Inprint Ltd v K&D Media Pty Ltd & Anor [1995] FCA 1107

CATCHWORDS COSTS - terms of settlement - no final determination - no trial on the merits - whether applicant reasonable in bringing proceedings - whether respondents reasonable in defending proceedings Australian Securities Commission v Aust-Home Investments Limited [1993] 44 FCR 194 Hacienda Apartments Pty Ltd v Vago & Ors (Young J Supreme Court of NSW, Equity Division, unreported 19 May 1988) INPRINT LTD (ACN 010 728 971) v K&D MEDIA PTY LTD (ADMINISTRATOR APPOINTED) & ANOR NG 3484/95 EINFELD J SYDNEY 22 DECEMBER 1995

IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 3484 of 1995 GENERAL DIVISION ) Between: INPRINT LTD (ACN 010-728-971) Applicant And: K & D MEDIA PTY LTD (Administrator Appointed) First Respondent And: VANDA RUSSELL GOULD Second Respondent REASONS FOR JUDGMENT EINFELD J SYDNEY 22 DECEMBER 1995 The applicant commenced proceedings on 5 September 1995 for the removal of the administrator of the first respondent and the appointment of an alternate administrator. Mr Gould, the then current administrator, is the second respondent. The Australian Securities Commission (ASC) appeared as amicus curiae. Additionally, the application called for declaratory relief and damages against the second respondent, and also sought orders that certain creditors be prohibited from voting on the removal of Mr Gould, and on the composition of the creditors' committee, including that certain creditors be appointed to that committee. Time for service was abridged and the application was made returnable on 7 September.

At the first return date the respondents sought time to resolve the matter between the parties or to file their evidence. Expedition was granted, a short timetable was set, and a date for final hearing was set down for 26 and 27 September. The second respondent filed an affidavit on 11 September 1995 and one was filed by the ASC on 13 September 1995. Correspondence between the parties ensued and on 20 September 1995 terms of settlement were handed up. Mr Gould tendered his resignation, which according to the correspondence had first been offered on 11 September 1995, less than a week after the commencement of the proceedings. In fact, it appears that other than the issue of costs which is the subject of this judgment, the substantive issues between the parties were resolved as early as 12 September 1995 even though formal consent orders were not finalised until 19 September 1995. The applicant submitted that the settlement between the parties was their victory. They said that they have substantially achieved the orders sought in their application and that in accordance with 'usual practice', costs should follow the event: Ritter v Godfrey [1920] 2 KB 47 at 52, 57. Additionally, they submitted that costs should be awarded against Mr Gould personally and not be a cost of the administration. The respondents challenged this so-called victory of the applicant and said that it is they who have had the victory. If the 'normal rule' is that costs follow the event, then it should follow that because the proceedings were dismissed, the respondents should receive an order for costs. Moreover, they submitted that costs should be awarded on an indemnity basis.