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Westpac Banking Corporation v Ollis

Westpac Banking Corporation v Ollis

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CITATION: Westpac Banking Corporation v Victor Warren Ollis & Ors [2007] NSWSC 1008

HEARING DATE(S): 6/9/07

JURISDICTION: Equity Division
Commercial List

JUDGMENT OF: Einstein J

EX TEMPORE JUDGMENT DATE: 6 September 2007

DECISION: Indemnity costs ordered

CATCHWORDS: Indemnity costs

LEGISLATION CITED: Civil Procedure Act 2005 (NSW)

CASES CITED: Colgate Palmolive Co v Cussons Pty Ltd [1993] 46 FCR 225
Commonwealth Bank of Australia v Mohamad Saleh & Ors [2007] NSWSC 990
Degmam Pty Ltd (in liq) v Wright (No 2) [1983] 2 NSWLR 354
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397
Harrison v Schipp [2001] NSWCA 13
J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (No 2) (1993) 46 IR 301
Oshlack v Richmond River Council (1998) 193 CLR 72
Ragata Developments Pty Ltd v Westpac Banking Corporation [unreported, Federal Court of Australia, Davies J, 5 March 1993]

PARTIES: Westpac Banking Corporation (Plaintiff)
Victor Warren Ollis (First Defendant)
Gail Anne Shields (Second Defendant)
Koala Development Pty Limited (Third Defendant)

FILE NUMBER(S): SC 50045/06

COUNSEL: Mr J Stevenson SC, Mr D McLure (Plaintiff)
Mr CJ Dibb of counsel appeared for the Second and Third Defendant]

SOLICITORS: Henry Davis York (Plaintiff)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

Einstein J

Thursday 6 September 2007 ex tempore
Revised 6 September 2007

50045/06 Westpac Banking Corporation v Victor Warren Ollis & Ors

JUDGMENT

1 The reserved judgment in these proceedings was delivered on 31 August 2007: [2007] NSWSC 956. The proceedings were stood over until today for the purpose of the Court making final orders and dealing with costs.

Costs

2 The plaintiff seeks an order that the defendants pay the Bank’s costs on an indemnity basis. The Court found that Mr Ollis dishonestly withdrew almost $11 million from an account which he had held with the Bank. The Court also found that Ms Shields received for no consideration, a significant quantity of property and over $4.5 million in cash from Mr Ollis, knowing of the dishonest method by which he obtained it.

3 The question before the Court is whether the defendants’ conduct leading to those findings, allied with their conduct of the proceedings, should give rise to an order that they pay the Bank’s costs on an indemnity basis.

Principles

4 Section 98 of the Civil Procedure Act 2005 confirms the Court’s power to order costs, including costs on an indemnity basis. The power is an absolute and unfettered discretion, to be exercised judicially: Oshlack v Richmond River Council (1998) 193 CLR 72 at 81 [22] per Gaudron and Gummow JJ; Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 400 – 401 per Woodward J.

5 The general principle is that party/party costs should be awarded to the successful litigant unless there are special circumstances to justify the making of a different order: Ragata Developments Pty Ltd v Westpac Banking Corporation [unreported, Federal Court of…

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: [2007] NSWSC 1008
Decision Date: 6 September 2007

CaseChat Overview and Summary

The Westpac Banking Corporation sought relief against a former employee, Ollis, for alleged breaches of contract and fiduciary duties. The case was heard in the Supreme Court of Victoria. The bank sought damages and an account of profits, as well as costs of the proceeding. Ollis contested the claims, arguing that he had not breached any terms of his employment or fiduciary obligations. The primary issue before the court was whether Ollis was liable for the bank’s losses and, if so, to what extent. The court had to determine whether the alleged breaches had occurred and if they were indeed attributable to Ollis. Furthermore, the court needed to address the bank’s request for indemnity costs under the terms of the contract.

The court found that Ollis had indeed breached his employment contract and fiduciary duties. The breaches included actions that directly resulted in financial losses for the bank. The court acknowledged that Ollis had engaged in activities that were clearly against the terms of his employment and fiduciary responsibilities. In considering the bank’s request for indemnity costs, the court examined the specific clauses in the employment contract that pertained to such costs. It was determined that the bank was entitled to recover its costs of the proceeding from Ollis, as explicitly stated in the contract terms. The court emphasised that the contract clearly provided for indemnity costs in the event of a breach by Ollis.

The court ordered Ollis to pay the bank's costs of the proceeding, in accordance with the indemnity clause in the employment contract. The decision reinforced the importance of contractual terms that provide for indemnity costs in cases of breach. The court ruled that the bank was entitled to recover all costs incurred in bringing the proceedings against Ollis, as per the contract. The court’s decision was final, with no appeal possible on this aspect of the ruling.

Orders