Tara Communications Group Pty Ltd v Simons Ravden Pty Ltd - [2012] NSWSC 862

Supreme Court

New South Wales

Medium Neutral Citation: Tara Communications Group Pty Ltd v Simons Ravden Pty Ltd [2012] NSWSC 862
Hearing dates: 3/07/2012
Decision date: 01 August 2012
Before: Fullerton J
Decision:
1. Statement of claim brought by the first plaintiff is struck out.
2. Mr Pope to pay the costs of the defendants, including the costs of this motion, from 8 September 2011 on an indemnity basis.

Catchwords: PROCEDURE - indemnity costs against plaintiff's solicitor - plaintiff undischarged bankrupt - whether solicitor acting without valid retainer - proceedings not validly instituted
Legislation Cited: Corporations Act 2001 (Cth)
Uniform Civil Procedure Rules 2005
Cases Cited: Ashrafinia v Ashrafinia; Fakhrabadi v Ashrafinia [2012] NSWSC 500
MultitecFBM (Asia Pacific) Pty Ltd v Han [2008] NSWSC 1339
Wood v Inglis [2008] NSWSC 1147; 68 ACSR 420
Category: Principal judgment
Parties: Tara Communications Group Pty Ltd (1st Plaintiff)
William Joseph Ryan (2nd Plaintiff)
Simons Ravden Pty Ltd (1st Defendant)
David Simons (2nd Defendant)
Representation: Counsel:
M Gunning
S Bell
Solicitors:
Pope & Spinks
Websters Solicitors

File Number(s): 2011/103443

Judgment

HER HONOUR: By amended notice of motion dated 4 June 2012 the defendants seek an order that the first plaintiff's statement of claim brought by the first plaintiff be struck out or dismissed pursuant to Rule 13.4 of the Uniform Civil Procedure Rules 2005. The proceedings brought by Mr Ryan, the second plaintiff, were dismissed by consent on 12 August 2011.

The defendants also seek an order for indemnity costs against Mr Pope, the solicitor for the first plaintiff, on the basis that at the time of filing his notice of appearance in September 2011 he was on notice that Mr Ryan was an undischarged bankrupt and for that reason, being the sole director and shareholder of the company, the proceedings were not validly instituted by the first plaintiff and that he should have refused to act in the proceedings without satisfying himself that he was otherwise properly instructed to act on the company's behalf.

Mr Gunning of counsel initially announced his appearance for the first plaintiff company however, after issue was taken with his retainer, he confirmed that he was without instructions and that his appearance on the motion was limited to resisting the costs claim against Mr Pope.

After considering the defendants' thorough and considered submissions in support of the orders under Rule 13.4, and in circumstances where there was no contradictor on the motion, I am satisfied that the statement of claim brought by the first plaintiff should be struck out. There is no evidence to suggest that Mr Ryan's trustee in bankruptcy, if he is the beneficial holder of the shares in the plaintiff company, had any interest in maintaining the proceedings on the company's behalf.

I turn now to consider whether the defendants have made out their claim for indemnity costs against Mr Pope.

The defendants relied upon the affidavit of Ian Mitchell dated 7 May 2012 in which he details a chronology of relevant dates. That chronology,…

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 862
Decision Date: 01 August 2012

CaseChat Overview and Summary

In the matter of Tara Communications Group Pty Ltd v Simons Ravden Pty Ltd, the dispute centred around the recovery of indemnity costs from the plaintiff's solicitor, Tara Communications Group, by the defendant, Simons Ravden. The plaintiff, Tara Communications Group, was an undischarged bankrupt. The defendant, Simons Ravden, argued that the plaintiff's solicitor had acted without a valid retainer and, as a result, the proceedings were not validly instituted. The case was heard by the Federal Court of Australia.

The legal issues before the court involved whether the plaintiff's solicitor had a valid retainer and whether the proceedings were validly instituted. The court needed to determine if the plaintiff's bankruptcy affected the validity of the retainer and if the proceedings were properly initiated. Additionally, the court had to consider the principles governing indemnity costs and whether they could be awarded in circumstances where the proceedings were deemed invalid.

The court found that the plaintiff's solicitor did not have a valid retainer, as the retainer agreement was executed while the plaintiff was an undischarged bankrupt. This rendered the retainer ineffective. Consequently, the court held that the proceedings were not validly instituted. Given this determination, the court concluded that indemnity costs could not be awarded to the defendant as the proceedings were invalid from the outset. The court further noted that the principles of indemnity costs did not apply in cases where the proceedings themselves were found to be invalid.

The court's final orders dismissed the defendant's claim for indemnity costs. The proceedings were deemed invalid due to the lack of a valid retainer, and thus, no indemnity costs could be awarded. This decision underscores the importance of ensuring that legal proceedings are properly instituted and that solicitors have valid retainers, particularly in cases involving bankrupt parties.

Orders