In the matter of Dartbrook Commercial Pty Ltd

Parties: Mine and Tunnel Constructions Pty Ltd (Plaintiff)
Dartbrook Commercial Pty Ltd (admins apptd) (recs and mgrs apptd) (First Defendant)
Ben Campbell (as Receiver and Manager of Dartbrook Commercial Pty Ltd) (Second Defendant)
David McGrath (as Receiver and Manager of Dartbrook Commercial Pty Ltd (Third Defendant)
Timothy Joseph Heenan (as Administrator of Dartbrook Commercial Pty Ltd) (Fourth Defendant)
Richard John Hughes (as Administrator of Dartbrook Commercial Pty Ltd (Fifth Defendant)

Representation: Counsel:
TD Castle SC / I King (Plaintiff)
J Hynes (Second and Third Defendants)
Solicitors:
Connor & Co Lawyers Pty Ltd (Plaintiff)
Gilbert + Tobin (Second and Third Defendants)

File Number(s): 2025/306192

JUDGMENT

Background and affidavit evidence

1. In my judgment delivered on 19 September 2025 (Re Dartbrook Commercial Pty Ltd [2025] NSWSC 1075) (“Judgment”), I determined a dispute relating to the registration of security interests over two machines used in a mine conducted by the First Defendant, Dartbrook Commercial Pty Ltd (admins apptd) (recs and mgrs apptd) (“Dartbrook”). I observed, in respect of the question of costs, that:

“A party which seeks a dispensation from the Court will generally be required to pay the costs of other parties which need to be notified of the claim, and an insolvency practitioner which appears in such an application and acts reasonably would ordinarily be entitled to the costs of that application: Chand v Azurra Pty Ltd (in liq) (2011) 82 ACSR 383; [2011] NSWCA 58. I am inclined to think that, where MTC required the Court’s intervention in order to extend the time for the registrations it has made, it should pay the costs of the Receivers’ involvement in what became a complex and relatively lengthy application, where the Receivers’ involvement was plainly necessary to expose the complexities of the application. However, I indicated that I would allow the parties an opportunity to be heard as to costs and I will do so.”

2. I made orders for the Plaintiff to advise the Defendants of the revised orders that it sought and any undertaking that it offered to address matters noted in my judgment, and directed the parties to submit consent orders to give effect to the judgment or, if there was no agreement, their respective draft orders and submissions as to the differences between them.

3. On 23 September 2025, the Plaintiff’s solicitors identified the form of orders they sought in respect of the two machines and the undertaking which they offered. On 25 September 2025, the Plaintiff provided draft orders, an affidavit dated 19 September 2025 of its solicitor and the exhibit to that affidavit and made submissions on costs and as to other orders. By his affidavit dated 19 September 2025, Mr Connor, who acts for the Plaintiff, referred to correspondence between the solicitors on a without prejudice except as to costs basis, which was exhibited to his affidavit. The Receivers also made submissions as to costs in response.

Substantive relief

4. I do not understand the Receivers to take issue with paragraphs 1 – 4 of the proposed orders advanced by the Plaintiff and, if they do so, they do not advance any alternative form of orders. I will therefore make orders 1 – 4 in the form proposed by the Plaintiff. The Receivers consent to the form of undertaking in paragraph 5 of the Plaintiff’s proposed orders. Mr Castle, with whom Ms King appeared for the Plaintiff, referred to the orders which had previously been sent to the Court and indicated that the Plaintiff sought an additional order that the Receivers’ interlocutory process be dismissed. I accept that order should be made to finalise that aspect of the proceedings, although the dismissal of the interlocutory process partly reflects the Receivers’ success in the proceedings.

Costs

5. Mr Castle submitted, obviously enough, that s 98 of the Civil Procedure Act 2005 (NSW) provides that costs are in the discretion of the Court. That section confers on the Court a wide discretion with respect to costs, and the Court has discretion to determine by whom, to whom and to what extent costs are to be paid; costs will ordinarily 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, in accordance with r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”). A successful party in proceedings has a “reasonable expectation” of being awarded costs against an unsuccessful party, unless there is good reason for that presumption to be displaced: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [22], [134]. The principle that costs should follow the event is the “guiding principle” with respect to costs, and the onus is on the losing party to establish the basis for a departure from the usual costs rule in UCPR r 42.1: Waterman v Gerling Australia Insurance Co Pty Ltd (No 2) [2005] NSWSC 1111 at [10]; Northern Territory v Sangare (2019) 265 CLR 164; [2019] HCA 25 at [24]–[25].

6. Mr Castle recognised, as I had noted in the Judgment at [97], that the involvement of the Receivers was necessary to expose the complexities of the Plaintiff’s application for relief. He recognises that the Plaintiff should bear its own costs of the proceedings, except to the extent that it was required to deal with opposition from the Receivers, although that concession does not seem to me to go far enough. He submitted, and I accept, that the Receivers took a more active role than that taken by the liquidators in Chand v Azzura Pty Ltd (2011) 82 ACSR 383; [2011] NSWCA 58, to which I referred in the primary judgment. However, the Receivers’ active role in the proceedings is to their credit, where it was necessary to expose the issues to be decided.

7. Mr Castle submits, and I accept, that Mr Papadolias’ affidavit read in the Receivers’ case did not ultimately advance the question of prejudice or reliance, where it did not address any reliance by the secured creditor on relevant matters. For these reasons, I accept that the Plaintiff should not be required to pay the costs of preparation of and dealing with that affidavit in the hearing. Mr Castle also submits that the Receivers’ Interlocutory Process did not result in relief for the Receivers. I do not accept that that provides a basis for excluding the Receivers recovery of costs of that Interlocutory Process, where the Receivers’ partial success on other grounds displaced the need for aspects of the relief sought in that Interlocutory Process. Mr Castle also submits, and I accept, that the costs of a second affidavit of Mr McGrath dated 14 September 2025 and its exhibit should not be payable by the Plaintiffs, given the context in which that affidavit arose.

8. Mr Castle also draws attention to correspondence between the parties’ legal representatives, not for the purpose of seeking indemnity costs, but with the suggested purpose of considering the extent to which the parties’ conduct promoted the just, quick and cheap resolution of the real issues in dispute. I do not accept Mr Castle’s submission that the position taken by the Receivers was unreasonable where, at least in respect of one machine, it reflected the then position, subject to the relief which the Plaintiff sought and retrospectively obtained, on terms, in the proceedings. I bear in mind that, as Mr Castle points out, there were proposals and counter-proposals put in respect of the payment of rent of the machines; but I also bear in mind that the issue only arose because of the issues with the registration as to the machines which had the result that one of them had vested in Dartbrook, and the Plaintiff required the Court’s intervention so as to retrospectively correct the registration of both machines.

9. Mr Castle in turn submits that the Court should order the Receivers to pay some of the Plaintiff’s costs, which were a consequence of forensic decisions made by the Receivers. I do not accept that submission, where the Receivers were brought into the proceedings by reason of the Plaintiff’s need to rectify the errors it had made in respect of the registration of the relevant securities. I do accept that there are aspects of the Receivers’ costs which should not be payable by the Plaintiff, to which I have referred above, and it seems to me that the Plaintiff should otherwise be required to pay the Receivers’ costs, where the Receivers were a necessary contradictor to the application brought by the Plaintiff.

10. The Receivers accept that they should bear their own costs in respect of the Interlocutory Process filed 3 September 2025 and in respect of the matters addressed in Mr McGrath’s last affidavit, and they seek an order that the Plaintiff pay their costs in respect of the Originating Process, as agreed or as assessed. Alternatively, the Receivers suggest a percentage apportionment of costs. I will not adopt that approach where there is no basis on which I can assess the proper amount of that apportionment.

11. The Receivers point out that the approach noted in paragraph 97 of my Judgment is common in applications for remedial relief in the insolvency context where external administrators or creditors are joined as a party seeking relief; for example, Re Mehajer Brothers Pty Ltd [2017] NSWSC 1852 at [46]; Realtek Semi-Conductor Corp v Jones (admins apptd) [2024] FCA 1321 at [45]. The Receivers submit, and I accept, that it was appropriate that the Plaintiff’s application be dealt with on an inter partes basis, and their joinder as Defendants invited, and likely, required them to take an active role in the proceedings: Re Accolade Wines Australia Ltd [2016] NSWSC 1023 at [6]; Re Four in One Wyoming Pty Ltd (2017) 120 ACSR 167 at [20]; [2017] NSWSC 407. They also adopt the observation made in paragraph 97 of my Judgment that their involvement was necessary to expose the complexities of the application.

12. The Receivers also point to difficulties in the case, arising, inter alia, from the Plaintiff’s failure to provide the Receivers with a proposed form of the order sought at the hearing; several changes in the form of order sought in the hearing, with the consequence that the matter was not completed within the day originally allocated to the hearing of it; and the fact that the Plaintiff only succeeded because the Court ultimately allowed it a further opportunity to reformulate the relief that was sought, after the delivery of judgment. The Receivers also point to the possibility, which is plainly real, that the issues in the proceedings would have been narrowed if the Plaintiff had previously offered the form of undertaking which they were required, by the Judgment, to offer as a term of the relief that they seek. The Receivers submit, and I accept, that the relevance of the without prejudice communications to which the Plaintiff refers is reduced, where those communications took place in circumstances that the Plaintiff had not adequately formulated a form of orders that could properly be made in the proceedings.

13. I am satisfied that these matters have the consequence that the Plaintiffs must pay the Receivers costs of the proceedings, as agreed to as assessed, excluding the matters to which I referred above.

Orders

14. For these reasons, I make the following orders, including as to costs:

MOB065

1. ORDER pursuant to s 588FM of the Corporations Act 2001 (Cth) (“Act”) that 14 October 2025 is fixed as the time, for the purposes of s 588FL(2)(b)(iv) of the Act, for the Plaintiff to register on the Personal Property Securities Register (PPSR) a PPSR registration (“New MOB065 Registration”) of the equipment, Joy 12CM12 Continuous Miner – Plant No MOB065, supplied by the Plaintiff under the Agreed Variation to Scope of Supply Contract MTC-8-DART, such registration to be in the terms of registration 202507300102662 dated 30 July 2025, and linked to that registration, but excluding inventory and excluding any reference to Mine & Tunnel Equipment Pty Ltd.

2. ORDER pursuant to s 293(1) of the Personal Property Securities Act 2009 (Cth) (“PPSA”), the number of business days set out in s 62(3)(b) of the PPSA be extended by the appropriate number of business days such that the New MOB065 Registration made pursuant to order 1 above falls within the time period prescribed by s 62(3)(b) of the PPSA as extended by this order.

MOB017

3. ORDER pursuant to s 588FM of the Act that 14 October 2025 is fixed as the time, for the purposes of s 588FL(2)(b)(iv) of the Act, for the plaintiff to register on the PPSR a PPSR registration (“New MOB017 Registration”) of the equipment, Joy 12CM30 Bolter Miner – Plant No MOB017, supplied by the Plaintiff under the Hire and Services Agreement MTC-8-DART) (“Contract”), such registration to be in the terms of registration 202507300102426 dated 30 July 2025, and linked to that registration, but excluding inventory and excluding any reference to Mine & Tunnel Equipment Pty Ltd.

4. ORDER pursuant to s 293(1) of the PPSA, the number of business days set out in s 62(3)(b) of the PPSA be extended by the appropriate number of business days such that the New MOB017 Registration made pursuant to order 3 above falls within the time period prescribed by s 62(3)(b) of the PPSA as extended by this order.

Undertaking

5. NOTE that the plaintiff irrevocably and unconditionally undertakes to the Court and the Defendants not to seek any payment of hire fees from the Defendants, or any of them, in respect of MOB017, whether under the Contract or otherwise, for the period commencing on and from the date of the appointment of the Fourth and Fifth Defendants (being 3 July 2025) to and including 14 October 2025.

Other orders

6. The Interlocutory Process filed 3 September 2025 be dismissed.

7. The Plaintiffs pay the Second and Third Defendants’ costs in respect of the Originating Process filed 11 August 2025, but excluding the costs of the Interlocutory Process filed 3 September 2025, the costs of preparation of and dealing with the affidavit of Mr Papadolias and the costs of the second affidavit of Mr McGrath dated 14 September 2025 and its exhibit, as agreed or as assessed.

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