In the matter of Formarcus Pty Ltd

Legislation Cited: - Civil Procedure Act 2005 (NSW), s 98
- Corporations Act 2001 (Cth)
- Uniform Civil Procedure Rules 2005 (NSW), r 42.1, 42.19

Cases Cited: - Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32
- Calderbank v Calderbank [1975] 3 All ER 333
- McNamara v San [2010] NSWSC 809
- Ofria v Cameron (No 2) [2008] NSWCA 242
- Parlby v Blair [2013] NSWSC 100
- Re Alsafe Security Products Pty Ltd atf Alsafe Trust (in liq) [2016] NSWSC 575
- Re Harmony Homes Pty Ltd (in liq) [2023] NSWSC 300
- Re Hermitage Engadine Pty Ltd [2025] NSWSC 414
- Re Mobius Distilling Pty Ltd (in liq) (No 2) [2025] NSWSC 649
- Spatt v Benson; Benson v Spatt [2019] NSWSC 1195

Category: Costs

Parties: Marcus John Warrick Betts (Plaintiff)
Formarcus Pty Ltd (First Defendant)
Dany Tjan (Second Defendant)
Glenda Michelle Green (Third Defendant)
Warwick John Betts (Fourth Defendant)

Representation: Counsel:
Mr J Brigden (Solicitor) (Plaintiff)
Mr M Smith (Solicitor) (Second Defendant)
Ms J Shaw / Ms C Cavallaro (Solicitors) (Third Defendant)
Not represented in costs application (Fourth Defendant)
Solicitors:
Priest Legal (Plaintiff)
Brander Smith McKnight Lawyers (Second Defendant)
Bartier Perry (Third Defendant)
Not represented in costs application (Fourth Defendant)

File Number(s): 2026/109818

JUDGMENT

Nature of the application and applicable principles

1. By Originating Process filed on 17 March 2026, the Plaintiff, Mr Marcus Betts, sought a range of orders in respect of allegations of oppression and in respect of access to documents against Formarcus Pty Ltd (“Company”), Mr Tjan and Ms Green. Mr Marcus Betts was a minor and Mr Nicholas Cox consented to act as his tutor in the proceedings. Mr Warwick Betts was subsequently joined as a Fourth Defendant to the proceedings. On 24 August 2026, I ordered that Mr Marcus Betts’ then Points of Claim be struck out and granted leave to file an amended Points of Claim. On 21 September 2026, Nixon J granted leave to discontinue the proceedings against Mr Tjan and Ms Green and ordered that the question of costs be determined by me on the papers.

2. I first address the applicable principles, which were not addressed in detail in the parties’ submissions, before turning to Mr Tjan’s and Ms Green’s respective applications. I bear in mind that s 98 of the Civil Procedure Act 2005 (NSW) (“CPA”) 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; and 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”).

3. I bear in mind the applicable principles in respect of an order for indemnity costs, which I summarised in Re Hermitage Engadine Pty Ltd [2025] NSWSC 414 at [18]. I also recognise that costs may be ordered on an indemnity basis in accordance with the principles identified in Calderbank v Calderbank [1975] 3 All ER 333 (“Calderbank”). I summarised those principles in Re Alsafe Security Products Pty Ltd atf Alsafe Trust (in liq) [2016] NSWSC 575 at [8] and again in Re Mobius Distilling Pty Ltd (in liq) (No 2) [2025] NSWSC 649 at [10]ff, and I adopt without repeating those summaries. A Calderbank offer will not justify an indemnity costs order unless its rejection was unreasonable: Ofria v Cameron (No 2) [2008] NSWCA 242 at [20].

4. I also bear in mind that UCPR r 42.19 deals with the position where proceedings are discontinued in accordance with UCPR r 12.1 and relevantly provides that:

“Unless the court orders otherwise or the notice referred to in rule 12.1(2) otherwise provides, the plaintiff must pay such of the defendant’s costs as, at the date on which the notice of discontinuance was filed, had been incurred by the defendant in relation to each claim in respect of which the proceedings have been discontinued.”

5. The application of this rule was considered in Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32 at [53]–[54] (Hodgson JA, Tobias and Basten JJA agreeing) and [70], [74] (Basten JA). In McNamara v San [2010] NSWSC 809 at [12], Hallen AsJ (as his Honour then was) summarised the principles applicable to the similar provision in UCPR r 42.20 as including that:

“(c) Rule 42.20 of the UCPR does not give rise to a presumption that costs will be ordered against the Plaintiff …. However, the rule does create a starting point by requiring “… the plaintiff must pay the defendant’s costs of the proceedings …” unless that outcome is displaced by a discretionary decision (“unless the court otherwise orders”);

(d) Generally, there must be some proper justification, sound positive ground, or a good reason, for departing from the ordinary position: …; circumstances in which it has been held appropriate to depart from the ordinary position include where the proceedings have been rendered unnecessary by circumstances beyond the plaintiff’s control; where the plaintiff achieved practical success in the proceedings, or where costs have been significantly increased by the unreasonable conduct of the defendant.

(e) The Plaintiff should be the moving party on an application for an alternative costs order… If facts are to be relied upon to found the court making a different order, the Plaintiff will bear the onus of proving the relevant facts;

(f) Where the proceedings are dismissed prior to any hearing on the merits, “the Court cannot try a hypothetical action between the parties” to determine the question of costs…;

(g) It may be necessary to analyse the whole of the proceedings to determine the appropriate costs order … A relevant consideration is whether the Plaintiff acted reasonably in commencing the proceedings and whether the defendant acted reasonably in defending them …; all the relevant circumstances, and not just the fact of dismissal, should be considered;

(h) It is also important to draw a distinction between cases in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event, or settlement, so removes, or modifies, the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for an exercise of the court’s discretion otherwise than by an award of costs by the successful party. It is the latter type of case that usually creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs …;

(i) The distinction between the two categories referred to above is often helpful in exercising the costs discretion, notwithstanding that neither category can be precisely defined, the boundary between them is unclear and other factors may be relevant …;

(j) The rule requires the court to make such order as it thinks just in the particular circumstances of the case.” [citations omitted]

6. That summary was cited with approval by Kunc J in Spatt v Benson*;* Benson v Spatt [2019] NSWSC 1195 at [64], and I followed it in Parlby v Blair [2013] NSWSC 100 at [13]ff and again in, inter alia, Re Harmony Homes Pty Ltd (in liq) [2023] NSWSC 300 at [5]ff.

Mr Tjan’s application

7. In his submissions, Mr Tjan referred to the history of the proceedings; to advice given by Mr Marcus Betts’ solicitor on 31 August 2026 that the proceedings against Mr Tjan would be discontinued; and to the orders made by Nixon J on 21 September 2026. Mr Tjan then elaborated on the issues raised in the proceedings and the relief sought, and referred to directions made and correspondence exchanged between the parties in respect of the proceedings. Mr Tjan also contended that the relief sought against him, by way of orders for the production of documents, could have been sought by the issue of a subpoena to him.

8. Mr Tjan referred to s 98 of the CPA and to UCPR r 42.1, to which I have referred above. I accept that rule applies here, where the claim brought against Mr Tjan was struck out and Mr Marcus Betts did not seek to replead it. Alternatively, Mr Tjan submitted that, if there was no “event” because there was no hearing on the merits, then he had an obvious and readily identifiable success where the proceedings were discontinued against him with no compromise or settlement compensation to the Plaintiff. That reflects no more than the fact that the proceedings have been discontinued against Mr Tjan, for whatever reason, and does not demonstrate any unreasonable conduct on the part of Mr Marcus Betts, absent a determination of the merits of the proceedings in respect of Mr Tjan. Mr Tjan did not refer to UCPR r 42.19, which I address below, but I accept that that rule applies here and he should be allowed the benefit of it, where it was raised by Ms Green and Mr Marcus Betts has had the opportunity to address it.

9. Mr Tjan submitted that Mr Marcus Betts should pay his costs of the proceedings on an indemnity basis for three reasons, namely that:

“(a) [Mr Tjan] ceased to be a director, tax agent and accountant of [the Company] prior to the filing of the amended Originating Process; and

(b) Between 20 March 2026 and 31 August 2026, the Plaintiff continued to maintain proceedings against [Mr Tjan][;]

(c) [Mr Tjan] incurred, or continued to incur, unnecessary legal costs during the period [specified above].”

10. The relevance of the first matter raised by Mr Tjan is not apparent, and was not explained, where proceedings can be maintained against a former officer of a company, and the second and third matters raise no more than the continuance of the proceedings. I am not persuaded that the claim for indemnity costs by Mr Tjan against Mr Marcus Betts is established

Ms Green’s application

11. By her submissions, Ms Green submitted that Mr Marcus Betts’ pleadings did not disclose a reasonable cause of action against her or plead any material facts capable of establishing an entitlement to relief against her. I accept that the striking out of the earlier Points of Claim reflected the fact that it did not then adequately articulate the facts and matters relied on for the claim against Ms Green.

12. Ms Green contended that she was the successful party for the purposes of r 41.1 of the UCPR and the ordinary cost discretion. I accept that submission, where the claim against Ms Green was struck out and Mr Marcus Betts did not seek to replead it. Alternatively, Ms Green rightly referred to UCPR r 42.19, on which she relied for the proposition that a party who discontinues proceedings must ordinarily pay the other party’s costs of the discontinued claim, unless the Court otherwise orders or the notice of discontinuance makes some other provision. Ms Green submitted, and I accept, that there is here no reason to depart from the ordinary position under r 42.19 that Mr Marcus Betts pay her costs of the claim on an ordinary basis.

13. Ms Green also referred to the interlocutory process that she filed on 27 July 2026, where (as I noted above) she obtained an order that Mr Marcus Betts’ then Points of Claim be struck out, with leave to file and serve an amended Points of Claim articulating the material facts relied on in respect of any claim against Ms Green, or otherwise deleting the claim against her and deleting her as a party. I reserved the costs of that application, to be determined when it was apparent whether any claim against Ms Green would proceed, or otherwise at the conclusion of the proceedings, subject to any other further order of the Court. I accept that, where the claim against Ms Green has not proceeded, she should have her costs of that interlocutory process, which would in any event form part of her costs of the proceedings.

14. Ms Green seeks indemnity costs from 20 March 2026 on the basis of a Calderbank offer inviting Mr Marcus Betts to discontinue the proceedings against her on the basis that each party bear their own costs, and she referred to subsequent correspondence in which she appears to have asserted the same position. As Ms Green recognised, an order for indemnity costs on the basis of a Calderbank offer requires that the Plaintiff’s rejection of that offer was unreasonable. It is not apparent that it was unreasonable for Mr Marcus Betts not to accept that offer, where there has been no determination of the claim against Ms Green on the merits, as distinct from a determination of the then inadequacy of the pleading. I am not satisfied that the basis of a claim for indemnity costs is established.

15. Ms Green seeks to establish a claim for costs against Mr Cox personally, who (as I noted above) filed a consent to act as tutor for Mr Marcus Betts when these proceedings were commenced at a time that Mr Marcus Betts was a minor. Ms Green submitted, by reference to authority, that a tutor is ordinarily liable for the costs of a successful defendant and submitted that Mr Cox should be ordered to pay the costs which the Plaintiff is ordered to pay. However, Ms Green did not explain how I could make such an order against Mr Cox where no interlocutory process was filed to seek such an order against Mr Cox personally and it is not apparent that he has been afforded the opportunity to lead evidence or make submissions in respect of such an application, so as to allow him procedural fairness. I will not make that order on that basis.

Mr Marcus Betts’ response

16. By submissions filed on 23 October 2026, Mr Marcus Betts relied upon evidence previously led by his solicitor in relation to the substantive proceedings and provided a detailed account of the matters which were alleged to give rise to the substantive claims; and referred to the production of documents by the Fourth Defendant, Mr Warwick Betts, on 4 May and 28 May 2026, which he contended disclosed matters that were not previously known to Mr Marcus Betts. Mr Marcus Betts in turn referred to matters relevant to the Court making orders under the Corporations Act 2001 (Cth) for the inspection of documents or in respect of oppression. No question of the application of those principles in respect of Mr Tjan or Ms Green arises here where the Points of Claim were struck out and Mr Marus Betts does not seek to replead his claims against them. Mr Marcus Betts rightly acknowledged that, unless the Court otherwise orders, a plaintiff who discontinues proceedings against a defendant would be ordered to pay that defendant’s costs up to the date of the discontinuance. Mr Marcus Betts in turn sought to agitate, in submissions, matters as to the merits of the proceedings, but those matters do not advance his position where the Points of Claim were struck out and he does not seek to replead his claims against Mr Tjan and Ms Green. Mr Marcus Betts submitted that, by reference to those matters, the Court would not make a costs order against him, and certainly not such an order on an indemnity basis.

Determination and orders

17. For the reasons noted above, Mr Marcus Betts has not established any matter which would displace the operation of the ordinary starting point applicable to costs on a discontinuance, that he should pay the Second and Third Defendants’ costs of the proceedings against them. Also, for the reasons noted above, the Second and Third Defendants have not established any basis for an order for indemnity costs against Mr Marcus Betts, and Ms Green has not established a claim for costs against Mr Cox personally.

18. For these reasons, the only order I make is that the Plaintiff pay the Second and Third Defendants’ costs of the proceedings, as agreed or as assessed.

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