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NMFM Property Pty Ltd v Citibank Ltd (No 2)

NMFM Property Pty Ltd v Citibank Ltd (No 2)

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Case Copied 27 April 2001 63 min read

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NMFM Property Pty Ltd v Citibank Ltd (No 11) [2001] FCA 480
Practice and Procedure
(2001) 109 FCR 77

FEDERAL COURT OF AUSTRALIA

NMFM Property Pty Ltd v Citibank Ltd (No 11) [2001] FCA 480

PRACTICE AND PROCEDURE – Costs – indemnity costs – circumstances in which indemnity costs will be ordered – applicant, having paid out claims of investors in applicant’s property trust, seeking to recover contribution or indemnity from bank which financed them into the investment – applicant fails in claim and must pay bank’s costs – whether it should be ordered to do so on an indemnity basis – suggested ethical or moral delinquency of applicant – whether ethical or moral delinquency in the underlying or background facts sufficient to support order for indemnity costs or whether ethical or moral delinquency must be associated with the commencement or manner of conduct of the litigation – whether case “hopeless” – whether case “fundamentally flawed” – notice to admit facts and notice disputing facts – whether party disputing facts should be ordered to pay costs of proof of the facts disputed

Calderbank v Calderbank [1976] Fam 93 cited

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 cited

Degmam Pty Ltd (in liq) v Wright (No 2) [1983] 2 NSWLR 354 cited

EMI Records Ltd v Ian Cameron Wallace Ltd [1983] 1 Ch 59 cited

Botany Municipal Council v Secretary, Department of the Arts, Sport, the Environment, Tourism and Territories (1992) 34 FCR 412 cited

Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151 (FC) cited

Australian Guarantee Corporation Ltdv De Jager [1984] VR 483 distinguished

National Australia Bank v Petit-Breuilh(No 3) [2000] VSC 291 not followed

Harrison v Schipp [2001] NSWCA 13 followed

Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 cited

Jones v Bartlett (2000) 75 ALJR 1 cited

Beswick v Beswick [1968] AC 58 cited

Concrete Constructions Pty Ltd v Government Insurance Office of New South Wales [1966] 2 NSWR 609 cited

Sacher Investments Pty Ltd v Forma Stereo Consultants Pty Ltd [1976] 1 NSWLR 5 cited

Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 cited

MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236 cited

NMFM PROPERTY PTY LIMITED (formerly called “National Mutual Property Services (Australia) Pty Ltd”) v CITIBANK LIMITED (formerly called “Citibank Savings Limited”)

NG 765 of 1994

LINDGREN J

27 APRIL 2001

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY NG 765 OF 1994

BETWEEN: NMFM PROPERTY PTY LIMITED (formerly called “National Mutual Property Services (Australia) Pty Ltd”)
FIRST APPLICANT
NATIONAL MUTUAL ASSETS MANAGEMENT LIMITED
SECOND APPLICANT
THE NATIONAL MUTUAL LIFE ASSOCIATION OF AUSTRALASIA LIMITED
THIRD APPLICANT
AND: CITIBANK LIMITED (formerly called “Citibank Savings Limited”)
RESPONDENT
FIRST CROSS-CLAIM
CITIBANK LIMITED (formerly called “Citibank Savings Limited”)
CROSS-CLAIMANT
[Lance Kelly Financial Management Pty Ltd, removed as a party]
FIRST CROSS-RESPONDENT
LANCE…

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: [2001] FCA 480
Decision Date: 27 APRIL 2001

CaseChat Overview and Summary

NMFM Property Pty Ltd and others commenced proceeding against Citibank Limited seeking contribution or indemnity for losses suffered by investors in a property trust. The proceeding was dismissed and Citibank sought indemnity costs against NMFM and others. The key issue for the court was whether there were circumstances that justified ordering NMFM and others to pay Citibank's costs on an indemnity basis. The court held that ethical or moral delinquency of NMFM and others in the underlying facts was not sufficient grounds to order indemnity costs. The court also held that NMFM and others' claim was not hopeless as it was arguable and they were not required to accept Citibank's settlement offers. The court found that NMFM and others' conduct as litigants did not warrant indemnity costs. The court further held that the facts sought to be admitted in notices disputing facts were not genuinely in dispute and ordering Citibank to pay NMFM and others' costs of proving those facts was not warranted. The court ordered that NMFM and others pay Citibank's costs on the usual party and party basis.

Orders