Re Solutions Hired Pty Ltd (Costs Ruling) - [2025] VSC 171

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2024 05026

IN THE MATTER of SOLUTIONS HIRED PTY LTD (ACN 632 065 377)

BETWEEN:

WILLIAMS EQUITY HOLDINGS PTY LTD (ACN 632 080 123) AS TRUSTEE FOR THE CORANGAMITE TRUST	Plaintiff
v
WILKINSON ENTERPRISES AUSTRALIA PTY LTD (ACN 155 136 351) AS TRUSTEE FOR THE WILKINSON FAMILY TRUST & ORS (according to the attached Schedule)	Defendant

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JUDGE:	Hetyey AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	7 March 2025, further material filed 14 March 2025 and 21 March 2025
DATE OF RULING:	7 April 2025
CASE MAY BE CITED AS:	Re Solutions Hired Pty Ltd (Costs Ruling)
MEDIUM NEUTRAL CITATION:	[2025] VSC 171

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CORPORATIONS – Part 5.4 of the Corporations Act 2001 (Cth) – s 461(1)(k) of the Corporations Act 2001 (Cth) – Application to wind up company on just and equitable ground – Alleged deadlock in management of company and irretrievable breakdown of relationship between shareholders – Where director defendant resigns prior to final hearing breaking deadlock.

COSTS – Proceeding resolved prior to final hearing – Court’s jurisdiction to award costs – s 24 of Supreme Court Act 1986 (Vic) – Circumstances in which Court will make costs order where no determination on the merits – Whether conduct of defendants unreasonable so as to warrant costs order in favour of plaintiff – Whether capitulation by defendants – Whether conduct of plaintiff in commencing proceeding unreasonable – Whether plaintiff entitled to indemnity costs – Special circumstances required – Relevant parties each acted unreasonably in commencing and defending proceeding – Where conduct inconsistent with overarching obligations under ss 20, 22, 25 and 26 of Civil Procedure Act 2010 (Vic) – Parties to bear own costs.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr B Carew	Colin Biggers & Paisley
For the First and Second Defendant	Mr J Petras	PCL Lawyers

TABLE OF CONTENTS

Introduction

Background

Legislative provisions and legal principles

Submissions by the parties on costs

Supplementary evidence on costs

Plaintiff’s supplementary evidence
First and second defendants’ supplementary evidence
Plaintiff’s supplementary evidence in reply

Consideration

Conclusion

HIS HONOUR:

Introduction

By originating process dated 20 September 2024, Williams Equity Holdings Pty Ltd (as trustee for the Corangamite Trust) (‘plaintiff’) made an application under s 461(1)(k) of the Corporations Act 2001 (Cth) (‘Act’) for the just and equitable winding up of Solutions Hired Pty Ltd (‘company’). The essence of the application was an alleged deadlock in the management of the company and a breakdown in the relationship between its shareholders.
However, for reasons I will discuss, it is no longer necessary for the plaintiff’s application to be determined by the Court. The parties are in agreement that the matter should be brought to an end without a hearing on the merits but disagree on the appropriate order as to costs. The plaintiff seeks its costs from Wilkinson Enterprises Australia Pty Ltd (as trustee for the Wilkinson Family Trust) (‘first…

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: [2025] VSC 171
Decision Date: 7 April 2025

CaseChat Overview and Summary

The case involved an application to wind up the company Solutions Hired Pty Ltd on just and equitable grounds, filed in the Supreme Court of Victoria. The plaintiff alleged a deadlock in the management of the company and an irretrievable breakdown of the relationship between the shareholders, which was the basis for the winding-up application. The defendant director subsequently resigned prior to the final hearing, which resolved the deadlock.

The primary legal issues before the court were whether it had the jurisdiction to award costs under section 24 of the Supreme Court Act 1986 (Vic) when the proceeding was resolved prior to a final hearing on the merits, and if so, what the circumstances were that would warrant such an order. The court had to consider whether the conduct of the defendants was unreasonable, whether there was a capitulation by the defendants, whether the plaintiff's conduct in commencing the proceeding was unreasonable, and whether the plaintiff was entitled to indemnity costs. The court also needed to determine if there were special circumstances that warranted an order for indemnity costs and whether the actions of the parties were inconsistent with the overarching obligations under the Civil Procedure Act 2010 (Vic).

The court found that both parties acted unreasonably in commencing and defending the proceeding, which was inconsistent with the overarching obligations under the Civil Procedure Act 2010 (Vic). The court held that special circumstances were required to justify an order for indemnity costs and that neither party met this threshold. Consequently, the court ordered that each party bear their own costs. This outcome was based on the lack of special circumstances and the mutual unreasonableness of the parties' conduct.

Orders