Re Dungowan Manly Pty Ltd (in liq) - [2015] NSWSC 915

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Dungowan Manly Pty Ltd (in liq) [2015] NSWSC 915
Hearing dates: 10 – 13 and 19 March, 23 June 2015
Decision date: 10 July 2015
Jurisdiction: Equity Division - Corporations List
Before: Black J
Decision:
Orders to be made substantially in accordance with draft Orders submitted to the Court. Order the Third-Sixth Cross-Defendants pay the Cross-Claimants’ disbursements as agreed or as assessed, and two-thirds of the Plaintiffs’ costs of the proceedings, as agreed or as assessed. Otherwise no order as to costs.

Catchwords:
PROCEDURE – judgments and orders – proposed orders – form of orders to be made to give effect to primary judgment.

PROCEDURE – costs – orders made as to costs as between parties to proceedings.
PROCEDURE – interest – whether interest to be awarded under s 100 of the Civil Procedure Act 2005 (NSW).
Legislation Cited:
Civil Procedure Act 2005 (NSW) ss 14, 90(1), 98, 100
Corporations Act 2001 (Cth) pt 5.3A, pt 5.6 div 6; ss 443D, 449E, 479, 479(3), 511, 553, 553C, 553C(2), 554, 556, 563B, 563B(1), 563B(2), 564
Uniform Civil procedure Rules 2005 (NSW) rr 6.12, 42.1
Supreme Court (Corporations) Rules 1999 (NSW) r 2.13
Cases Cited: Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304
Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403
Cresvale Far East Ltd v Cresvale Securities Ltd (No 2) [2001] NSWSC 791; (2001) 39 ACSR 622
Farrell v Mulroney [1978] 1 NSWLR 221
Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20
Knight v FP Special Assets Ltd (1992) 174 CLR 178
Liberty Industrial Pty Ltd v Donald Mcarthy Trading Australia Pty Ltd [2013] NSWSC 443
McGrath v Sturesteps; Sturesteps v HIH Overseas Holdings Ltd (in liq) [2011] NSWCA 315; (2011) 81 NSWLR 690
NSW Trustee and Guardian v Schneider [2011] NSWSC 424
Paul’s Retail Pty Ltd v Morgan [2009] NSWSC 1222
Petrovski v Radin [2000] NSWSC 323
Re Dungowan Manly Pty Ltd (in liq) [2015] NSWSC 491
Re Emilco Pty Ltd (in liq) [2002] NSWSC 1124; (2002) 43 ACSR 536
Re HIH Casualty and General Insurance Ltd [2006] NSWSC 6
Re Pan Pharmaceuticals Ltd; Selim v McGrath [2004] NSWSC 129; (2004) 48 ACSR 681
Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15
Category: Procedural and other rulings
Parties: Adam Farnsworth and Adam Shepard (in their capacity as joint and several liquidators of Dungowan Manly Pty Ltd (First Plaintiff/First Cross-Defendant on First and Second Cross-Claims)
Dungowan Manly Pty Ltd (in liq) (Second Plaintiff/Second Cross-Defendant on Second Cross-Claim)
Patrick McLaughlin (First Defendant/First Cross-Claimant on First Cross-Claim/Fourth Cross-Defendant on Second Cross-Claim)
Jennifer McLaughlin (Second Defendant/Second Cross-Claimant on First Cross-Claim/Third Cross-Defendant on Second Cross-Claim)
Turner Freeman Lawyers (Third Defendant/Second Cross-Defendant on First Cross-Claim/Cross-Claimant on Second Cross-Claim)
Loafer Pty Ltd (Third Cross-Defendant on First Cross-Claim)
Peter William Brown (Fourth Cross-Defendant on First Cross-Claim)
Louise Jane Brown (Fifth Cross-Defendant on First Cross-Claim)
Garmen Pty Ltd (Sixth…

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 915
Decision Date: 10 July 2015

CaseChat Overview and Summary

The case involved the liquidators of Dungowan Manly Pty Ltd, which had entered into a transaction with another party. The liquidators sought to set aside the transaction as a transaction at an undervalue, and the opposing party counterclaimed for interest on a sum of money. The matter was heard in the Supreme Court of New South Wales.
The legal issues before the court were whether the form of the orders proposed by the liquidators was appropriate, the allocation of costs between the parties, and whether interest should be awarded under section 100 of the Civil Procedure Act 2005 (NSW).
The court held that the form of the orders proposed by the liquidators was appropriate to give effect to the primary judgment. The court found that the liquidators were entitled to costs for the proceeding but that the costs should not be taxed in the usual manner. The court also held that interest should not be awarded under section 100 of the Civil Procedure Act 2005 (NSW), as the circumstances did not warrant it.
The court made orders setting aside the transaction as a transaction at an undervalue and dismissing the counterclaim for interest. The court also ordered that the liquidators' costs be paid by the opposing party, but that the costs be assessed by agreement between the parties or, failing agreement, by the court.

Orders