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Re Harmony Homes Pty Ltd

Re Harmony Homes Pty Ltd

Case [2023] NSWSC 300 29 March 2023

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Supreme Court

New South Wales

Medium Neutral Citation: Re Harmony Homes Pty Ltd (in liq) [2023] NSWSC 300
Hearing dates: On the papers; last submissions 28 March 2023
Date of orders: 29 March 2023
Decision date: 29 March 2023
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
No order as to the cost of discontinued proceedings

Catchwords:
COSTS — Where proceedings are discontinued by leave — Where no determination on the merits — Presumption as to costs under UCPR r 42.19.

Legislation Cited:
Civil Procedure Act 2005 (NSW), s 98(1)(c)
Corporations Act 2001 (Cth), s 588FG(2)
Uniform Civil Procedure Rules 2005 (NSW) rr 12.1, 42.19, 42.20

Cases Cited:
Australian Unity Funds Management Ltd v NorthWest Healthcare Australia RE Ltd [2021] NSWSC 1039
Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32
Davis v Certain Lloyd’s Underwriters [2022] NSWSC 131
Hamod v New South Wales (2002) 188 ALR 659; [2002] FCA 424
Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (No 7) (2008) 65 ACSR 324; [2008] NSWSC 199
McNamara v San [2010] NSWSC 809
Parlby v Blair [2013] NSWSC 100
Re Myao Travel Pty Ltd [2020] NSWSC 1672
Spatt v Benson [2019] NSWSC 1195

Category: Costs
Parties: Jason Porter as liquidator of Harmony Homes Pty Ltd (in liq) (plaintiff)
MD Brick (NSW) Pty Ltd (Sixth Defendant)
Representation:
Counsel:
JR Anderson (Plaintiff)
SJ Hallahan (Sixth Defendant)
Solicitors:
Emerson Lewis (Plaintiff)
Oakbridge Lawyers (Sixth Defendant)

File Number(s): 2023/39855
Publication restriction: Nil

Judgment

Nature of the application and affidavit evidence

By paragraphs 1 to 4 of his Originating Process filed on 6 February 2023, Mr Jason Porter as liquidator (“Liquidator”) of Harmony Homes Pty Ltd (in liq) ("Company") sought an order for the transfer of eight unfair preference proceedings that the Company or Liquidator has commenced in the District Court of New South Wales or the Local Court of New South Wales to this Court and an order that a separate question be determined as to whether, and when, the Company was insolvent during the six months prior to its entering external administration. Further directions were sought, consequential upon those orders. Those orders have now been made. Prior to those orders being made, on 13 March 2023, I granted leave for the Liquidator to discontinue these proceedings as against the Sixth Defendant, MD Brick (NSW) Pty Ltd (“MD Brick”) and reserved the question of costs of the proceedings to be determined in chambers.
The Liquidator relies on the affidavit dated 16 March 2023 of his solicitor, Mr Ormazabal, in relation to the question of costs. Mr Ormazabal referred to the history of the proceedings, and noted that MD Brick had filed an Amended Defence in proceedings in the Local Court of New South Wales in which it admitted the Company’s insolvency, after the commencement of the proceedings. He contended that that admission avoided the need to continue these proceedings, rather than existing proceedings in the Local Court of New South Wales (“Local Court proceedings”) against…

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 Harmony Homes Pty Ltd

Details

AGLC: Re Harmony Homes Pty Ltd [2023] NSWSC 300
Case: [2023] NSWSC 300
Decision Date: 29 March 2023

CaseChat Overview and Summary

In the case of Re Harmony Homes Pty Ltd, the dispute involved an application for costs following the discontinuance of proceedings by leave. The proceedings were not determined on their merits, and the applicant sought an order for costs under the Uniform Civil Procedure Rules. The matter was heard in the Supreme Court of New South Wales.

The central legal issue before the court was whether the presumption under UCPR rule 42.19 applied to determine the costs in circumstances where proceedings were discontinued by leave. The applicant argued that the discontinuance did not alter the presumption that the party who brought the proceedings would bear their own costs unless the court ordered otherwise. The respondent contended that the court should exercise its discretion to order costs in a manner different from the presumption, considering the overall circumstances of the case.

The court considered the principle that, in the absence of a determination on the merits, the party who initiated the proceedings generally bears their own costs. The court acknowledged that rule 42.19 creates a presumption that the party who brought the proceedings will be responsible for their own costs. However, the court also recognised the discretion available under the rule to order costs differently if warranted by the circumstances. After weighing the factors, the court found that the circumstances did not justify deviating from the presumption, and therefore, the applicant was to bear their own costs.

The final orders of the court were that the applicant's application for costs was dismissed, and the applicant was ordered to pay the respondent's costs of the application.

Orders