Supreme Court New South Wales Medium Neutral Citation: In the matter of Australian Innovative Precast Pty Limited (in liquidation) [2015] NSWSC 203 Hearing dates: 16 February 2015 Date of orders: 16 February 2015 Decision date: 16 February 2015 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Parties to bear their own costs Catchwords: COSTS – recovery of costs – interlocutory application for contempt filed by liquidator – where liquidator has consented to dismissal of application – whether liquidator entitled to costs of proceedings – where interlocutory application doomed to fail – held, liquidator not entitled to costs order Category: Costs Parties: David Anthony Hurst and Philip Raymond Hosking in their capacity as joint and several liquidators of Australian Innovative Precast Pty Limited (in liquidation) (plaintiffs) Representation: Counsel: Ms M Moody (plaintiffs) Mr B Balasubramanian (defendants) Solicitors: Clayton Utz (plaintiffs) File Number(s): 2014/274738 Judgment (ex tempore) 1. HIS HONOUR: On 26 September 2014, the plaintiff liquidators had an order for production issued addressed to Maul Products Pty Ltd. On or about 17 October 2014, counsel for the present respondent, Mr Paul De Oliveira – who is apparently the proper officer of that company – appeared and produced documents in answer to the order for production. Inspection of those documents revealed to the liquidator that the documents had been redacted. 2. On 3 November 2014, Mr De Oliveira was publicly examined before a Deputy Registrar. In the course of that public examination, he gave an undertaking, in somewhat ambiguous terms, to produce unredacted copies of the documents within two weeks. The Deputy Registrar asked him: Are you going to provide a copy of these unredacted documents to the liquidator in compliance with the order for production you have already been served with? 1. To which the answer was, "Yes". The Registrar said that he would try and stop short of making a formal order to do so, but extracted an undertaking, asking: It's a matter for you whether you want to give that undertaking now verbally on the record as to whether you will provide those unredacted... 1. To which Mr De Oliveira responded, "Yeah, I'll provide the documents." 2. Ultimately, the Deputy Registrar said: And finally I'll remind you of your undertaking which required unredacted copies of the documents that you have produced in response to the order for production within two weeks. 1. The order for production, of course, required production to the Court, not to the liquidator. On 5 November 2014, the liquidator's solicitors sent an email to Mr De Oliveira's solicitors, which noted: During the examination your client offered an undertaking to the Court to provide full and complete copies of the documents produced by Maul Products with no redactions by no later than 17 November 2014. Our clients look forward to receiving those documents imminently in accordance with your client's undertaking to the Court. 1. On 18 November 2014, a further email was sent, noting: Your client has not provided full and complete copies of the documents...and has therefore breached the undertaking he provided to the Court on 3 November 2014. Please provide the required documents by no later than 5pm today, failing which our clients will be required to bring your client's breach of his undertaking to the attention of the Court. 1. Mr De Oliveira's solicitor responded at 4.18pm that day: I have attempted to contact our client regarding your email. I anticipate the documents will be produced directly to you shortly and then to the Court. 1. In fact, it appears that on 16 November, Mr De Oliveira had sent to the Court two faxes producing the documents in question. However, neither he nor his solicitors informed the liquidator's solicitors that that had happened. 2. On 8 December 2014, the liquidator filed an interlocutory process seeking an order that Mr De Oliveira be dealt with for contempt in failing to produce the documents in compliance with his undertaking. That interlocutory process first came before the Court on 17 December, when the proceedings were adjourned to today. General access was granted to the documents produced to the registry by fax on 16 November, and the parties attended at the registry to track down the documents that had been produced, which were, with some difficulty, ultimately located. 3. Today, the liquidator has consented to an order dismissing the contempt application, but seeks an order for costs of the interlocutory process. On one view – the substantive relief having been dismissed – the starting point might be that the liquidator should pay the costs of the unsuccessful contempt application. Alternatively, the view espoused in many cases is that where the parties can agree on the outcome of proceedings but are unable to agree on the question of costs, the Court will ordinarily not embark on a hearing of the proceedings to decide the question of costs but will take the view that each party should bear its own costs. 4. In this case, it seems to me that the contempt application was doomed to fail because Mr De Oliveira had already produced the documents to the Court, albeit by facsimile and prior to the date by which their production was required. It is unfortunate, to say the least, that that was not communicated to the liquidator's solicitors, but it is also unfortunate that the liquidators did not make inquiries of the Court to ascertain whether there had been production. Mere reliance on an assumption that there would be production inter partes does not seem to me to be sufficient ground to commence proceedings for contempt. 5. In those circumstances, I am certainly not satisfied that the liquidator is entitled to a costs order. No order is sought by Mr de Oliveira. Accordingly, there will be no order as to costs, to the intent that each party bear their own costs of the interlocutory process filed 8 December 2014. ********** 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: 11 March 2015