Newlinx Pty Ltd v Domain Gray Pty Ltd - [2018] QSC 256

SUPREME COURT OF QUEENSLAND

CITATION:

Newlinx Pty Ltd & anor v Domain Gray Pty Ltd & ors [2018] QSC 256

PARTIES:

NEWLINX PTY LTD

ACN 092 202 750
(first plaintiff)
BARGARA PROPERTY DEVELOPMENTS PTY LTD (IN LIQUIDATION)
ACN 109 676 468
(second plaintiff)

v
DOMAIN GRAY PTY LTD
ACN 101 123 148
(first defendant/applicant)
BARBARA ANNE GRAY
(second defendant/applicant)
KENNETH JOHN GRAY
(third defendant/applicant)
PLASTIRAS LAWYERS
ABN 38 839 584 819

(fourth defendant)
and
GAVIN MOSS
(non-party/respondent)
NATHAN FRANKLIN
(non-party/respondent)
DANIEL SIMIC

(non-party/respondent)

FILE NO/S:

SC No 3544 of 2015

DIVISION:

Trial

PROCEEDING:

Claim

DELIVERED ON:

9 November 2018

DELIVERED AT:

Brisbane

HEARING DATE:

19 July 2018

JUDGE:

Atkinson J

ORDERS:

The orders of the Court are:

1.   The application filed 5 October 2017 is dismissed.

2.   The first, second and third defendants/applicants pay the costs of and incidental to the application of the respondent Gavin Moss on the standard basis until 20 March 2018 and thereafter on the indemnity basis.

3.   The first, second and third defendants/applicants pay the costs of and incidental to the application of the respondents Nathan Franklin and Daniel Simic on the standard basis.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – PARTIES AND NON-PARTIES – NON-PARTIES GENERALLY – where the first, second and third defendants (“defendants”) were successful in an application for summary judgment against the plaintiffs – where the plaintiffs were ordered to pay the defendants’ costs – where the defendants apply for an order that the liquidator of the second plaintiff pay the costs the subject of that order – whether the interests of justice favour the making of such an order

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – PARTIES AND NON-PARTIES – NON-PARTIES GENERALLY – DIRECTOR OF COMPANY – where the defendants further apply for an order that the current director and shareholder of the first plaintiff and former director and shareholder of the first plaintiff pay the costs the subject of that order – whether the interests of justice favour the making of such an order

Uniform Civil Procedure Rules 1999 (Qld), r 681

Arawak Holdings Pty Ltd v King Tide Company [2018] QCA 148, cited
Commissioner of Stamp Duties v Westleigh Management Services Pty Ltd [2001] QSC 176, cited
FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340, cited
Gdanski v Palms Court Management Pty Ltd [2017] VSCA 348, applied
Knight v FP Special Assets Ltd (1992) 174 CLR 178; [1992] HCA 28, cited
Vestris v Cashman [1998] SASC 6852, cited
The Beach Retreat Pty Ltd v Mooloolaba Marina Ltd [2009] 2 Qd R 356, cited

Yates v Boland [2000] FCA 1895, cited

COUNSEL:

L M Copley for the first and second plaintiffs
A C Barlow for the first, second and third defendants/applicants
No appearance for the fourth defendant
D de Jersey for the respondent Gavin Moss

L M Copley for the respondents Nathan Franklin…

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: [2018] QSC 256
Decision Date: 9 November 2018

CaseChat Overview and Summary

In the matter of Newlinx Pty Ltd v Domain Gray Pty Ltd, the defendants sought an order that costs awarded against the plaintiffs be paid by the liquidator of one of the plaintiffs, and by two directors of the other plaintiff. The plaintiffs, Newlinx and Bargara Property Developments Pty Ltd (in liquidation), had originally sought damages from the defendants for the sale of two units. The defendants were successful in obtaining summary judgment, and sought to have the costs of the proceedings paid by the liquidator of Bargara PD and by two directors of Newlinx. The court had to determine whether the interests of justice favoured such an order.

The court held that making a costs order against a non-party is an exceptional course, and is only appropriate if it is necessary to ensure justice is done. The court found that there were no exceptional circumstances that warranted making such an order against the liquidator or the directors. The liquidator had no personal liability for the costs, and the directors were not responsible for the conduct that gave rise to the costs. The court noted that the defendants had not provided any evidence to support their application, and that the liquidator and directors had not acted improperly.

The application was dismissed, and the defendants were ordered to pay the costs of the application. The court found that the defendants' application was an abuse of process, and that the liquidator and directors were not liable for the costs of the proceedings. The court emphasised the importance of ensuring that costs orders are not used as a tool for punishing non-parties, and that they should only be made in exceptional circumstances. The orders of the Court were that the application filed 5 October 2017 is dismissed, and that the first, second and third defendants/applicants pay the costs of and incidental to the application of the respondents on the standard and indemnity basis.

Orders

Orders of the court

The orders of the Court are:

1. The application filed 5 October 2017 is dismissed.

2. The first, second and third defendants/applicants pay the costs of and incidental to the application of the respondent Gavin Moss on the standard basis until 20 March 2018 and thereafter on the indemnity basis.

3. The first, second and third defendants/applicants pay the costs of and incidental to the application of the respondents Nathan Franklin and Daniel Simic on the standard basis.

Background

Background to the litigation

The three respondents are:1.Gavin Moss, the liquidator of the second plaintiff, Bargara Property Developments Pty Ltd (in liquidation) (“Bargara PD”);2.Nathan David Franklin, a current director and shareholder of the first plaintiff, Newlinx Pty Ltd (“Newlinx”); and3.Daniel Matthew Simic, a director and shareholder of Newlinx until 25 August 2016.Background In December 2006, the defendants contracted to buy two units being developed at Bargara by the second plaintiff, Bargara PD. The defendants did not complete the contract and the properties were sold to other purchasers at a much reduced value, reflecting a loss of $950,000.00. On 10 April 2012, Mr Moss and Nick Combis were appointed as liquidators of Bargara PD at a meeting of the members. Prior to being placed into liquidation, Bargara PD was a developer that was developing a block of units situated at Bargara, a small seaside town near Bundaberg. On 5 July 2013, Domain Gray Pty Ltd (“Domain Gray”) commenced proceeding number M1412/13 in the Magistrates Court of Queensland against Bargara PD and Plastiras Lawyers (“the Magistrates Court proceeding”, also referred to as “the first proceeding”). This proceeding involved an application by Domain Gray for declarations that the contracts for the sale of land had been terminated pursuant to the Property Agents and Motor Dealers Act 2000 (Qld) (“PAMDA”) and that Domain Gray were entitled to the return of the contract deposit held by Plastiras Lawyers. In or around July 2013, the liquidators engaged a solicitor, Mr Edwards, to act on behalf of Bargara PD in relation to the Magistrates Court proceeding. On 10 November 2014, Newlinx took an assignment of a damages claim by Bargara PD against the defendants. Following that assignment, on 13 November 2014, Newlinx filed proceedings in the Supreme Court of New South Wales seeking damages against Domain Gray (“the New South Wales proceeding”, also referred to as “the second proceeding”). On 11 February 2015, the Magistrates Court proceeding was transferred from the Magistrates Court to the District Court of Queensland. The New South Wales proceeding was then transferred to this Court and consolidated with the Magistrates Court proceeding by order of Philip McMurdo J (as his Honour then was) on 3 November 2015. On 16 September 2016, Peter Lyons J ordered summary judgment for the defendants. On 5 October 2017, the defendants applied for an order that the respondents pay the costs the subject of the order of Peter Lyons J. The hearing of this application was then adjourned to 19 July 2018.Application against Mr Moss Rule 681(1) of the Uniform Civil Procedure Rules 1999 (Qld) provides that costs of a proceeding, including an application in a proceeding, are in the discretion of the Court, but follow the event unless the Court orders otherwise. Costs orders may, in appropriate circumstances, be made against non-parties.[1] The making of a costs order against a non-party is, however, “an exceptional course for a court to take.”[2][1] Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 190; Commissioner of Stamp Duties v Westleigh Management Services Pty Ltd [2001] QSC 176 at [18]-[19] per Mackenzie J.[2] Gdanski v Palms Court Management Pty Ltd [2017] VSCA 348 at [1].

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Newlinx Pty Ltd & anor v Domain Gray Pty Ltd & ors [2018] QSC 256
PARTIES:	NEWLINX PTY LTD ACN 092 202 750 (first plaintiff) BARGARA PROPERTY DEVELOPMENTS PTY LTD (IN LIQUIDATION) ACN 109 676 468 (second plaintiff) v DOMAIN GRAY PTY LTD ACN 101 123 148 (first defendant/applicant) BARBARA ANNE GRAY (second defendant/applicant) KENNETH JOHN GRAY (third defendant/applicant) PLASTIRAS LAWYERS ABN 38 839 584 819 (fourth defendant) and GAVIN MOSS (non-party/respondent) NATHAN FRANKLIN (non-party/respondent) DANIEL SIMIC (non-party/respondent)
FILE NO/S:	SC No 3544 of 2015
DIVISION:	Trial
PROCEEDING:	Claim
DELIVERED ON:	9 November 2018
DELIVERED AT:	Brisbane
HEARING DATE:	19 July 2018
JUDGE:	Atkinson J
ORDERS:	The orders of the Court are: 1. The application filed 5 October 2017 is dismissed. 2. The first, second and third defendants/applicants pay the costs of and incidental to the application of the respondent Gavin Moss on the standard basis until 20 March 2018 and thereafter on the indemnity basis. 3. The first, second and third defendants/applicants pay the costs of and incidental to the application of the respondents Nathan Franklin and Daniel Simic on the standard basis.
CATCHWORDS:	PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – PARTIES AND NON-PARTIES – NON-PARTIES GENERALLY – where the first, second and third defendants (“defendants”) were successful in an application for summary judgment against the plaintiffs – where the plaintiffs were ordered to pay the defendants’ costs – where the defendants apply for an order that the liquidator of the second plaintiff pay the costs the subject of that order – whether the interests of justice favour the making of such an order PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – PARTIES AND NON-PARTIES – NON-PARTIES GENERALLY – DIRECTOR OF COMPANY – where the defendants further apply for an order that the current director and shareholder of the first plaintiff and former director and shareholder of the first plaintiff pay the costs the subject of that order – whether the interests of justice favour the making of such an order Uniform Civil Procedure Rules 1999 (Qld), r 681 Arawak Holdings Pty Ltd v King Tide Company [2018] QCA 148, cited Commissioner of Stamp Duties v Westleigh Management Services Pty Ltd [2001] QSC 176, cited FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340, cited Gdanski v Palms Court Management Pty Ltd [2017] VSCA 348, applied Knight v FP Special Assets Ltd (1992) 174 CLR 178; [1992] HCA 28, cited Vestris v Cashman [1998] SASC 6852, cited The Beach Retreat Pty Ltd v Mooloolaba Marina Ltd [2009] 2 Qd R 356, cited Yates v Boland [2000] FCA 1895, cited
COUNSEL:	L M Copley for the first and second plaintiffs A C Barlow for the first, second and third defendants/applicants No appearance for the fourth defendant D de Jersey for the respondent Gavin Moss L M Copley for the respondents Nathan Franklin…