New Cap Reinsurance Corporation Limited (in Liq) v Azmin Firoz Daya [2012] NSWSC 1205

New Cap Reinsurance Corporation Limited (in Liq) v Azmin Firoz Daya [2012] NSWSC 1205

The plaintiffs did not show sufficient justification for an order displacing UCPR r 42.19. Mr Peck's impecuniosity existed from the outset, the insurers had declined indemnity before proceedings began, their joinder did not remove Mr Peck's exposure because they could challenge leave and coverage, and Mr Peck had separate defences not advanced by the insurers. Although the plaintiffs achieved a significant settlement with the insurers, discontinuance against Mr Peck meant he was successful as against them, and any exposure to his costs should have been considered in the settlement. Because the fourth defendant had been out of pocket for costs for some time, interest on his costs was also...

Jurisdiction
Australia
Judgment Date
08 August 2012
Procedural Posture
Costs Application Following Discontinuance of Proceedings / Application by the Plaintiff Under UCPR R 42.19 for an Otherwise Order and Application by the Fourth Defendant for Interest on Costs Under Civil Procedure Act 2005, S 101
Outcome
The Court declined to make an otherwise order, ordered the plaintiffs to pay the fourth defendant's costs of the discontinued proceedings, ordered interest on those costs, reserved liberty to apply, and granted leave to discontinue against the fourth defendant.
Legal Topics
['discontinuance' 'otherwise Order Under UCPR R 42.19' 'interest on Costs' 'insolvent Trading Proceedings' "directors' and Officers' Insurance"]
['civil Procedure' 'costs' 'corporations'] ['discontinuance' 'otherwise Order Under UCPR R 42.19' 'interest on Costs' 'insolvent Trading Proceedings' "directors' and Officers' Insurance"]

Case Brief

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Procedural Posture

Costs Application Following Discontinuance of Proceedings / Application by the Plaintiff Under UCPR R 42.19 for an Otherwise Order and Application by the Fourth Defendant for Interest on Costs Under Civil Procedure Act 2005, S 101

Legal Issues

  1. 1 ["Whether the Court should depart from the ordinary rule under UCPR r 42.19 that a discontinuing plaintiff must pay the defendant's costs." "Whether Mr Peck's impecuniosity and the joinder and settlement with the D & O insurers justified relieving the plaintiffs from paying his costs." 'Whether Mr Peck was entitled to continue to defend the proceedings after the insurers were joined.' "Whether interest should be paid on the fourth defendant's costs under (NSW) Civil Procedure Act 2005, s 101."]

Ratio Decidendi

The plaintiffs did not show sufficient justification for an order displacing UCPR r 42.19. Mr Peck's impecuniosity existed from the outset, the insurers had declined indemnity before proceedings began, their joinder did not remove Mr Peck's exposure because they could challenge leave and coverage, and Mr Peck had separate defences not advanced by the insurers. Although the plaintiffs achieved a significant settlement with the insurers, discontinuance against Mr Peck meant he was successful as against them, and any exposure to his costs should have been considered in the settlement. Because the fourth defendant had been out of pocket for costs for some time, interest on his costs was also...

Court Disposition

The Court declined to make an otherwise order, ordered the plaintiffs to pay the fourth defendant's costs of the discontinued proceedings, ordered interest on those costs, reserved liberty to apply, and granted leave to discontinue against the fourth defendant.

Orders

  • ["Decline to otherwise order for the purposes of Rule 42.19 upon the plaintiffs' discontinuance against the fourth defendant, so that the plaintiffs are to pay the fourth defendant's costs of the discontinued proceedings; for more abundant caution that does not extend to the costs of the cross-claim." 'Order that...