Steadfast ICT Security Pty Ltd v Peak (No 3) - [2022] ACTSC 31

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	Steadfast ICT Security Pty Ltd v Peak (No 3)
Citation:	[2022] ACTSC 31
Hearing Date:	Decided on written submissions
DecisionDate:	1 March 2022
Before:	Mossop J
Decision:	See [27]
Catchwords:	COSTS – APPLICATION FOR COSTS – Plaintiff seeks costs from the first and fourth defendants on an indemnity basis – where judgment for the plaintiff was significantly more favourable than the plaintiff’s Calderbank offer – all defendants conducted a joint defence and jointly propounded a false narrative to the plaintiff – the defendants’ stance in relation to multiple settlement offers was unreasonable in the circumstances – solicitor and client costs awarded from the date the defendants rejected the initial Calderbank offer COSTS – APPLICATION FOR COSTS – Plaintiff seeks costs from the second, third and fifth defendants on an indemnity basis from the date the plaintiff made a second Calderbank offer – only declaratory relief was granted against the second and fifth defendant but relief included declarations of breach of fiduciary duty – third defendant rejected a settlement offer more favourable than the ultimate outcome of the case – causal connection between the third defendant’s conduct and the plaintiff’s losses and fourth defendant’s profits was not so clear as to make it unreasonable in the circumstances to reject the settlement offer – party and party costs awarded
Legislation Cited:	Corporations Act 2001 (Cth), s 182 Court Procedures Rules 2006 (ACT), rr 1727, 1751, 1752
Cases Cited:	Hulanicki v Walton (No 2) [2015] ACTCA 45 Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 Steadfast ICT Security Pty Ltd v Peak (No 2) [2021] ACTSC 319
Parties:	Steadfast ICT Security Pty Ltd ( Plaintiff) Gareth Peak ( First Defendant) Lachlan Watt (Second Defendant) Nenad Stefanovic (Third Defendant) Dreamtime Supply Company Pty Ltd (Fourth Defendant) David Stephen Glavonjic (Fifth Defendant)
Representation:	Counsel E Cox SC and A Munro ( Plaintiff) B Buckland (Defendants)
Solicitors Mackenzie Workplace Law ( Plaintiff) Bradley Allen Love (Defendants)
File Number:	SC 333 of 2019

MOSSOP J:

Introduction

I have delivered two previous judgments in relation to this matter: see Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Steadfast No 1) and Steadfast ICT Security Pty Ltd v Peak (No 2) [2021] ACTSC 319 (Steadfast No 2). These reasons relate to the costs. In these reasons, I refer to the parties in the same manner that I did in my two substantive judgements.

On 30 August 2021, I made orders that Dreamtime Supply Company Pty Ltd (Dreamtime) account to Steadfast ICT Security Pty Ltd (Steadfast) for profits in equity in the sum of $1,187,249.64: see Steadfast No 1 at [452].

On 17 December 2021, I made orders relating to the claims against Mr Peak, Mr Watt, Mr Stefanovic and Mr Glavonjic. Declarations were made of breach of duty by each of these defendants. However, orders to pay compensation were only made against Mr Peak (in the sum of $1,187,249.64) and in…

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: [2022] ACTSC 31
Decision Date

CaseChat Overview and Summary

Steadfast ICT Security Pty Ltd (Plaintiff) brought proceedings against Gareth Peak (First Defendant), Lachlan Watt (Second Defendant), Nenad Stefanovic (Third Defendant), Dreamtime Supply Company Pty Ltd (Fourth Defendant), and David Stephen Glavonjic (Fifth Defendant) (Defendants). Steadfast sought a declaration of breach of fiduciary duty and damages against the defendants. In a written decision dated 1 March 2022, Mossop J dealt with the defendants' liability, the quantum of damages, and the issue of costs. The plaintiff had sought indemnity costs from the first and fourth defendants and party and party costs from the second, third, and fifth defendants. The first and fourth defendants had conducted a joint defence and jointly propounded a false narrative to the plaintiff. They rejected the plaintiff's settlement offer that was more favourable than the outcome of the case. The court held that their stance in relation to the settlement offer was unreasonable in the circumstances. The court awarded costs from the date the defendants rejected the initial Calderbank offer. The second, third, and fifth defendants had rejected a settlement offer that was more favourable than the outcome of the case. However, the court was not satisfied that the causal connection between the third defendant's conduct and the plaintiff's losses and fourth defendant's profits was so clear as to make it unreasonable to reject the settlement offer. The court awarded party and party costs from the date the plaintiff made the second Calderbank offer.

The court considered the relevant principles in Hulanicki v Walton (No 2) [2015] ACTCA 45. The court held that a successful litigant was entitled to recover their costs from the opposing party. A party was entitled to costs on an indemnity basis if the opposing party unreasonably rejected a Calderbank offer. The court held that the defendants unreasonably rejected the plaintiff's Calderbank offer. The court awarded costs from the date the defendants rejected the initial Calderbank offer on a solicitor and client basis. The court held that the third and fifth defendants were not liable for costs more than party and party costs. The court held that the second defendant was liable for party and party costs.

Orders