Russell v Lee Holdings Pty Ltd - [2020] WASC 256

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RUSSELL -v- LEE HOLDINGS PTY LTD [2020] WASC 256
CORAM:   KENNETH MARTIN J
HEARD:   ON THE PAPERS
DELIVERED          :   3 JULY 2020
FILE NO/S:   COR 58 of 2018
BETWEEN:   SHANA FRANCINNE RUSSELL
First Plaintiff
NERIDA JAYNE PUANGKHAM
Second Plaintiff
AND
LEE HOLDINGS PTY LTD
First Defendant
FAY EILEEN LEE
Second Defendant
JOHN ANTHONY CAMPBELL LEE
Third Defendant
AUSTRALIAN EXECUTOR TRUSTEES LIMITED
Fourth Defendant

Catchwords:

Costs - Costs orders against second and third defendants sought to be stayed - Opposed application for the plaintiffs to be given permission to commence derivative proceeding by first defendant - Leave to commence derivative proceeding granted - Derivative Action commenced - Derivative Action pending trial in August 2020 - Application to stay costs orders of opposed derivative proceeding application - Application to stay payment of costs orders opposed - Discretionary considerations - Special circumstances required by s 15(3) of Civil Judgments Enforcement Act 2004 (WA) - Turns on own facts

Legislation:

Civil Judgments Enforcement Act 2004 (WA)

Result:

Application refused

Category: B

Representation:

Counsel:

First Plaintiff	:	No appearance
Second Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance

Solicitors:

First Plaintiff	:	Bennett + Co
Second Plaintiff	:	Bennett + Co
First Defendant	:	Hotchkin Hanly
Second Defendant	:	Hotchkin Hanly
Third Defendant	:	Croftbridge
Fourth Defendant	:	Gilbert + Tobin

Case(s) referred to in decision(s):

Burnet v Francis Industries plc [1987] 1 WLR 802
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2019] WASCA 141
New Resource Holdings Pty Ltd v Lunt [No 3] [2008] WASC 221
Russell v Lee Holdings Pty Ltd [2017] WASC 283
Russell v Lee Holdings Pty Ltd [2018] WASC 275
Russell v Lee Holdings Pty Ltd [2019] WASC 320
State Bank of Victoria v Parry (1989) WAR 240
Streeter v Western Areas Exploration Pty Ltd [2009] WASCA 214

KENNETH MARTIN J:

Introduction

On 29 August 2018, after resolving an opposed application, heard on 6 August 2018, I then issued orders granting leave to the plaintiffs to bring proceedings on behalf of and in the name of Lee Holdings Pty Ltd (ACN 008 692 537) against each of Lee Bros Pty Ltd (ACN 008 692 546), Fay Eileen Lee, John Anthony Campbell Lee and Australian Executor Trustees Ltd (ACN 007 869 794) as trustee of the estate of the late Ronald William Lee, for:
(i)relief from oppression pursuant to s 233 of the Corporations Act 2001 (Cth) (the Act);
(ii)relief from each of Fay Eileen Lee, John Anthony Campbell Lee and Australian Executor Trustees Ltd as trustee of the estate of the late Ronald William Lee for breach of directors' duties pursuant to s 180(1), s 181(1), s 182(1), s 191(1) and s 1317H of the Act and breach of fiduciary duties;
(iii)orders pursuant to s 233 of the Act, further or alternatively s 461(1)(e), (f), (g) and/or (k) of the Act…

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] WASC 256
Decision Date: 3 JULY 2020

CaseChat Overview and Summary

In the matter of Russell v Lee Holdings Pty Ltd, the plaintiffs sought costs orders against the second and third defendants, which the defendants sought to stay. The plaintiffs had earlier been granted leave to commence a derivative proceeding against the first defendant. The defendants opposed the plaintiffs' application for permission to commence the derivative proceeding and sought to stay the costs orders. The court had to decide whether the defendants could stay the costs orders pending the outcome of the derivative action.

The court considered the legal definitions of 'judgment' and 'monetary judgment' under the Civil Judgments Enforcement Act 2004 (WA). It found that the costs orders met the definition of a 'monetary judgment', making them subject to an application for suspension of enforcement under s 15(1)(a) of the Act. The court noted that the defendants needed to establish 'special circumstances' to justify staying the enforcement of the costs orders, as required by s 15(3) of the Act. The court reviewed the previous proceedings and determined that the costs were awarded because the plaintiffs were successful and would not be parties to the derivative action.

The court found that the defendants had not established any special circumstances that would justify staying the enforcement of the costs orders. It observed that the costs were assessed at a later stage and the defendants had not yet formally taxed the bill of costs. The court decided that the defendants' applications to stay the costs orders were opposed and would not be granted. The court maintained the costs orders and noted that the defendants could apply to stay the payment of the costs until the disposition of the proposed proceedings.

The court ordered that the defendants were liable to pay the costs of the plaintiffs as assessed and ordered. It noted that the defendants could apply to stay the payment of the costs until the disposition of the proposed proceedings. The court reserved the issue of the amount of costs to be paid by the defendants until further order.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The word 'judgment' is a defined term under s 3 within Pt 1 of the Civil Judgments Enforcement Act meaning, inter alia '(a) a monetary judgment'. The term 'monetary judgment' is then defined in s 3:monetary judgment means a judgment or an order of a court that requires or has the effect of requiring a person to pay money, whether or not the judgment or order contains any other requirements. Given the breadth of such definitions, I am satisfied here that order 4 of my orders as to costs of 29 August 2018, as regards John and Fay being then ordered to pay the plaintiffs' costs of that application, does meet the description of a 'judgment' for the purposes of s 15(1)(a). Therefore, it may be the legitimate subject of an application for an order suspending the enforcement of all or part of such a judgment. By reference to s 15(3), however, there is a basal need for John and Fay to establish 'special circumstances' which 'justify doing so'. Those phrases as used in s 15(3) essentially pose the key issue for resolution now upon the respective applications of John and Fay to suspend enforcement. John's written submissions refer me back to the transcript of the hearing on 6 August 2018 and particularly to what was said then concerning costs upon the determination of the application and in the wake of the ex tempore decision. It is correct that at the time I had expressed to counsel for John and Fay my then inclination to order that the costs of the application be reserved to be dealt with in the wash-up result, in effect, of the outcome of the derivative proceeding that was now permitted to be commenced - and thereby leaving the costs of the leave application to later and so then to abide the decision of whatever the trial judge, upon an eventual determination of the Derivative Action, would then assess as appropriate. However, that 'later' position as to costs was opposed at the time by counsel for the plaintiffs (Mr Bennett), leading me to observe in regard to costs at page 42 of the transcript:I am in the end persuaded by Mr Bennett that the plaintiffs should have their costs in the present application since (a) they were successful and (b) they won't be parties to the second action.So I will make an order in terms of what was the former paragraph 5. That will now be paragraph 4. But I will indicate [that] there's liberty to apply to the second and third defendants to stay the payment of any costs assessed until after the disposition of the proposed proceedings, which I think will cater for [the] concern that was troubling me in dialogue with counsel. After the issuing those August 2018 orders and then later dealing with some further ancillary issues during September 2018, it transpired that it was not until 27 March 2020 that a bill for those costs was lodged on behalf of the plaintiffs (in the amount of $57,405.40) by their lawyers. There followed a provisional assessment of that bill by a Registrar of this court on 8 April 2020. However, John and Fay, via their lawyers, have respectively objected to the provisional costs assessment. It is not apparent to me that any formal taxation of the claimed bill of costs has yet taken place.

Ratio Decidendi

Legal Principle Established

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