Olivaylle Pty Ltd v Flottweg GmbH and Co KGaA (No 7) - [2011] FCA 689

FEDERAL COURT OF AUSTRALIA
Olivaylle Pty Ltd v Flottweg GMBH & Co KGAA (No 7) [2011] FCA 689

Citation: Olivaylle Pty Ltd v Flottweg GMBH & Co KGAA (No 7) [2011] FCA 689

Parties: OLIVAYLLE PTY LTD (ACN 080 670 640) (ADMINISTRATORS APPOINTED) v FLOTTWEG AG (FORMERLY FLOTTWEG GMBH & CO KGAA) (ABN 95 101 547 424)

File number: SAD 261 of 2006

Judge: LOGAN J

Date of judgment: 17 June 2011

Catchwords: COSTS – claim against non-party – unsuccessful party in administration and unable to meet substantial costs order – non-party played active part in litigation and failure to settle the matter – non-party is director and controlling shareholder of the applicant – respondent twice sought security for costs unsuccessfully – where non-party misrepresented to the Court the true liabilities of the unsuccessful party – jointly against unsuccessful party and non-party

Legislation: Corporations Act 2001 (Cth) s 1335, Pt 5.3A
Federal Court of Australia Act 1976 (Cth) s 43
Federal Court Rules (Cth) O 62 r 4(2)(c)

Cases cited: Gore v Justice Corporation Pty Ltd (2002) 119 FCR 429 considered
Knight v FP Special Assets Ltd (1992) 174 CLR 178 applied
NAGM v Minister for Immigration & Multicultural & Indigenous Affairs (2002) 125 FCR 488 applied
Olivaylle Pty Ltd v Flottweg GMBH & CO KGAA [2010] FCAFC 62 cited
Olivaylle Pty Ltd (ACN 080 670 640) v Flottweg GMBH & CO KGAA (ABN 95 101 547 424) [2007] FCA 56 cited
Olivaylle Pty Ltd (ACN 080 670 640) v Flottweg GMBH & CO KGAA (ABN 95 101 547 424) (No 2) [2007] FCA 1892 cited
Olivaylle Pty Ltd v Flottweg GMBH & CO KGAA (No 4) (2009) 255 ALR 632 cited
Olivaylle Pty Ltd v Flottweg GMBH & CO KGAA (No 5) [2009] FCA 571 cited
Olivaylle Pty Ltd v Flottweg GMBH & CO KGAA (No 6) [2011] FCA 688 cited
Vestris v Cashman (1998) 72 SASR 449 applied

Date of hearing: 2 June 2011

Date of last submissions filed on behalf of the Respondent: 15 June 2011

Place: Brisbane (via videolink to Adelaide and Sydney)

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 39

Solicitor for the Applicant: Minter Ellison

Counsel for the Respondent: Mr M Hoffmann QC

Solicitor for the Respondent: Fisher Jeffries as town agents Baker McKenzie

Mr Jorge de Moya (non-party to principal application and respondent to costs application by respondent): Mr Jorge de Moya did not appear

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

SAD 261 of 2006

BETWEEN:
OLIVAYLLE PTY LTD (ACN 080 670 640) (ADMINISTRATORS APPOINTED)
Applicant

AND:
FLOTTWEG AG (FORMERLY FLOTTWEG GMBH & CO KGAA) (ABN 95 101 547 424)
Respondent

JUDGE:

LOGAN J

DATE OF ORDER:

17 JUNE 2011

WHERE MADE:

BRISBANE (VIA VIDEOLINK TO ADELAIDE AND SYDNEY)

THE COURT ORDERS THAT:
1.Jorge de Moya is jointly and severally liable with the applicant to meet the costsordered to be paid by the applicant by paragraphs 1, 2 and 3 of the order made on 17…

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.

Continue reading Olivaylle Pty Ltd v Flottweg GmbH and Co KGaA (No 7)

Details

AGLC: Olivaylle Pty Ltd v Flottweg GmbH and Co KGaA (No 7) [2011] FCA 689
Case: [2011] FCA 689
Decision Date: 17 June 2011

CaseChat Overview and Summary

The case of Olivaylle Pty Ltd v Flottweg GmbH and Co KGaA (No 7) involved a complex litigation concerning the costs incurred in the proceedings, with specific focus on the role and liability of Jorge de Moya, a non-party to the litigation but a director and controlling shareholder of the applicant company, Olivaylle Pty Ltd. The Federal Court was called upon to decide the legal issues surrounding the costs and the liability of Jorge de Moya for the substantial costs incurred by the unsuccessful party, Olivaylle Pty Ltd.

The court had to determine whether Jorge de Moya, who played an active part in the litigation and misrepresented the true liabilities of Olivaylle Pty Ltd to the court, could be held liable for the costs ordered against the unsuccessful party. Additionally, the court had to assess the appropriateness of imposing joint and several liability on both the unsuccessful party and Jorge de Moya, as well as the implications of the respondent's unsuccessful attempts to secure costs from Jorge de Moya.

In its decision, the court found that Jorge de Moya's active involvement in the litigation, coupled with his misrepresentation to the court about the financial liabilities of Olivaylle Pty Ltd, justified holding him jointly and severally liable with the company for the costs. The misrepresentation exacerbated the situation, leading to the imposition of joint and several liability. The court also concluded that it was equitable to stay the recovery of certain costs from Jorge de Moya pending further determination of set-off amounts. Furthermore, Jorge de Moya was ordered to pay the respondent's costs related to a specific application.

The court's final orders included making Jorge de Moya jointly and severally liable with Olivaylle Pty Ltd for certain costs, staying the recovery of some of these costs pending further determination, and requiring Jorge de Moya to pay the respondent's costs associated with a particular application. The court also reserved the right for the parties to apply for further orders under certain conditions.

Orders

Orders of the court

1. Jorge de Moya is jointly and severally liable with the applicant to meet the costs ordered to be paid by the applicant by paragraphs 1, 2 and 3 of the order made on 17 June 2011 and by the order made on 28 May 2009.

2. Save in respect of the costs ordered to be paid by the applicant pursuant to paragraphs 2 and 3 of the order made on 17 June 2011, recovery of its costs by the respondent from Jorge de Moya pursuant to paragraph 1 of this order is stayed, pending the determination by taxation, agreement or fixing in gross of the amount of the set off referred to in paragraph 2 of the order made on 28 May 2009 and paragraph 1(b) of the order made on 17 June 2011 or further earlier order.

3. Jorge de Moya is to pay the respondent’s costs of and incidental to its application filed on 19 May 2011, to be taxed if not agreed or fixed in gross.

4. Liberty to apply on two clear business days notice is reserved to the respondent, the applicant (including its administrators and any liquidator who may come to be appointed) and Jorge de Moya.

Note:

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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Citation:		Olivaylle Pty Ltd v Flottweg GMBH & Co KGAA (No 7) [2011] FCA 689
Parties:		OLIVAYLLE PTY LTD (ACN 080 670 640) (ADMINISTRATORS APPOINTED) v FLOTTWEG AG (FORMERLY FLOTTWEG GMBH & CO KGAA) (ABN 95 101 547 424)
File number:		SAD 261 of 2006
Judge:		LOGAN J
Date of judgment:		17 June 2011
Catchwords:		COSTS – claim against non-party – unsuccessful party in administration and unable to meet substantial costs order – non-party played active part in litigation and failure to settle the matter – non-party is director and controlling shareholder of the applicant – respondent twice sought security for costs unsuccessfully – where non-party misrepresented to the Court the true liabilities of the unsuccessful party – jointly against unsuccessful party and non-party
Legislation:		Corporations Act 2001 (Cth) s 1335, Pt 5.3A Federal Court of Australia Act 1976 (Cth) s 43 Federal Court Rules (Cth) O 62 r 4(2)(c)
Cases cited:		Gore v Justice Corporation Pty Ltd (2002) 119 FCR 429 considered Knight v FP Special Assets Ltd (1992) 174 CLR 178 applied NAGM v Minister for Immigration & Multicultural & Indigenous Affairs (2002) 125 FCR 488 applied Olivaylle Pty Ltd v Flottweg GMBH & CO KGAA [2010] FCAFC 62 cited Olivaylle Pty Ltd (ACN 080 670 640) v Flottweg GMBH & CO KGAA (ABN 95 101 547 424) [2007] FCA 56 cited Olivaylle Pty Ltd (ACN 080 670 640) v Flottweg GMBH & CO KGAA (ABN 95 101 547 424) (No 2) [2007] FCA 1892 cited Olivaylle Pty Ltd v Flottweg GMBH & CO KGAA (No 4) (2009) 255 ALR 632 cited Olivaylle Pty Ltd v Flottweg GMBH & CO KGAA (No 5) [2009] FCA 571 cited Olivaylle Pty Ltd v Flottweg GMBH & CO KGAA (No 6) [2011] FCA 688 cited Vestris v Cashman (1998) 72 SASR 449 applied
Date of hearing:	2 June 2011
Date of last submissions filed on behalf of the Respondent:	15 June 2011
Place:	Brisbane (via videolink to Adelaide and Sydney)
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	39
Solicitor for the Applicant:	Minter Ellison
Counsel for the Respondent:	Mr M Hoffmann QC
Solicitor for the Respondent:	Fisher Jeffries as town agents Baker McKenzie
Mr Jorge de Moya (non-party to principal application and respondent to costs application by respondent):	Mr Jorge de Moya did not appear

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	SAD 261 of 2006

JUDGE:	LOGAN J
DATE OF ORDER:	17 JUNE 2011
WHERE MADE:	BRISBANE (VIA VIDEOLINK TO ADELAIDE AND SYDNEY)