Quest Enterprises (NSW) Pty Ltd v Cassaniti [2007] NSWSC 519

New South Wales Supreme Court

CITATION : Quest Enterprises (NSW) Pty Ltd v Cassaniti [2007] NSWSC 519

HEARING DATE(S) : 27/02/07 Written submissions: 05/03/07. 12/03/07

JUDGMENT DATE : 22 May 2007

JURISDICTION : Equity Division Corporations List

JUDGMENT OF : Barrett J

DECISION : Orders with respect to costs as per paragraph 26

CATCHWORDS : PROCEDURE - costs - various costs questions determined

LEGISLATION CITED : Corporations Act 2001 (Cth), Part 5.9, ss.486B, 530C, 596A, 596B, 597A, 1335(2)

Alam v Quest Enterprises (NSW) Pty Ltd [2006] NSWSC 751 CASES CITED : Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1 Oshlack v Richmond River Council (1998) 193 CLR 72 Re Rainbow Systems of Australia Pty Ltd; Wily v Parker (1996) 21 ACSR 171

Quest Enterprises (NSW) Pty Ltd - First Plaintiff Christopher Thomas Wykes - Second Plaintiff Gino Cassaniti - First Defendant PARTIES : Patricia Cassaniti - Second Defendant Armstrong Scalisi Holdings Pty Ltd - Third Defendant David Cassaniti - Fourth Defendant Sam Cassaniti - Fifth Defendant

FILE NUMBER(S) : SC 5328/06

COUNSEL : Mr J.D. O'Connor - Plaintiffs Mr D.A. Allen - Defendants

SOLICITORS : Uther Webster & Evans - Plaintiffs Hancocks Solicitors - Defendants

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

BARRETT J

TUESDAY, 22 MAY 2007

5328/06 QUEST ENTERPRISES (NSW) PTY LTD & ANOR v GINO CASSANITI & 4 ORS JUDGMENT 1 I am dealing with several questions relating to costs in these proceedings. Before referring to the orders sought, it will be convenient to outline the background. This may be done by quoting from the outline of submissions provided by the solicitors for the plaintiffs, but with names included for greater clarity. "1. On 4 August 2006, the second plaintiff [Mr Wykes] was appointed liquidator of the first plaintiff [Quest]. 2. Following his appointment, the second plaintiff [Mr Wykes] made demands upon the defendants [Gino Cassaniti, Patricia Cassaniti, Armstrong Scalisi Holdings, David Cassaniti and Sam Cassaniti] for the provision of books and property of the first plaintiff [Quest Enterprises], and upon the first, second and fifth defendants [Gino Cassaniti, Patricia Cassaniti and Sam Cassaniti] to provide reports as to affairs and directors questionnaires. 3. On 17 October 2006, a warrant was issued in these proceedings pursuant to s.530C of the Corporations Act 2001. 4. On 18 October 2006, the warrant issued pursuant to s.530C of the Act was served and executed by the second plaintiff [Mr Wykes] at the premises at 1/106 Moore Street Liverpool, NSW ('the Liverpool premises'). 5. Upon exercising the warrant, the liquidator found that the server of the computer system in use at the Liverpool premises had been removed and that the premises contained no documents or records relating to the first plaintiff [Quest Enterprises] apart from those minimal documents provided to the second plaintiff [Mr Wykes] by the first defendant [Gino Cassaniti] on 18 October 2006. 6. On 30 October 2006, White J made further orders in the matter as to the provision of reports as to affairs and directors questionnaires by the first, second and fifth defendants [Gino Cassaniti, Patricia Cassaniti and Sam Cassaniti], as to restraints upon all defendants and as to the filing of affidavits by the defendants. 7. On 13 November 2006, the first defendant [Gino Cassaniti] swore an affidavit, purportedly in compliance with the orders of 30 October 2006, in which he claimed that minimal books and records of the first plaintiff [Quest Enterprises] existed and annexed a report as to affairs. 8. On 11 December 2006, White J made further orders including an order that the defendants serve affidavits by 1 February 2007. 9. On 15 December 2007, the plaintiffs filed an interlocutory process in these proceedings. On 19 December 2006 an amended interlocutory process was filed, seeking orders as to the issue of a warrant for the arrest of the first defendant [Gino Cassaniti] under s.486B of the Act, orders the same as those the subject of this application relating to costs, and orders as to contempt. 10. On 5 February 2007, the proceedings were adjourned to 12 February 2007. 11. On 8 February 2007, the plaintiffs' solicitors wrote to the defendants' solicitors requesting that the defendants comply with the previous court orders. The defendants' solicitor did not reply to the plaintiffs' solicitors letter dated 8 February 2007. 12. On 12 February 2007, the matter was re-listed for directions, at which time a further amended interlocutory process was filed in court, which severed the prayers for orders relating to contempt from the amended interlocutory process. The defendants' counsel indicated that the first defendant [Gino Cassaniti] would be available to attend the court to be questioned as to the location of the books and records of the first plaintiff [Quest Enterprises]. The matter was adjourned to 19 February 2007, and the parties were directed to inform the court on the next return date as to when the first defendant [Quest Enterprises] would be available to attend court for voluntary examination. 13. On 13 February 2007, the plaintiffs' solicitors requested the first defendant's solicitor confirm the date upon which the first defendant [Gino Cassaniti] would be able to attend court to be examined and again enquired as to whether the defendants proposed to correct their breaches of previous court orders. 14. The defendants' solicitors did not reply to the plaintiffs' solicitor's letter dated 13 February 2007 and failed to confirm whether the first defendant [Gino Cassaniti] is available to attend court to be questioned as to the location of the books and records of the first plaintiff [Quest Enterprises]. 15. On 19 February 2007, the defendants' solicitor could not inform the court of when the defendants would be able to attend for examination, and the matter was stood over to 27 February 2007 for the hearing of the further amended interlocutory process. 16. At the hearing of the further amended interlocutory process on 27 February 2007, the first, fourth and fifth defendants [Gino Cassaniti, Patricia Cassaniti and Sam Cassaniti] attended in person and their counsel indicated that in lieu of a warrant being issued for the arrest of the first defendant [Gino Cassaniti] and the fourth defendant [David Cassaniti] pursuant to ss.596A and 596B of the Act respectively. 17. The plaintiffs agreed to the defendants' proposal, and the balance of the application was pressed as to costs of obtaining and exercising the warrant pursuant to s.530C of the Act, the directions hearings on 17 October 2006 and 30 October 2006 and in respect of the further amended interlocutory application." 2 To this should be added the observation that, on 27 February 2007, I made by consent orders for Part 5.9 examinations of Gino Cassaniti and David Cassaniti and orders dispensing to facilitate service. Gino Cassaniti and David Cassaniti were examined before Senior Deputy Registrar Kiang on 12 March 2007. 3 Not expressly mentioned in the above account is the precise relief sought in the originating process filed on 17 October 2006. There were claims for Order 1: a declaration that, during a stated period, Quest owned and operated an accountancy practice known as "Cassaniti & Associates"; Order 2: the issue of a warrant under s.530C authorising Mr Wykes to search for and seize property or books of Quest in the possession of the defendants; Order 3: an order that each of the defendants deliver up to Mr Wykes all books and property of Quest in their possession; Order 4: an order that Gino Cassaniti provide to Mr Wykes a report as to affairs and answers to a questionnaire as required by Mr Wykes' letter of 2 September 2006; Order 5: a corresponding order in respect of Patricia Cassaniti and Sam Cassaniti by reference to a letter of 27 September 2006; Order 6: an order that Gino Cassaniti file an affidavit identifying books of Quest and giving other particulars; Order 7: an order that the defendants account to the plaintiffs for all money and property of Quest "received, sold, disposed of or otherwise dealt with by them at any time"; Order 8: an order under s.597A that each of Gino Cassaniti, Patricia Cassaniti, Armstrong Scalisi Holdings and David Cassaniti file and serve an affidavit disclosing certain matters relating to receipt of money for work done by Quest; Order 9: orders under s.596A and 596B for the issue of examination summonses directed to Gino Cassaniti, Sam Cassaniti Patricia Cassaniti and David Cassaniti; Order 10: an order that the defendants, upon receiving any money or property of Quest, deliver it to Mr Wykes;