Currububula Holdings Pty Ltd v Franxton Pty Ltd [2005] NSWSC 783

New South Wales Supreme Court

Currububula Holdings Pty Ltd v Franxton Pty Ltd [2005] NSWSC 783 CITATION : This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S) : 26/07/05

JUDGMENT DATE : 2 August 2005

Equity Division JURISDICTION : Corporations List

JUDGMENT OF : Barrett J

DECISION : Second, third and fourth defendants to pay plaintiff's costs of the proceedings

CATCHWORDS : PROCEDURE - costs - substantive order made without opposition - no determination on the merits - whether conduct of fifth defendant in allowing proceedings to be initiated and pursued was unreasonable - whether second, third and fourth defendant complicit therein

CASES CITED : Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622

Currububula Holdings Pty Limited - Plaintiff Franxton Pty Limited - First Defendant Shane Jonathon Paola - Second Defendant PARTIES : Trent Nicholas Paola - Third Defendant Lynette Denise Paola - Fourth Defendant Anthony Michael Paola - Fifth Defendant

FILE NUMBER(S) : SC 3479/04

Mr P.A. Fury - Plaintiff COUNSEL : Mr S.P. Brennan - Second, Third and Fourth Defendants Ms B. Obradovic - Fifth Defendant

Peter Kemp Solicitors - Plaintiff SOLICITORS : Guild Legal Limited - Second, Third and Fourth Defendants N.J. Papallo & Co - Fifth Defendant

LOWER COURT JURISDICTION :

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

BARRETT J

TUESDAY, 2 AUGUST 2005

3479/04 CURRUBUBULA HOLDINGS PTY LIMITED v FRANXTON PTY LIMITED & 4 ORS JUDGMENT ON COSTS 1 On 26 April 2005, I made, without opposition by the defendants, order 1 sought by the plaintiff in the originating process filed on 17 June 2004: "A declaration that since 27 July 1989 the Plaintiff has been and remains the legal and beneficial owner of all of the issued shares in the First Defendant." 2 There was a hearing on costs on 27 June 2005 in which the plaintiff sought an order that its costs of the proceedings be paid by the second, third and fourth defendants. They are the sons and the wife of the fifth defendant who became a bankrupt three days before the hearing on costs. 3 It is the contention of the plaintiff that, although there was no hearing on the merits, it should nevertheless have its costs against the defendants in question. Relevant to the circumstances are the observations of McHugh J in Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 (at pp.624-4): "In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd , the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent Council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans.