Re Myao Travel Pty Ltd - [2020] NSWSC 1672

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Myao Travel Pty Ltd [2020] NSWSC 1672
Hearing dates: On the papers
Decision date: 24 November 2020
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Defendant pay Plaintiff’s costs of and incidental to 7 September 2020 hearing on separate question before Rees J. Plaintiff otherwise pay the Defendant’s costs of the proceedings, as agreed or as assessed.

Catchwords:
COSTS - Where proceedings dismissed - Where no determination on the merits - Default provision for costs in UCPR r 42.20 - Whether to depart from ordinary position – Where Plaintiff put on notice of grounds of opposition to winding up
COSTS — Party/Party — Exceptions to general rule that costs follow the event — Company not wound up only because of Defendant’s actions after proceedings commenced — Calderbank offers — Not unreasonable not to accept offer — Grounds of opposition to winding up asserted but not self-evident from evidence available to Plaintiff

Legislation Cited:
- Civil Procedure Act 2005 (Cth), s 98
- Coronavirus Economic Response Package Omnibus Act 2020 (Cth)
- Corporations Act 2001 (Cth), s 459S
- Uniform Civil Procedure Rules 2005 (NSW), rr 42.1 and 42.20

Cases Cited:
- Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365
- Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32
- Calderbank v Calderbank [1975] 3 All ER 333
- Fordyce v Fordham (2006) 67 NSWLR 497; [2006] NSWCA 274
- McNamara v Bao San & Ors [2010] NSWSC 809
- Merrion B Pty Ltd v Donchoid Pty Ltd (No 2) [2020] VSC 566
- One.Tel Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548; [2000] FCA 270
- Parlby v Blair [2013] NSWSC 100
- Perpetual Nominee Ltd v NA Investment Holdings Pty Ltd [2011] NSWSC 282
- Re Alsafe Security Products Pty Ltd atf the Alsafe Trust (in liq) [2016] NSWSC 575
- Re Kornucopia Pty Ltd (No 4) [2020] VSC 7
- Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 at 624-625; [1997] HCA 6
- Myao Travel Pty Limited [2020] NSWSC 1219

Category: Costs
Parties: Savoy Investments Pty Ltd (Plaintiff)
Myao Travel Pty Ltd (Defendant)
Representation:
Counsel:
Mr I Leong (Plaintiff)
Mr S Lees (Defendant)
Solicitors:
SHL & Associates (Plaintiff)
Ren Zhou (Defendant)

File Number(s): 2020/168469

Judgment

Background facts

This application concerns the costs of winding up proceedings which I dismissed by consent on 13 November 2020. The application has been determined on the papers, as the parties requested, and I have had regard to their respective affidavit evidence and submissions filed in accordance with the consent orders made by the Court.
Dealing first with the history of the proceedings, by Originating Process filed on 5 June 2020, the Plaintiff, Savoy Investments Pty Ltd (“Savoy”) applied to wind up Myao Travel Pty Ltd (“Myao”) relying on a failure to comply with a creditor’s statutory demand. On 17 August 2020, I…

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: [2020] NSWSC 1672
Decision Date: 24 November 2020

CaseChat Overview and Summary

The case of Re Myao Travel Pty Ltd involved a winding up application initiated by the plaintiff, which was subsequently dismissed. The defendant, Myao Travel Pty Ltd, applied for costs under the Uniform Civil Procedure Rules (UCPR) rule 42.20. The central issue before the court was whether the defendant was entitled to costs as a result of the dismissal of the winding up application, and whether the plaintiff should be ordered to pay those costs despite the absence of a determination on the merits.

The court considered the default provision in UCPR rule 42.20, which generally mandates that costs follow the event. However, the court also contemplated whether it should depart from this ordinary position. The plaintiff had been notified of the grounds of opposition to the winding up but these grounds were not self-evident from the evidence available to the plaintiff. Additionally, the dismissal of the proceedings was not solely due to the defendant's actions after the proceedings began. The court also took into account the Calderbank offers made by the defendant, determining it was not unreasonable for the plaintiff not to accept these offers.

After weighing these factors, the court decided that the ordinary position on costs should not be departed from in this case. The dismissal of the winding up application was not due to the defendant’s actions post-commencement of the proceedings, and the plaintiff had not unreasonably refused the Calderbank offers. Consequently, the court ruled that the plaintiff was not liable for the defendant's costs. The final order was that the plaintiff was not to pay the defendant's costs.

Orders