Pleash (Liquidator) v Tucker (No 2)

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FEDERAL COURT OF AUSTRALIA

Pleash (Liquidator) v Tucker (No 2) [2018] FCAFC 168

Appeal from: Pleash, in the matter of Equititrust Limited (In Liquidation) (Receivers and Managers Appointed) (No 3) [2017] FCA 1074
File number: QUD 2 of 2018
Judges: MCKERRACHER, FARRELL AND BANKS-SMITH JJ
Date of judgment: 5 October 2018
Catchwords: COSTS - where indemnity costs sought - where leave to appeal granted but appeal dismissed - whether rejection of offers unreasonable
Legislation: Federal Court Rules 2011 (Cth) rr 20.31, 25
Cases cited:

Calderbank v Calderbank [1975] 3 All ER 333

Pleash (Liquidator) v Tucker [2018] FCAFC 144

Visscher v Teekay Shipping (Australia) Pty Ltd (No 5) [2013] FCA 28

Date of hearing: Determined on the papers
Date of last submissions: 6 September 2018 (Appellant)
5 and 12 September 2018 (Respondents)
Registry: Queensland
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: Corporations and Corporate Insolvency
Category: Catchwords
Number of paragraphs: 34
Counsel for the Appellant: Mr SC Russell
Solicitor for the Appellant: Russells
Counsel for the Respondents: Mr P Hackett
Solicitor for the Respondents: Tucker & Cowen Solicitors

ORDERS

QUD 2 of 2018
BETWEEN:

BLAIR ALEXANDER PLEASH AND RICHARD ALBARRAN AS LIQUIDATORS OF EQUITITRUST LTD (IN LIQ) (RECEIVERS AND MANAGERS APPOINTED) (ACN 061 383 944)

Appellant

AND:

DAVID ROBERT WALTER TUCKER

First Respondent

VIKWOOD PTY LTD

Second Respondent

TUCKER FINANCE PTY LTD (and others named in the Schedule)

Third Respondent

JUDGES:

MCKERRACHER, FARRELL AND BANKS-SMITH JJ

DATE OF ORDER:

5 OCTOBER 2018

THE COURT ORDERS THAT:

1.The respondents are to bear their own costs of the affidavits removed from the Court record in accordance with the orders of the Court made 9 May 2018 and of the affidavits filed by the respondents dated 16 May 2018.

2.Subject to order 1, the appellant (Liquidators) pay the respondents' costs of the application for leave to appeal, the appeal and the interlocutory application filed 25 May 2018 on a party and party basis.

3.Subject to order 1, the Liquidators pay the respondents' costs of the Production Application:

(a)before 11.00 am on 26 April 2018 on a party and party basis;

(b)after 11.00 am on 26 April 2018 on an indemnity basis.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

THE COURT:

  1. On 29 August 2018 we granted leave to appeal but dismissed the appeal, and also dismissed an application for production of documents:  Pleash (Liquidator) v Tucker [2018] FCAFC 144. At the time that judgment was given the respondents indicated that they wished to seek costs on an indemnity basis, and an order was therefore made that the parties file submissions, with the question of costs to be determined on the papers.

  2. Put generally, the parties made submissions as to the costs of the application for leave to appeal, the appeal itself and an application for production of documents.

  3. It is necessary to set out some of the relevant events.

  4. On 3 January 2018 the appellant (Liquidators)…

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Details
Case
[2018] FCAFC 168
Decision Date

CaseChat Overview and Summary

In the case of Pleash (Liquidator) v Tucker (No 2), the issue before the court was the allocation of costs in relation to a dispute involving the liquidators of a company and Tucker. The matter reached the court following an appeal that was ultimately dismissed, and the liquidators sought indemnity costs based on the circumstances of the appeal and related proceedings.

The primary legal issue the court had to address was whether the liquidators' rejection of offers made by Tucker during the litigation process was unreasonable, thereby justifying an award of indemnity costs. The liquidators argued that their refusal to accept the offers was justified given the circumstances, and they should be awarded indemnity costs for the appeal and related proceedings. Conversely, Tucker contended that the rejection of the offers was unreasonable and that the liquidators should bear their own costs.

The court found that the liquidators' refusal to accept Tucker's offers was not unreasonable, given the context and the potential implications of accepting the offers. The court held that the liquidators' decision was made in good faith and with a reasonable basis. Consequently, the liquidators were not entitled to indemnity costs for the appeal and related proceedings. However, the court ordered that the liquidators were to bear their own costs for specific affidavits and the interlocutory application filed by Tucker. For other costs associated with the proceedings, the court ordered that the liquidators pay Tucker's costs on a party and party basis, except for the costs incurred after a certain time on a particular date, which were to be paid on an indemnity basis.

The final orders required the liquidators to bear certain specified costs, while Tucker was to bear the costs of other proceedings on a party and party basis. The liquidators were also ordered to pay Tucker's costs after a particular time on a specified date on an indemnity basis. This decision underscores the importance of the reasonableness of rejecting settlement offers in determining the allocation of costs in litigation.

Orders

Orders of the court

1. The respondents are to bear their own costs of the affidavits removed from the Court record in accordance with the orders of the Court made 9 May 2018 and of the affidavits filed by the respondents dated 16 May 2018.

2. Subject to order 1, the appellant (Liquidators) pay the respondents' costs of the application for leave to appeal, the appeal and the interlocutory application filed 25 May 2018 on a party and party basis.

3. Subject to order 1, the Liquidators pay the respondents' costs of the Production Application:

(a) before 11.00 am on 26 April 2018 on a party and party basis;

(b) after 11.00 am on 26 April 2018 on an indemnity basis.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

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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