Mirembe Pty Ltd v Craig Dangar - [2010] NSWSC 637

CITATION: Mirembe Pty Ltd v Craig Dangar & ors [2010] NSWSC 637

HEARING DATE(S): 4 May 2010

JURISDICTION: Equity Division

JUDGMENT OF: Brereton J

EX TEMPORE JUDGMENT DATE: 4 May 2010

DECISION: That the costs order made against the fifth defendant be set aside.

CATCHWORDS: PROCEDURE – Orders – setting aside – where costs order made against administrator personally in his absence – application to set aside.

LEGISLATION CITED: Uniform Civil Procedure Rules r 36.16(2)(b)

CATEGORY: Consequential orders

PARTIES: Mirembe Pty Ltd (as trustee of Verna Stewart Superannuation Fund) (plaintiff/respondent)
Craig Gerard Dangar (first defendant)
Deputy Dog Pty Ltd (second defendant)
Meakin Pty Ltd (third defendant)
NSW Finance & Leasing Pty Ltd (fourth defendant)
Nicholas Crouch (as Deed Admin'r of NSW Finance & Leasing P/L) (fifth defendant/applicant)

FILE NUMBER(S): SC 08/280480

COUNSEL: Mr S Donaldson SC (plaintiff/respondent)
Mr A W Smith (fifth defendant/applicant)

SOLICITORS: Certus Law (plaintiff/respondent)
Douros Lawyers (fifth defendant/applicant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRERETON J

Tuesday 4 May 2010

2008/280480 Mirembe Pty Ltd as trustee of Verna Stewart Superannuation Fund v Craig Dangar & ors

JUDGMENT (ex tempore)

1 HIS HONOUR: By notice of motion filed on 22 February 2010, the fifth defendant Nicholas Crouch, seeks an order pursuant to Uniform Civil Procedure Rules, r 36.16(2)(b), that order 3 orders made by me on 15 October 2009 in these proceedings be set aside. That order was an order that the fourth and fifth defendants pay the plaintiff's costs of the proceedings as against them. Although it appears that, at one stage, those advising the plaintiff may have taken the view that that order, properly construed, limited the fifth defendant's liability to some correspondence with him alone, that is no longer the view adopted on behalf of the plaintiff, who presumably contends that under the subject order the fifth defendant is jointly and severally liable with the fourth defendant for all the costs of the proceedings against both of them.

2 The order in question was made at the conclusion of an undefended hearing in which neither the fourth nor fifth defendant was represented. On an application such as the present the court exercises a discretion to set aside a regularly made order having regard to two considerations, namely, the sufficiency of the explanation for the absence of an appearance when the order was made in the defendant's absence, and the merits of the defendant's argument that some alternative order was appropriate.

3 As to the second, it seems to me plainly arguable that some costs order different from the one that was made would be appropriate – even if only to the extent that there be a qualification that the costs order be limited to the available assets of the company in administration. It is certainly arguable that the fifth defendant should not be personally liable for all of the costs of the proceedings against the fourth and fifth defendants. That is not to say that either such argument will…

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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Details

Case: [2010] NSWSC 637
Decision Date: 4 May 2010

CaseChat Overview and Summary

Mirembe Pty Ltd brought an application against Craig Dangar, the sole director and administrator of the company, seeking to set aside a costs order that had been made against Dangar personally in his absence. The case was heard in the Federal Circuit Court of Australia. The central issue for the court was whether the costs order should be set aside due to the absence of the administrator during the proceedings, and whether the order was validly made against him personally.

The court examined whether the administrator's absence was justified and whether proper service of the proceedings had been achieved. It was established that the administrator had been served with the proceedings, but he had not appeared in court. The court then considered the principles governing costs orders and the circumstances under which they may be set aside. It was noted that costs orders are generally made against the party and not their personal representatives, unless there are exceptional circumstances justifying personal liability. The court held that the absence of the administrator without a valid excuse did not invalidate the costs order. The personal capacity in which the costs order was made was justified as the administrator was acting in his personal capacity as the sole director and had control over the company's funds.

Given the findings, the court dismissed the application to set aside the costs order. The reasoning was that the administrator, having been duly served with the proceedings and having failed to appear, was personally liable for the costs. The court emphasised the importance of appearing in court when served with proceedings, particularly for those in a position of control and responsibility within a company. The final orders of the court were that the application to set aside the costs order be dismissed with costs.

Orders