Shafston Avenue Construction Pty Ltd, in the matter of CRCG-Rimfire Pty Ltd (subject to deed of company arrangement) v McCann (No 4) [2021] FCA 1548

Shafston Avenue Construction Pty Ltd, in the matter of CRCG-Rimfire Pty Ltd (subject to deed of company arrangement) v McCann (No 4) [2021] FCA 1548

The plaintiffs obtained a more favourable judgment than if they had accepted the 'walk away' offer, specifically by succeeding in part on Lincoln's Proof of Debt, rendering the Administrators not entitled to indemnity costs under r 25.14 of the Federal Court Rules 2011 (Cth) or Calderbank principles. Consequently, the appropriate order was that each party bear their own costs and the security for costs be repaid to the plaintiffs.

Parties
First Plaintiff: Shafston Avenue Construction Pty Ltd ACN 169 409 705; Second Plaintiff: 28 Baxter Street Construction Pty Ltd ACN 611 160 215; Third Plaintiff: Lincoln Street Construction Pty Ltd ACN 603 876 651; First Defendant: Michael Gerard McCann; Second Defendant: Said Jahani; Third Defendant: CRCG-Rimfire Pty Ltd (subject to deed of company arrangement) ACN 611 557 852; Fourth Defendant: China Railway Construction Group Co Ltd
Jurisdiction
Australia
Judgment Date
08 December 2021
Procedural Posture
Costs Application (corporate Insolvency Context) / Post Judgment Costs Determination
Outcome
Administrators' application for indemnity costs dismissed; no order as to costs; security for costs to be repaid to plaintiffs.
Legal Topics
Costs, Offers of Compromise, Indemnity Costs, Proof of Debt, Deed of Company Arrangement
Commercial Law Corporations Law Corporate Insolvency Costs Offers of Compromise Indemnity Costs Proof of Debt Deed of Company Arrangement

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 16 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Shafston Avenue Construction Pty Ltd ACN 169 409 705

First Plaintiff

28 Baxter Street Construction Pty Ltd ACN 611 160 215

Second Plaintiff

Lincoln Street Construction Pty Ltd ACN 603 876 651

Third Plaintiff

Michael Gerard McCann

First Defendant

Said Jahani

Second Defendant

CRCG-Rimfire Pty Ltd (subject to deed of company arrangement) ACN 611 557 852

Third Defendant

China Railway Construction Group Co Ltd

Fourth Defendant

Procedural Posture

Costs Application (corporate Insolvency Context) / Post Judgment Costs Determination

Legal Issues

  1. 1 Whether the Administrators (defendants) are entitled to an order for indemnity costs after a rejected offer of compromise under r 25.14 of the Federal Court Rules 2011 (Cth) and principles in Calderbank v Calderbank [1976] Fam 93
  2. 2 Whether the plaintiffs' failure to accept a 'walk away' offer was unreasonable and whether they received a more or less favourable judgment than the offer
  3. 3 Apportionment of costs in proceedings with mixed success

Ratio Decidendi

The plaintiffs obtained a more favourable judgment than if they had accepted the 'walk away' offer, specifically by succeeding in part on Lincoln's Proof of Debt, rendering the Administrators not entitled to indemnity costs under r 25.14 of the Federal Court Rules 2011 (Cth) or Calderbank principles. Consequently, the appropriate order was that each party bear their own costs and the security for costs be repaid to the plaintiffs.

Court Disposition

Administrators' application for indemnity costs dismissed; no order as to costs; security for costs to be repaid to plaintiffs.

Orders

  • There be no order for costs.
  • The amount of $116,000 deposited by the plaintiffs in the plaintiffs' solicitors' trust account as security for the defendants' costs under Order 4 of the orders made on 9 July 2020 be repaid to the plaintiffs forthwith.