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Re Aquaqueen International Pty Ltd

Re Aquaqueen International Pty Ltd

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Case Copied 4 May 2015 44 min read

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Aquaqueen International Pty Ltd [2015] NSWSC 500
Hearing dates: 16 March 2015
Decision date: 04 May 2015
Jurisdiction: Equity Division - Corporations List
Before: Black J
Decision:
Gross sum costs order made against the company and its director in respect of the costs of a winding up. No order as to interest on costs. Parties to bring in Short Minutes of Order within 14 days to give effect to the judgment.

Catchwords: PROCEDURE – costs – gross sum costs order – where parties involved in extensive litigation – where conduct of director or unsuccessful party substantially increased costs – where unsuccessful party was insolvent and wound up – whether gross sum costs order should be made under Civil Procedure Act 2005 (NSW) s 98(4)(c).
PROCEDURE – costs – whether order for costs on indemnity basis.
PROCEDURE – costs – personal costs order – where director appeared with leave on behalf of the company – where conduct of director prolonged litigation – whether personal costs order should be made against director.
Legislation Cited: - Civil Procedure Act 2005 (NSW) ss 56, 98, 98(4), 101, 101(4)
- Legal Profession Act 2004 (NSW) s 364
- Uniform Civil Procedure Rules 2005 (NSW) rr 7.1, 7.2, 42.1, 42.2, 42.5, 42.7
Cases Cited: - Cat Media Pty Ltd v Allianz Australia Ltd [2006] NSWSC 790
- Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 801; (1993) 46 FCR 225
- Drummond & Rosen Pty Ltd v Easey (No 2) [2009] NSWCA 331
- Dubow v Fitness First Australia Pty Ltd (No 2) [2012] NSWSC 961
- Dye v Commonwealth Securities No 2 [2012] FCA 407
- Filmlock Pty Ltd v Nissi Investments Pty Ltd (No 3) [2013] NSWSC 1594
- FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340
- Greenacre Business Park Pty Ltd v Deliver Australia Pty Ltd [2014] NSWSC 1646
- Hadid v Lenfest Communications Inc [2000] FCA 628
- Hamod v State of New South Wales [2011] NSWCA 375
- Harrison v Schipp [2002] NSWCA 213; (2002) 54 NSWLR 738
- Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23
- Ireland (as Executor of the Estate of the late Gordon) v Retallack (No 2) [2011] NSWSC 1096
- JJES Pty Ltd v Sayan (No 2) [2014] NSWSC 975
- Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178
- Lahoud v Lahoud [2006] NSWSC 126
- Liberty Industrial Pty Ltd v Donald Mcarthy Trading Australia Pty Ltd [2013] NSWSC 279
- Liverpool City Council v Estephan [2009] NSWCA 161
- May v Christodoulou [2011] NSWCA 75
- Ng v Chong [2010] NSWSC 127
- Re Palladium Consulting Pty Ltd [2013] NSWSC 92
- Simone Starr-Diamond v Talus Diamond (No 4) [2013] NSWSC 811
- Vantage Holdings Pty Ltd v Huang (No 2) [2015] FCA 185
- Ying v Song [2011] NSWSC 618
Texts…

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: [2015] NSWSC 500
Decision Date: 04 May 2015

CaseChat Overview and Summary

In the case of Re Aquaqueen International Pty Ltd, the dispute arose out of extensive litigation between the parties. Aquaqueen International Pty Ltd, the respondent, was involved in a protracted legal battle with the appellant. The matter was heard in the Supreme Court of New South Wales, where the primary focus was on the allocation of costs incurred during the litigation. The court was tasked with determining whether a gross sum costs order should be made under s 98(4)(c) of the Civil Procedure Act 2005 (NSW), considering the conduct of the director or the unsuccessful party that substantially increased the costs, as well as the insolvency and winding up of the respondent.

The court had to decide whether the costs incurred by the appellant should be awarded on a gross sum basis, taking into account the substantial increase in costs due to the conduct of the director or the unsuccessful party. Additionally, the court needed to determine if an order for costs on an indemnity basis was appropriate. Another key issue was whether a personal costs order should be made against the director who appeared with leave on behalf of the company, given that their conduct prolonged the litigation.

The court reasoned that given the extensive litigation and the significant increase in costs due to the conduct of the director, a gross sum costs order was warranted. The court found that the unsuccessful party's conduct substantially contributed to the escalation of costs, and thus, it was appropriate to make such an order under s 98(4)(c) of the Civil Procedure Act 2005 (NSW). Furthermore, the court determined that the director's conduct warranted a personal costs order, as their actions prolonged the litigation. Consequently, the court ordered that the appellant pay the respondent's costs on a gross sum basis and that the director personally pay a portion of the costs.

Orders