Pearce v Gulmohar Pty Ltd (No 2) [2017] FCA 783

Pearce v Gulmohar Pty Ltd (No 2) [2017] FCA 783

Indemnity costs were refused because the plaintiffs did not establish that the judgments against the defendants were more favourable than the collective offers, the offers could not be accepted by individual defendants, there was no evidence the compromises were likely to be approved under s 477(2A) and (2B) of the Corporations Act, and there were no special circumstances justifying departure from the usual party and party basis because the defence was not untenable and the defendants' conduct was not unreasonable.

Jurisdiction
Australia
Judgment Date
06 July 2017
Procedural Posture
Commercial and Corporations; Corporations and Corporate Insolvency Proceeding for Orders Pursuant to S 588 FF of the Corporations Act 2001 (cth) / Post Judgment Determination of Costs Basis
Outcome
The plaintiffs obtained substantive orders and costs, but their application for indemnity costs was declined; costs were ordered on a party and party basis, except the plaintiffs were to pay the defendants' costs of 11 November 2016.
Legal Topics
['indemnity Costs' 'party and Party Costs' 'offers of Compromise' 'voidable Transactions' 'liquidator Powers and Compromises']
['costs' 'corporations and Corporate Insolvency'] ['indemnity Costs' 'party and Party Costs' 'offers of Compromise' 'voidable Transactions' 'liquidator Powers and Compromises']

Case Brief

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Procedural Posture

Commercial and Corporations; Corporations and Corporate Insolvency Proceeding for Orders Pursuant to S 588 FF of the Corporations Act 2001 (cth) / Post Judgment Determination of Costs Basis

Legal Issues

  1. 1 ['Whether the plaintiffs obtained judgments more favourable than offers made pursuant to r 25.01 of the Federal Court Rules 2011 (Cth) for the purposes of r 25.14(3).' 'Whether the defendants should pay costs on an indemnity basis because of alleged untenability of the defence or unreasonable conduct of the proceeding.' 'Who should pay the costs of the hearing on 11 November 2016.']

Ratio Decidendi

Indemnity costs were refused because the plaintiffs did not establish that the judgments against the defendants were more favourable than the collective offers, the offers could not be accepted by individual defendants, there was no evidence the compromises were likely to be approved under s 477(2A) and (2B) of the Corporations Act, and there were no special circumstances justifying departure from the usual party and party basis because the defence was not untenable and the defendants' conduct was not unreasonable.

Court Disposition

The plaintiffs obtained substantive orders and costs, but their application for indemnity costs was declined; costs were ordered on a party and party basis, except the plaintiffs were to pay the defendants' costs of 11 November 2016.

Orders

  • ['The fixed and floating charge granted by the second plaintiff to the first defendant on or about 22 May 2009 is void and unenforceable.' 'The first defendant pay to the second plaintiff the sum of $582,031 plus interest in the sum of $247,395.07 being a total of $829,426.07.' 'The second defendant pay to the...