Re Bill Express Limited (No. 5)
[2011] VSC 318
•5 April 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
MAJOR TORTS LIST
No. S CI 2009 10799
IN THE MATTER OF BILL EXPRESS LIMITED (IN LIQUIDATION)
(ACN 090 059 564)
| CRAIG DAVID CROSBIE and IAN MENZIES CARSON AS JOINT AND SEVERAL LIQUIDATORS OF BILL EXPRESS LIMITED (IN LIQUIDATION) (ACN 090 059 564) | Applicants |
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JUDGE: | Gardiner AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | The parties filed written submissions consequent on delivery of reasons on 24 November 2010 | |
DATE OF ORDER: | 5 April 2011 | |
CASE MAY BE CITED AS: | Re Bill Express Limited (No. 5) | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 318 | |
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CORPORATIONS ― Costs - winding up in insolvency ― examination of directors and other persons associated with company in liquidation ― liquidators application that questions put and answers given by examinee be recorded in writing and examinee sign written record of examination ― examinee opposes the making of such orders ― examinee who unsuccessfully opposed application for orders sought by liquidator ordered to pay costs of argument on that question.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicants | Mr P. Bick QC | Freehills |
| For the Respondent, Mr Peter Couper | Mr J. Moore | Mills Oakley Lawyers |
HIS HONOUR:
On 9, 11, 13 and 20 May 2010, the applicants who are the liquidators of Bill Express Limited, conducted an examination of Mr Peter Couper before me pursuant to s 596B of the Corporations Act 2001.
The applicants made application at the conclusion of that examination that the questions put and the answers given by Mr Couper be recorded in writing and that Mr Couper sign that written record of the examination. Mr Couper opposed the making of such orders.
That application was heard several months after the conclusion, for the time being at least, of Mr Couper’s examination. Both sides were represented by senior counsel who delivered very comprehensive written submissions supplemented by oral argument.
In November 2010, I published reasons in respect of that application. I ordered that Mr Couper’s testimony be recorded in writing and that he sign that written record.
The parties, at my invitation, have filed written submissions in relation to the costs of that application. These reasons are in respect of my order that Mr Couper pay the costs of resisting the application by the applicants. In separate reasons which I have published, I have ordered that Mr Couper pay ASIC’s costs of its intervention as an interested party in the liquidators’ application.
The bases upon which Mr Couper resisted the application are set out in my reasons published 24 November 2010. In broad terms, it was submitted on his behalf that no such order should be made because, first, they could only be made at the commencement of the examination and, secondly, in the exercise of the Court’s discretion, such an order should not be made as it would cause Mr Couper an injustice.
As my reasons reveal, Mr Couper was unsuccessful in resisting the application.
In his submissions, Mr Moore said that there are three reasons why costs should not follow the event in these circumstances. First, he says that the applicants applied to the Court for the exercise of its discretion in a matter incidentally arising in proceedings commenced by them. It was said that Mr Couper was not a party to the “proceeding” constituted by the examination although he had a right to be heard on matters which affected him. In practical terms, I do not agree with that. While he clearly had the right to be heard on matters which directly affected him and oppose the orders which were sought, he adopted the stance of litigious respondent in the proceeding and directed significant resources to opposing the application. For my part, I do not consider that, although I delivered a lengthy reserved judgment, the decision was a finely balanced one. Mr Couper had a clear loss for the reasons given.
Secondly, Mr Moore submitted that there was no authority on the question as to whether an order should be made under s 597(13). In the absence of such an authority, Mr Moore contended that it could not be said that the making of submissions by Mr Couper on the issue was unreasonable.
As the published reasons of 24 November 2010 reveal, complex issues were involved for determination but, at the end of the day, the submissions made on behalf of the liquidators, in addition to those of ASIC, in my view overwhelmed Mr Couper’s position. Mr Couper was entitled to oppose the application but, having entered the forum effectively as a party litigant and thereby requiring the application of a considerable resources by the liquidators to protect their position, and having lost, I consider that he should pay the costs.
Thirdly, it is said that by reason of the absence of prior authority on the issues the subject of my reasons of 24 November 2010, liquidators, including the applicants, will benefit from the guidance which is said to arise from the publishing of such reasons. It is said that Mr Couper should not be required to pay the costs of that exercise which will obviously benefit insolvency practitioners in the future conducting these types of examinations. That submission might be advanced by any respondent involved in a novel application before any court as being a reason why they should not pay costs. I disagree with that submission for the same reason that I have given in relation to the first two grounds advanced.
Consideration of the legislation and the case law dealing with examinations reveals a policy designed to assist liquidators in the performance of their functions which is often to the detriment of the rights of those who were involved in the affairs of the company the subject of the examination.
Mr Couper submits that if the applicants are seeking an order that Mr Couper pay the liquidators’ costs of applying for and conducting the examination, there is no basis for such an order, and I agree. The only order for costs which I propose to make is that Mr Couper should pay the costs of the application which proceeded on 23 July 2010 in which the applicants sought the orders against Mr Couper under s 597(13).
I order that Mr Couper should pay Mr Crosbie and Mr Carson’s costs of the argument which took place on 23 July 2010 in relation to their application for an order under s 597(13) that the questions put and the answers given by Mr Couper be recorded in writing and that he sign the written record of the examination. Those costs are to be paid on a party/party basis.
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