Saba Bros Tiling (ACT) Pty Ltd v Australian Securities and Investments Commission (No 2)

[2021] ACTSC 59

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Saba Bros Tiling (ACT) Pty Ltd v Australian Securities and Investments Commission (No 2)

Citation:

[2021] ACTSC 59

Hearing Date:

Determined on the papers

DecisionDate:

14 April 2021

Before:

Mossop J

Decision:

See [13]

Catchwords:

COSTS – PRACTICE AND PROCEDURE – Applicant successful in reinstatement application – costs initially ordered against reinstated companies – application to vary costs order – costs sought against individual who resisted reinstatement – appropriate that costs follow the event – costs order varied

Cases Cited:

Saba Bros Tiling (ACT) Pty Ltd v Australian Securities and Investments Commission [2021] ACTSC 47

Parties:

Saba Bros Tiling (ACT) Pty Ltd (Applicant)

Australian Securities and Investments Commission (First Respondent)

Andrew Jolley (Second Respondent)

Representation:

Counsel

D Robens (Applicant)

A Greinke (Second Respondent)

Solicitors

Meridian Legal (Applicant)

Mills Oakley (Second Respondent)

File Number:

SC 286 of 2020

MOSSOP J:

Introduction

1. I gave reasons and made orders in this matter on 30 March 2021: Saba Bros Tiling (ACT) Pty Ltd v Australian Securities and Investments Commission [2021] ACTSC 47. Pursuant to liberty granted at the time the judgment was delivered, the applicant has sought to vary the costs order made in the proceedings. The variation sought would substitute the order requiring that the applicant’s costs be paid by the two companies that are to be reinstated with an order that the person who unsuccessfully resisted the reinstatement, Andrew Jolley, pay those costs. In these reasons I will use the same abbreviations of the names of the applicant and the companies that I ordered to be reinstated that I did in my earlier reasons.

Submissions

1. In its written submissions, Saba contended that costs should follow the event and that it succeeded in the face of the only opposition to the reinstatement, which came from Mr Jolley.

1. On the other hand, Mr Jolley contended that no order should be made against him or, alternatively, that an order should be limited to 20% of Saba’s costs of the proceedings.  Mr Jolley contended that such an outcome is appropriate because:

(a)Saba failed on all but one of its factual and legal contentions;

(b)the point on which the applicant succeeded was a new point arising late in the trial and involved a significant departure from its previous case;

(c)Saba had been delinquent by unexplained delays; and

(d)Saba gave no notice that it would seek an order for costs against Mr Jolley at any point prior judgment.

1. Mr Jolley also contended that there was no basis to make an order against him because of his conduct.

Result

1. In short, I accept the submissions made by Saba.  In my view it is appropriate that the costs of the application should largely follow the event.  I do not accept that the arguments put by Mr Jolley should result in either no order being made against him or an order for only a proportion of Saba’s costs.  It is appropriate that Mr Jolley pay the costs of the proceedings from the point at which he entered an appearance for the purposes of opposing the application. 

Reasons

1. The applicant succeeded in its application despite Mr Jolley’s opposition.  But for Mr Jolley’s opposition, the application would have been straightforward and the costs very substantially less.

1. I accept that in some cases it will be appropriate to apportion costs depending upon the matters in issue, the respective success of the parties and the time and resources devoted by the parties to discrete issues.  I also accept that the arguments put by Mr Jolley on a number of legal and factual issues that he raised in opposition to the reinstatement of the companies were successful.  However, the applicant was ultimately successful.  This case is to be distinguished from most cases where some apportionment of costs is sought because in this case Mr Jolley chose to participate and raise the matters that he did.  It is to be distinguished from a case in which a defendant has no choice about participation in the proceedings and successfully defends discrete aspects of a claim against it.  The fact that Mr Jolley chose to participate in the proceedings and the fact that he himself defined the scope of the issues raised are both matters which indicate that this is not a case in which costs should be apportioned between issues.

1. I do not accept the submission that the issue upon which the applicant succeeded was raised late in the trial and involved a significant departure from its previous case.  The application was put on the basis that having regard to the transfer of assets away from the Chase entity, the inaccurate declaration by Mr Jolley and continuation of negotiations both before and after deregistration, reinstatement was appropriate in order to allow a liquidator to investigate the affairs of the company.  Further, the “late in the trial” submission does not properly reflect the fact that the hearing took one day.

1. I do not accept the submission that the delays by the applicant between October 2019 and August 2020 are disentitling in relation to costs.  Any ultimate prejudice to the companies’ capacity to recover funds from third parties as a result of that delay will flow through to the capacity of the applicant to recover any of its own entitlements from the companies.  However, the potential prejudice to the companies after reinstatement does not disentitle the applicant to costs from the party who opposed the reinstatement.

1. I accept the evidence of one of Mr Jolley’s solicitors that at no time prior to delivery of the judgment did the applicant give express notice that it would seek an order for costs against Mr Jolley.  He was not named as a party to the Originating Application and hence no order could have been sought against him.  Mr Jolley filed a notice of appearance on 14 September 2020 indicating that he intended to oppose the application.  He was only joined as a party to the proceedings by an order made in the judgment, although by the time of the hearing it was uncontroversial that he should be joined.  The final orders proposed by the applicant at the hearing included an order for costs against the companies but not Mr Jolley.  Notwithstanding the absence of any express notice given to Mr Jolley of the application for an order for costs against him until after judgment, there is no evidence that the absence of such notice had any effect upon the approach that he took to the application generally or to the hearing.  It must have been obvious to him, if he was properly advised, that his participation in the proceedings exposed him to the risk of a costs order if his opposition to the reinstatement was not successful.  My impression is, from the variety of grounds taken in opposition to reinstatement, that express notice of such a claim against him would not have altered the approach to the proceedings, or to the final hearing, at all.  In my view there is no injustice to Mr Jolley in permitting the applicant to seek an order for costs against him in the manner that has occurred.  In my view, the procedural history in relation to the application for costs does not provide a discretionary reason for refusing now to make a costs order against him.

1. Mr Jolley also made submissions contending that there were no adverse factual findings made in relation to his conduct.  The reasons given on 30 March 2021 identify that conduct and the admission made on his behalf that the declaration of solvency he made prior to the winding up of the Chase entity was incorrect.  What might be considered parsimonious findings about his conduct were of that character because it was not necessary to go any further to reach the conclusion that reinstatement was appropriate in order to permit a liquidator to undertake a more detailed examination of the circumstances of the Chase entity and Manhattan.  That investigation may well disclose additional matters of relevance to the characterisation of his conduct and it was not appropriate in the reasons that were given to address the matter in a way which might be seen to confine the scope of any liquidator’s enquiries or prejudge any conclusions about Mr Jolley’s conduct that might be reached by the liquidator with the benefit of the two companies’ records and the investigatory powers available to him.  Therefore, while the findings expressed in the earlier reasons are limited, that does not in my view provide an appropriate basis for qualifying or limiting an order for costs in favour of Saba.

1. In my view the appropriate order is that Mr Jolley pay the applicant’s costs of the proceedings from 14 September 2020, the date when Mr Jolley gave notice of his intention to appear and oppose the application.  Otherwise, the applicant’s costs of the proceedings will be ordered to be paid by the companies.

Order

1. Order 6 made on 30 March 2021 is amended so that it reads:

6. The applicant’s costs of these proceedings from 14 September 2020 be paid by Andrew Jolley and its costs up to but not including that date be paid by 113 134 964 Pty Ltd (ACN 113 134 964) and Manhattan Development Pty Ltd (ACN 144 701 173).

I certify that the preceding thirteen [13] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop.

Associate:

Date: 14 April 2021