New South Wales Supreme Court CITATION : Onefone Australia Pty Ltd v One.Tel Ltd [2007] NSWSC 1239 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S) : 18/10/07 JUDGMENT DATE : 2 November 2007 JURISDICTION : Equity Division Corporations List JUDGMENT OF : Barrett J DECISION : Order that applicant pay respondent's costs CATCHWORDS : PROCEDURE - costs - whether costs should follow the event - no matter of principle LEGISLATION CITED : Australian Securities and Investments Commission Act 2001, s.127 Uniform Civil Procedure Rules 2005, rule 42.1 CASES CITED : Onefone Australia Pty Ltd v One.Tel Ltd [2007] NSWSC 1188 Onefone Australia Pty Limited - First Plaintiff DCA Resources Australia Pty Limited - Second Plaintiff Pacific Finance Group Pty Limited - Third Plaintiff PARTIES : Talent2 Works Pty Ltd - Fourth Plaintiff One.Tel Limited - First Defendant Steven Sherman - Second Defendant Peter Walker - Third Defendant Paul Gerard Weston - Special Purpose Liquidator FILE NUMBER(S) : SC 5291/03 COUNSEL : Mr R.D. Glasson - Applicant - Special Purpose Liquidator Mr D.R. Stack - Respondent - Australian Securities and Investments Commission SOLICITORS : NOT Lawyers - Special Purpose Liquidator Georgina Hayden - Solicitor for Australian Securities and Investments Commission IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST BARRETT J FRIDAY, 2 NOVEMBER 2007 5291/03 ONEFONE AUSTRALIA PTY LTD & 3 ORS v ONE.TEL LIMITED & 2 ORS JUDGMENT 1 I am dealing with the question of costs consequent upon my judgment of 23 October 2007: [2007] NSWSC 1188. 2 ASIC submits that the SPL should be ordered to pay ASIC's costs of the interlocutory process filed in court on 18 October 2007 and heard on that day. The SPL submits that there should be no order as to costs. 3 Upon the hearing of the application, the SPL moved for certain orders requiring ASIC to produce documents. ASIC opposed the application. The court declined to make the orders sought by the SPL. On the basis prescribed by rule 42.1 of the Uniform Civil Procedure Rules 2005, therefore, the SPL should be ordered to pay ASIC's costs unless it appears to the court that some other order should be made. 4 In contending that the result ordinarily to be expected should be displaced, the SPL made the following points: 1. The submissions about the scope of s.68 on which ASIC succeeded were raised for the first time at the hearing. They had not been mentioned in lengthy correspondence beforehand. Indeed, ASIC had not opposed similar orders sought on an earlier occasion on the same basis. And ASIC had previously given some documents to the SPL. 2. ASIC had, in pre-hearing correspondence, suggested that the outcome sought by the SPL should be pursued in the separate proceedings commenced in May 2007 – something that the court observed might entail an abuse of process. 3. It could not be said that the SPL acted unreasonably in making the application, when the precise scope of s.68 was unclear and some of the documents were not otherwise available. 4. ASIC was not obliged by s.127 of the Australian Securities and Investments Commission Act 2001 to oppose the application. 5. ASIC had no objection to providing one of the documents (being one that was effectively in the public domain). 6. Both ASIC and the SPL are acting in creditors' interests. 5 I am of the opinion that none of these factors warrants departure from the ordinary rule that costs should follow the event. 6 Item 1 does not, in my view, bespeak any unreasonable behaviour on the part of ASIC which is entitled to deal with every application as it sees fit. Item 2 is irrelevant since the SPL did not press that basis. Item 3 is also irrelevant: an inquiry into or conclusion about the reasonableness of the conduct of the losing party is not an ingredient of a finding that costs should follow the event. Nor do I consider item 4 relevant: whether ASIC was obliged to act as it did is beside the point; there is no suggestion that it was not entitled so to act. Item 5 has no real bearing on the question of the displacement of the ordinary rule; nor does item 6. 7 There being no basis on which the court should depart from the course laid down by rule 42.1, I order that Paul Weston, as special purpose liquidator of One.Tel Limited, pay the costs of Australian Securities and Investments Commission of the interlocutory process heard on 18 October 2007, such costs to be an expense in his administration as such special purpose liquidator. ********** 02/11/2007 - Substituted "Public" for "Restricted" - Paragraph(s) Cover sheet DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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