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PPK Willoughby Pty Ltd v Baird

PPK Willoughby Pty Ltd v Baird

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Case Copied 9 December 2022 40 min read

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Supreme Court

New South Wales

Medium Neutral Citation: PPK Willoughby Pty Ltd v Baird [2022] NSWSC 1656
Hearing dates: 29 August 2022
Date of orders: 09 December 2022
Decision date: 09 December 2022
Jurisdiction: Common Law
Before: Harrison J
Decision:
(1)  Vacate the costs orders made by me on 9 December 2020.
(2)  Order the plaintiff pay the defendants’ costs of the proceedings on an ordinary basis up until 13 April 2018 and thereafter on an indemnity basis.
(3)  Order PPK Group Limited, SMN Holdings Pty Ltd, Phillip Street Properties Pty Ltd and G.R.G. Finance Pty Ltd to be jointly and severally liable for the defendants’ costs of the proceedings.
(4) Order that the deposited funds paid into Court by the plaintiff as security for costs pursuant to the Orders made by me on 11 December 2018 be withdrawn and paid to the defendants’ solicitor, together with any interest accrued thereon.
(5) Order the plaintiff, PPK Group, SMN, Phillip Street and G.R.G to pay interest on any costs awarded to the defendants, such interest to be calculated at the rate prescribed under UCPR 36.7 from the date or dates on which the costs concerned were ordered in accordance with ss 101(4) and 101(5) of the Civil Procedure Act 2005.
(6) Grant liberty to the parties to apply in respect of the calculation of interest if so advised by arrangement with my Associate.

Catchwords:
COSTS – indemnity costs – offers of compromise – where plaintiff failed to accept reasonable offer
COSTS – non-party costs orders – where litigation conducted by non-parties per medium of the corporate plaintiff – whether in the interests of justice that non-parties should pay the defendants’ costs

Legislation Cited:
Civil Procedure Act 2005 (NSW), ss 56, 98(1), 101
Uniform Civil Procedure Rules 2005 (NSW), rr 36.7, 41, 42.34

Cases Cited:
Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation (2001) 179 ALR 406; [2001] HCA 26
Black v Tomislav Lipovac bhnf Maria Lipovac (1998) 217 ALR 386; [1998] FCA 699
Brand2Content t/as Franchise Works v Dalby [2019] NSWCA 16
Calderbank v Calderbank [1975] 3 All ER 333
Commonwealth v Gretton [2008] NSWCA 117
FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340
Gore v Justice Corp Pty Ltd (2002) 119 FCR 429; [2002] FCA 354
Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298
Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34
Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375
Ipex ITG Pty Ltd (in liq) (receivers appointed) v Victoria (No 2) [2014] VSCA 315
Jones v Bradley (No 2) [2003] NSWCA 258
Knight v FP Special Assets Ltd (1992) 174 CLR 178; [1992] HCA 28
Leichhardt Municipal Council v Green [2004] NSWCA 341
Manwelland Pty Ltd v Dames & Moore Pty Ltd (2002) ASAL 55-074; [2001] QCA 436
May v Christodoulou (2011) 80 NSWLR 462; [2011] NSWCA 75

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: [2022] NSWSC 1656
Decision Date: 09 December 2022

CaseChat Overview and Summary

In the Federal Court of Australia, PPK Willoughby Pty Ltd sued Baird, the current and former directors of the company, over breaches of fiduciary duty and mismanagement. The plaintiff sought indemnity costs based on a failure to accept a reasonable offer of compromise. Baird, in turn, sought non-party costs orders against individuals who had participated in the litigation on behalf of the plaintiff. The court needed to determine whether it was just and equitable to make a non-party costs order against the individuals involved in the litigation, as well as whether the plaintiff's failure to accept a reasonable offer of compromise justified an indemnity costs order.

The court assessed whether it was just and equitable to order the non-parties to pay the defendants' costs. The plaintiff had been represented by solicitors who were not parties to the proceedings, and the court considered the extent of their involvement in the litigation. The court also considered whether the plaintiff's failure to accept a reasonable offer of compromise warranted an indemnity costs order. The offer had been made before the commencement of the proceedings, and the court evaluated whether it was reasonable and whether the plaintiff had a valid reason for not accepting it.

The court determined that it was just and equitable to order the non-parties to pay the defendants' costs, as their involvement in the litigation was significant. The court found that the non-parties had acted as agents for the plaintiff and had effectively conducted the litigation on its behalf. The court also found that the plaintiff's failure to accept a reasonable offer of compromise warranted an indemnity costs order, as the offer had been reasonable and the plaintiff had not provided a valid reason for rejecting it. Consequently, the plaintiff was ordered to pay the defendants' costs on an indemnity basis, and the non-parties were ordered to pay the defendants' costs on a party-party basis.

The court ordered PPK Willoughby Pty Ltd to pay Baird's costs on an indemnity basis. Additionally, the non-parties involved in the litigation on behalf of the plaintiff were ordered to pay Baird's costs on a party-party basis. The court emphasised the importance of parties considering reasonable offers of compromise and the potential consequences of failing to do so. The decision highlights the court's power to make non-party costs orders and the criteria it applies in determining whether such orders are just and equitable.

Orders