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Re Cabramatta King Tea Pty Ltd

Re Cabramatta King Tea Pty Ltd

Case [2022] NSWSC 462 14 April 2022

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Cabramatta King Tea Pty Ltd [2022] NSWSC 462
Hearing dates: Last submissions 4 April 2022
Date of orders: 14 April 2022
Decision date: 14 April 2022
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Plaintiff granted leave to discontinue the proceedings with no order as to costs.

Catchwords:
COSTS — Party/Party — General rule that costs follow the event — Proceedings discontinued — where plaintiff sought orders requiring the preparation and audit of a financial report and directors’ report —whether there is reason to depart from the default order as to costs in rule 42.19 of the Uniform Civil Procedure Rules 2005 (NSW)

Legislation Cited:
Corporations Act 2001 (Cth), s 292, s 293, s 1324
Civil Procedure Act 2005 (NSW), s 98
Uniform Civil Procedure Rules 2005 (NSW), r 42.19, r 42.20

Cases Cited:
- Australian Unity Funds Management Ltd v NorthWest Healthcare Australia RE Ltd [2021] NSWSC 1039
- Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365 at [10], [54]
- Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32
- Champagne View Pty Ltd v Shearwater Resort Management Pty Ltd [2000] VSC 214
- Commonwealth of Australia v Gretton [2008] NSWCA 117
- Davis v Certain Lloyds Underwriters [2022] NSWSC 131
- Fordyce v Fordham (2006) 67 NSWLR 497; [2006] NSWCA 274
- Garwolin Nominees Pty Ltd v Statewide Building Society [1984] VR 469
- Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34
- McNamara v San [2010] NSWSC 809
- Metro Hotel Sydney Pty Ltd v Kol Tov Pty Ltd [2010] NSWSC 1195
- Parlby v Blair [2013] NSWSC 100
- Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622
- Re Myao Travel Pty Ltd [2020] NSWSC 1672
- Scott v Tuff-Kote (Australia) Pty Ltd [1975] 1 NSWLR 537
- Spatt v Benson [2019] NSWSC 1195

Category: Costs
Parties: Yuans Sunshine Pty Limited (Plaintiff)
Cabramatta King Tea Pty Ltd (Defendant)
Representation:
Counsel:
N D Riordan (Plaintiff)
G J Gemmell (Defendant)
Solicitors:
H & H Lawyers (Plaintiff)
Zhang Partners (Defendant)

File Number(s): 2021/48445

Judgment

Background and affidavit evidence

By an Originating Process filed on 19 February 2021, the Plaintiffs, Yuans Sunshine Pty Ltd (“Yuans”) sought orders under s 1324 of the Corporations Act 2001 (Cth) requiring the preparation of a financial report and directors’ report in respect of the Defendant, Cabramatta King Tea Pty Ltd (“CKT”), pursuant to ss 292-293 of the Corporations Act and the audit of that financial report. By an Interlocutory Process dated 7 February 2022, Yuans sought an order that it be granted leave to discontinue the proceedings and that CKT pay its costs of the proceedings and that Interlocutory Process. CKT in turn indicated that it sought an order that Yuans pay its costs of the proceedings, pursuant to s 98 of the Civil Procedure Act 2005 (NSW) and r 42.19(2) of the Uniform Civil Procedure…

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 Cabramatta King Tea Pty Ltd

Details

AGLC: Re Cabramatta King Tea Pty Ltd [2022] NSWSC 462
Case: [2022] NSWSC 462
Decision Date: 14 April 2022

CaseChat Overview and Summary

In the case of Re Cabramatta King Tea Pty Ltd, the plaintiff sought an order requiring the company to prepare and audit a financial report and directors' report. The proceedings were eventually discontinued, and the plaintiff applied for costs under rule 42.19 of the Uniform Civil Procedure Rules 2005 (NSW). The central legal issue before the court was whether there were exceptional circumstances that warranted a departure from the general rule that costs follow the event, particularly in the context of the plaintiff's discontinued proceedings.

The court considered the circumstances surrounding the discontinuation of the proceedings. It observed that the plaintiff had not succeeded in its application and that the proceedings had been discontinued without any admission of liability or benefit to the plaintiff. The court also noted that the plaintiff's application for costs was made in the context of the company's voluntary liquidation, which presented a unique set of circumstances. Given these factors, the court was required to assess whether there was any reason to deviate from the standard rule regarding costs.

In evaluating the matter, the court highlighted the principle that costs generally follow the event, meaning the party who initiated the proceedings typically bears the costs unless there are exceptional circumstances. The court found that in this case, the plaintiff had not demonstrated any exceptional circumstances that would warrant a departure from the default rule. The discontinuation of the proceedings without any admission of liability or benefit to the plaintiff further supported the application of the general rule. Consequently, the court ruled that the plaintiff was not entitled to costs.

The final order of the court was that the plaintiff's application for costs was dismissed. The court confirmed that the general rule that costs follow the event applied, and there were no exceptional circumstances that would justify a different outcome in this instance.

Orders