Lewis, in the matter of Damilock Pty Ltd (in Liquidation) ACN 008 083 985 v A.E. Smith & Son Pty Ltd ACN 004 274 793 [2009] FCA 35

Lewis, in the matter of Damilock Pty Ltd (in Liquidation) ACN 008 083 985 v A.E. Smith & Son Pty Ltd ACN 004 274 793 [2009] FCA 35

The plaintiffs' 9 May 2008 offer complied with O 23 of the Federal Court Rules and the consent judgment ultimately obtained was for an amount exceeding that offer. The defendant did not show any proper reason to displace the presumption in favour of indemnity costs; prolonged negotiations, attempts to secure a lower settlement, and asserted reasonable conduct did not justify departure from O 23 r 11(4). The defendant was therefore ordered to pay the plaintiffs' costs on a party and party basis to 9 May 2008 and thereafter on an indemnity basis.

Jurisdiction
Australia
Judgment Date
03 February 2009
Procedural Posture
Corporations Proceeding Concerning Alleged Voidable Unfair Preferential Payments and Costs After Consent Judgment / Determination of Costs Following Consent Judgment
Outcome
Defendant ordered to pay the plaintiffs' costs of the action, on a party and party basis to 9 May 2008 and thereafter on an indemnity basis.
Legal Topics
['unfair Preferences' "liquidators' Recovery Proceedings" 'offers of Compromise' 'indemnity Costs' 'party and Party Costs' 'insolvency Trial Costs']
['corporations Law' 'insolvency' 'civil Procedure' 'costs'] ['unfair Preferences' "liquidators' Recovery Proceedings" 'offers of Compromise' 'indemnity Costs' 'party and Party Costs' 'insolvency Trial Costs']

Case Brief

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Procedural Posture

Corporations Proceeding Concerning Alleged Voidable Unfair Preferential Payments and Costs After Consent Judgment / Determination of Costs Following Consent Judgment

Legal Issues

  1. 1 ["Whether the defendant should pay the plaintiffs' costs after consent judgment had been entered for the judgment sum and interest." 'Whether the plaintiffs were entitled to indemnity costs from 9 May 2008 under O 23 r 11(4) of the Federal Court Rules because their offer of compromise was not accepted and the judgment obtained was more favourable.' "Whether negotiations after the offer of compromise or the defendant's conduct provided a proper reason to depart from the usual operation of O 23 r 11(4)." "How the defendant's position on the separate insolvency issue affected costs of the insolvency trial."]

Ratio Decidendi

The plaintiffs' 9 May 2008 offer complied with O 23 of the Federal Court Rules and the consent judgment ultimately obtained was for an amount exceeding that offer. The defendant did not show any proper reason to displace the presumption in favour of indemnity costs; prolonged negotiations, attempts to secure a lower settlement, and asserted reasonable conduct did not justify departure from O 23 r 11(4). The defendant was therefore ordered to pay the plaintiffs' costs on a party and party basis to 9 May 2008 and thereafter on an indemnity basis.

Court Disposition

Defendant ordered to pay the plaintiffs' costs of the action, on a party and party basis to 9 May 2008 and thereafter on an indemnity basis.

Orders

  • ['The defendant pay to the plaintiffs their costs of the action, on a party and party basis to 9 May 2008 and thereafter on an indemnity basis.']