Chief Disruption Officer Pty Ltd as Trustee for the McDonald Family Trust v Michel, in the matter of Laava ID Pty Ltd (No 5) [2023] FCA 304

Chief Disruption Officer Pty Ltd as Trustee for the McDonald Family Trust v Michel, in the matter of Laava ID Pty Ltd (No 5) [2023] FCA 304

The successful parties (first to fourth defendants and fifth defendant) were overwhelmingly successful, while the plaintiffs’ success was minor. Costs were apportioned so plaintiffs pay 95% of the first to fourth defendants' costs and all of the fifth defendant’s on a party and party basis. Refusal to accept settlement offers was not unreasonable given timing, complexity and information available at the time, so indemnity costs were not warranted.

Parties
First Plaintiff: Chief Disruption Officer Pty Ltd as Trustee for the McDonald Family Trust; Second Plaintiff: Iain James McDonald; First Defendant: Patrick Michel; Second Defendant: Anthony Surtees; Third Defendant: Wilemich Pty Ltd as Trustee for the Path Family Trust; Fourth Defendant: Mortgage Company of Australia Pty Limited as Trustee for the Surtees Family Trust; Fifth Defendant: Laava ID Pty Ltd; Sixth Defendant: Gavin Ger; Seventh Defendant: Wyargine Group Pty Ltd; Eighth Defendant: Lufrapa Pty Ltd as Trustee for the Lucette Michael Family Trust; Ninth Defendant: Robert Fitzpatrick
Jurisdiction
Australia
Judgment Date
06 April 2023
Procedural Posture
Corporations Dispute / Costs Judgment After Final Determination
Outcome
Plaintiffs to pay 95% of first to fourth defendants' costs on a party and party basis; plaintiffs to pay all of fifth defendant's costs on a party and party basis; plaintiffs to pay all of Mr Potter's costs (expert witness).
Legal Topics
Costs, Unfair Prejudice, Shareholder Disputes, Calderbank Offers, Indemnity Costs
Corporations Law Commercial Law Costs Unfair Prejudice Shareholder Disputes Calderbank Offers Indemnity Costs

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Parties

Chief Disruption Officer Pty Ltd as Trustee for the McDonald Family Trust

First Plaintiff

Iain James McDonald

Second Plaintiff

Patrick Michel

First Defendant

Anthony Surtees

Second Defendant

Wilemich Pty Ltd as Trustee for the Path Family Trust

Third Defendant

Mortgage Company of Australia Pty Limited as Trustee for the Surtees Family Trust

Fourth Defendant

Laava ID Pty Ltd

Fifth Defendant

Gavin Ger

Sixth Defendant

Wyargine Group Pty Ltd

Seventh Defendant

Lufrapa Pty Ltd as Trustee for the Lucette Michael Family Trust

Eighth Defendant

Robert Fitzpatrick

Ninth Defendant

Procedural Posture

Corporations Dispute / Costs Judgment After Final Determination

Legal Issues

  1. 1 What is the appropriate allocation of costs where the plaintiffs were successful only on a narrow issue?
  2. 2 Does any conduct by the fifth defendant disentitle it to costs or warrant a reduction?
  3. 3 Does rejection of Calderbank settlement offers justify an indemnity costs order against the plaintiffs?

Ratio Decidendi

The successful parties (first to fourth defendants and fifth defendant) were overwhelmingly successful, while the plaintiffs’ success was minor. Costs were apportioned so plaintiffs pay 95% of the first to fourth defendants' costs and all of the fifth defendant’s on a party and party basis. Refusal to accept settlement offers was not unreasonable given timing, complexity and information available at the time, so indemnity costs were not warranted.

Court Disposition

Plaintiffs to pay 95% of first to fourth defendants' costs on a party and party basis; plaintiffs to pay all of fifth defendant's costs on a party and party basis; plaintiffs to pay all of Mr Potter's costs (expert witness).

Orders

  • The plaintiffs pay 95 per cent of the first to fourth defendants' costs of the proceeding on a party and party basis, as agreed or taxed.
  • The plaintiffs pay the fifth defendant's costs of the proceeding on a party and party basis, as agreed or taxed.