 1268/02, be paid by David Patrick Watson personally on an indemnity basis; (5) The First Opponent to pay personally the claimant's costs of the summons for leave to appeal and the appeal but to have a certificate under the Suitor's Fund Act 1951 if otherwise qualified
CATCHWORDS:
PROCEDURE - Costs - Circumstances in which a liquidator may be ordered to pay personally costs which have been ordered against the company in liquidation - - Liquidator caused company to bring proceedings to recover corporate assets - Proceedings unsuccessful due to estoppel and Ex parte James defences - Personal costs order sought against liquidator - Whether liquidator's conduct of litigation was "improper" - Whether liquidator acted reasonably in opposing estoppel and Ex parte James defences - Whether "exceptional circumstances" established justifying personal costs order against liquidator - PROCEDURE - Costs - Indemnity costs - Whether conduct of litigation such as to warrant award of indemnity costs against liquidator
Colin Anthony Mead David Patrick Watson as Liqduiator for Hypec Electronics Pty Limited (in liq) & Anor
FILE NUMBER(S):
CA 40770/04
COUNSEL:
CL: D Fagan SC / V Bedrossian 1 OPP: P W Taylor / A Justice
SOLICITORS:
CL: Etheringtons, North Sydney 1 OPP: Horton Rhodes, Sydney
LOWER COURT JURISDICTION:
Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):
ED 1268/02; ED 1933/01
LOWER COURTJUDICIAL OFFICER:
Campbell J
CA 40770/04
SHELLER JA IPP JA TOBIAS JA
Thursday 28 April 2005
COLIN ANTHONY MEAD v DAVID PATRICK WATSON as Liquidator for HYPEC ELECTRONICS PTY LIMITED (IN LIQUIDATION) & Anor [2]
This was an appeal…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Mead v Watson [2005] NSWCA 133
Case
[2005] NSWCA 133
Decision Date
CaseChat Overview and Summary
In *Mead v Watson*, the New South Wales Court of Appeal considered an appeal from orders made by Campbell J concerning the personal liability of a liquidator for costs. The liquidator, David Patrick Watson, had caused the company in liquidation to bring proceedings to recover corporate assets. These proceedings were unsuccessful due to the defences of estoppel and *Ex parte James*. A personal costs order was sought against the liquidator.
The primary legal issues before the Court of Appeal were whether the liquidator's conduct of the litigation was "improper" or whether he acted unreasonably in opposing the *estoppel* and *Ex parte James* defences, thereby establishing "exceptional circumstances" to justify a personal costs order. The court also considered whether the conduct of the litigation warranted an award of indemnity costs against the liquidator.
The Court of Appeal found that the liquidator's conduct in pursuing the claims, particularly in the face of the *estoppel* defence, was unreasonable and constituted exceptional circumstances justifying a personal costs order. The court reasoned that the liquidator ought to have recognised the strength of the *estoppel* defence earlier and that his continued pursuit of the claims was not justified. Consequently, the court allowed the appeal, setting aside the orders of Campbell J and ordering that the liquidator, David Patrick Watson, pay the costs of the first defendant on an indemnity basis in the proceedings concerning the recovery of four properties. Further, the liquidator was ordered to pay the claimant's costs personally on an indemnity basis in relation to certain interlocutory processes heard with those proceedings.
Orders
Orders of the court
(1) Leave to appeal granted; (2) Appeal allowed; (3) Set aside Order 4 made by Justice Campbell on 13 August 2004 in proceedings No. 1268/02 and in lieu thereof order that David Patrick Watson pay the costs of the First Defendant in those proceedings, being costs of and incidental to claims made by the Plaintiff to recover the four properties, on an indemnity basis; (4) Set aside Order 5 made by Justice Campbell on 13 August 2004 in proceedings No. 1933/02 and in lieu thereof order that the costs of the applicant and of David Patrick Watson in proceedings begun by interlocutory process filed 13 December 2001, to the extent that that interlocutory process was heard together with proceedings No. 1268/02, be paid by David Patrick Watson personally on an indemnity basis; (5) The First Opponent to pay personally the claimant's costs of the summons for leave to appeal and the appeal but to have a certificate under the Suitor's Fund Act 1951 if otherwise qualified