City of Swan v Lehman Bros Australia Ltd (No 3) [2009] FCA 1190

City of Swan v Lehman Bros Australia Ltd (No 3) [2009] FCA 1190

Defendants who are active parties with the same interest and who failed in their defence are liable jointly and severally to pay the plaintiffs’ costs. Lehman Bros, while joined after proceedings had commenced, had already been substantively involved; thus, it is just to make it liable for 75% of costs, but not for subpoena compliance costs, as such costs would have been incurred if it had been a party from the outset.

Parties
First Plaintiff: City of Swan; Second Plaintiff: Parkes Shire Council; Third Plaintiff: Wingecarribee Shire Council; First Defendant: Lehman Brothers Australia Limited (In Liq); Second Defendant: Neil Singleton; Third Defendant: Stephen Parbery; Fourth Defendant: Lehman Brothers Asia Holdings Limited (In Liquidation); Fifth Defendant: Lehman Brothers Holdings Inc
Jurisdiction
Australia
Judgment Date
21 October 2009
Procedural Posture
Corporations Proceeding / Post Judgment (costs Determination)
Outcome
Defendants held jointly and severally liable for plaintiffs’ costs; fifth defendant (Lehman Bros Holdings Inc) liable for 75% of costs; no order for reimbursement of subpoena costs to fifth defendant.
Legal Topics
Costs, Joinder of Parties, Deed of Company Arrangement, Subpoena Compliance
Corporations Law Civil Procedure Costs Joinder of Parties Deed of Company Arrangement Subpoena Compliance

Case Brief

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Parties

City of Swan

First Plaintiff

Parkes Shire Council

Second Plaintiff

Wingecarribee Shire Council

Third Plaintiff

Lehman Brothers Australia Limited (In Liq)

First Defendant

Neil Singleton

Second Defendant

Stephen Parbery

Third Defendant

Lehman Brothers Asia Holdings Limited (In Liquidation)

Fourth Defendant

Lehman Brothers Holdings Inc

Fifth Defendant

Procedural Posture

Corporations Proceeding / Post Judgment (costs Determination)

Legal Issues

  1. 1 Whether unsuccessful defendants are liable jointly and severally for costs
  2. 2 Whether a party joined late is liable for costs incurred prior to joinder
  3. 3 Whether expenses of compliance with subpoena by a party later joined as defendant should be compensated

Ratio Decidendi

Defendants who are active parties with the same interest and who failed in their defence are liable jointly and severally to pay the plaintiffs’ costs. Lehman Bros, while joined after proceedings had commenced, had already been substantively involved; thus, it is just to make it liable for 75% of costs, but not for subpoena compliance costs, as such costs would have been incurred if it had been a party from the outset.

Court Disposition

Defendants held jointly and severally liable for plaintiffs’ costs; fifth defendant (Lehman Bros Holdings Inc) liable for 75% of costs; no order for reimbursement of subpoena costs to fifth defendant.

Orders

  • Plaintiffs’ costs to be paid jointly and severally by first and fourth defendants (whole amount), and by fifth defendant (75%)
  • Plaintiffs’ costs of the proceedings to be paid by the first defendant as costs in respect of an application for the winding up, with priority under s 556(1)(b) of the Corporations Act 2001