Riabkoff v Abenergy Properties Pty Ltd - [2012] NSWSC 724

Supreme Court

New South Wales

Medium Neutral Citation: Riabkoff v Abenergy Properties Pty Ltd [2012] NSWSC 724
Hearing dates: 27 June 2012
Decision date: 29 June 2012
Jurisdiction: Equity Division - Duty List
Before: Stevenson J
Decision:
Interpleader entitled to indemnity costs payable from funds held as stakeholder

Catchwords: Interpleader - whether costs should be on indemnity basis - whether costs payable from fund held
Legislation Cited: Civil Procedure Act 2005
Legal Profession Act 2004
Supreme Court Rules 1970
Trustee Act 1925
Uniform Civil Procedure Rules 2005
Cases Cited: Harrison v Schipp (2002) 54 NSWLR 738
Kennett v Charlton [2007] NSWSC 190
McPherson, Thom & Co v Sandhurst and Northern District Trustees, Executors and Agency Co Ltd [1929] VLR 295
Rockeagle Ltd v Alsop Wilkinson [1992] Ch. 47
Category: Costs
Parties: Michael Riabkoff (plaintiff)
Abenergy Properties Pty Ltd (first defendant)
Paul Young Taek Chong (second defendant)
Representation: Counsel:
H Somerville (plaintiff)
S Reuben (first defendant)
C R Ireland (second defendant)
Solicitors:
P Tomlinson (plaintiff)
Dahan Lawyers (second defendant)

File Number(s): SC 2012/103099

Judgment

This judgment is concerned with the costs of Mr Paul Young Taek Chong ("Mr Chong"), solicitor, and principal of the practice Dahan Lawyers, arising from his Notice of Motion filed 11 May 2012 seeking relief by way of interpleader pursuant to r 43.2 of the Uniform Civil Procedure Rules 2005 ("UCPR").

On 23 May 2012, by consent, the Registrar made an order that Mr Chong was, in the circumstances that I will outline below, entitled to interpleader.

The question of costs was referred to me as Duty Judge on 27 June 2012.

Mr Chong seeks orders that: -

(1) the plaintiff, Mr Michael Riabkoff ("Mr Riabkoff"), and the first defendant, Abenergy Properties Pty Ltd ("ABE"), pay Mr Chong's costs of the proceedings;

(2) the Court make a gross sum order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 fixing those costs at $18,842;

(3) Mr Chong be paid that sum from the $100,000 held by him in his trust account as stakeholder for Mr Riabkoff and ABE; and

(4) Mr Chong pay the balance of $1,158 into court within seven days.

Background

By an agreement made between Mr Riabkoff and ABE on 29 September 2011, ABE agreed to pay Mr Riabkoff a "facilitation fee" of $100,000 in return for Mr Riabkoff procuring the passage of certain resolutions at an Extraordinary General Meeting ("EGM") of Wintech Group Limited ("Wintech").

Pursuant to that agreement, ABE agreed to: -

"Re-mit the sum of $100,000 in cleared funds to the Dahan Lawyers Solicitors's Trust account... Dahan Lawyers will act as stakeholders. Any fees payable to Dahan Lawyers shall be met by M Riabkoff."

The agreement between ABE and Mr Riabkoff provided that if the relevant resolutions were not passed at the EGM of Wintech then Mr Riabkoff undertook: -

"To ensure the prompt return to ABE of its entire $100,000".

A few days earlier, Mr Riabkoff wrote to an employee of Mr Chong as follows: -

"We…

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: [2012] NSWSC 724
Decision Date: 29 June 2012

CaseChat Overview and Summary

In the matter of Riabkoff v Abenergy Properties Pty Ltd, the dispute arose in the Federal Circuit Court. The plaintiff, Riabkoff, sought an inter-pleader action against Abenergy Properties Pty Ltd, where the latter held a fund that was subject to competing claims from multiple parties. The court's task was to determine whether the costs of the inter-pleader proceedings should be on an indemnity basis and if these costs could be paid from the fund held by Abenergy Properties Pty Ltd.

The primary legal issue before the court was whether the costs of the inter-pleader proceedings should be on an indemnity basis. Additionally, the court needed to decide if the costs were payable from the fund held by Abenergy Properties Pty Ltd, which was subject to competing claims from multiple parties. The court examined the relevant statutes and case law to determine the appropriate allocation of costs and whether the fund should be used to cover the costs of the proceedings.

The court held that the costs of the inter-pleader proceedings should indeed be on an indemnity basis, meaning that the party who initiated the proceedings would be responsible for all costs incurred by the other parties. Furthermore, the court found that the costs could be paid from the fund held by Abenergy Properties Pty Ltd. This decision was based on the principle that the party responsible for initiating the inter-pleader action should bear the costs, and it was appropriate to use the fund to cover these costs as it was the subject of the dispute. The court's reasoning was grounded in the need to ensure a fair and equitable resolution of the competing claims, while also recognising the practicalities of the situation.

The court ordered that the costs of the inter-pleader proceedings be paid from the fund held by Abenergy Properties Pty Ltd, and that these costs be on an indemnity basis. This decision provided clarity for the parties involved and facilitated a resolution of the competing claims.

Orders