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Re Pan Pharmaceuticals Ltd; Selim v McGrath

Re Pan Pharmaceuticals Ltd; Selim v McGrath

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Case Copied 9 March 2004 30 min read

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Reported Decision:
48 ACSR 681

Supreme Court

CITATION: Pan Pharmaceuticals Ltd - Selim v McGrath - Costs [2004] NSWSC 129

HEARING DATE(S): Written Submissions - 07/10/03, 22/10/03, 30/10/03. 31/10/03, 12/12/03, 17/12/03

JUDGMENT DATE:
9 March 2004

JURISDICTION:
Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: Applications for costs by non-parties refused, except for application related to costs of answering subpoena

CATCHWORDS: COSTS - interested persons granted leave to be heard without becoming parties - other interested persons attending without such leave - whether costs orders in favour of such persons may be made against party - factors relevant to such award - non-party subjected to subpoena - jurisdiction to award costs - whether award confined to fixed sum

LEGISLATION CITED: Supreme Court Act 1970, s.76
Supreme Court (Corporations) Rules 1999, r.2.13
Supreme Court Rules, Pt 37 r.9

CASES CITED: Cresvale Far East Ltd v Cresvale Securities Ltd (2001) 39 ACSR 622
Danieletto v Khera (1995) 35 NSWLR 684
Knight v F P Special Assets Ltd (1992) 174 CLR 178
Kumagai Australia Finance v Avarton Ltd (NSWSC, unreported, Bryson J, 7 June 1991)
Marsden v Amalgamated Television Services Pty Ltd [2001] NSWSC 77
Re Obie Pty Ltd (1983) 8 ACLR 439
Petrovski v Radin [2000] NSWSC 323
Selim v McGrath (2003) 47 ACSR 537
Triotas Pty Ltd v Rohn (NSWSC, unreported, Young J, 20 May 1993)

PARTIES :
Pharmacy Guild of Australia - Applicant
F H Faulding & Co Limited - Applicant
Australian Pharmaceutical Industries Ltd & Ors - Applicants
James Selim - Respondent

FILE NUMBER(S): SC 4687/03; 5062/03

COUNSEL: Mr D B Studdy - Pharmacy Guild of Australia
Mr M C Garner - F H Faulding & Co Ltd
Ms S C M Cockayne, Solicitor - Australian Pharmaceutical Industries Ltd & Ors
Mr S J Stanton - Respondent

SOLICITORS: Minter Ellison - Pharmacy Guild of Australia
Freehills - F H Faulding & Co Ltd
PricewaterhouseCoopers Legal - Australian Pharmaceutical Industries Ltd & Ors
Aitken McLachlan Thorpe - Respondent

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

TUESDAY, 9 MARCH 2004

4687/03 – RE PAN PHARMACEUTICALS LTD – JAMES SELIM v ANTHONY GREGORY McGRATH & ANOR
5062/03 – JAMES SELIM v ANTHONY GREGORY McGRATH & ANOR

JUDGMENT ON COSTS

Background

1 This judgment deals with applications for costs orders in proceedings 4687/03 and 5062/03. In each case, the plaintiff was Mr Selim and the defendants were Mr McGrath and Mr Honey who, when the first proceeding was commenced, were the administrators of Pan Pharmaceuticals Ltd (“Pan”) under Part 5.3A of the Corporations Act 2001 (Cth). By the time the second proceeding was initiated three weeks later, they had become the liquidators of Pan.

2 Proceedings 4687/03 were commenced by an originating process filed on 4 September 2003 by which Mr Selim sought certain declarations and orders as to the status and effect of decisions and conduct of Mr McGrath and Mr Honey, as administrators, in relation to recognition of voting entitlements at a meeting…

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: [2004] NSWSC 129
Decision Date: 9 March 2004

CaseChat Overview and Summary

The case of Re Pan Pharmaceuticals Ltd; Selim v McGrath involved a dispute concerning the legality of costs orders in the context of corporate liquidation. The parties included Selim, who sought to be heard in the proceedings, and McGrath, a liquidator of Pan Pharmaceuticals Ltd. The central issue was whether the court could make a costs order in favour of an interested party who attended the proceedings without being formally heard. Additionally, the case examined whether the court had jurisdiction to award costs against a non-party who was subjected to a subpoena.

The court considered several factors in determining whether to make a costs order against the party. These factors included the benefit derived by the party from the proceedings, the extent to which the party's attendance contributed to the resolution of the matter, and the fairness of the outcome. The court held that it had the jurisdiction to award costs against a non-party subjected to a subpoena, but the award was to be confined to a fixed sum unless exceptional circumstances warranted otherwise. The decision underscored the importance of ensuring that the costs orders were just and equitable, taking into account the contributions and benefits received by all parties involved.

The court concluded that it was appropriate to make a costs order in favour of the interested person who had attended the proceedings without being formally heard, provided that the order was reasonable and just. The court also determined that the award of costs against the non-party should be limited to a fixed sum, reflecting the court's discretion to ensure fairness in the proceedings. The decision provided clarity on the scope of the court's authority to award costs in complex corporate liquidation cases and highlighted the need for a balanced approach in such matters.

Orders