Re Pacific Mobile Phones Pty Ltd (No 2)
[2008] QSC 214
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- Unreported Judgment
- Re Pacific Mobile Phones Pty Ltd (No 2)[2008] QSC 214
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Re Pacific Mobile Phones Pty Ltd (No 2)[2008] QSC 214
Re Pacific Mobile Phones Pty Ltd (No 2)[2008] QSC 214
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Trial Division | |
PROCEEDING: | Winding-up application |
ORIGINATING COURT: | |
DELIVERED ON: | 10 September 2008 |
DELIVERED AT: | Brisbane |
HEARING DATE: | Written submissions |
JUDGE: | White J |
ORDER: | The applicant pay the respondent’s costs of and incidental to the application, including the interlocutory application filed by the respondent opposing the orders sought, to be assessed on the indemnity basis. |
CATCHWORDS: | PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – ORDER FOR COSTS ON INDEMNITY BASIS – the applicant persisted in an application to wind-up the respondent in circumstances where it constituted an abuse of process – the application was refused – whether the respondent should have its costs on the indemnity basis Corporations Act 2001 (Cth), s 1335 CGUW Workers Compensation (Vic) Ltd v Carousel Bar Pty Ltd (No. 2) [1999] VSC 237, cited Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248, applied Cosgrove and Anor v Johns [2000] QCA 157 (6 June 2000), cited Martinovic v Chief Executive, Queensland Transport [2005] 1 Qd R 502, cited Re: Pacific Mobile Phones Pty Ltd [2008] QSC 210, related |
COUNSEL: | Mr C Coulsen for the applicant Mr C Wilson for the respondent |
SOLICITORS: | Hall Lawyers for the applicant DLA Phillips Fox for the respondent |
[1] The applicant sought an order winding up the respondent in deemed insolvency. That application was dismissed[1]. The respondent seeks its costs of and incidental to the application and other reserved costs on the indemnity basis. The applicant was given an opportunity to respond to the respondent’s written submissions about costs and did so by letter dated 3 September 2008 in the following terms:
“Bearing in mind, the findings made in paragraph 31(2) of the reasons for judgment we do not believe that there is anything further we can add with respect to the issue of costs.”
It is not clear if that is an acceptance of the application for costs to be assessed on the indemnity basis, but paragraph 31(2) states:
“If there was service of the statutory demand the applicant knew that the respondent had no notice of it within a day of posting the statutory demand; had adequate information about the respondent to bring the statutory demand to the respondent’s actual notice; brought the winding-up application when an application to set aside the judgment in default of appearance had been listed for hearing; and persisted in that application after the judgment had been set aside so as to characterise the pursuit of the winding up of the company as an abuse of process.”
Accordingly, the letter may well be a concession that costs ought to be awarded on the indemnity basis.
[2] The costs of any proceeding before the court under the Corporations Act 2001 are in the discretion of the court.[2] That will include the basis upon which costs are to be calculated. The circumstances when a court may make an order for costs to be assessed on the indemnity basis are not closed. Reference is regularly made to the discussion by Sheppard J in Colgate Palmolive Co v Cussons Pty Ltd[3] as a guide to the exercise of the discretion. His Honour said[4]:
“…it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152 evidence of particular misconduct that causes loss of time to the court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Regata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 (Court of Appeal); Crisp v Kent (SC(NSW)(CA), 27 Sept 1993, unreported) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records). Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis. The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.”
[3] In CGUW Workers Compensation (Vic) Ltd v Carousel Bar Pty Ltd (No. 2)[5] Gillard J ordered indemnity costs in circumstances which had some features in common with the facts here. As has been set out in the principal judgment, the applicant persisted in its application to wind-up the company in circumstances where that application constituted an abuse of process. The day after the statutory demand was returned to the applicant as undelivered it was aware that there could not, in fact, be a presumed insolvency. Even so, the applicant continued with its application for summary judgment. It persisted after it was notified that the respondent proposed to seek to set aside the summary judgment. It has continued with this application to wind-up after that judgment had been set aside with the supporting affidavit clearly showing the debt was disputed. Those proceedings in New South Wales are continuing but would be stifled by a winding-up order. The applicant was advised in sufficient time to have minimised its costs as well as those of the respondent by withdrawing the application. This whole exercise has resulted in costs to the respondent which it will be unlikely to recover even on the indemnity basis.
[4] The order is that the applicant, Commonwealth Broadcasting Corporation Pty Ltd, pay the respondent’s costs of and incidental to the application, including the interlocutory application filed by Pacific Mobile Phones Pty Ltd opposing the orders sought, to be assessed on the indemnity basis.
Footnotes
[1] Re: Pacific Mobile Phones Pty Ltd [2008] QSC 210.
[2] Section 1335(2).
[3] (1993) 118 ALR 248 at 254-257; see for example, for Queensland, Martinovic v Chief Executive, Queensland Transport [2005] 1 Qd R 502; and Cosgrove and Anor v Johns [2000] QCA 157 (6 June 2000).
[4] At 257.
[5] [1999] VSC 237.