Plutus Payroll Australia Pty Ltd (in liquidation) v Saikali [2024] NSWSC 1164 | Case summary

Supreme Court of NSW|2024-09-12|Before: Nixon J

JUDGMENT

On 28 August 2024, I delivered reasons for judgment in this matter: Plutus Payroll Australia Pty Ltd (in liquidation) v Saikali [2024] NSWSC 1093 (Primary Judgment). I determined that the Plaintiffs succeeded in various claims against the Second to Fourth Defendants (the Teplitsky Parties) and that the Plaintiffs were entitled to their costs. At that time, I directed the parties to bring in short minutes of order to give effect to those reasons, including dealing with interest and costs. I indicated that, if there was any dispute about the form of those orders, including the quantification of interest, or if any party sought a different costs order, or a costs order other than on the ordinary basis, the parties would have an opportunity to be heard on those matters.
I have been provided with competing sets of orders by the Plaintiffs and the Teplitsky Parties. I have also been provided with short written submissions in respect of each set of orders. The parties have indicated that they are content for the Court to determine this issue on the papers.

Declarations

The Plaintiffs included, in their proposed form of order, declarations in the following terms: "Declare that: a. Daniel Rostankovski breached his fiduciary duties to the first plaintiff. b. The second, third and fourth defendants assisted Daniel Rostankovski in the breach of his fiduciary obligations to the first plaintiff. c. The Transactions (as defined in [2024] NSWSC 1093 at [21]): i. were uncommercial transactions within the meaning of s 588FB of the Corporations Act 2001 (Cth); ii. were insolvent transactions within the meaning of s 588FC of the Corporations Act 2001 (Cth); and iii. were voidable transactions within the meaning of s 588FE(3) of the Corporations Act 2001 (Cth)."
The Teplitsky Parties did not include, in their proposed form of orders, any such declarations, but did not make any submissions in opposition to the proposed declarations.
I accept that, as the Plaintiffs submitted, the proposed declarations reflect findings of the Court (in particular at [643] to [645] of the Primary Judgment), and that the declarations in paragraph 1(c) were sought in prayer 4 of the Summons.
However, it does not follow that the declarations should be made.
In Carbone v Fowler Homes Pty Ltd; Carbone v Fowler Homes Pty Ltd [2024] NSWCA 192 at [29], Leeming JA (with whom Ward P and Mitchelmore JA agreed) observed that a "bare declaration that a party has committed a tort or contravened a law should not ordinarily be made". In cases where declaratory relief is appropriate, the declaration should "specifically and succinctly identify the gist of the relevant conduct and its relationship to contravention" (Carbone at [31]). The proposed declarations in paragraphs 1(a) and 1(b) are bare assertions of breach of duty, and of assistance in such breach, without any identification of the conduct in issue. Further, one of those bare assertions is sought in respect of a non-party.
In any case, the remedy of a declaration is not an appropriate way of recording in a summary form, conclusions reached by the Court in reasons for judgment (Carbone at [32]). Although there may be utility in declaring contraventions of a statute in order to define and publicise the type of conduct that constitutes a contravention of the Act and to set out clearly the foundation on which the consequential orders by way of injunction and pecuniary penalty, including those based on accessorial liability, are grounded (Carbone at [32]), I have not found that the Teplitsky Parties contravened any statutory provision and, in any case, the present proceedings are private litigation to recover money.
For those reasons, I decline to make the declarations sought by the Plaintiffs.

Orders for Judgment

The Plaintiffs proposed the following orders for judgment and interest: "Judgment for the plaintiffs against the second, third and fourth defendants jointly and severally in the sum of $11.152m."
The Teplitsky Parties proposed the following orders: "Judgment for the plaintiffs against the second, third and fourth defendants jointly and severally in the sum of $6,852,000. Judgment for the plaintiffs against the second defendant in the sum of $4,300,000."
The Plaintiffs noted that the findings of the Court at paragraphs [646] to [648] of the Primary Judgment gave rise to overlapping money judgments in respect of separate heads of liability, against different defendants. The Plaintiffs referred to the decision of Black J in In the matter of Sirrah Pty Limited (in prov liq) [2021] NSWSC 492, where his Honour accepted (at [2], [6] and [16]) that where multiple defendants are found to be in breach of duty, those defendants will be jointly and severally liable, and that this should be reflected in the form of the orders. His Honour observed (at [6]) that so long as the claimant does not recover more than the judgment sum, the liability of each of the defendants to the claimant is a matter of contribution as between them.
I accept that, where two defendants are found jointly and severally liable for the same damage, this should be reflected in the form of the order for judgment. However, where one of those defendants is, in addition, liable for some further damage (for which the other is not liable), then judgment for that additional sum should be entered only against that defendant. That is the situation which Black J considered in Sirrah. There, his Honour found that the second and fourth defendants were jointly and severally liable to the first defendant for the amount of around $15.675m and that, further, the second defendant was liable to the first defendant for an additional sum of around $1.014m. Black J did not order judgment against the second and fourth defendants jointly and severally in the amount of $16.689m, but instead ordered judgment against them jointly and severally in the amount of $15.675m and, in addition, ordered judgment against the second defendant in the amount of $1.014m.
In the present case, I have determined that each of the Teplitsky Parties is liable to the Plaintiffs for the amount of the Plutus Funds paid away as a result of the $7m Transaction (being $6.852m), and that, in addition, Mr Teplitsky (but not the other Teplitsky Parties) is liable to the Plaintiffs for the amount of the Plutus Funds paid away as a result of the $4.6m Transaction (being $4.3m). Given that is so, I do not accept the Plaintiffs' submission that judgment should be entered against the Teplitsky Parties jointly and severally in the sum of $11.152m. Instead, judgment will be ordered against the Teplitsky Parties jointly and severally in the sum of $6.852m and, further, judgment will be ordered against Mr Teplitsky in the additional sum of $4.3m.

Interest

It follows that pre-judgment interest should be separately calculated in respect of the amount of $6.852m for which the Teplitsky Parties are jointly and severally liable and in respect of the additional amount of $4.3m for which Mr Teplitsky is liable.
I have not been provided with such a calculation. The Plaintiffs provided an interest calculation based only on the total sum of $11.152m and the Teplitsky Parties, while submitting that interest should instead be calculated on the basis I have outlined above, did not provide such a calculation.
I have used the schedule of interest calculations provided in the affidavit filed by the Plaintiffs in support of their proposed orders, in order to perform a calculation of the pre-judgment interest on each separate judgment amount. The total amount of pre-judgment interest which I have calculated for, respectively, the $6.852m judgment and the $4.3m judgment is equal to the pre-judgment interest amount calculated by the Plaintiffs in respect of an $11.152m judgment. If I have inadvertently made some arithmetic error, the parties can make an application under the slip rule to amend the order to the correct amount of pre-judgment interest in respect of either judgment sum.

Costs

Finally, the Plaintiffs sought an order that their costs be paid on an indemnity basis in the period from 6 December 2022 onwards, by reason of an offer of compromise issued by the Plaintiffs to the Teplitsky Parties on 5 December 2022 pursuant to rule 20.25 of the Uniform Civil Procedure Rules 2005 (NSW), together with a letter comprising a Calderbank offer.
The Teplitsky Parties accepted that such an order should be made.

orders

For those reasons, I make the following orders. 1. Judgment for the Plaintiffs against the Second, Third and Fourth Defendants jointly and severally in the sum of $6,852,000.00. 2. Pursuant to s 100 of the Civil Procedure Act 2005 (NSW), the Second, Third and Fourth Defendants jointly and severally pay pre-judgment interest in the amount of $2,787,789.86. 3. Further to order 1, judgment for the Plaintiffs against the Second Defendant in the additional sum of $4,300,000.00. 4. Further to order 2, pursuant to s 100 of the Civil Procedure Act 2005 (NSW), the Second Defendant pay pre-judgment interest in the amount of $1,769,816.07. 5. The Second, Third and Fourth Defendants pay the Plaintiffs' costs as agreed or assessed: 1. on the ordinary basis in the period up to 5 December 2022; and 2. on an indemnity basis in the period from 6 December 2022 onwards.

Amendments 13 September 2024 - Amended formatting at [3] 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: 13 September 2024

Plutus Payroll Australia Pty Ltd (in liquidation) v Saikali

At a glance

Court

Decision date

Before

Source

Judgment (7 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (3)