Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors; Idoport Pty Limited and Market Holdings Pty Limited v Donald Robert Argus

Supreme Court of NSW|2001-10-17|Before: Einstein J, Mr JJ

CITATION : Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors; Idoport Pty Limited and Market Holdings Pty Limited v Donald Robert Argus [39] [2001] NSWSC 914 FILE NUMBER(S) : SC 50113/98; 50026/99 HEARING DATE(S) : 17/10/01 JUDGMENT DATE : 17 October 2001

Idoport Pty Limited (Plaintiff) PARTIES : Market Holdings Pty Limited (Plaintiff) National Australia Bank Limited (Defendant) Donald Robert Argus (Defendant) JUDGMENT OF : Einstein J

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION - COMMERCIAL LIST

17 October 2001 ex tempore 11.00am 17 October 2001 revised 1.00pm

50113/98 IDOPORT PTY LIMITED & ANOR v NATIONAL AUSTRALIA BANK LIMITED & 8 ORS

50026/99 IDOPORT PTY LIMITED & ANOR v DONALD ROBERT ARGUS

JUDGMENT 1 Market Holdings Pty Ltd (in liquidation) ["Market Holdings"] which is the second plaintiff in proceedings No 50113 of 1998 and No 50026 of 1999 seeks an order pursuant to part 34 Rule 6A of the Supreme Court rules for the dismissal of both sets of proceedings so far as concerns any causes of action or the whole or any part of any claims for relief made by Market Holdings in both sets of proceedings. 2 Market Holdings has submitted that in relation to costs, any order to be made by the Court requires to recognise: (a) that the evidence adduced by the plaintiffs and the interlocutory steps taken to date cannot be properly characterised as being exclusively for the benefit of the case being maintained by Market Holdings (b) that the first plaintiff, Idoport Pty Ltd ("Idoport"), is maintaining the prosecution of the proceedings and has the benefit of all evidence adduced and interlocutory steps taken and, necessarily, the costs expended by the defendants to each set of proceedings would, in the main, have necessarily been incurred in the defence of the proceedings maintained by the first plaintiff in any event 3 Market Holdings then submits that having regard to those matters, and to the extent the Court makes a costs order against Market Holdings, the appropriate costs order to be made is that Market Holdings be liable for the defendants costs: (a) incurred in defending the issues in the proceedings arising from the causes of action raised by Market Holdings; and

(b) which would not have been incurred but for Market Holdings participation in the proceedings. 4 Market Holdings has also formally advised the Court that, at this stage, it intends to take no active part (in the sense of continuing its presence in the courtroom) in defending the cross-claim brought against it, and intends to rely upon its defence, as filed, and the evidence adduced by the other named cross-defendants. 5 My own view is that the provisions in part 52A. Rule 23 (2) should apply in circumstances where the Court is to order that the claims of Market Holdings be dismissed under Part 34 Rule 6A. In short, Market Holdings, by operation of part 52A Rule 23(2), will be liable to pay the costs occasioned by the dismissed claims, of all parties against whom the dismissed claims are made. 6 Idoport, Negubo Pty Limited, Investors Buying Service (IBS) Pty Ltd and Mr John Malcolm Maconochie ("the Idoport parties") seek to advance submissions in support of the proposition that the hearing of any application by the liquidator of Market Holdings should be formally made on written process supported by evidence. The submission is that any determination of such application should be deferred until an appeal by the Idoport parties, against the judgment of Young CJ in Eq. under which the liquidator was appointed, is heard and determined. 7 In my view, such remedy, if any, as the Idoport parties may have in terms of restraining the liquidator from making the subject applications for a dismissal of the proceedings so far as concerns causes of action or claims for relief made in the proceedings by Market Holdings, lies elsewhere. 8 In those circumstances I do not propose to entertain any application by the Idoport parties for such a remedy. Whilst I have been prepared to informally read the affidavit of Mr D'Emilio, solicitor for the Idoport parties, made on 16 October 2001 (MFI P241) and have been prepared to permit the Idoport parties to advance submissions both in writing and from the bar table in relation to the position, it seems to me clear that such remedy as they have, if any, lies elsewhere. 9 During argument the Court indicated its disposition to allow 24 hours prior to the making of formal orders. Each of Mr Bathurst QC for the defendants, Mr Jones of counsel for Market Holdings and Mr Garnsey QC for the Idoport parties, adopted the position that it was preferable for forensic reasons for the Court to make formal orders and then to stay the operation of those orders. In those circumstances, it seems to me appropriate to simply, having made the orders, stay their operation for a period of 24 hours. 10 Finally, before making the orders it is appropriate to refer to the submissions which Mr Jones advanced on behalf of Mr Silvia, the liquidator of Market Holdings. The submission was that the Court should order that the liquidator is not personally liable for any costs orders. 11 Mr Bathurst QC for the defendants submitted that whilst there was, as I understood him, no question of any liability in the liquidator personally, for any costs orders, it was simply not appropriate for the Court presently to formalise that position by formal order. 12 As I have understood the position of Mr Silvia as liquidator of Market Holdings as announced in this Court from time to time from the bar table, and as reflected from time to time in judicial advice given to Mr Silvia, he has in every way from his appointment as liquidator, approached the difficult questions of determining what Market Holdings' position in relation to these ongoing proceedings should be, in a proper, professional and perfectly acceptable way. I know of no possible basis upon which any party could suggest that in any respect Mr Silvia could be said to be personally liable for any of the costs orders which are about to be made. It seems to me that those comments suffice to protect Mr Silvia and whilst, had there been occasion to do so, I would have been persuaded to make a formal order that he not be personally liable for any of the costs orders to be made, it is simply inappropriate because it is unnecessary, to now make that order.

Orders 13 The orders which are appropriate to be made and which I make are as follows: 14 The Court on the application of Market Holdings Pty Ltd (in liquidation) being a claimant for relief in proceedings No 50113 of 1998, both as a plaintiff in the proceedings and as the second cross-claimant to the second cross-claim, orders pursuant to Part 34 Rule 6A that the proceedings be dismissed so far as concerns any cause of action or the whole or any part of any claim for relief made in the proceedings by Market Holdings Pty Ltd (in liquidation). 15 The Court on the application of Market Holdings Pty Ltd (in liquidation) being a claimant for relief in proceedings No 50026 of 1999, orders pursuant to Part 34 Rule 6A that the proceedings be dismissed so far as concerns any cause of action or the whole or any part of any claim for relief made in the proceedings by Market Holdings Pty Ltd (in liquidation). 16 I order that the operation of these orders be stayed for a period of 24 hours.

I certify that paragraphs 1 - 16 are a true copy of the reasons for judgment herein of the Hon. Justice Einstein given on 17 October 2001 at 11.00am ex tempore and revised on 17 October 2001 at 1.00pm.

  Susan Piggott
  Associate

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