Westhusen v Eurosources Pty Ltd

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   WESTHUSEN -v- EUROSOURCES PTY LTD [2020] WASC 432
CORAM:   MASTER SANDERSON
HEARD:   10 NOVEMBER 2020
DELIVERED          :   11 DECEMBER 2020
PUBLISHED           :   11 DECEMBER 2020
FILE NO/S:   COR 88 of 2020
BETWEEN:   ERNST DIETER WESTHUSEN
Plaintiff

AND

EUROSOURCES PTY LTD
First Defendant

GERDA MARIA VOGL
Second Defendant

Catchwords:

Costs - Order fixing costs - Turns on own facts

Legislation:

Nil

Result:

Plaintiff's application granted

Category: B

Representation:

Counsel:

Plaintiff	:	PG McGowan
First Defendant	:	No appearance
Second Defendant	:	A McDonald

Solicitors:

Plaintiff	:	DTS Legal
First Defendant	:	No appearance
Second Defendant	:	Pragma Lawyers

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

Nil

MASTER SANDERSON:

This was the plaintiff's application to wind up the first defendant. It is yet another case where the company, having two directors and two shareholders, was deadlocked. In support of the application, the plaintiff swore an affidavit of 9 July 2020. In that affidavit he made serious allegations about the unauthorised withdrawal of funds by the second defendant from the accounts of the first defendant. Those allegations were confirmed in a supplementary affidavit sworn 23 October 2020. The second defendant did not file any affidavit material. That means the plaintiff's allegations have never been tested. It will be for the liquidator of the first defendant to investigate the allegedly improper transactions. Be that as it may, the evidence on the court file at least establishes the plaintiff had justifiable concerns about the conduct of the second defendant with respect to the company.
These reasons deal with the question of costs. The plaintiff seeks costs in an amount of $38,333.20. Of that amount, there is a disbursement of $12,870 for counsel fees. A detailed schedule of costs was provided by the plaintiff's solicitors and filed 16 November 2020.
It is the second defendant's position the amount claimed is unreasonable. Counsel in written submissions referred to the Consolidated Practice Direction 4.7.1 dealing with interlocutory applications. Counsel points out that the standard costs for such applications is an amount of just under $6,000. He further submits a reasonable amount for counsel fees would be $8,500.
There is no question in this case of there being an order for indemnity costs. No such order was sought and of course no such order was made. But the fact is, this was a case where the company was deadlocked. There were two directors and they could not agree as to the management of the company. Winding up was inevitable. The costs incurred by the plaintiff were directly referable to the position taken by the second defendant. While I would accept the costs claimed are at the higher end of what is reasonable in the circumstances, I am also satisfied that in this case the amount claimed by the plaintiff is reasonable. There were complicating factors in this case. The main complicating factor was the allegation of inappropriate removal of funds by the second defendant from the first defendant's bank account. That added a degree of complexity to what would otherwise have been a relatively straightforward application.
On balance then, I am satisfied the amount of costs claimed by the plaintiff is reasonable. Accordingly, the orders will be:
(1)The first defendant be wound up on the just and equitable ground.
(2)Jimmy Trpcevski be appointed as liquidator of the first defendant.
(3)The plaintiff's costs be fixed in the sum of $38,333.20, to be paid from the property and assets of the first defendant.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CB
Associate to Master Sanderson
11 DECEMBER 2020

In the Federal Court of Australia, Westhusen, the plaintiff, brought a case against Eurosources Pty Ltd, the defendant, concerning the costs associated with legal proceedings. The dispute primarily revolved around the assessment and fixation of costs incurred during the litigation process. The case was decided by the Court, which had to determine the appropriate amount of costs that should be awarded to the plaintiff.

The primary legal issue the court had to resolve was the basis for determining the costs that should be awarded to the successful party in litigation. Specifically, the court needed to decide whether the costs should be based on the general principles of awarding costs in litigation or whether they should be tailored to the unique circumstances of the case. The court had to balance the need for fairness and proportionality in the costs awarded with the practical considerations of ensuring that legal proceedings are not unduly burdensome.

The court considered the principles governing the fixation of costs in litigation, noting that while there are standard guidelines, each case must be assessed on its own merits. The court found that the case presented unique circumstances that warranted a departure from the standard approach. The court awarded costs based on the particular facts and the efforts expended by both parties. The decision emphasised the importance of proportionality and fairness in determining the appropriate costs. The court concluded that the costs awarded should reflect the specific circumstances of the case, rather than adhering strictly to a formulaic approach.

The final orders of the court fixed the costs to be paid by the defendant to the plaintiff. The amount was determined based on the specific facts of the case, taking into account the efforts and resources expended by both parties. The court's decision underscored the importance of considering the unique aspects of each case when determining the appropriate costs in litigation.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established