In the Matter of Matter of VPlus Superstores Pty Ltd [2012] NSWSC 777

Supreme Court New South Wales

Medium Neutral Citation: In the Matter of Matter of VPlus Superstores Pty Ltd [2012] NSWSC 777 Hearing dates: 2 July 2012 Decision date: 02 July 2012 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Grant leave to the plaintiffs to discontinue the proceedings; defendant to pay plaintiff's costs. Catchwords: COSTS - UCPR r 42.19 - circumstances in which a departure from the usual rule will be ordered - defendant to pay plaintiffs costs Legislation Cited: (NSW) Uniform Civil Procedure Rules 2005 r 42.19 Category: Principal judgment Parties: Trevor Mark Pogroske (plaintiff 1) Said Jahani (plaintiff 2) VPlus Superstores P/L (plaintiff 3) Sthn Pacific Import & Export P/L (plaintiff 4) VPlus Supermarket (Gosford) P/L (plaintiff 5) VPlus Supermarket (Liverpool) P/L (plaintiff 6) VPlus Supermarket (Campsie P/L (plaintiff 7) Yong, Nyuk-Min (defendant 1) Huang, Ruibing (defendant 2) Le, Karen (defendant 3) Representation: Counsel: D L Cook (Plaintiffs) S Velik (Solicitor) (Defendants) Solicitors: Norton Rose Australia (Plaintiffs) Velik Solicitors (Defendants) File Number(s): 2012/ 187399

Judgment (ex tempore) 1HIS HONOUR: On 14 June 2012 the plaintiff administrators approached the court, initially ex parte, with an originating process that was filed in court that day seeking, inter alia, a declaration that they were validly appointed as administrators of the third to seventh plaintiff companies and orders framed as orders for possession of premises from which those companies operated stores, together with leave for the issue of a writ for possession. They also sought an account of the profits made by the defendants during their occupation of the premises, the defendants having entered into occupation after the plaintiffs had taken control following their appointment. The defendants' solicitor appeared, and the matter was substantially resolved the same day, by the defendants undertaking not to remain in, or enter into, possession of any of the premises, and their submission to an order to file and serve an affidavit containing their account of profits, which they say they have now done. The only outstanding matter of substance was the question raised by the application for a declaration as to the validity of the administrators' appointment, which the administrators no longer wish to pursue. The defendants wish to bring a cross-claim that will raise the validity of the appointment, but they do not wish to litigate further the question of occupation of the premises. In those circumstances, the plaintiffs seek an order that the proceedings be dismissed, which the defendants oppose on account of their wish to bring the cross-claim to which I have referred. 2The appropriate course is to grant leave to the plaintiffs to discontinue the proceedings. Doing so in no way inhibits the ability of the defendants to agitate any of the matters that they have foreshadowed that they would wish to raise by way of cross-claim, and the fact that the defendants may wish to agitate those issues is no reason to compel the plaintiffs to maintain their proceedings on foot. Accordingly, I grant leave to the plaintiffs to discontinue the proceedings. 3The normal consequence of that is that, unless the court otherwise orders, the plaintiffs would be liable to pay the defendants' costs [(NSW) Uniform Civil Procedure Rules 2005 (UCPR), r 42.19]. One circumstance in which the court will otherwise order is if the discontinuance is a consequence of the plaintiff having achieved practical success in relation to the claim. The plaintiff has achieved practical success in relation to the claim for possession, by reason of being restored to occupation and possession of the premises in question, which at the time of the commencement of the proceedings was the central issue. 4It is said that the defendants' submission to that course was the result of new matters that came to light on or about 13 or 14 June. However, it also has to be said that the self-help measure of re-taking possession of premises from an administrator was a provocative one, fraught with a substantial degree of risk that it would provoke proceedings of exactly the type that took place. The evidence also establishes that the defendants were forewarned of the application, and provided an opportunity to avoid its consequences by agreeing to vacate before it was made. 5As Mr Velik has fairly pointed out, when the matter came before the court on 14 June, it was practically resolved then. As far as my recollection goes, the matter was stood down once or twice while the arrival of Mr Velik was awaited, and then while some negotiations took place that culminated in a set of short minutes that were proffered to the court, essentially contemporaneously with the granting of leave to file the process. It is commendable that, at least at that stage, the parties were able to cooperate in reducing the issues and reaching a compromise. 6The fact remains that there were proceedings before the court that day, and the question remains who should bear the cost of those proceedings. To my mind, on that issue, the significant considerations are, first, as I have already indicated, that the action of directors retaking possession from administrators who were in possession was a provocative and high risk one from the outset. The second is that requests had previously been made to reinstall the administrator, and while at least by 13 June it appeared that some progress was being made towards that end, it had not yet been achieved, and the indications on 13 June were ambiguous as to whether it would be achieved. 7For those reasons, the defendants must pay the costs of the application. 8I order that, notwithstanding r 42.19, the defendants pay the plaintiffs' costs of the proceedings on 14 June and today.