Supreme Court New South Wales Medium Neutral Citation: In the matter of Cummings Engineering Holdings Pty Ltd ACN 001 794 743 [2015] NSWSC 2145 Hearing dates: 14 September 2015 Date of orders: 14 September 2015 Decision date: 14 September 2015 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: Interlocutory process dismissed. Catchwords: PROCEDURE – judgments and orders – effect of judgments – where defendants ordered to pay plaintiffs' costs – where plaintiffs allege that defendants have used company funds to pay defendants' costs – whether further order can be made – held, fresh proceedings required. Cases Cited: In the matter of Cummings Engineering Holdings Pty Ltd ACN 001 794 743 [2014] NSWSC 250 Category: Consequential orders (other than Costs) Parties: Wendy Anne Hansen (first plaintiff) Sandra Crayn (second plaintiff) Diane Styles (third plaintiff) Chaljenamu Pty Ltd (fourth plaintiff) Jackev Pty Ltd (fifth plaintiff) Cupieson Pty Ltd (sixth plaintiff) Cummings Engineering Holdings Pty Ltd (seventh plaintiff) Michael Cummings (first defendant) Robyn Cummings (second defendant) Cummings Engineering Pty Ltd (third defendant) Representation: Counsel: M Sneddon (plaintiffs) I Mitchell (defendants) Solicitors: Carrolls Lawyers (plaintiffs) Websters Solicitors (defendants) File Number(s): 2013/52846 Judgment (ex tempore) 1. HIS HONOUR: On 28 March 2015 I delivered final judgment in these proceedings [In the matter of Cummings Engineering Holdings Pty Ltd ACN 001 794 743 [2014] NSWSC 250]. As a result of that judgment, final orders were made that: 1. The Court gives judgment that the first and second defendants pay the seventh plaintiff the sum of $282,973; 2. Cummings Engineering Pty Ltd be joined as the third defendant. 1. On the cross-claim, the Court gave judgment that the seventh plaintiff pay the third defendant the sum of $39,070, that the seventh plaintiff pay the first defendant the sum of $141,175 and that, save insofar as any previous costs order otherwise provides, the defendants pay one half of the plaintiffs' costs of the proceedings, including the cross-claim. 2. It does not appear to be contended that those orders have not been complied with, save that while the costs order has not yet been complied with, the plaintiffs have not yet had the costs assessed. 3. The plaintiffs, on 10 September 2015, filed an interlocutory process seeking the following: Pursuant to and in accordance with the orders of the Court entered on 28 March 2014 the Defendants are not entitled to deduct from the moneys under the orders and held presently in trust in the sum of $377,858.00: Any legal costs which the Defendants have sought to do so in the sum of $18,397.11 as indicated in the correspondence of Websters Solicitors dated 6 August 2014; and Any accountancy costs and expenses which the Defendants have sought to do so in the sum of $61,299.13 as indicated in the correspondence of Websters Solicitors dated 6 August 2014. and, the formal orders of the Court be varied so far as necessary to give effect to the same. An order that the First Defendant arrange the immediate distribution of all moneys in the account of Cummings Engineering Holdings Pty Ltd forthwith to the rightful shareholders. 1. Counsel for the plaintiffs promptly acknowledged that claim 2 was plainly outside the scope of the proceedings. Claim 1 is said to arise from the circumstance that, in calculating the amount to be distributed to the shareholders in the company from the amount standing to its credit, the defendants have deducted sums for professional costs and accountancy costs. The evidence entirely fails to indicate whether those costs are in connection with these proceedings or not. Questions directed to the defendants' solicitors to ascertain the particulars of those deductions have not met with any meaningful response. 2. If the defendants have indeed deducted from the company's funds amounts on account of their costs and disbursements, it is possible, though it is not necessarily the case, that that would either be inconsistent with the order previously made for costs in these proceedings or, more likely, in breach of their duties as directors of the company. Whether that is so is entirely impossible to say on the previous evidence. But, more importantly, it would be a completely different breach from those litigated in the subject proceedings in which the Court has made final orders and in which nothing, save performance of those orders, remains to be done. Even if the defendants have subtracted from the company funds in respect of their own costs and disbursements, that is not necessarily inconsistent with an order that they pay the plaintiffs' costs of the proceedings. 3. It seems to me that any such questions can only be resolved in fresh proceedings. As I have indicated, because those proceedings would arise out of the resolution of the instant proceedings in a sense, the Court is likely to afford them an expeditious hearing. However, the interlocutory process in the instant proceedings is misconceived. 4. When the Court was approached for a listing date in respect of the interlocutory process, it pointed out that it should not be assumed that any such application would correctly be made in the extant proceedings. Although the plaintiffs' interlocutory process was misconceived and was brought in the face of that warning, as the defendants have contributed considerably to the situation by their at best opaque, if not evasive, responses to the plaintiffs' enquiries, I do not propose to make any costs order. 5. The Court orders that the interlocutory process filed on 10 September 2015 be dismissed. The plaintiffs may have liberty to apply by arrangement with my Associate for the listing on short notice of any new originating process that they may seek to file. ********** 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: 22 September 2017