Niardone v Clubb (No 3) [2021] FCA 1449

Niardone v Clubb (No 3) [2021] FCA 1449

The cross-claimant (MCL) was only successful to a minimal extent, and its appointment of administrators and prosecution of the larger debt claim was unreasonable in the circumstances, given a longstanding bona fide dispute and The Agency's willingness to pay the Due Diligence Fee. Costs orders should reflect relative success, with MCL ordered to pay the vast majority of The Agency's costs. The contractual indemnity costs provision did not apply as the major part of legal costs was not for 'recovery costs' as meant by the agreement. No indemnity costs order was justified as the Agency's offers did not meet all requirements for such orders.

Parties
First Applicant: Paul Clement Niardone; Second Applicant: Adam Stuart Davey; Third Applicant: Andrew Paul Jensen; Fourth Applicant: Matthew Joseph Lahood; First Respondent: Duncan Edward Clubb; First Respondent: Andrew Thomas Sallway; Second Respondent: MCL 105 Pty Ltd (ACN 638 967 218); Third Respondent: The Agency Group Australia Ltd (ACN 118 913 232); Cross Claimant: MCL 105 Pty Ltd (ACN 638 967 218); Cross Respondent: The Agency Group Australia Ltd (ACN 118 913 232)
Jurisdiction
Australia
Judgment Date
19 November 2021
Procedural Posture
Corporations/commercial (cross Claim and Application for Injunctive Relief) / Costs Determination Following Judgment in Principal Claim and Cross Claim
Outcome
Cross-claimant (MCL 105 Pty Ltd) had very limited success; The Agency Group Australia Ltd substantially successful on the main issues; orders made as to payment of debt, adjustment of security interests, and detailed costs allocation; money paid into court to be returned to The Agency.
Legal Topics
Costs, Appointment and Conduct of Administrators, Enforcement of Security Interests, Settlement Offers, Use of Insolvency Procedures for Debt Collection
Corporations Law Civil Procedure Insolvency Costs Appointment and Conduct of Administrators Enforcement of Security Interests Settlement Offers Use of Insolvency Procedures for Debt Collection

Case Brief

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Parties

Paul Clement Niardone

First Applicant

Adam Stuart Davey

Second Applicant

Andrew Paul Jensen

Third Applicant

Matthew Joseph Lahood

Fourth Applicant

Duncan Edward Clubb

First Respondent

Andrew Thomas Sallway

First Respondent

MCL 105 Pty Ltd (ACN 638 967 218)

Second Respondent

The Agency Group Australia Ltd (ACN 118 913 232)

Third Respondent

MCL 105 Pty Ltd (ACN 638 967 218)

Cross Claimant

The Agency Group Australia Ltd (ACN 118 913 232)

Cross Respondent

Procedural Posture

Corporations/commercial (cross Claim and Application for Injunctive Relief) / Costs Determination Following Judgment in Principal Claim and Cross Claim

Legal Issues

  1. 1 Entitlement to costs arising from urgent injunction and cross-claim proceedings
  2. 2 Applicability of contractual indemnity costs clause
  3. 3 Whether conduct in appointing administrators was unreasonable or justified by limited success

Ratio Decidendi

The cross-claimant (MCL) was only successful to a minimal extent, and its appointment of administrators and prosecution of the larger debt claim was unreasonable in the circumstances, given a longstanding bona fide dispute and The Agency's willingness to pay the Due Diligence Fee. Costs orders should reflect relative success, with MCL ordered to pay the vast majority of The Agency's costs. The contractual indemnity costs provision did not apply as the major part of legal costs was not for 'recovery costs' as meant by the agreement. No indemnity costs order was justified as the Agency's offers did not meet all requirements for such orders.

Court Disposition

Cross-claimant (MCL 105 Pty Ltd) had very limited success; The Agency Group Australia Ltd substantially successful on the main issues; orders made as to payment of debt, adjustment of security interests, and detailed costs allocation; money paid into court to be returned to The Agency.

Orders

  • Judgment for the cross-claimant against the cross-respondent in the sum of $11,000 (including GST) with interest fixed at $1,500.
  • Upon payment, cross-claimant to lodge financing change statements within two business days regarding PPSR registrations.