Prechelt, in the matter of Hillcrest Pty Ltd v Hillcrest Pty Ltd (No 3) [2017] NFSC 6

Prechelt, in the matter of Hillcrest Pty Ltd v Hillcrest Pty Ltd (No 3) [2017] NFSC 6

Given the directors' active conduct of litigation with an interest in its subject matter and having been put on notice, the Court has jurisdiction and it is appropriate to order that they pay the plaintiff's costs from 25 November 2016 on an indemnity basis. Costs before that date are to be reimbursed from the company's property. In interlocutory applications with mixed success, each party should bear their own costs.

Parties
Plaintiff: Gregg Prechelt; Defendant: Hillcrest Pty Ltd
Jurisdiction
Australia
Judgment Date
17 October 2017
Procedural Posture
Originating Process – Winding Up Application / Costs Determination Following Substantive Winding Up Judgment
Outcome
Costs orders granted in favour of plaintiff; directors to pay costs on indemnity basis from 25 November 2016; plaintiff's costs before that reimbursed from company property; interlocutory application costs borne individually by each party.
Legal Topics
Costs Orders Against Non Parties, Winding Up of Companies, Indemnity Costs, Court's Discretion in Costs, Directors' Liability for Costs
Corporate Law Civil Procedure Costs Orders Against Non Parties Winding Up of Companies Indemnity Costs Court's Discretion in Costs Directors' Liability for Costs

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Parties

Gregg Prechelt

Plaintiff

Hillcrest Pty Ltd

Defendant

Procedural Posture

Originating Process – Winding Up Application / Costs Determination Following Substantive Winding Up Judgment

Legal Issues

  1. 1 Whether the Court has power to award costs against non-party directors under s 6(2) of the Supreme Court Act 1960 (NI) and Court Procedures Rules 2006 (ACT) r 1703
  2. 2 Whether costs should be assessed on an indemnity basis against the directors
  3. 3 Whether costs should include interlocutory applications where parties had mixed success

Ratio Decidendi

Given the directors' active conduct of litigation with an interest in its subject matter and having been put on notice, the Court has jurisdiction and it is appropriate to order that they pay the plaintiff's costs from 25 November 2016 on an indemnity basis. Costs before that date are to be reimbursed from the company's property. In interlocutory applications with mixed success, each party should bear their own costs.

Court Disposition

Costs orders granted in favour of plaintiff; directors to pay costs on indemnity basis from 25 November 2016; plaintiff's costs before that reimbursed from company property; interlocutory application costs borne individually by each party.

Orders

  • Plaintiff's costs before 25 November 2016 to be reimbursed out of the property of the company on an indemnity basis.
  • Mr Kerry Douran and Ms Gordina Douran to pay the plaintiff's costs of the proceeding on an indemnity basis on and from 25 November 2016.