LM Investment Management Ltd (in liq) v Whyte [No 2]
[2023] QSC 147
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- Unreported Judgment
- LM Investment Management Ltd (in liq) v Whyte [No 2][2023] QSC 147
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LM Investment Management Ltd (in liq) v Whyte [No 2][2023] QSC 147
LM Investment Management Ltd (in liq) v Whyte [No 2][2023] QSC 147
SUPREME COURT OF QUEENSLAND
CITATION: | LM Investment Management Ltd (in liquidation) (No. 2) & Ors v Whyte [2023] QSC 147 |
PARTIES: | LM INVESTMENT MANAGEMENT LIMITED (IN LIQUIDATION) ACN 077 208 461 (first plaintiff) LM INVESTMENT MANAGEMENT LIMITED (IN LIQUIDATION) ACN 077 208 461 AS RESPONSIBLE ENTITY OF THE LM FIRST MORTGAGE INCOME FUND ARSN 089 343 288(second plaintiff) LM INVESTMENT MANAGEMENT LIMITED (IN LIQUIDATION) ACN 077 208 461 AS RESPONSIBLE ENTITY OF THE LM INSTITUTIONAL CURRENCY PROTECTED AUSTRALIAN INCOME FUND (third plaintiff) LM INVESTMENT MANAGEMENT LIMITED (IN LIQUIDATION) ACN 077 208 461 AS RESPONSIBLE ENTITY OF THE LM CURRENCY PROTECTED AUSTRALIAN INCOME FUND (fourth plaintiff) v DAVID WHYTE AS RECEIVER OF LM INVESTMENT MANAGEMENT LIMITED (RECEIVERS & MANAGERS APPOINTED) (IN LIQUIDATION) ACN 077 208 461 AS RESPONSIBLE ENTITY OF THE LM FIRST MORTGAGE INCOME FUND ARSN 089 343 288 (defendant) |
FILE NO/S: | BS No 14389 of 2022 |
DIVISION: | Trial Division |
PROCEEDING: | Application as to costs |
ORIGINATING COURT: | Supreme Court at Brisbane |
DELIVERED ON: | 30 June 2023 |
DELIVERED AT: | Brisbane |
HEARING DATE: | Heard on the papers. Plaintiffs’ written submissions filed 21 June 2023; Defendant’s written submissions filed 23 June 2023. |
JUDGE: | Kelly J |
ORDER: |
|
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – INDEMNITY COSTS – RELEVANT CONSIDERATIONS GENERALLY – where the defendant applied to strike out the plaintiffs’ amended statement of claim on the basis that it disclosed no reasonable cause of action – where the application was dismissed – where the plaintiffs seek costs of and incidental to the application – where the plaintiffs also seek a costs order that the defendant’s entitlement to recover costs from the scheme property of the LM First Mortgage Income Fund be reserved – where the defendant contends no order should be made in relation to his costs – whether costs are to be ordered against the defendant and on what basis Uniform Civil Procedure Rules 1999 (Qld), r 703 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 LM Investment Management Ltd (in liquidation) & Ors v Whyte [2023] QSC 132, related |
COUNSEL: | J Peden KC, with D Clarry, for the plaintiffs D O'Brien KC, with D Ananian-Cooper, for the defendant |
SOLICITORS: | Russells for the plaintiffs Cowen Schwarz Marschke Lawyers for the defendant |
- [1]The defendant applied to strike out the plaintiffs’ amended statement of claim on the basis that it disclosed no reasonable cause of action. On 16 June 2023, I dismissed the application and published reasons.[1] I invited submissions in relation to costs. These are my reasons in relation to that issue. In these reasons, I have adopted defined terms from my earlier reasons.
- [2]The plaintiffs seek the following costs orders:
- (a)The plaintiffs’ costs of and incidental to the application be assessed on the indemnity basis and paid by the second plaintiff from the scheme property of the Fund.
- (b)Mr Whyte’s entitlement to recover his costs of the application from the scheme property of the Fund be reserved.
- (a)
- [3]Mr Whyte has provided submissions to the effect that he will abide any order of the court in relation to the plaintiffs’ costs, but no order should be made in relation to his costs.
- [4]The plaintiffs’ submissions in relation to their costs suggested two bases for their proposed order. First, the plaintiffs’ opposition to the application had been in the best interests of the beneficiaries of the Fund and reflected the default position provided for under r 703 UCPR whereby the second plaintiff was the responsible entity and trustee of the Fund. It was said to be artificial to distinguish between the costs of each plaintiff since, as a matter of substance and reality, there was only one plaintiff, represented by one firm. Secondly, reliance was placed on the principles in Colgate-Palmolive Co v Cussons Pty Ltd.[2] In my consideration, the plaintiffs’ opposition to the application was in the best interests of the beneficiaries of the Fund, having regard to the amount of the adverse costs liability and the material conclusions I reached in my earlier reasons.[3] I accept the plaintiffs’ submission that it would be artificial to distinguish between the costs of each plaintiff. I do not accept the plaintiffs’ submission that an indemnity costs order is appropriate having regard to the principles in Colgate-Palmolive. In my consideration, the circumstances in which the application was brought and maintained do not engage those principles.
- [5]As to Mr Whyte’s costs, he submits that the issue as to his indemnity for his costs is not ripe for determination and he is not able to properly address that issue in the present circumstances. The plaintiffs concede that it “is possible” that not all issues relevant to Mr Whyte’s costs have “been exposed on the present application” and may be affected by presently unknown factors. I accept Mr Whyte’s submissions in relation to the position concerning his costs and have decided that it is appropriate to make no order in respect of his costs.
- [6]The costs order I make is as follows:
- (a)The plaintiffs’ costs of and incidental to Mr Whyte’s application filed 13 April 2023 be paid by the second plaintiff on the indemnity basis from the property of the Fund.
- (a)