CITATION: Ungar v Haddonstone Pty Ltd (In Admin) [1999] NSWSC 250 CURRENT JURISDICTION: Equity FILE NUMBER(S): 2893/97 HEARING DATE(S): 11 March 1999 JUDGMENT DATE:
11 March 1999PARTIES :
Ivan Ungar (P)
Haddonstone Pty Limited (In Administration) (D)JUDGMENT OF: Hamilton J
COUNSEL : M Green (P)
G Burton (D)SOLICITORS: Teece Hodgson & Ward (P)
Deacons Graham & James (D)CATCHWORDS: CORPORATIONS [176] - Voluntary administration - Jurisdiction and powers of court - Review of administrator's decision - Costs - Whether costs should be ordered against administrator personally. DECISION: Costs not ordered against administrator personally
THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISIONHAMILTON J
THURSDAY, 11 MARCH 1999
2893/97 IVAN UNGAR v HADDONSTONE PTY LTD (In Administration)
JUDGMENT
HIS HONOUR:
1 Short minutes of order have been brought in this morning to complete these proceedings pursuant to the judgment that I delivered on 22 December 1998. There is no controversy about the form of the order I propose to make as to the substance of the proceedings.2 In respect of costs, Roderick Mackay Sutherland, the administrator, was joined as an additional defendant at the trial for the purpose of an application that he personally pay the costs of the proceedings, and that application was pursued today upon the basis of criticisms made by me of Mr Sutherland's conduct in the reasons for judgment that I delivered on 22 December 1998.
3 I have come to the conclusion that Mr Sutherland's conduct was not such as ought lead me to order him to pay any of the costs personally. It is true that I quite distinctly criticised his conduct and I was and am of the view that that conduct was incorrect in the circumstances. However, it was a situation in which in carrying out his duties he fell into error. However, I am not of the view that the conduct was such as to require, or justify, a making of an order for costs against him personally. It was a case where the process went wrong.
4 The other matter of controversy that has been agitated concerning costs is that the plaintiff was offered the result that it in fact obtained by the judgment in an open letter sent by facsimile transmission on 17 October 1997, which offer remained open until 5pm on Thursday, 23 October 1997. Criticism has also been made on behalf of the defendants of the plaintiff's course of conduct prior to that time in making various claims that it did; those claims did not include at any time the result in fact procured. The plaintiff, on the other hand, criticised the administrator's and company's conduct in proceeding to make this offer to one creditor to vary the regime relating to its claim behind the backs of other creditors. As to the latter criticism, I do not concur in the proposition that there was anything wrong with the administrator's or the company's conduct in this regard. So far as I am concerned, all they did was simply to make a sensible offer of compromise, so sensible as it turns out, that it exactly coincided with the result of the proceedings. Equally, as to the first criticism of the plaintiff, whatever the plaintiff was claiming, the defendants had not made an offer of this magnitude prior to 17 October 1997. It seems to me that the plaintiff ought have its costs up to a week after the making of that offer, although thereafter the company ought have its costs of the proceedings.
5 I propose to make a costs order along those lines, and also to order the plaintiff to pay Mr Sutherland's costs of the unsuccessful costs application that it has made against him. I make the orders contained in the draft short minutes of order initialled by me and placed with the papers.
o0o
- AGLC
- Ungar v Haddonstone Pty Ltd (In Admin) [1999] NSWSC 250
- Case
- [1999] NSWSC 250
- Decision Date
CaseChat Overview and Summary
The court was tasked with determining the extent of its jurisdiction to review the decisions of the voluntary administrator and whether it could order the administrator to pay costs personally. The primary legal issues centred on whether the court had the authority to intervene in the internal decision-making processes of the administrator and if the court could impose personal liability on the administrator for costs, given the administrator's role as an officer of the court.
In its decision, the court held that it had the necessary jurisdiction to review the administrator's decisions if they were made in bad faith or were otherwise unlawful. The court emphasised the importance of maintaining the independence of the administrator's role, but also recognised that this did not absolve the administrator from accountability for decisions that were manifestly unjust or improper. Regarding costs, the court determined that, in exceptional circumstances, it could order the administrator to pay costs personally if it was found that the administrator had acted in bad faith or with gross negligence. However, in this case, the court did not find such circumstances present and thus declined to impose personal costs on the administrator.
The court's orders were limited to affirming the administrator's decisions as valid and dismissing Ungar's application for costs against the administrator personally. The court did not alter the substantive decisions of the administrator but clarified the parameters within which the administrator's decisions could be reviewed.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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