Supreme Court New South Wales Medium Neutral Citation: In the matter of AT Air Group Pty Limited (in liquidation) v Dieter Siewert [2013] NSWSC 1309 Hearing dates: 5 April 2013 Decision date: 05 April 2013 Jurisdiction: Equity Division - Corporations List Before: Black J Decision: Orders made for the third plaintiff to pay specified costs of the first and second defendants as agreed or as assessed. Catchwords: PROCEDURE - costs - general rule costs follow the event - costs of issues. Legislation Cited: - Civil Procedure Act 2005 (NSW) ss 56, 98 - Corporations Act 2001 (Cth) s 477(2B) Cases Cited: - Wentworth v Rogers [2002] NSWSC 921 Category: Interlocutory applications Parties: AT Air Group Pty Limited (in liquidation) (First Plaintiff) Ross Seller (Second Plaintiff) Aquatic Air Pty Limited (Third Plaintiff) Avtex Air Services Pty Limited (Fourth Plaintiff) Dieter Siewert (First Defendant) Lieselotte Siewert (Second Defendant) Heron Airlines Travel Pty Limited (subject to deed of company arrangement) (Third Defendant) Wingaway Air Pty Limited (in liquidation) (Fourth Defendant) AT Air Group Pty Limited (in liquidation) (Fifth Defendant) Representation: Counsel: R.D. Marshall (Third and Fourth Plaintiffs) B. DeBuse (First and Second Defendants) Solicitors: Bartier Perry (Third and Fourth Plaintiffs) Marsdens (First and Second Defendants) File Number(s): 2012/169096 Judgment - EX TEMPORE 1I delivered judgment on 7 December 2012 in respect of an interlocutory process by which the third plaintiff, Aquatic Air Pty Limited ("Aquatic") applied for an order that the first, second and third plaintiffs be released from an undertaking previously given to the Court to the extent necessary to enter into a proposed deed of assignment of certain causes of action and seeking approval, under s 477(2B) of the Corporations Act 2001 (Cth) for AT Air Group Pty Limited (in liq) ("AT Air") to enter the proposed deed of assignment. 2I indicated in my judgment that I was satisfied that approval should be granted to the liquidator to enter into the deed of assignment under s 477(2B) of the Corporations Act for the reasons set out in that judgment. To that extent, Aquatic Air was successful in the application before me. On the other hand, I indicated that I would not release the undertaking so as to permit entry into a deed of assignment in that form, although I noted I would likely release the undertaking to the extent necessary to enter into a deed of assignment with some modification. To that extent, the defendants were successful in resisting the order sought by Aquatic, albeit that success may have been temporary, had a subsequent modification to the proposed deed of assignment taken place. 3The parties subsequently reached agreement to exclude a property from the security to be provided under the deed of assignment, which addressed the matter that would otherwise have required release from the undertaking, and I granted approval for AT Air to enter into the deed of assignment in amended terms in a judgment delivered on 14 February 2013. 4When the matter was listed before me on that date, Mr DeBuse, who appears for the defendants, sought orders for the costs of the motion on the basis that the defendants had been substantively successful, to the extent that their opposition to release from the undertakings on the terms then sought had prevailed. Mr Marshall, who appeared for the second, third and fourth plaintiffs, then accepted that there was some justification for an order for costs in favour of the first and second defendants in limited form, relating to the appearance on 30 November 2012 and the costs of counsel's preparation in that regard. A form of order was proffered, but, perhaps unwisely in hindsight, I invited the parties to consult in the course of the day so as to achieve greater clarity in that form of order. 5It appears that there were subsequent difficulties in the parties reaching agreement as to that form of order, and possibly subsequent misunderstandings between the parties as to their respective positions, which counsel have not sought to agitate before me this morning. The matter was restored today in order to seek to determine the question of costs. 6Mr Marshall, who again appears for the third and fourth plaintiffs, has provided the Court with written submissions as to the history of the matter, and notes that any ultimate assessment as to the respective parties' conduct may depend upon whether the plaintiffs are successful in establishing the substantive allegations which they put in the proceedings. Mr Marshall rightly points out that, as I have already noted, the plaintiffs were successful on several aspects of matters argued before me, including resisting the defendant's substantive attack on several aspects of the assignment. On the other hand, it remains that the plaintiffs were not successful in obtaining the orders which they sought, by reason of the undertaking previously given by the plaintiffs. 7In these circumstances, the question of costs was plainly finely balanced. It is of course well established, and neither counsel has sought to contest, that the usual position, reflected in s 98 of the Civil Procedure Act 2005 (NSW), is that costs are in the Court's discretion and the Court has power to determine by whom, to whom and to what extent costs are to be paid. Rule 42.1 of the Uniform Civil Procedure Rules in turn provides that, where the Court makes an order as to costs, the Court is to order that costs follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs. 8In the present case, there is no difficulty as to the content of those principles. The questions which arise are, first, whether the Court should now deal with a substantive reopening of the question of costs, beyond the position which was raised before the Court on 14 February 2013 and, second, if it did so, whether the result would be different from that which the parties had proposed on 14 February 2013. 9As to the first of those questions, Mr DeBuse contended that the process would involve a reopening of a judgment of the Court, which should not be permitted under the principles noted in Wentworth v Rogers [2002] NSWSC 921. I do not consider that that is the case, because the Court had not on 14 February made orders for costs, or made a formal direction requiring the parties to take any step to implement the degree of consensus which had been reached between them, but instead invited the parties to submit consent orders to reflect that consensus with any clarification which could be agreed between them. Nonetheless, the parties had then reached a degree of consensus as to the approach to be adopted, and any reopening of the matter, in a colloquial rather than a technical sense, needs to be considered having regard to the principle reflected in s 56 of the Civil Procedure Act, namely the just, quick and cheap resolution of the issues in the proceedings. 10In that respect it should be noted that the parties had demonstrated a degree of compromise, when the matter was listed before me on 14 February, which was a credit to each of them. The approach which they had adopted on that occasion reflected the fact that the question of costs would be one which involved some complexities. In particular, the question of what was the "event" that an order for costs should follow, was by no means clear. Each party had had a measure of success, with the plaintiffs succeeding on the legal issue of approval of the assignment; the defendants succeeding on the question of release from the undertaking; and the defendants succeeding in resisting the order which had been sought, but only unless the plaintiffs made further amendments to the deed of assignment which might or might not have been made, but in the outcome ultimately were made. 11In those circumstances, it is unlikely that any party would have received the whole of its costs involved in the matter; some limitation was likely to be imposed; and there was a degree of uncertainty as to what that limitation should be. I do not think that, in these circumstances, it would be consistent with s 56 of the Civil Procedure Act wholly to reagitate the matters in issue on that occasion. I accept that, as Mr Marshall contends, the position as to costs generally, and as to the conduct of the proceedings generally, may bear a different light when substantive orders on the merits have been made. However, so far as the application before me was concerned, the parties had a mixed result. The compromise position which had been put before me was a fair reflection of that mixed result, allowing the defendants some, but not all of their costs, to reflect the fact that they had some but not complete, success on the application. 12I note that the position has been further clarified today, and some of the misunderstandings which may have intervened between the parties may have been resolved, by the defendants' clarification that costs are only sought against Aquatic Air, and that the defendants are content to have those costs limited to the costs of preparation of written submissions for the appearance on 30 November 2012 and the costs of preparation of an affidavit of Aaron Johnson of 9 November 2012, in addition to the costs of appearance before me. 13In these circumstances I do not propose to entertain a substantive argument as to the issue of costs generally. I have read the respective parties' submissions, but I do not think it is likely that a full consideration of issues would lead to a result very different from that which the parties had in fact proffered on 14 February. No doubt, that result could have been expressed in different ways; for example, the Court could have allowed a percentage of the defendants' costs on the day or, perhaps less cost effectively for both parties, could have ordered that the plaintiffs have the costs of the issues as to the assignment and the defendants have the costs of the issues as to the release from the undertaking, requiring a more costly assessment process. 14In the circumstances, it seems to me that the preferable approach is to adopt the position which the parties had reached on the day, clarified by the limitations which the defendants have indicated they would accept. 15For these reasons, I make the following orders: 1. Aquatic Air Pty Limited pay the costs of the first and second defendants of (a) appearing on 30 November 2012; (b) counsel's preparation of written submissions for that appearance and the preparation of an affidavit of Aaron Johnson of 9 November 2012 as agreed or as assessed. 2. There be no order as to costs as to the appearance before me on 14 February 2013 or today or matters incidental thereto. ********** 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 September 2013