Raffy Nominees Pty Ltd v nib Holdings Ltd (No 2) [2023] NSWSC 1294

Raffy Nominees Pty Ltd v nib Holdings Ltd (No 2) [2023] NSWSC 1294

The Court had power to make gross sum costs orders against the plaintiff as the prior costs order reserved the question of quantum and did not preclude further costs orders before assessment took place. However, the Court had no power to order costs against Mr Donnellan personally, as such an order would constitute a variation of a final order not permitted by UCPR r 36.16. Discretion would not have favoured such an order due to the existing security arrangements and the absence of sufficient personal benefit to Mr Donnellan. Leave under s 440D(1)(b) of the Corporations Act 2001 (Cth) was granted to the defendants to pursue costs against the plaintiff in administration.

Parties
Plaintiff: Raffy Nominees Pty Ltd (Administrators Appointed); First Defendant: nib Holdings Ltd; Second Defendant: nib Health Funds Ltd; Third Defendant: Michelle McPherson; First Respondent on 11 August 2023 Motion & Second Respondent on 17 August 2023 Motion: Matthew Donnellan; Second Respondent on 11 August 2023 Motion & Third Respondent on 17 August 2023 Motion: Raffy Holdings Pty Ltd
Jurisdiction
Australia
Judgment Date
01 November 2023
Procedural Posture
Costs Application Following Discontinuance / Post Judgment, Costs Orders Phase
Outcome
Gross sum costs orders made for defendants against plaintiff; motions for costs against third party (Mr Donnellan) dismissed; leave granted under s 440D(1)(b) to proceed against company in administration; costs of certain motions awarded as specified.
Legal Topics
Costs, Party/party Costs, Gross Sum Costs Order, Costs Against Non Parties, Leave to Proceed Under Corporations Act S 440 D
Civil Procedure Corporate Insolvency Costs Party/party Costs Gross Sum Costs Order Costs Against Non Parties Leave to Proceed Under Corporations Act S 440 D

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Parties

Raffy Nominees Pty Ltd (Administrators Appointed)

Plaintiff

nib Holdings Ltd

First Defendant

nib Health Funds Ltd

Second Defendant

Michelle McPherson

Third Defendant

Matthew Donnellan

First Respondent on 11 August 2023 Motion & Second Respondent on 17 August 2023 Motion

Raffy Holdings Pty Ltd

Second Respondent on 11 August 2023 Motion & Third Respondent on 17 August 2023 Motion

Procedural Posture

Costs Application Following Discontinuance / Post Judgment, Costs Orders Phase

Legal Issues

  1. 1 Whether the Court has power to make gross sum costs orders after an indemnity costs order has been made
  2. 2 Whether applications for costs against non-parties (including directors) are applications to vary final orders
  3. 3 Whether to grant leave to proceed against a company in administration under s 440D(1)(b) of the Corporations Act 2001 (Cth)

Ratio Decidendi

The Court had power to make gross sum costs orders against the plaintiff as the prior costs order reserved the question of quantum and did not preclude further costs orders before assessment took place. However, the Court had no power to order costs against Mr Donnellan personally, as such an order would constitute a variation of a final order not permitted by UCPR r 36.16. Discretion would not have favoured such an order due to the existing security arrangements and the absence of sufficient personal benefit to Mr Donnellan. Leave under s 440D(1)(b) of the Corporations Act 2001 (Cth) was granted to the defendants to pursue costs against the plaintiff in administration.

Court Disposition

Gross sum costs orders made for defendants against plaintiff; motions for costs against third party (Mr Donnellan) dismissed; leave granted under s 440D(1)(b) to proceed against company in administration; costs of certain motions awarded as specified.

Orders

  • To the extent necessary, leave granted under s 440D(1)(b) of the Corporations Act 2001 (Cth) to first, second and third defendants to proceed against the plaintiff.
  • The plaintiff to pay the first and second defendants' costs of the proceedings fixed at $251,941.