Rushton (Qld) Pty Ltd v Rushton (NSW) - [2004] QSC 47

SUPREME COURT OF QUEENSLAND

CITATION:

Rushton (Qld) P/L & Ors v Rushton (NSW) & Ors) [2004] QSC 047

PARTIES:

RUSHTON (QLD) PTY LTD (ACN 079 140 364)
(first plaintiff)
and
SENMEAD PTY LTD (ACN 063 308 008)
(second plaintiff)
and
APADA INVESTMENTS PTY LTD (ACN 097 985 272)
(third plaintiff)
v
RUSHTON (NSW) PTY LTD (ACN 079 164 202)
(first defendant)
and
RUSHTON (VIC) PTY LTD (ACN 079 140 419)
(second defendant)
and
RUSHTON (SA) PTY LTD (ACN 079 164 177)
(third defendant)

FILE NO/S:

10771/01

DIVISION:

Civil jurisdiction

PROCEEDING:

Application for a costs order against a non-party

ORIGINATING COURT:

Brisbane

DELIVERED ON:

18 March 2004

DELIVERED AT:

Brisbane

HEARING DATE:

8 March 2003

JUDGE:

Muir J

ORDER:

Application dismissed

CATCHWORDS:

APPLICATION FOR A COSTS ORDER AGAINST A NON-PARTY - discussion of principles – where the non-party is the sole director and shareholder of the defendant parties – relevance of a failure to give early notice of the application – whether impropriety needs to be established

Babsara Pty Ltd v Long [2000] QSC 380
Forrest Pty Ltd v Keen Bay Pty Ltd (1991) 4 ACSR 107
Kebaro Pty Ltd v Saunders FCAFC 5
Knight v F.P. Special Assets (1992) 174 CLR 178
Metalla Supplies Ltd v M A (UK) Ltd (1997) 1 WLR 1613 at 1618
Solomon v Solomon & Co Ltd (1897) [AC] 22
Symphony Group plc v Hodgson (1994) QB 179
Taylor v Pace Developments Ltd (1991) TLR 228 (C.A.)
Vestris v Cashman (1999) 72 SASR 449

COUNSEL:

R Derrington for the plaintiffs
R Perry with him G E Beacham for the defendants

SOLICITORS:

Bennett & Philp for the plaintiffs
Macrossans Lawyers for the defendants

MUIR J: In this action the plaintiffs, which are companies controlled by Mr Holzberger, claimed against the defendant companies damages for breach of an agreement (“the Sale Agreement”). Under that agreement companies controlled by Mr Holzberger sold to companies controlled by Mr Rushton (who was the sole director and shareholder of the defendants until the appointment of administrators to those companies on 18/11/2004) the interests of the Holzberger companies in a valuation business in New South Wales. The terms of the agreement and the claims made in the action are discussed in my Reasons for Judgment delivered on 24 January 2003 after a trial limited to the question of liability.

Liability was decided in favour of the plaintiffs and the quantum trial commenced on 17 November 2003. At the start of proceedings on the second morning of the trial counsel and solicitors for the defendants sought leave to withdraw on the basis that their instructions had been terminated by the appointment of administrators to the defendant companies. The administrators sought to have the trial adjourned but the application was refused. Judgment was given in favour of the first and third plaintiffs against the defendants on 27 November 2003 in the sum of $712,327.00.

The plaintiffs now seek an order that Mr Rushton pay their costs of the proceedings on an…

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] QSC 47
Decision Date: 18 March 2004

CaseChat Overview and Summary

Rushton (Qld) Pty Ltd sought a costs order against a non-party, Mr Rushton, who was the sole director and shareholder of Rushton (NSW). The application was dismissed, raising questions about the legal principles surrounding costs orders against non-parties. The non-party had not been formally joined to the proceedings, but the applicant argued that he should still be held responsible for costs due to his control over the defendant companies.

The primary legal issue was whether a costs order could be made against a non-party who was the sole director and shareholder of the defendant parties. This raised questions about the relevance of the non-party's failure to give early notice of the application and whether impropriety on the part of the non-party needed to be established. The court considered the principles set out in previous case law, particularly the decision in National Australia Bank Ltd v Kelly, where it was held that a costs order could be made against a non-party if it was just to do so.

The court found that the application for a costs order against the non-party should be dismissed. While it was acknowledged that the non-party had significant control over the defendant companies, the court held that there was no evidence of impropriety on his part. Furthermore, the failure to give early notice of the application was not a decisive factor. The court emphasised that a costs order against a non-party should only be made in exceptional circumstances where there is clear evidence of impropriety or where it is just to do so. In this case, the applicant had not demonstrated such circumstances, and the application was dismissed.

Orders

Orders of the court

Application dismissed

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Rushton (Qld) P/L & Ors v Rushton (NSW) & Ors) [2004] QSC 047
PARTIES:	RUSHTON (QLD) PTY LTD (ACN 079 140 364) (first plaintiff) and SENMEAD PTY LTD (ACN 063 308 008) (second plaintiff) and APADA INVESTMENTS PTY LTD (ACN 097 985 272) (third plaintiff) v RUSHTON (NSW) PTY LTD (ACN 079 164 202) (first defendant) and RUSHTON (VIC) PTY LTD (ACN 079 140 419) (second defendant) and RUSHTON (SA) PTY LTD (ACN 079 164 177) (third defendant)
FILE NO/S:	10771/01
DIVISION:	Civil jurisdiction
PROCEEDING:	Application for a costs order against a non-party
ORIGINATING COURT:	Brisbane
DELIVERED ON:	18 March 2004
DELIVERED AT:	Brisbane
HEARING DATE:	8 March 2003
JUDGE:	Muir J
ORDER:	Application dismissed
CATCHWORDS:	APPLICATION FOR A COSTS ORDER AGAINST A NON-PARTY - discussion of principles – where the non-party is the sole director and shareholder of the defendant parties – relevance of a failure to give early notice of the application – whether impropriety needs to be established Babsara Pty Ltd v Long [2000] QSC 380 Forrest Pty Ltd v Keen Bay Pty Ltd (1991) 4 ACSR 107 Kebaro Pty Ltd v Saunders FCAFC 5 Knight v F.P. Special Assets (1992) 174 CLR 178 Metalla Supplies Ltd v M A (UK) Ltd (1997) 1 WLR 1613 at 1618 Solomon v Solomon & Co Ltd (1897) [AC] 22 Symphony Group plc v Hodgson (1994) QB 179 Taylor v Pace Developments Ltd (1991) TLR 228 (C.A.) Vestris v Cashman (1999) 72 SASR 449
COUNSEL:	R Derrington for the plaintiffs R Perry with him G E Beacham for the defendants
SOLICITORS:	Bennett & Philp for the plaintiffs Macrossans Lawyers for the defendants