In the matter of ENA Development Pty Ltd (in liq) (No 2)

[2022] NSWSC 1035

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of ENA Development Pty Ltd (in liq) (No 2) [2022] NSWSC 1035
Hearing dates:	On the papers; submissions received 26 July 2022
Date of orders:	02 August 2022
Decision date:	02 August 2022
Jurisdiction:	Equity - Corporations List
Before:	Stevenson J
Decision:	Second defendant to pay 60% of plaintiff’s costs of and incidental to the Interlocutory Process filed 9 May 2022
Catchwords:	COSTS – where second defendant wholly unsuccessful in its opposition to the relief claimed by plaintiff – where second defendant’s involvement increased time and costs of proceedings – whether offer made by plaintiff could be said to be a compromise for the purposes of indemnity costs
Cases Cited:	In the matter of ENA Development Pty Ltd (in liq) [2022] NSWSC 919
Category:	Costs
Parties:	Peter Krejci in his capacity as liquidator of ENA Development Pty Ltd (in liq) (Plaintiff) ENA Development Pty Ltd (in liq) (First Defendant) One T Development Pty Ltd (Second Defendant)
Representation:	Counsel: M L Rose (Plaintiff) Solicitors: ERA Legal (Plaintiff) Kazi & Associates (Second Defendant)
File Number(s):	2022/32115

JUDGMENT

1. I delivered judgment in this matter on 11 July 2022. [1]

   1. In the matter of ENA Development Pty Ltd (in liq) [2022] NSWSC 919.

2. I shall use the same abbreviations here.

3. I held that the Liquidator is justified in treating certain assets of ENA as beneficially owned by that company.

4. On 18 July 2022, Hammerschlag CJ in Eq, sitting as the Commercial List Judge, directed that the parties exchange submissions as to costs by 29 July 2022.

5. I received submissions from Mr Rose on behalf of the Liquidator on 26 July 2022. I have not received any submissions from One T Development.

6. One T Development sought and obtained leave to be joined in these proceedings as a defendant.

7. It has been wholly unsuccessful in its opposition to the relief claimed by the Liquidator.

8. One T Development is thus in the position of unsuccessful litigant who, in the ordinary course, would be ordered to pay the costs incurred by reason of its unsuccessful opposition to the relief in question.

9. As Mr Rose submitted, One T Development’s involvement in these proceedings did not assist me. Rather, its involvement has served only to increase the time and expense involved in hearing the Liquidator’s application. One T Development chose to take an active role, to author lengthy submissions and to raise issues in respect of which it was not successful.

10. But for One T Development’s involvement, the Liquidator’s application would have been comfortably dealt with within a day’s hearing. As it was, the proceedings took two days and necessitated the provision of further submissions.

11. One T Development should bear the costs occasioned by its opposition to the relief claimed by the Liquidator.

12. I assess those costs as being 60% of the costs occasioned by the Liquidator.

13. On 13 May 2022, the Liquidator, through his solicitor, sent Mr Hall, who was then representing One T Development, an email inviting One T Development to withdraw its opposition to the Interlocutory Process on the basis that, among other things, there would be no order as to costs.

14. In that communication, the Liquidator’s solicitors said:

“It is clear that the ENA Development Trust is a sham and the trust deed purported to have been executed and stamped for duty in about September 2009 is a fabrication. In the circumstances, your client’s application has no merit and ought never have been filed. Similarly, it is clear that all of the assets identified by my client are owned by ENA Development Pty Ltd beneficially and the [C]ourt will make the directions sought by my client.”

15. In substance, I have upheld those contentions.

16. However, I do not see the Liquidator’s offer as being in substance a compromise. It was, rather, an invitation to One T Development to capitulate.

17. Accordingly, I do not propose to make an order for indemnity costs.

18. I order that:

1. The second defendant is to pay 60% of the plaintiff’s costs of and incidental to the Interlocutory Process filed on 9 May 2022, and to the extent that such costs are not recovered by the plaintiff from the second defendant, such costs are to be the plaintiff’s costs in the winding up of ENA Development Pty Ltd (in liq).

**********

Endnote