Rodgers v CJS Panels Pty Ltd [2001] VSC 470

Supreme Court of Victoria|2001-11-23|Before: Warren J

This matter in some respects invites the same observations as already made with respect to the costs application in the Caprice matter. However there are some important differences. Perhaps the most significant difference is the fact that Mr Cassar who agitated the appeal was not a director, even more so he was not a contributory as was the case in the Caprice matter. In my view the applications brought under the appeal and sections 471A and 482 of the Corporations Act were entirely misconceived. In my view in the CJS matter, Mr Cassar must have been taken to have been on notice as to whether or not to proceed with the appeal.

It is necessary because an application is made in this matter also to consider the liability of the solicitor Mr Freid, for costs. On balance and in the circumstances of the matter, I am satisfied that Mr Freid at all times was acting in the interests and on the instructions of his client Mr Cassar. It seems to me appropriate therefore that the costs order should be made against Mr Cassar solely and not against Mr Freid.

I turn then to the question of the level of costs that should be ordered. From the very outset in my view, the application by way of appeal, the application for the adjournment, and the applications nunc pro tunc under both ss.471A and 482 of the Corporations Act were futile. It follows in my view that having been warned of the futility of the application in correspondence by the other parties, it was inappropriate for the appeal to proceed, particularly when it is borne in mind that Mr Cassar was not only not a director but he was not a contributory of the subject company. In my view, in the CJS case the conduct of the appellant falls into the category described by Tadgell J. in de Jager, and also as adverted to in Colgate-Palmolive Company v Cussens Pty Ltd [1993] FCA 536; (1993) 46 FCR 225, 231 as high handed. Accordingly, I consider that Mr Cassar should pay the costs in the CJS matter of the appeal and on an indemnity basis.

It follows necessarily that an appeal against the winding up of a company is a matter that is subject to the provisions of s.471A of the Corporations Act. So much was considered by the Court of Appeal of Queensland in Rockbottom Fashion Market Pty Ltd v H.R. & C.E. Griffiths Pty Ltd [1997] QCA 399; (1997) 25 ACSR 467. There, the Queensland Court of Appeal considered the fact of the relatively recent introduction of s.471A to the Corporations provisions. The court also considered the rule at common law known as the Diamond Fuel rule. Ultimately the Court of Appeal concluded that where an appeal was made against an order for the winding up of a company, it was necessary for such appellant to make application to the court at the outset by way of a threshold step under s.471 to allow such appeal to be brought. No such application has been made in this case.

More recently, in Walker v Midlink Nominees Pty Ltd & Anor [2000] WASC 112; [2000] 34 ACSR 210 Owen J. of the Supreme Court of Western Australia with respect to the winding up of a company and the appointment of a provisional liquidator has expressed very strict views with respect to s.471A of the Corporations Act.

I turn first of all to the Caprice matter. At the outset Mr Denton who appeared with Ms Hardy for the plaintiff sought costs on an indemnity basis against both the agitating party, Francis Michael Cassar, and also the solicitor for that party, Mr Barry Freid. Mr Denton took me to a number of authorities to support the proposition that it was appropriate that costs be ordered against the solicitor (see The Bullfinch Surprise Gold Mining Company No Liability v Butler (1913) 35 ALT 99; Da Sousa & Anor v Minister of State for Immigration [1993] FCA 146; (1993) 114 ALR 708; Broughton v Broughton (1955) SASR 241). In essence the submissions of Mr Denton were to the effect that the application was hopeless and high-handed, but more importantly that the applicant had no standing to bring the application and the solicitor, it followed, had no instructions to agitate it on behalf of his client.

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