Rimac & 1 Ors v Costa [2001] NSWSC 938

New South Wales Supreme Court

CITATION : Rimac & 1 Ors v Costa [2001] NSWSC 938 revised - 23/10/2001 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 1972/98 HEARING DATE(S) : 09/10/01, 10/10/01, 11/10/01, 16/10/01 JUDGMENT DATE : 16 October 2001

Nenad Rimac (First Plaintiff) PARTIES : Mirko Rimac (Second Plaintiff) Placido Costa (Defendant) JUDGMENT OF : Santow J

COUNSEL : M B Evans (First Plaintiff) B W Rayment, QC (Defendant) SOLICITORS : John McEncroe & Co (First Plaintiff) Koffels (Defendant) CATCHWORDS : CORPORATIONS - Pleaded case leaves no room for argument that one-third interest not intended. DECISION : See paragraph 18

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

SANTOW J

No. 1972/98 Nenad Rimac First Plaintiff Mirko Rimac Second Plaintiff Placido Costa Defendant

JUDGMENT ex tempore 16 October 2001 (Revised 23 October 2001)

INTRODUCTION 1 The present proceedings have proceeded by pleadings. The central issue that emerged in argument from the joinder of issue was whether instructions from the First Plaintiff, Nenad Rimac, as client, to the Defendant, Placido Costa, acting as a solicitor or in a legal capacity, were not properly carried out or carried out in breach of fiduciary duty. In particular whether the shares in a company to be formed to subdivide and sell 38 acres of land in Bargo as a profit-making venture should not have been issued so as to confer a one-third shareholding upon the Defendant. 2 However, that question has no ultimate significance in relation to the pleaded case unless it follow that the First Plaintiff were entitled to compensation as a result of any such breach. The position which presently obtains is that the interposed company Satate Pty Limited was, following contested proceedings in 1993 (matter No. 2347/93 in the Equity Division), wound-up. There are presently proceeds from that winding-up. Both Plaintiffs, father Nenad Rimac and Mirko Rimac his son, pleaded a claim to these. However, as emerged on the day of the hearing, the Second Plaintiff, Mirko Rimac, now forgoes any claim in favour of the First Plaintiff. 3 The practical result is that, depending on whether the Plaintiffs or Defendant succeeds, the monies presently held back from the liquidation will be allocated according to the determination of the present proceedings. 4 Somewhat unusually, it has emerged for reasons that I will elaborate, that on the Plaintiffs' own pleaded case, no compensation could be payable, even were it the case that the company should have been incorporated with the Plaintiffs as the sole shareholders. I am in any event satisfied that a one-third shareholding was correctly allocated to the Defendant, for reasons I will elaborate.