Sinergia Construction Project Management Pty Ltd v Clear Interiors Pty Ltd (No 2) [2016] FCA 1308

Sinergia Construction Project Management Pty Ltd v Clear Interiors Pty Ltd (No 2) [2016] FCA 1308

It is not appropriate to make a costs order against Mr Struck personally, as merely being a sole director and shareholder with an interest and active role is insufficient. There was no bad faith, improper purpose, or egregious conduct. His involvement, including appearing as representative, drafting submissions, and swearing affidavits, did not reach the threshold for a personal costs order, especially given the lack of notice and that his actions were justifiable in context.

Parties
Plaintiff: Sinergia Construction Project Management Pty Ltd; Defendant: Clear Interiors Pty Ltd; Non Party (sole Director and Shareholder of Plaintiff): Desmond Struck
Jurisdiction
Australia
Judgment Date
07 November 2016
Procedural Posture
Application for Costs Order Against Non Party / Post Judgment (costs Application After Dismissal of Statutory Demand Set Aside Application)
Outcome
Defendant's application for a personal costs order against Mr Struck dismissed. Plaintiff to pay defendant's costs of the action. Defendant to pay Mr Struck's costs re the costs application.
Legal Topics
Costs, Non Party Costs Orders, Statutory Demands, Corporate Insolvency
Civil Procedure Corporations Law Costs Non Party Costs Orders Statutory Demands Corporate Insolvency

Case Brief

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Parties

Sinergia Construction Project Management Pty Ltd

Plaintiff

Clear Interiors Pty Ltd

Defendant

Desmond Struck

Non Party (sole Director and Shareholder of Plaintiff)

Procedural Posture

Application for Costs Order Against Non Party / Post Judgment (costs Application After Dismissal of Statutory Demand Set Aside Application)

Legal Issues

  1. 1 Whether an order for costs should be made against a non-party who is the sole director and shareholder of the plaintiff company
  2. 2 Circumstances in which costs orders may be made against company directors personally

Ratio Decidendi

It is not appropriate to make a costs order against Mr Struck personally, as merely being a sole director and shareholder with an interest and active role is insufficient. There was no bad faith, improper purpose, or egregious conduct. His involvement, including appearing as representative, drafting submissions, and swearing affidavits, did not reach the threshold for a personal costs order, especially given the lack of notice and that his actions were justifiable in context.

Court Disposition

Defendant's application for a personal costs order against Mr Struck dismissed. Plaintiff to pay defendant's costs of the action. Defendant to pay Mr Struck's costs re the costs application.

Orders

  • The defendant's application for an order that the plaintiff and Mr Desmond Struck be jointly and severally liable to pay the defendant's costs is dismissed.
  • Subject to the order in paragraph 3, the plaintiff is to pay the defendant's costs of the action.