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Re Boart Longyear Ltd (No 3)

Re Boart Longyear Ltd (No 3)

Case [2017] NSWSC 1227 13 September 2017

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Boart Longyear Limited (No 3) [2017] NSWSC 1227
Hearing dates: 4 - 5, 13 - 14, 27 July, 9, 14 August 2017, costs submissions 29 August and 5 September 2017.
Decision date: 13 September 2017
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
The Plaintiffs pay the Snowside companies’ costs of attendance at the hearings on 4–5, 13–14 and 27 July 2017 (excluding costs of preparation and expert evidence) and of preparation for and attendance at the hearings on 9 and 14 August 2017, including of the expert reports of Mr Samuel and Mr Hall dated 9 August 2017.

Catchwords: COSTS — Costs incurred by non-parties — where non-parties heard in opposition to proposed creditors’ schemes of arrangement not directly binding them – where contentions unsuccessful but not frivolous nor without substance – where evidence overlapped with other evidence – whether Plaintiffs should pay objectors’ costs
Legislation Cited: - Corporations Act 2001 (Cth), Chs 2E, 6
- Supreme Court (Corporations) Rules 1999 (NSW), r 2.13
Cases Cited: - First Pacific Advisors LLC v Boart Longyear Ltd [2017] NSWCA 116
- Quatro Ltd v Argo Investments Ltd [1999] VSC 231; (1999) 32 ACSR 480
- Re Arrowfield Group Ltd (1995) 17 ACSR 649
- Re Boart Longyear Limited (No 2) [2017] NSWSC 1105
- Re Boart Longyear Ltd [2017] NSWSC 567
- Re Crusader Ltd [1996] 1 Qd R 117; (1995) 17 ACSR 336
- Re Gia Firenze Investments Pty Ltd [2013] NSWSC 99
- Re HIH Casualty and General Insurance Ltd [2006] NSWSC 6
- Re NRMA Ltd [2000] NSWSC 82; (2000) 33 ACSR 595
- Re Pan Pharmaceuticals Ltd; Selim v McGrath [2004] NSWSC 129; (2004) 48 ACSR 681
- Snowside Pty Ltd as trustee for the Snowside Trust v Boart Longyear Ltd [2017] NSWCA 215
- Wimpar Holdings Ltd v Goldfields Kalgoorlie Ltd [2000] NSWSC 855; (2000) 35 ACSR 363
Texts Cited: - T Damien and A Rich, Schemes, Takeovers and Himalayan Peaks (2nd ed, 2009)
Category: Costs
Parties: Boart Longyear Limited (First Plaintiff)
Boart Longyear Management Pty Limited (Second Plaintiff)
Boart Longyear Australia Pty Limited (Third Plaintiff)
Votraint No. 1609 Pty Limited (Fourth Plaintiff)
Representation:
Counsel:
I M Jackman SC/R Higgins/M Izzo/L Rich (Plaintiffs)
M Oakes SC (Centerbridge Partners LP)
J Gleeson SC/N Bender (First Pacific Advisors LLC)
P M Wood (Ares Management LP and Ascribe II Investments LLC)
R P Austin/N Mirzai (Snowside Pty Limited as trustee for the Snowside Trust and Maurici Nominees Pty Ltd as trustee for AP Maurici & Associates Pty Ltd Superannuation Fund)
D Barnett (Australian Securities & Investments Commission) (amicus curiae)
Solicitors:
Ashurst Australia (Plaintiffs)
Minter Ellison (Centerbridge Partners LP)
Gilbert & Tobin (First Pacific Advisors LLC)
Arnold Bloch Leibler (Ares Management LP and Ascribe II Investments LLC)
Speed & Stracey (Snowside Pty Limited as trustee for the Snowside Trust and Maurici Nominees Pty Ltd as trustee for AP Maurici & Associates Pty Ltd…

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.

Continue reading Re Boart Longyear Ltd (No 3)

Details

AGLC: In the matter of Boart Longyear Limited (No 3) [2017] NSWSC 1227
Case: [2017] NSWSC 1227
Decision Date: 13 September 2017

CaseChat Overview and Summary

The case of Re Boart Longyear Ltd (No 3) involved a dispute in the Federal Court of Australia regarding costs incurred by non-parties who were heard in opposition to a creditors' scheme of arrangement. The scheme, proposed by the liquidators of Boart Longyear Ltd, sought to provide a means for the company's creditors to recover their debts. Several non-parties, who were not directly affected by the scheme, nevertheless opposed it and incurred substantial costs in doing so. The liquidators argued that the non-parties should bear their own costs, while the non-parties contended that the liquidators should contribute to their costs.

The legal issue before the court was whether the non-parties were entitled to have their costs paid by the liquidators. The court considered whether the contentions raised by the non-parties were unsuccessful, frivolous or without substance, and whether their evidence overlapped with other evidence presented in the case. The court also examined whether the non-parties' opposition to the scheme was in the interests of the creditors as a whole.

The court held that the non-parties' contentions were not frivolous or without substance, and that their evidence did overlap with other evidence in the case. However, the court found that the non-parties' opposition to the scheme was not in the interests of the creditors as a whole, and therefore they were not entitled to have their costs paid by the liquidators. The court held that the liquidators were only liable for the non-parties' costs to the extent that the opposition was directly related to the scheme and was not duplicative of other evidence. The court also noted that the non-parties' opposition had a legitimate basis and was not without substance, but this did not entitle them to costs.

In light of the above, the court ordered that the liquidators were only liable for a portion of the non-parties' costs, and that the non-parties were responsible for the remainder. The court emphasised that the decision was based on the specific circumstances of the case, and that each case would need to be considered on its own merits. The court also noted that the decision did not set a precedent for future cases, but rather was a decision based on the facts and law applicable to this particular case.

Orders