Scharer v Giro Construction Group Pty Ltd

Scharer v Giro Construction Group Pty Ltd - [2017] NSWCATAP 140 - NSWCATAP 2016 case summary — Zoe

External administrator appointed to the Respondent on 6 January 2016

Meanwhile, on 6 January 2016, an external administrator had been appointed to the Respondent and the proceedings below listed for mention on 18 January 2016 to deal with the consequences of that administration for the Administration in view of s 440D of the Corporations Act (Cth), which, it was assumed, applied to the Tribunal. Section 440D provides: (1) During the administration of a company, a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except: (a) with the administrator's written consent; or (b) with the leave of the Court and in accordance with such terms (if any) as the Court imposes.
Section 58AA of the Corporations Act provides: Meaning of court and Court (1) Subject to subsection (2), in this Act: "court " means any court. "Court " means any of the following courts: (a) the Federal Court; (b) the Supreme Court of a State or Territory; (c) the Family Court of Australia; (d) a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act. (2) Except where there is a clear expression of a contrary intention (for example, by use of the expression "the Court"), proceedings in relation to a matter under this Act may, subject to Part 9.6A, be brought in any court.
The word "court" is not, relevantly, further defined in that Act.
The Respondent's Administrator provided a document in the following terms providing consent to the Tribunal: to deliver judgement [sic] in respect of the preliminary issue that has been heard in File HB 14/495581: whether the Applicant has standing to sue in these proceedings…I do not oppose the delivery of this judgement [sic] and for the respondent, if successful, to make an application for costs.
The Applicants then objected to 'discrete consent' being given in relation to the preliminary issue as opposed to the whole proceedings, (we note that at this time there was no submission that if consent could be given to delivery of reasons on the preliminary application then consequential costs orders could not also be made.)
The Tribunal rejected the Applicants' submission as to the efficacy of the consent and proceeded to deliver the decision given 10 February 2016 referred to above.
In the result the Applicants decided to apply to join other parties (arguably) within the 14 days provided by the Orders which took effect on 10 February 2016.
On 2 May 2016 the Tribunal stayed the dismissal orders to permit the Applicants to file and serve submissions as to why dismissal should not be ordered, and amending the timetable for consequential costs submissions from the parties.

[4]

The decision of 7 September 2016

On 7 September 2016 the Tribunal ordered that the proceedings be dismissed and the Applicants pay the Respondent's costs as taxed or agreed. An appeal and an application for leave to appeal is brought from those orders.
The first point to note is that as recorded in that decision below ([7] and [8]) the dismissal decision was by consent of both parties. Although the Amended Notice of Appeal to us formally challenges that order, the Appellants' submissions to us at [31] resile from that formal document by accepting that the dismissal order made below should remain. There is accordingly no reason to further consider the order dismissing proceedings HB 14/495581.
It follows that the only remaining issue before us is the costs of the proceedings below.
The Tribunal below proceeded to make an order for costs against the Applicants. The member below (correctly) considered that Rule 38 of the Civil and Administrative Tribunal Rules 2014 applied to permit the award of costs 'even in the absence of special circumstances': cp Civil and Administrative Tribunal Act s 60.
The Tribunal's essential reasoning was that the previous ruling delivered on 10 February was that the Applicants never had standing to proceed against the Respondents, the latter were thus, clearly, the successful party, and that to award costs would be to follow the reasoning of McHugh J in Oshlack v Richmond River Council [1998] HCA 11 at [67], where his Honour said: The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.
The Tribunal also noted there was no disentitling conduct by the Respondent.
A decision about costs concerns a matter of practice and procedure, and one concerning which we do not propose to grant leave to appeal in circumstances where there was the unremarkable application of principle to the facts, involving no discernible error of principle in circumstances where, we repeat, the dismissal of the proceedings was by consent of both parties.

At a glance

Court

Decision date

Before

Source

Judgment (7 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (1)

Cited By (1)