Bryant, in the matter of Gunns Limited (in liq) (receivers and managers appointed) v Edenborn Pty Ltd (No 2) [2020] FCA 1083

Bryant, in the matter of Gunns Limited (in liq) (receivers and managers appointed) v Edenborn Pty Ltd (No 2) [2020] FCA 1083

The plaintiffs are entitled to indemnity costs from 11.00am on 18 February 2019 under r 25.14(3) of the Federal Court Rules 2011 (Cth) because the requirements of r 25.01(1) were met, the offer to compromise was more favourable than the judgment, and there were no special circumstances to displace the presumption in favour of indemnity costs. Rejection of Calderbank offers by the defendant was not unreasonable in light of the proceedings' stage and genuine legal and factual issues, and did not justify indemnity costs prior to the formal offer to compromise.

Parties
Plaintiffs: Daniel Mathew Bryant, Ian Menzies Carson, and Craig David Crosbie (in their capacities as joint and several liquidators of Gunns Limited (in liquidation) (receivers & managers appointed) (ACN 009 478 148)); Defendant: Edenborn Pty Ltd (ACN 065 056 180)
Jurisdiction
Australia
Judgment Date
30 July 2020
Procedural Posture
Corporations/corporate Insolvency Proceeding / Application for Costs Following Primary Judgment
Outcome
Plaintiffs awarded indemnity costs from 11.00am on 18 February 2019; party and party costs awarded before that time. Judgment for the plaintiffs for recovery of unfair preferences and related interest. Defendant ordered to pay principal amount, pre-judgment and post-judgment interest, and costs as specified.
Legal Topics
Unfair Preference, Insolvent Transactions, Voidable Transactions, Costs, Offers of Compromise, Indemnity Costs, Calderbank Offers
Corporations Law Corporate Insolvency Civil Procedure Unfair Preference Insolvent Transactions Voidable Transactions Costs Offers of Compromise +2 more

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Parties

Daniel Mathew Bryant, Ian Menzies Carson, and Craig David Crosbie (in their capacities as joint and several liquidators of Gunns Limited (in liquidation) (receivers & managers appointed) (ACN 009 478 148))

Plaintiffs

Edenborn Pty Ltd (ACN 065 056 180)

Defendant

Procedural Posture

Corporations/corporate Insolvency Proceeding / Application for Costs Following Primary Judgment

Legal Issues

  1. 1 Whether circumstances justify indemnity costs order against defendant under r 25.14(3) of the Federal Court Rules 2011 (Cth)
  2. 2 Whether rejection of Calderbank offers by defendant was unreasonable

Ratio Decidendi

The plaintiffs are entitled to indemnity costs from 11.00am on 18 February 2019 under r 25.14(3) of the Federal Court Rules 2011 (Cth) because the requirements of r 25.01(1) were met, the offer to compromise was more favourable than the judgment, and there were no special circumstances to displace the presumption in favour of indemnity costs. Rejection of Calderbank offers by the defendant was not unreasonable in light of the proceedings' stage and genuine legal and factual issues, and did not justify indemnity costs prior to the formal offer to compromise.

Court Disposition

Plaintiffs awarded indemnity costs from 11.00am on 18 February 2019; party and party costs awarded before that time. Judgment for the plaintiffs for recovery of unfair preferences and related interest. Defendant ordered to pay principal amount, pre-judgment and post-judgment interest, and costs as specified.

Orders

  • Declaration that transactions between Gunns Limited and Edenborn Pty Ltd between 30 March 2012 and 16 May 2012 were unfair preferences, insolvent and voidable transactions under ss 588FA, 588FC, and 588FE of the Corporations Act 2001 (Cth) for $220,000.
  • Declaration that further enumerated payments were unfair preferences, insolvent and voidable transactions under the Act.