Quest Minerals Limited, in the matter of Quest Minerals Limited

[2016] FCA 1537

FEDERAL COURT OF AUSTRALIA

Quest Minerals Limited, in the matter of Quest Minerals Limited [2016]

FCA 1537

File number:	WAD 469 of 2016
Judge:	MCKERRACHER J
Date of judgment:	16 December 2016
Legislation:	Corporations Act 2001 (Cth) s 1322(4)(d)
Cases cited:	Mutual Holdings Pty Ltd v Shepard [2015] WASC 412
Date of hearing:	Determined on the papers
Date of last submissions:	20 October 2016
Registry:	Western Australia
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Category:	No Catchwords
Number of paragraphs:	10
Solicitor for the Applicant:	The Applicant did not file submissions
Solicitor for the Intervener:	Bennett + Co

ORDERS

WAD 469 of 2016

IN THE MATTER OF QUEST MINERALS LIMITED (ACN 062 879 583)

BETWEEN:

QUEST MINERALS LIMITED (ACN 062 879 583)

Applicant

MUTUAL HOLDINGS PTY LIMITED (ACN 092 024 336)

Intervener

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Amicus curiae

JUDGE:	MCKERRACHER J
DATE OF ORDER:	16 DECEMBER 2016

THE COURT ORDERS THAT:

1.The applicant pay the costs of the intervener, fixed at $4,500.

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

REASONS FOR JUDGMENT

MCKERRACHER J:

1. In this proceeding, Quest Minerals Limited sought, amongst other orders, orders that:

   (a)the time for service and hearing of the application be abridged;

   (b)pursuant to s 1322(4)(d) of the Corporations Act 2001 (Cth), the notice period to be given for a meeting of Quest’s members be abridged to not less than 7 days; and

   (c)such further or other order as the Court thinks fit.

2. The originating process was accompanied by an affidavit of Mr Jerome Vitale, chartered accountant and company director of Quest, and submissions of eight pages.  The Australian Securities and Investments Commission (ASIC) appeared at the hearing, as did Mutual Holdings Pty Limited by consent of Quest.  A further affidavit of Mr Vitale of the 13 October 2016 was filed and the matter was briefly argued.  In the course of argument I suggested that an extension of time be sought from the Australian Securities Exchange (ASX) so that the orders sought may be unnecessary.  That action was taken.  The extension was granted and the application was no longer needed.  The application was dismissed.

3. Costs were sought by Mutual, who had appeared without objection by Quest.  Quest offered to pay $500 towards costs, which were, as it transpired, essentially costs incurred on seeking an adjournment of the application so that other counsel could appear.  Mr Tharby for Quest was not prepared to accept that offer, nor did he have any instructions to accept the offer.

4. It was necessary to make orders as follows in relation to costs:

   If there is to be any application for costs by Mutual Holdings Pty Ltd:

   a.within 7 days, Mutual Holdings Pty Ltd file written submissions in support, including the quantum claimed;

   b.within 7 days thereafter, the Plaintiff file written submissions in response; and

   c.the issue of costs be determined on the papers.

5. Mutual has filed submissions on costs.  Quest has not filed submissions, despite the time limit in the orders expiring some weeks ago. 

6. Mutual, on production of a schedule of time spent preparing for the hearing, says it has properly incurred costs of $7,045 in preparing for the application.  It accepts that $6,000 would be appropriate.

7. Mutual makes the point that its sole director, Mr Nikolaenko, was the subject of, and vitally interested in, several of the resolutions to be put to the proposed meeting of members of Quest.  Mutual had an interest in the application and acted reasonably in seeking leave to intervene, which was granted.  It says that Quest, through its own delay, created the need for the application, whereas the debate about whether or not Mr Nikolaenko was a ‘shadow director’ to be the topic of resolutions at the proposed Extraordinary General Meeting (EGM), has long been the subject of correspondence between Quest and the ASX, Supreme Court of Western Australia proceedings CIV 2888 of 2013 between Mutual and Quest, upon Quest entering into administration, the rejection of proofs of debt lodged by Mutual and a subsequent appeal to the Supreme Court in Mutual Holdings Pty Ltd v Shepard [2015] WASC 412.

8. The costs submissions raise substantive matters to do with the merits of the application.  It is the fact, nonetheless, that the only requirement on the day was to seek an adjournment, which in the end, was unnecessary due to the Court’s intervention and the action of the ASX.

9. Notwithstanding this, the entire exercise took the best part of the morning and was necessarily preceded with an examination of the written materials which, to some extent, the schedule of professional time spent reflects.  In my view, a reasonable allowance is $4,500.

10. Accordingly, I will order that Quest pay the costs of Mutual, fixed at $4,500. 

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Associate:

Dated:        16 December 2016