FEDERAL COURT OF AUSTRALIA
Ozmen v Culture Map Pty Ltd (No 2) [2020] FCA 1891
File number(s): NSD 2423 of 2018 Judgment of: RARES J Date of judgment: 17 December 2020 Catchwords: PRACTICE AND PROCEDURE – application for security for costs pursuant to s 56 Federal Court of Australia Act 1976 (Cth) and r 19.01 Federal Court Rules 2011 (Cth) – Held: application dismissed Legislation: Corporations Act 2001 (Cth) s 237
Federal Court of Australia Act1976 (Cth) ss 37N, 56
Foreign Judgments Act 1991 (Cth)
Federal Court Rules 1979 (Cth) s 56
Federal Court Rules2011 (Cth) r 19.01
Cases cited: Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1
Commission of Taxation (Cth) v Vasiliades (2016) 344 ALR 558
Jeffery & Katauskas Pty Limited v SST Consulting Pty Ltd (2009) 239 CLR 75
KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189
Morris v Hanley [2001] NSWCA 374
Neptune Hospitality Pty Ltd v Ozmen Entertainment Pty Ltd (2020) 375 ALR 489
Ninan v St George Bank Ltd (2012) 294 ALR 190 at 199 [35]
Ozmen Entertainment Pty Ltd v Neptune Hospitality Pty Ltd (2019) 369 ALR 644
Ozmen v Culture Map Pty Ltd (No 1) [2020] FCA 1890
PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321
Tyne (as trustee of Argot Trust) v UBS AG (2014) 102 ACSR 403
Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 28 Date of hearing: 17 December 2020 Counsel for the Applicants: Mr Alwyn Narayan Solicitor for the Applicants: Craddock Murray Neumann Counsel for the First and Third Respondents Ms Bridie Nolan Solicitor for the First and Third Respondents Metis Law Counsel for the Second Respondent Self-represented ORDERS
NSD 2423 of 2018 BETWEEN: MERT ACUN OZMEN
First Applicant
KARTAL ALTIKULACOGLU
Second Applicant
OZMEN ENTERTAINMENT GROUP PTY LTD
Third Applicant
AND: CULTURE MAPS PTY LTD
First Respondent
NGUYEN (JOHN) LE
Second Respondent
ERIC WOO (and another named in the Schedule)
Third Respondent
ORDER MADE BY:
RARES J
DATE OF ORDER:
17 DECEMBER 2020
THE COURT ORDERS THAT:
1.The first and third respondents’ interlocutory application for security for costs filed 31 August 2020 be dismissed with costs.
2.The first and third respondents pay the applicant’s costs of and incidental to the interlocutory application filed 19 November 2020 for rectification of the share register.
3.The proceeding be listed for hearing to commence on 19 July 2021 for 5 days.
4.The parties exchange lists of documents to be included in the court book by 12 March 2021.
5.The applicants prepare and file 2 copies of a Court book in hard copy and one copy in electronic form consisting of clear, clean copies of each document that each party proposes to tender arranged in chronological order (without duplication unless there is a need for more than one copy), double sided, with no tabs, and consecutively paginated by 1…
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- Case
- [2020] FCA 1891
- Decision Date
CaseChat Overview and Summary
The court dismissed the application for security for costs with costs and made several orders for the conduct of the proceedings. The court ordered that the Ozmen parties were to pay the costs of the interlocutory application for rectification of the share register. The court also made orders for the exchange of documents, the preparation of a court book, and the filing of outlines of opening and reply submissions. The hearing of the proceedings was listed to commence on 19 July 2021 for 5 days. The court made it clear that the dismissal of the application for security for costs was not to be taken as any indication of the merits of the case or any other issue in the proceedings.
Orders
Orders of the court
1. The first and third respondents’ interlocutory application for security for costs filed 31 August 2020 be dismissed with costs.
2. The first and third respondents pay the applicant’s costs of and incidental to the interlocutory application filed 19 November 2020 for rectification of the share register.
3. The proceeding be listed for hearing to commence on 19 July 2021 for 5 days.
4. The parties exchange lists of documents to be included in the court book by 12 March 2021.
5. The applicants prepare and file 2 copies of a Court book in hard copy and one copy in electronic form consisting of clear, clean copies of each document that each party proposes to tender arranged in chronological order (without duplication unless there is a need for more than one copy), double sided, with no tabs, and consecutively paginated by 1 April 2021.
6. The applicants file and serve an outline of opening submissions limited to 10 pages on or before 7 May 2021.
7. The respondents file and serve an outline of opening submissions limited to 10 pages on or before 4 June 2021.
8. The applicants file and serve an outline of submissions in reply limited to 5 pages on or before 2 July 2021.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
They pointed to the fact that the, nominally, third applicant is Entertainment, but part of the relief sought in the originating application is for an order under s 237 of the Corporations Act 2001 (Cth) that the Ozmen parties be appointed to represent its interests as minority shareholders so as to be able to apply to set aside certain securities. Culture Map relied on the absence of any current grant of leave under s 237(1) and the fact that any application seeking such leave has yet to be made. They argue that there is no ability for them to seek reciprocal enforcement of a judgment in Turkey under the Foreign Judgments Act 1991 (Cth), and that there is no evidence that the Ozmen parties have property in Australia or in Turkey. For these reasons, Culture Map contends that there should be an order for security. Consideration In my opinion, only the costs which Ms Dang estimated for preparation for and conduct of the final hearing are relevant to the exercise of the present discretion. They are in the order of $50,000 for preparation and $41,000 for the hearing, including counsel’s fees, together with other disbursements, being hearing fees and transcripts, in the order of $13,500. If security were to be ordered, then it would be on the basis of the approximately $90,000 plus $13,500 disbursements for those stages. However, Ms Dang based her estimate on the hearing taking four to five days, whereas it was set down for two days before the vacation of the hearing fixed for 23 March 2020. That being so, I think it would be necessary to discount those estimates. Assuming that the total of the solicitor-client costs was $70,000 and was available to form a basis for the provision of security for the preparation and hearing stages, and allowing a recovery on taxation of about 70 per cent of those costs, in the order of about $49,000 would be recoverable on taxation plus $13,500 in disbursements, making a total of about $62,500. I reject Culture Map’s submission that they have explained the reasons for their delay, being the supposed failure of the Ozmen parties’ solicitors to assist them in establishing whether or not Mr Ozmen was ordinarily resident in Australia or not in 2019, and that somehow s 37N of the Federal Court Act or otherwise would require the Ozmen parties to assist Culture Map in the pursuit of a security for costs application being formulated against them. That submission does not make any sense to me in an adversarial system. At the time, Culture Map appeared to have been fishing for a basis on which to bring an application for security, which they did not choose to make in the absence of the missing “assistance” of the Ozmen parties to facilitate that endeavour. In my opinion, the Ozmen parties did not have any duty to help Culture Map in its attempt to fish. Culture Map has delayed excessively in bringing this application for security. Ordinarily, applications for security for costs should be made promptly (see Beazley J’s judgment in KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189). Culture Map also argued that it would have been impossible for them to succeed in any application unless they could establish that Mr Ozmen was not ordinarily a resident in Australia because of the provisions of r 19.01. However, r 19.01(3)(b), which I apprehend is the source of that assertion, merely provides that a respondent applying for security should file an affidavit that states “whether the applicant is ordinarily resident outside Australia”. The rule does not say it is a condition or otherwise of the grant of security that such a person is resident. That submission is without a basis.