William Timothy Cape v Robert Maidment; Redarb Pty Limited (Receiver and Manager Appointed) and Serendipity Pty Limited [1994] ACTSC 117 (30 November 1994)

SUPREME COURT OF THE ACT

WILLIAM TIMOTHY CAPE v. ROBERT MAIDMENT; REDARB PTY LIMITED (RECEIVER AND
MANAGER APPOINTED) and SERENDIPITY PTY LIMITED
No. SC333 of 1989
Number of pages - 30
Practice and Procedure - Injunctions

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
HIGGINS J

CATCHWORDS

Practice and Procedure - costs of interlocutory motion when costs order silent - reserved costs - costs of preparing submissions - costs of individual submissions should follow the event - payment of receiver's costs in the event of liquidation - indemnity costs - test to be applied - costs of subpoenas should follow the event - costs of applications to validate remuneration in error - costs of application for information and entitlement.

Injunctions - prevention of receiver selling or disposing of assets - conduct of parties - indemnity costs in relation to injunctive relief.

Mentors Ltd v Evans (1912) 3 KB 174

Friis v Paramount Bagwash Co (1940) 2 KB 654
Re Roby (1916) WN 37
McLaughlin v City Bank of Sydney (1916) 16 SR (NSW) 491
Jelbarts Pty Ltd v McDonald (1919) VLR 478
AG v Huon (1881) 714 R(E) 30
Cape v Redarb Pty Ltd (Receiver and Manager appointed) (1991) 6 ACSR 559
Cape v Redarb Pty Ltd (Receiver and Manager appointed) (1992) 8 ACSR 67

HEARING

CANBERRA, 9 February 1994
30:11:1994

Counsel for the Plaintiff: Mr G Borzatti

Instructing solicitors: Crossin Barker Gosling

Counsel for the First and Fifth

Defendants: Mr Weber

Instructing solicitors: Sly and Weigall

Counsel for the Second Defendant: Mr T Chamberlain

Instructing solicitors: Gallen Crowley and Chamberlain

ORDER

The Court orders that:
1. The reserved costs matters are determined as set out in this
judgment.
2. The costs of each individual submission on costs will follow
the event.

DECISION

HIGGINS J In the course of this matter, numerous applications were made to the Court. Some of those applications were disposed of and orders for costs made. Some were determined but costs reserved. Others were dealt with without an order for costs being made in favour of any party.

2. The parties seeking or opposing orders fall into three groups. There is Mr Cape, the plaintiff. The second group consists of Mr Maidment and his corporate vehicle, Serendipity Pty Limited. Those are the first and fifth defendants. Then there is the company in receivership and the receiver and manager, Mr Yeomans. The company is the second defendant.

3. There are some general principles to be observed in determining the reserved costs matters.

Where an order in an interlocutory proceeding is merely silent
as to costs, the successful party will usually be entitled to
those costs as his, hers or its costs in the cause unless the
motion was unopposed, in which case the costs of both parties are
costs in the cause generally: Mentors Ltd v Evans (1912) 3 KB
174; Friis v Paramount Bagwash Co (1940) 2 KB 654; Re Roby
(1916) WN 37.
Where costs are reserved, they require a special order before
they may be taxed: see McLaughlin v City Bank of Sydney (1916) 16
SR (NSW) 491.
In general, costs will follow the event: see Jelbarts Pty Ltd v
McDonald (1919) VLR 478.
In general, a receiver and manager's costs should be paid out of
the fund administered and, if insufficient, by the beneficiaries
in proportion to their interest in the fund: see AG v Huon (1881)
714 R(E) 30. That should, in the absence of misconduct or other
disqualifying event, be on an indemnity basis.

4. If, however, no order for costs is made but the company and the receiver are to be paid out of the fund, then a declaration as to that entitlement will suffice. The recompense will be fixed by the order for remuneration of the receiver and manager.

5. If no order is made for costs of the receiver to be paid by either party, or if an order is made only as to party and party costs, the remainder insofar as not thus met by another party will be paid out of the assets of the company, as supplemented, if necessary, by rateable contributions from the other parties.

6. Any shortfall in the fund constituted by the assets of the company will be made up by contributions from Cape and Maidment. Unless otherwise ordered, that will be in equal shares.

7. In the following decisions on particular matters, I will refer to the plaintiff as "Cape". The first and fifth defendants have the same interests. They will be treated as one and referred to simply as "Maidment/Serendipity". Where it is necessary to refer to the first and fifth defendants separately, I will refer to them respectively as "Maidment" and "Serendipity". The receiver and manager represents the trustee company, the second defendant. I will refer to the company and/or the receiver and manager simply as "the receiver".

INTRODUCTORY MATTERS
Costs order sought by receiver
8. In almost every reserved costs matter, the receiver seeks orders that:

1. The costs and expenses of the receiver on an indemnity basis be
paid as part of the expenses of the receivership in the first
instance.
2. Cape pay to Redarb the amount of the costs and expenses so paid
and/or payable to the receiver.

These orders will be referred to repeatedly below.

Concession by Cape
9. On the first page of his submissions, Cape says that in regard to all costs matters on which he makes no submissions, costs are conceded.

Submissions in reply
10. Submissions in reply were made by both the receiver and the Maidment/Serendipity interests. These are incorporated below whenever they add anything to the primary submissions.

SECTION A - ACCOUNT TAKING AND RESTRAINT OF DISTRIBUTION
AA Notice of Motion dated 27 September 1989

11. By this notice of motion, Cape sought, inter alia, that a limitation on the power of the receiver, imposed by order of Lockhart J on 8 August 1989 be continued. The limitation was imposed as one of several orders made that day for appointment of a receiver and manager, pursuant to reasons of Lockhart J handed down on 21 July 1989. His Honour ordered:

3. That the powers of the receiver and manager are not to extend
to the payment in whole or in part of any debt due on any accord
by the company to any of its unit holders.

12. The further hearing of the action was adjourned to 28 September 1989 at 10:15am. Prior to that hearing, Cape put on the notice of motion mentioned above. In so far as any moneys might be paid out, Cape sought an order that they be paid equally to Cape and Serendipity.

Result
13. Lockhart J revoked the limitation on the receiver's power to make payments to unit holders in the trust. The receiver was authorised to distribute 75% of the assets of the trust: 50% to Serendipity and 25% to Cape. Otherwise, the powers of the receiver were not to extend to payment of any debt due to unit holders.

14. It seems that Cape substantially lost on the day, given that 75% of the assets were freed up and of those assets 2/3 were to go to Serendipity and 1/3 were to go to Cape, as opposed to the 1/2:1/2 split sought by Cape.

Submissions of Cape
15. Costs ought to be borne equally by the parties, as the application was for the purpose of further clarifying the powers of the receiver against distribution of assets and loss of the benefit of both parties.

Submissions of Maidment/Serendipity
16. Cape should pay the costs of the defendants on an indemnity basis. Cape's application was an unsuccessful attempt to restrain proper distributions to Serendipity. The order as sought was not made by the court. After a full hearing of all matters, including the taking of accounts. Cape was unable to make good his complaints such as to justify his application.

Submissions of the Receiver
17. The receiver says that he should have his costs on an indemnity basis as outlined above under introductory matters.

18. In reply to Cape's submissions the receiver says that Cape's application was clearly not successful as Lockhart J authorised a 75% distribution.

Decision
19. In my opinion, so far as Maidment and Serendipity are concerned, they should have their costs, being one set of costs only, on a party and party basis against Cape.

20. The costs of Redarb should be paid by Cape on an indemnity basis.

A1 Notice of Motion 24 November 1989
21. By this notice of motion Cape sought, inter alia, orders: (a) restraining the receiver from disposing of any of the assets of the company except in the ordinary course of business; and (b) preventing payments to any of the unit holders until the capital accounts were verified and accepted.

22. The above applications first came before Lockhart J on 27 November 1989. At that time they were adjourned to 14 December 1989. On 14 December 1989 Lockhart J made orders for the taking of accounts of the Redarb Unit Trust, together with directions requiring the parties to file documents for the account taking purpose by 26 January 1990, with replies by each party on 9 February 1990.

Submissions of Cape
23. Each party should pay their own costs in relation to orders made on 27 November 1989 and 14 December 1989. In relation to the orders made by Lockhart J on 14 December 1989, these were for the benefit of both Cape and Maidment, and the receiver's powers were further clarified in order 8. These matters arose out of and were consequential upon matters determined by Lockhart J on 13 June 1989 (the costs order made that day was for the parties to pay their own costs).

Submissions of Maidment/Serendipity
24. Cape should pay the costs of the defendants on an indemnity basis.

(1) The orders sought are another example of Cape seeking orders
for an improper purpose, being his desire to harm Maidment. The
restraint of distribution of assets from the Redarb Unit Trust
deliberately sought to harm Maidment and to "intensify pressure
on Maidment".
(I doubt that this is an accurate assessment. The orders taken
out for that day simply consolidate the proceedings. I am
certainly not satisfied that any improper notice Cape gave had
infected the application or its result.)
(2) The orders sought form part of a package of orders, including
the removal of the receiver, which were rejected by the Court and
all appeals therefrom, including an application for special leave
to appeal to the High Court.
(3) Cape sought the appointment of Mr Star as receiver at a time
when Mr Star could not have been considered an appropriate
candidate for the office of receiver.

25. The orders sought were yet another attempt to restrain distribution to Serendipity and hence Maidment. Ultimately the relief sought was not obtained and the motion led to the taking of accounts at the request of Maidment/Serendipity. These orders were not opposed by Cape.

Submissions of the Receiver
26. The receiver presents a chronology of events following the filing of this notice of motion. The ultimate submission made appears to be that Cape ought pay the receiver's costs on an indemnity basis as discussed above under introductory matters.

27. In reply to Cape's submissions, the receiver notes that Cape was unsuccessful in his efforts to restrain the receiver from disposing of assets of the company.

Decision
28. Contrary to the submissions of Maidment/Serendipity and the receiver, it seems to me that Cape was, in this application, simply requesting or acquiescing in a necessary step for finalisation of the matter for the benefit of both beneficiaries.

29. I make no order as to costs but declare that the receiver is entitled to indemnity from the assets of, or made available to, the company.

A7 Notice of Motion 6 April 1990
30. This was an application by Maidment/Serendipity for orders.

1. To vacate Lockhart J's orders of 14 December 1989 for taking of
accounts.
2. That the receiver determine how the matters still in dispute
between the parties should be decided.
3. That the receiver retain $35,103 pending determination of 2.
4. That the receiver distribute 75% of the trust assets in
accordance with the order of Lockhart J dated 28 September 1989.

Result
31. Cape opposed the notice of motion. On 10 April 1990, Lockhart J gave directions for Cape to file affidavits in opposition by 20 April 1990. Maidment and Serendipity were to file affidavits in reply by 27 April 1990. The notice of motion was adjourned to 4 May 1990 and on that day was further adjourned to 18 May 1990. Both parties exceeded the directed time limits in putting on their affidavit material.

32. On 18 May 1990, Miles CJ part heard the notice of motion of Maidment and adjourned it to 27 June 1990. On 27 June 1990, Miles CJ made a consent order:

(a) vacating the orders of 14 December 1994;
(b) referring the disputed matters to Sir Laurence Street for
determination; and
(c) entitling the receiver to distribute capital and assets to
unit holders in half shares provided that $400,000 was retained
in trust.

33. As a result, only order 1 of the notice of motion was made as sought. Order 2 was not made, some matters being settled by the parties and the remainder being referred to Sir Laurence Street. Orders 3 and 4 were not made. Distribution was ordered, but not on the terms previously ordered by Lockhart J and a greater sum was required to be retained by the receiver.

Submissions of Cape
34. No submissions are made specifically in relation to this notice of motion. Submissions are made that deal with the orders of Miles CJ made on 27 June 1990. Cape says that he should have his costs because he succeeded before the referee in obtaining a finding that the sum of $135,000 was wrongfully taken from the trust by Maidment and should be credited to it from Maidment.

35. In relation to an order made granting Maidment/Serendipity permission to uplift an exhibit for copying and scientific examination, Cape says that nothing was done by them in this regard, and that he should have his costs.

Submissions of Maidment/Serendipity
36. Maidment filed this notice of motion to prevent further frustration by Cape of the account taking process. In relation to that notice of motion, the orders sought were, for the most part, made by the Court.

37. In accordance with the usual principles and having regard to Cape's consistent default in complying with the original orders for the account taking process, the order should be that Cape pay the defendants' costs on an indemnity basis.

38. In reply to Cape's submissions, it is noted that the referee made findings to a total of $121,305.83.

Submissions of the Receiver
39. The receiver seeks costs on an indemnity basis, as outlined above under introductory matters.

Decision
40. In my view, so far as the orders sought were merely procedural, there should be no order as to costs. Otherwise, as each of Cape and Maidment made default in complying with directions and the matters were, ultimately, largely disposed of by consent, I make no order as to costs but direct that the receiver is entitled to indemnity out of the fund for costs incurred.

A11 Notice of Motion 2 May 1990
41. By this application, the receiver sought an order that Cape remove all caveats from Fernleigh Park estate.

Background and Result
42. The notice of motion was filed as a consequence of Cape lodging caveats over land owned by Redarb in the Fernleigh Park subdivision.

43. By letter dated 3 May 1990, Cape's solicitors indicated that the caveat was lodged by Cape, on 22 March 1990, so as to allow him to be informed should any transfer of the subject blocks be made without his knowledge. It was said that:

Our client was and is concerned that the land not be sold below
market value.

44. At the time the caveats were lodged in April 1990, the receiver had the power in accordance with order 2(c) made by Lockhart J on 8 August 1989:

To sell assets of the Trust sufficient to enable the debts of the
company as trustee of the trust to be paid and discharged.
On 14 December 1989, this order was expanded so as to empower the
receiver to sell all of the assets of the Redarb Unit Trust.

45. The application for removal of the caveat came before Gallop J on 4 May 1990 at which time it was adjourned at Cape's request on the basis that he intended to support the caveat by "fairly extensive evidence", without order as to costs. No evidence was subsequently filed by Cape.

46. The application for removal of caveats by Cape came before Master Hogan on 11 May 1990 at which time consent orders were made as to removal of the caveats by Cape. An undertaking was given by the receiver that he would give Cape's solicitors seven days notice of any proposed sale of the land in question where the proposed sale price was more than $2,000 below the listed price supplied to the selling agent.

Submissions of Cape
47. Cape's costs in this matter should be borne by the receiver as Cape's caveats succeeded in establishing the proper sale procedure.

Submissions of Maidment/Serendipity
48. The costs of the defendants should be paid by Cape on an indemnity basis. Against the background of the orders made by the court entitling the receiver to sell the land in question, Cape's conduct in lodging caveats most probably constituted an act of contempt of court. It is clear that Cape had no caveatable interest.

49. In reply to the submissions of Cape it is said that lodging a caveat in these circumstances should not be sanctioned by the court and could not properly be said to be the cause for any "proper sale procedure" being adopted.

Submissions of the Receiver
50. The receiver seeks costs on an indemnity basis as outlined above under introductory matters. At pages 27ff of his submissions, the receiver sets out his version of the facts surrounding removal of the caveats. In reply to Cape's submissions, the receiver says that generally the receiver followed the sales procedure formerly carried out by Cape and Maidment. The caveats caused expense and ensured simply that Cape was consulted if a proposed sale had a $2,000 or greater shortfall.

Decision
51. In my view, Cape had the right to be informed of the progress of the sale of assets. As a beneficiary in a unit trust it is not obvious to me that he had no caveatable interest in the assets of the trust. In any event, he could, as an interested party, have sought directions from the Court having a similar effect for all practical purposes as a caveat.

52. I have not been told of any significant cost differential, save perhaps to Cape himself, in the procedural choice he made.

53. As between Cape and Maidment, there should be no order as to costs but the receiver is entitled to indemnity from the fund.

A12 Notice of Motion 19 July 1990
54. This was an application by Cape for orders:

1. that the receiver be restrained from making any further
distribution to unit holders until further order;
2. that the Court direct that the receiver not distribute in
specie any assets of the trust by chance or lot; and
3. a declaration that the proposal by the receiver to
distribute assets in specie is beyond power or is an improper
exercise of power.

55. This is not a matter on which costs have been reserved. At the conclusion of the hearing of this notice of motion on 20 July 1990, Miles CJ ordered that the choice by lot may not proceed. However, he did order that the receiver was authorised to proceed with a distribution in specie subject to each unit holder making a voluntary choice. Costs of the proceedings were awarded to the receiver, as costs of the receivership, other parties were to pay their own costs.

Decision
56. There is no requirement for an order on this application. The receiver will be entitled to indemnity from the fund.

A13 Subpoena 13 March 1990
57. Cape says nothing about the costs of this subpoena (included in the bundle of agreed reserved costs matters). It was directed to the Commonwealth Bank of Australia Ltd. It is a matter incidental to the action generally and costs of the parties in connection with it would be costs in the cause.

58. I make no order, although I note that, for reasons not clear to me, Maidment seeks an order for costs relating to it.

A14 Notice of Motion 26 July 1990
59. The receiver sought orders allowing distribution of 12 blocks of land at Fernleigh Park Estate: six blocks to Cape and 6 to Serendipity. Distribution was to be on a choice basis, with Cape having first pick. If either party refused to make any choice, the receiver was to be empowered to proceed with such distribution in specie to the consenting unit holder and to sell blocks by auction to obtain an equivalent value for the non-consentor.

Result
60. On 27 June 1990, Miles CJ said:

I think it high time that a distribution and a substantial
distribution should be made. There is no purpose in postponing
it any further.

His Honour proceeded to order that the capital and income of the trust be distributed in equal half shares to Serendipity and Cape, provided that the receiver retain assets of the trust to the value of $400,000. Cape had opposed distribution in specie by notice of motion dated 19 July 1990.

61. The receiver organised a meeting of the unit holders for the purpose of conducting the distribution at 10.00am on 23 July 1990 and notified Cape by letter dated 17 July 1990. Cape and his solicitors refused to attend, which prompted the notice of motion of 26 July 1990.

62. Consent orders were made by Higgins J on 5 October 1990 that there be a distribution in specie, by choice and with a cash alternative. This enabled the distribution to proceed without further necessity for cooperation by either unit holder.

Submissions of Cape
63. Cape says nothing about the orders made by Miles CJ and myself in relation to this application: see page 1 of Cape's submissions.

Submissions of Maidment/Serendipity
64. In relation to the motion of 26 July 1990, Cape should pay the costs of the defendants on an indemnity basis. Cape refused to take part in an in specie distribution of assets despite the order of Miles CJ. The application was only necessary because of the obstructiveness of Cape.

Submissions of the Receiver
65. Cape should pay the receivers costs on an indemnity basis as discussed above under introductory matters. Reference is made to volume 6 of the receiver's report of accounts:

... the view of the Receiver is that the process has been
deliberately extended to the maximum limits of time, difficulty
and aggravation. There is no evidence of any degree of difficulty
in selecting the blocks that have fallen to Cape nor of any
independent valuations and marketing opinion having been obtained.

Decision
66. It seems to me, that in relation to this matter, Cape did demonstrate an unreasonable lack of cooperation with the orders of Miles CJ. He should pay the costs of the defendants on an indemnity basis.

A15 Notice of Motion 28 September 1990
67. This was an application by the receiver for orders that the receiver have leave to inspect the Family Court file of Cape and that leave be granted to copy documents.

68. It seems that access to these documents was considered necessary to investigate the "cash enquiry" matters raised by Cape under section B: particularly B5 of his submissions.

Result
69. On 5 October 1990, I ordered:

1. The Receiver to have access to any document within the Family
Court file number C1296 of 1980 in the matter of Cape and
presently held by the Registrar of this Honourable Court of which
the Receiver holds a copy.
2. The Receiver may have access to the Index of Documents.
3. Thereafter if Mr Cape does not object to any of the documents
that appear to relate to his financial circumstances being
inspected by the Receiver, the Receiver may inspect them.
4. Any objections to inspection are to be referred before a
Judge or Registrar to determine that objection.
5. That access for the purpose referred to will be granted now.

70. On 10 October 1990, I ordered that:

7. The plaintiff is to indicate in respect of the Family Court
file C1296, to which documents he has no objection to access.
8. Leave is granted to approach the Registrar for determination
as to whether the documents in the file relate to financial
circumstances of Mr Cape, such that the Receiver should be
permitted access to them.

Submissions of Cape
71. Cape refers only to the orders of myself dated 10 October 1990 and says that as the application was made by the receiver, Cape's costs should be borne by the receiver.

Submissions of Maidment/Serendipity
72. Maidment submits that these matters arose solely from the conduct of Cape and were necessarily incidental to proceedings commenced by him. Cape should pay the costs of the receiver on an indemnity basis and those of Maidment/Serendipity on a party and party basis.

73. In reply to the submissions of Cape, Maidment/Serendipity say that proceedings commenced by Cape were never sustained. Furthermore, the application was necessary only because Cape withheld documents from the receiver. There is a change of stance, with Maidment/Serendipity seeking their costs on an indemnity basis for the orders that I made on 5 October 1990.

Submissions of the Receiver
74. The subject documents contained statements of the assets, liabilities and income of Cape in 1981 and 1982 respectively. At a hearing before the Registrar on Monday 22 June 1990, Counsel for Cape opposed access and told the Registrar that the matters on which access was sought were either resolved or irrelevant.

75. The receiver in fact needed access to the documents to exhaust avenues into research of the claims made by the parties. Cape's response to this requirement was obscure and/or trivial.

76. The application arose because of Cape's failure to disclose fully relevant material in his possession.

Decision
77. I am not satisfied that the material which Cape did not wish to disclose was, in the result, of any real use. Prima facie, it was confidential and personal. It was, however, proper for the receiver to seek to inspect it.

78. I consider that there should be no order as to the costs of this application. The receiver will be entitled to indemnity out of the fund.

A17 Notice of Motion 20 November 1990
79. This was an application by Maidment/Serendipity seeking, inter alia, acceptance of Sir Laurence Street's report and vacation of orders relating to retention by the receiver of funds of the trust. Orders were also sought for distribution in specie of blocks at Fernleigh Park Estate.

Result
80. On 17 December 1990, Miles CJ sat in vacation to determine whether the reports should be adopted. Cape opposed adoption of the report. Miles CJ ordered the reports be accepted and other aspects of the motion were stood over with costs reserved. In his reasons for decision, delivered on 22 February 1991, Miles CJ stated:

There was, in my view, abundant factual material for the referee
to make the findings of fact that he did make. To those findings
of fact he applied a standard of reasoning which has not been
shown to be based on any misapprehension of law.

81. It appears that, notwithstanding adoption of the report, Cape continued to press objections to the accounts and raise new objections.

82. In regard to the orders sought for distribution in specie of blocks at Fernleigh Park Estate, similar orders were sought in the notice of motion dated 26 July 1990 and I made consent orders in those terms on 5 October 1990. It is not clear why it was necessary to seek those orders. The order sought vacating the requirement to keep $400,000 in trust was made by Miles CJ on 22 March 1991. However, the parties say nothing about the adjourned parts of the notice of motion.

Submissions of Cape
83. The reports of Sir Laurence Street were adopted by the Court. In this regard Cape succeeded in his claim to the extent of $135,000. Sir Laurence Street described Maidment's conduct in regard to at least one of the transactions as being "unconscionable". Costs should follow the event, that is, Cape should have his costs because he, to that extent, succeeded before the referee.

Submissions of Maidment/Serendipity
84. Cape should pay the costs of Redarb, Maidment and Serendipity on an indemnity basis for the following reasons.

1. Cape refused an open offer of settlement which would have
rewarded him with more than the ultimate result of the account
taking process.
2. Cape's grossly inflated claim caused delay and expense.
3. Cape's claims were ambit claims, found in large part to have
no basis in fact.
4. There was no reasonable basis for opposition to adoption of
the report.
5. The need for the declaration of 1 March 1991 was solely the
result of Cape's conduct in continuing to agitate matters which
had been finalised by the referee and the adoption of his report
by the court on 17 December 1990.

In reply to Cape's submissions, Maidment/Serendipity emphasise that Cape opposed adoption of the report, Miles CJ ordered adoption and Cape appealed to the Federal Court, but later discontinued the appeal.

Submissions of the Receiver
85. The receiver seeks costs on an indemnity basis, as outlined above under introductory matters. The receiver notes that the plaintiff initially appealed the order adopting the reports of the referee. The appeal proceeded to the preparation of draft indexes then was discontinued.

86. In reply to Cape's submissions, the receiver says that Sir Laurence Street described the banking of $30,321 (proceeds from trade-in of a car) as "unconscientious", but did not use the term "unconscionable". As consequence of the finding, Maidment was required to pay $14,000 interest compensation to Redarb.

Decision
87. In my view, it follows from the findings of Miles CJ that Cape had no reasonable basis for opposing the adoption of Sir Laurence Street's report. The fact that he succeeded, to some extent before the referee, is irrelevant.

88. The substantial lack of any discernible merit in Cape's application warrants an order that he pay the costs of each of the other parties on an indemnity basis.

A21 Notice of Motion 26 February 1991
89. This was an application by the receiver for an order that the acceptance of the referee's reports precludes any of the parties from raising a claim which affects the unit holder's accounts annexed to the said report dated 13 November 1990.

90. During January and February 1991, following acceptance of the referee's reports, it appears that Cape continued to agitate matters concerning the quantification of the unit holders' accounts: see the matters dealt with in Part B, "cash enquiry". The receiver filed a notice of motion seeking a declaration as to the finality of the accounts of the trust.

91. On 22 March 1991, Miles CJ declared by consent:

... that the Receiver is under no obligation to make any further
investigation or to take any other step in relation to the
accounts of the unit holders in the Redarb Unit Trust with respect
to the period prior to the 31st day of October 1990 ...

By consent, his Honour ordered, inter alia that:

... the order of this Court of the 27th day of June 1990 requiring
the Receiver to retain assets of the Redarb Unit Trust to a value
of $400,000 be vacated ...

Submissions of Cape
92. There are no submissions of Cape dealing specifically with this notice of motion. Accordingly, the submission of Cape that he may be taken to have conceded any costs that are not directly disputed may come into play.

Submissions of Maidment/Serendipity
93. Cape should pay Maidment's' costs on an indemnity basis as a result of Cape's conduct in continuing to agitate matters which had been finalised by the Referee and the adoption of his report.

94. In part, these orders were made in response to a notice of motion filed by the receiver on 26 February 1991. That notice of motion attempted to "shut the door" on other potential claims made by Cape.

Submissions of the Receiver
95. The receiver deals with this notice of motion under the general heading of "cash enquiry" beginning on page 39 of the receiver's submissions. He says that his notice of motion was necessitated by Cape's unmeritorious and unsuccessful initiatives contained in the notices of motion dated 17 September 1990, 9 October 1990 and 13 December 1991.

Decision
96. The above recitation of the course of this application leads me to conclude that this was an unmeritorious application.

97. Cape should pay the costs of each other party on an indemnity basis.

A22 Subpoena 3 October 1990
98. Details of what was sought by this subpoena, and whether the documents were produced or not, are not to be found in the submissions of the parties.

Submissions of Cape
99. Cape says nothing about the costs of this subpoena.

Submissions of Maidment/Serendipity
100. This subpoena arose solely from the conduct of Cape and was necessarily incidental to proceedings commenced by him. As the proceedings were ultimately unsuccessful, Cape should pay the costs of the receiver on an indemnity basis and those of Maidment and Serendipity on a party and party basis.

Submissions of the Receiver
101. This subpoena is but one element of the account taking and restraint of distribution matters dealt with under A1 above. The same costs order is sought here as was there sought.

Decision
102. Generally, I agree with the submission of the receiver that this was but a normal step in the proceedings. It should have formed part of the costs of the proceedings generally.

103. I make no special order but note the receiver will have his costs out of the fund on an indemnity basis.

A23 Consent orders 27 June 1990
104. These orders referred the dispute over accounts to Sir Laurence Street for determination. The order commences : "Upon motion made this day...", and the receiver indicates that the applicant on the motion was Serendipity.

Submissions of Cape
105. Cape is entitled to his costs in relation to this order because it succeeded before the referee in the sum of $135,000. (The actual figure appears to be $121,305.83: see receiver's submissions at p 22.)

Submissions of Maidment/Serendipity
106. In relation to the account taking process before Sir Laurence Street, Cape should pay Maidment's costs on an indemnity basis. Cape refused an open offer of settlement which would have rewarded him with more than the ultimate result of the account taking process.

Submissions of the Receiver
107. Cape's claim was allowed in part, with some adjustments in his favour, some claims settled and some awards against Maidment.

108. Cape should pay costs on an indemnity basis, or in the alternative Cape should pay 92% of the costs of the account taking process and reference before Sir Laurence Street being to the extent to which his claims were successful or settled in his favour.

109. Basis for costs orders:

1. Cape rejected an offer dated 12 March 1990 which was of a
higher value than the result achieved in the ensuing 12-26
months of accounts agitation;
2. Cape undertook by letter of 4 July 1989 to pay the costs of
an audit of the company's accounts if it did not reveal
discrepancies greater than $25,000 (see the submissions of the
receiver at p4);
3. discrepancies did not exceed $25,000 (It is unclear what the
receiver means by "discrepancies", the referee ordered an
adjustment of $121,305.83); and
4. Cape's lack of ready and frank cooperation with the receiver
throughout the account taking process.

Decision
110. In my view, the important consideration is that an open offer of settlement was made to Cape and he refused it. It is clear that his refusal to accept it was unreasonable. He clung to a view without any evidence to support it, as has been found in proceedings generally, that Maidment had cheated him and/or that the receiver was biased against him in favour of Maidment.

111. He failed in all but relatively trivial claims before Sir Laurence Street.

112. In my view, Cape should pay the costs of each other party on this application on an indemnity basis.

SECTION B - CASH INQUIRY
B1 Notice of Motion 17 September 1990
113. This was an application by Cape for orders:

1. that Maidment and/or Breeze (two directors of the company)
furnish to the court an explanation for the current discrepancy
in the records of the company referred to in the affidavit of
Cape sworn 17 September 1990.
2. that the explanation be provided in 7 days
3. that the defendants produce for inspection of Cape the record
book referred to in Cape's affidavit.

Result
114. Counsel for Maidment/Serendipity argued before me on 21 September 1990 that the motion was incompetent and beyond jurisdiction. Counsel argued that if the receiver has inadequately discharged his function, the court should properly exercise its control over the receiver and not two of the directors. I agreed that it was more appropriate to proceed in that fashion (ie. to seek orders as against the receiver) if at all. I directed that Cape was at liberty to file an amended notice of motion if he so chose.

115. The notice of motion in its existing form was then adjourned to 5 October 1990 and costs were reserved. On 5 October 1990 the notice of motion was adjourned to 10 October 1990 because there was insufficient time to deal with the matter. By 10 October 1990, Cape had filed an amended notice of motion of 9 October 1990 and counsel for Cape moved on that motion. I then ordered, agreed transcript at 3.156, that Cape pay the costs

... of and thrown away by the amendment in respect of the
defendants and, so far as is relevant, the (receiver).

Decision
116. It would therefore seem that costs are no longer reserved on this notice of motion to that extent. Insofar as there were costs associated with the plaintiff's application which are not costs "of and thrown away by the amendment", they are the costs of the notice of the motion dated 9.10.90 as amended.

B5 Amended Notice of Motion 9 October 1990
117. By this notice of motion, Cape sought substantially the same orders as had been sought in the notice of motion of 17 September 1990, except that the orders sought were directed to the receiver rather than to the two directors, Maidment and Breeze.

Result
118. The amended notice of motion came on for hearing on 10 October 1990, at which time some evidence was given in relation to various cash transactions and accounting issues concerning the Redarb Unit Trust. At the conclusion of the day it was agreed between the parties that the receiver would undertake investigations into matters raised by Cape.

119. The receiver conducted his investigations and reported to the court in four bound volumes of report dated 19 November 1990. The receiver commented unfavourably on Cape's behaviour in obstructing the investigation. Complaints were made that various documents in the possession of Cape were not promptly made available or known to the receiver. These documents contained answers to various queries raised by Cape.

120. Nothing favouring Cape was turned up by the investigations and Miles CJ eventually dismissed the notice of motion by consent on 22 March 1991.

Submissions of Cape
121. This notice of motion was an application by the plaintiff that the receiver furnish an explanation for the apparent discrepancies in the records of Redarb disclosed by affidavit and directing the receiver to investigate the matter. This was carried out and Cape is entitled to have his costs.

Submissions of Maidment/Serendipity
122. Regard should be had to the following matters:

1. The motion caused the receiver to undertake the "cash enquiry"
which was at significant cost to the trust and ultimately to the
unit holders.
2. The motion and amended motion are instances of Cape attempting
to frustrate the distribution of assets to Maidment, delay the
receivership and cause Maidment harm.
3. The receiver made a number of comments damaging to Cape in his
report to the Court. These comments are significant as made by
the court appointed receiver and may, it is submitted, assist the
court in the exercise of its discretion concerning costs.
4. To a large extent the receiver's extensive report should have
been unnecessary. None of the issues raised, which required the
report to be prepared, was sustained.

Submissions of the Receiver
123. The receiver seeks an order that Redarb be completely indemnified by Cape for this notice of motion and that of 17 September 1990. There are several matters encompassed within the "cash enquiry" brought about by this notice of motion.

1. Cash extraction: an allegation that cash had been extracted
from the business, unknown to Cape and principally for Maidment's
benefit.
2. Cash dispersals: allegations about other individuals as to
their receipt of cash or the veracity of evidence elsewhere.
3. Video assets: issues in relation to valuation of video assets
conducted for the receiver.

124. Cape claims entitlement to initiate these inquiries within entitlement as a director of the company. However, the proper place to make the enquiry was at the outset of the receivership and within the parameters of opportunities then available, for example, when briefing the court appointed receiver, who was appointed by consent; a complete list of suggested opportunities is at p39 of the receiver's submissions.

125. The receiver reported on 8 March 1990 and said in volume 6 at paragraph 2.1:

...it is advised that, on balance, further enquiry is unlikely
to be conclusive, warranted or constructive.

126. The cash enquiry issues were raised at the end of a lengthy, expensive and thoroughly conducted account taking process. The result could have been achieved earlier had Cape fully disclosed his knowledge and documents.

Decision
127. I agree with the receiver's submissions. The enquiry was a waste of time and should, insofar as it had any relevance at all, have been initiated earlier and formed part, insofar as it did not, of the original account taking exercise.

128. Cape should pay the costs of each other party to the motion on an indemnity basis.

B7 and B8 Subpoena 25 December 1990 and Notice of Motion 1 February 1991
129. Cape had subpoenas issued to the Managers of the Commonwealth Bank branches at Dickson and Gunnedah, seeking information about accounts of Maidment. By notice of motion, Maidment then applied to have the subpoenas set aside, or have access denied.

Result
130. The application to have the subpoenas set aside was successful, such order being made by me on 8 February 1991. I reserved the question of costs "until the question to which the subpoenas related, namely adoption of the receiver's vol. 6 is litigated".

Submissions of Cape
131. Cape says nothing about the costs of the subpoena or of the subsequent application.

Submissions of Maidment/Serendipity
132. Ultimately Cape did not press the litigation regarding vol. 6 of the receiver's report. In accordance with the usual principles, Cape should pay the costs of the notice of motion.

Decision
133. The costs of the subpoenas should follow the event. I cannot say that the subpoenas were in any way improper. It follows that whilst Cape should pay Maidment's costs, it will be on the usual party and party basis.

B9 Notice of Motion 13 February 1991
134. This was an application by Cape seeking orders that:

1. the receiver provide a statement that he has personally
inspected duplicate deposit slips of Maidment's accounts at the
Commonwealth Bank and the original/duplicate deposit slips be
annexed to the statement.
2. that Cape have leave to inspect certain documents produced on
subpoena; and
3. that a timetable be set for Cape to make further challenges to
the receiver's report of accounts volumes 6 and 7.

Submissions of Cape
135. The receiver furnished the court with a verified statement as to personal inspection of the deposit slips. The information being duly furnished, Cape's costs should be paid by the receiver.

Submissions of Maidment/Serendipity
136. Cape should pay Maidment's costs on an indemnity basis. This notice of motion came before me on 15 February 1991 at which time it was adjourned. The notice of motion came before Miles CJ on 1 March 1991 at which time the notice of motion was stood over to 22 March 1991 on a condition that in 14 days Cape set out and serve upon Maidment points of claim whereby he challenged the findings of the receiver contained in the reports of accounts vol 6 and 7.

137. Cape did not comply with the court's order since no points of claim were filed. Cape did file an affidavit purporting to reply to the receiver's report to the court contained in vol. 6 and 7. The affidavit filed by Cape is a commentary and expression of views by Cape on the receiver's reports. On 22 March 1991 Cape consented to this notice of motion being dismissed.

Submissions of the Receiver
138. The submission of the receiver is the general one discussed above under introductory matters.

139. In reply to Cape's submissions, the receiver says:

The plaintiff consented to the notice of motion being dismissed
on 22 March 1991, notwithstanding that he had filed an affidavit
relevant to volume 6, but no points of claim.
The receiver did not furnish the Court with a verified statement
as to personal inspection of the deposit slips, but rather
provided by letter, an analysis an copies of deposit slips, direct
to Cape.

Decision
140. Costs should follow the event. The receiver's costs on a party and party basis will be paid by Cape. I am not satisfied that an indemnity costs order should be made against Cape. However, I note that the difference between such orders, if any, will be recoverable by the receiver from the fund.

SECTION D - MISCELLANEOUS
D1 Notice of Motion 23 November 1989
141. This was an application by the first and fifth defendants (supported by the receiver) seeking:

1. revocation of orders made by Lockhart J on 28 September 1989;
2. limitation of the powers of the receiver to prevent payment of
any debt due by the company to unit holders in excess of 50% due
to Serendipity and 25% due to Cape;
3. that the receiver be authorised to distribute 75% of net assets
as to 50% to Serendipity and as to 25% to Cape.

Submissions of Cape
142. Each party should pay its own costs. On 27 November 1989, Lockhart J adjourned this notice of motion to 14 December 1989 at 9.30am, along with Cape's notice of motion of 24 November 1989. His Honour also gave directions for the filing of affidavits. Orders made on 14 December 1989 dealt with the process of account taking and challenges to the accounts.

Submissions of Maidment/Serendipity
143. Serendipity, Maidment and Cape should pay their own costs. The receiver's costs should be paid on an indemnity basis from the assets of the trust.

144. The notice of motion sought merely to clarify and extend the powers of the receiver in relation to distribution of assets of the Redarb unit trust.

Submissions of the Receiver
145. Cape should pay the receiver's costs on an indemnity basis as discussed above under introductory matters.

Decision
146. In this case, there is no basis, in my view, for a costs order against any party. I note the receiver will be entitled to indemnity for his costs out of the fund.

D2 Notice of Motion 21 March 1991
147. The receiver applied for orders directing payment of the receiver according to the Insolvency Practitioners' Association of Australia (IPAA) scale and for passage of the receiver's accounts by the court. This application was necessary, inter alia, to validate the withdrawal of funds from the trust by way of remuneration without order of the court.

Result
148. On 18 April 1991, Miles CJ ordered, inter alia, that:

The Receiver and Manager ... was and is empowered to deduct or
withhold from the funds of Redarb Pty Limited and the Redarb Unit
Trust a sum to cover his proper remuneration and that such
remuneration was and is to be fixed at the rates prescribed by
the Insolvency Practitioners' Association of Australia.

149. This order was the subject of an appeal to the Federal Court by Cape: Cape v Redarb Pty Ltd (Receiver and Manager appointed) (1991) 6 ACSR 359. The full court held that the receiver was not entitled to draw his remuneration as and when he did without prior orders of the court fixing the basis for his remuneration, and taxing his costs. The court then authorised the receiver's remuneration according to the IPAA scale, from 8 August 1989 until further order.

150. The full court made the following relevant comments at 374:

In retrospect, it is unfortunate that the early orders of the
Court did not give directions as to the passing of accounts and
the making of drawings on account of remuneration ... As it was,
no party made such an application, and it was the Receiver himself
who came to Court for directions to enable the Receivership to be
completed in accordance with law.
In the meantime he had filed accounts which disclosed the receipts
and payments of the Receivership (even though he had not been
directed to do so), and in the absence of application by one of
the parties who obtained the order, we do not think the Receiver
should be penalized for proceeding as he did (emphasis added).

151. The court continued at 375:

The directions sought by the Receiver in his notice of motion
provided a sensible, practical, way of ensuring that the Court
ultimately passed accounts for the Receivership, and ultimately
sanctioned the remuneration claimed by him.

Finally, the court concluded at 376:

In the result we consider a proper exercise of the discretions of
the Court requires an order with directions which will produce
substantially the same result as the order of Miles CJ.

Submissions of Cape
152. The receiver should pay Cape's costs. The receiver sought ex post facto approval for remuneration taken from the trust without authorisation.

Submissions of Maidment/Serendipity
153. The receiver should have costs on an indemnity basis. Otherwise the parties should pay their own costs. The notice of motion was procedural in nature, the orders sought were made and remained substantially unchanged by the full Federal Court.

Submissions of the Receiver
154. The receiver's costs of the proceedings before Miles CJ should be paid by Cape on an indemnity basis. Grounds for submission:

1. Cape opposed remuneration initially through his action for
damages and for removal of the receiver.
2. The defect in the order of appointment was an error of both
parties (not the receiver) and one easily corrected by consent.
3. The result achieved by the application and Federal Court
process could have been achieved by consent.
4. Cape never produced an alternative basis for calculation of
the receiver's remuneration.
5. The application was successful.

155. Any suggestion by Cape that the receiver was in error ignores the full Federal Court's findings in Cape v Redarb (supra).

Decision
156. The receiver was in error in making an application to validate his remuneration ex post facto. However, the error was made in good faith as found by the Federal Court. It was also found that he acted properly in the circumstances.

157. I do not believe any party should be penalised for this. The application should be viewed as a normal incident of the receivership. There will be no order as to costs but the receiver is entitled to be indemnified out of the fund.

D3 Notice of Motion 17 August 1992
158. By this notice of motion, Cape sought information concerning the Redarb superannuation trust fund and payment within seven days of the amount to which Cape was found to be entitled.

Result
159. On 21 August 1992, I ordered that Cape's notice of motion of 17 August 1992 be dismissed.

Submissions of Cape
160. These submissions relate to the orders of Higgins J made on 21 August 1992. Cape's costs in this matter should be paid by the receiver as his application was for information and for an order to pay him his entitlement. The receiver subsequently submitted to such an order. (It is not clear when the receiver so submitted. There is no record of it that I can find in the material put before me.)

Submissions of Maidment/Serendipity
161. Cape should pay Maidment's costs on an indemnity basis, because:

1. Cape did not obtain the orders sought.
2. The application was misconceived and doomed to failure from
inception because it was filed when the trust was insolvent.
3. At the relevant time, Cape had been the subject of indemnity
costs orders in favour of the company which had not been taxed,
but were still outstanding and payable by Cape.

Submissions of the Receiver
162. Costs should be awarded against Cape as:

1. The notice of motion was issued in the defunct matter SC 34/90.
2. There was no necessity for the application. Information sought
by the notice of motion was immediately supplied upon receipt of
the notice of motion. Furthermore, Cape had extensively inspected
the books and accounting records of the fund in May.

Decision
163. I agree that Cape's application was misconceived and ill-founded. It was not successful. Cape should pay the costs of the other parties on an indemnity basis.

D4 Notice of Motion 17 August 1992
164. This application by Cape complemented the other notice of motion of 17 August 1992, seeking that the defendants pay to Cape $135,332 by way of distribution of part of the proceeds of the trust.

Submissions of Cape
165. Cape's submissions, at 2.67, do not appear to relate to this notice of motion.

Submissions of Maidment/Serendipity
166. The supporting affidavit of Cape refers to an affidavit of Warwick Davis sworn 28 July 1992 in which Davis refers to the receiver holding cash, as at 28 July 1992, in the sum of $143,232. However, that affidavit also detailed debts owed by the trust to the receiver and its legal advisers totalling $120,887 at that time and costs likely to be incurred in defending the action commenced by Cape in the Federal Court. It further stated that the receiver had insufficient funds to conduct the appeal unless funds were received from Cape pursuant to costs orders made against him. Cape ought to pay Maidment's costs on an indemnity basis, because:

1. Cape did not obtain the orders sought
2. The application was misconceived and doomed to failure from
its inception because it was filed at a time when the trust was
insolvent.
3. Cape had not paid the costs that he owed.

Submissions of the Receiver
167. The receiver's submissions relating to this notice of motion are contained in the receiver's submissions in reply at pages 7 and 8. (Note: Unfortunately, they are incomprehensible.)

Decision
168. I agree with Maidment's submission. The application was unnecessary, ill-conceived and doomed to failure.

169. Cape will pay the costs of each other party on an indemnity basis.

SECTION E - INJUNCTION 18 December 1989
170. By notice of motion dated 18 December 1989, Cape applied to restrain the receiver from selling or disposing of any video outlet assets of the company until further order.

Result
171. The application came before Kelly J on 18 December 1989 and his Honour granted the injunction. The matter came before Kelly J again on 20 December 1989 at which time the injunction was continued until 4.00pm on 29 December 1989. Evidence was presented on that day to satisfy Kelly J that the receiver had received, and, in fact replied to, an initial inquiry by Ramsay, a prospective purchaser of the video outlet assets. It appeared, however, that the information provided was not immediately received by Ramsay's advisers. Kelly J continued the injunction to allow a response on behalf of Ramsay.

172. On 29 December 1989, Ramsay made a conditional offer for the video outlet assets which was conditional upon a restrictive covenant being agreed to by Maidment. The matter then came before Kelly J again on 5 January 1990. His Honour then discharged the injunction, the way then being clear for the receiver to negotiate with the various offerers, but continued the undertaking as to damages which had been given by Cape in the first instance.

Findings of Higgins J
173. In Cape v Redarb Pty Ltd (Receiver and Manager appointed) (1992) 8 ACSR 67, I said at 73:

... Ramsay made an offer. It was $425,000 for all the Redarb
Videoville assets. It asked for a restrictive covenant from
Maidment as part of that deal.
...
While a restrictive covenant could be offered by Redarb, the
receiver could not speak for Maidment or his companies.
There was obviously consultation by Cape and his advisers with
Ramsay.

I continued at 74:

By this time, it seems to me, Cape was a man obsessed. He had
two objectives. To advance his own interests but also, and more
importantly, to ensure that Maidment obtained no advantage.
...
I have no doubt Ramsay was a front for Cape at least in the sense
that, if his offer had been accepted, he and Cape would probably
have conducted the Redarb Videoville businesses in association
with each other. Again, there was nothing in that which could be
criticised.
Cape was clearly attempting, at least to bid Maidment up.

Submissions of Cape
174. Cape's costs, associated with orders made on 20 December 1989 and 5 January 1990, should be paid by the receiver. Cape argues that it was necessary to apply for the injunction because a prospective purchaser, Ramsay, had not been supplied with material necessary to make a bid. He says that he was in no way to blame for circumstances that brought about the necessity to make the application.

Submissions of Maidment/Serendipity
175. Cape should pay the defendants' costs on an indemnity basis. This application for injunction was another attempt by Cape to frustrate the early sale of assets by the receiver. Ramsay and Cape were in cahoots. Ramsay's offer contained the same restrictive covenant which Cape had sought previously in an offer made on 26 October 1989.

176. Given my earlier finding of consultation between Ramsay and Cape, Maidment says it is clear that Ramsay's offer was not a genuine offer. Ramsay knew it was not an offer that the receiver could accept. The offer by Ramsay and the application for injunction by Cape were mischievous and not bona fide. The injunction was part of a concerted campaign actuated by malice.

Submissions of the Receiver
177. Cape should pay the receiver's costs on an indemnity basis as outlined above under introductory matters. The application was without merit and conducted without candour in failing to reveal various matters, including the extent of Cape's knowledge of and relationship with the Ramsay interests.

178. In reply to Cape's submissions, the receiver says that Cape's professed lack of blameworthiness is contrary to my judgment of 22 June 1992. The application itself was made contrary to the order of Lockhart J on 14 December 1989.

Decision
179. I found previously that, on the balance of probabilities, Ramsay was a front for Cape. That did not, of course, entitle the receiver to ignore his offer. It is possible that Ramsay's offer was a sham, but I am not satisfied of that. The offer was certainly designed, at least, to bid Maidment up. That, however, was a legitimate commercial purpose.

180. Cape failed ultimately in demonstrating that the receiver had been guilty of any substantive misconduct. He succeeded to a lesser extent in obtaining a favourable finding that the sale to Maidment was a breach of duty on the part of the receiver albeit committed by a delegate of the receiver. However, no loss flowed from that breach of duty.

181. There was a probable lack of candour displayed by Cape on 20 December 1989 before Kelly J. Whether it would have made a difference in the result I cannot say. It certainly precludes Cape from any order in his favour. In any event, he substantially lost on the main issue.

182. In my view, Cape should pay the receiver's costs on a party and party basis.

183. I think Maidment's conduct contributed to Cape's obsessive conduct in these injunction proceedings. I make no order as to his costs.

184. The receiver will be entitled to indemnity from the fund for any costs additional to those payable by Cape.

SECTION F - INJUNCTION APRIL 1989
185. On 24 April 1989, Cape issued an amended summons seeking, inter alia, orders restraining sale or disposal of specified interests in land held by the company. This application came on before Kelly J on 26 April 1989.

186. Lockhart J delivered a judgment on 21 July 1989 dealing with some of the matters raised in the summons. His Honour saw the issues in the following way:

In this proceeding Mr Cape challenges the purported appointment
of Mr Maidment as chairman of directors of Redarb or chairman of
any meeting of directors of Redarb and asserts that certain
purported meetings of directors of Redarb are invalid. Injunctive
relief is sought to restrain Redarb from dealing with its assets;
and orders are sought intended to reinstate equality in the
holding of units in the Redarb Trust by Mr Cape and Serendipity.
Serendipity has filed a counter claim in which it seeks the
appointment of a receiver and manager of the assets of the Redarb
Trust.1

1 Cape v Maidment, unreported, Supreme Court, ACT, 21 July 1989.

187. In the result, Lockhart J declared that certain resolutions and purported meetings of the directors of Redarb were invalid. In particular, his Honour declared that:

(e) the resolutions of the meeting of 3 April 1989 for the
sale of land at Buderim and Fernlea (sic) Park respectively
are invalid;2

2 Ibid, at 29

188. Lockhart J concluded as follows:

As to costs, Mr Cape has won on most, but not all, issues relating
to the validity of meetings of Redarb and its directors; and Mr
Maidment and Serendipity have won on the question of the
appointment of a receiver and manager though not on all questions
of fact which govern the basis of such an appointment.
The interests of justice are best served by each party paying his
or its own costs. Accordingly, I propose that no order be made
for the costs of any party.3

3 Ibid, at 30

189. Although these remarks do not relate directly to the application for injunctive relief, they do show that Cape had cause to be concerned about decisions made in directors' meetings concerning sale of assets.

190. Kelly J made orders on 26 April 1989, as sought by Cape, restraining Redarb from taking part, or continuing to take part in any action to sell or otherwise dispose of: (a) the company's land at Buderim; (b) the company's land at Fernleigh Park; and (c) the company's 50% beneficial interest in the Hotel Dickson site, prior to the first day of July 1989.

191. The matter came before Kelly J again on 12 May 1989 and his Honour discharged so much of the injunction as prevented sale of land at Buderim. On 16 May 1989, Kelly J restored the injunction in relation to the Buderim land upon, in the first instance, an oral application having been made on Cape's behalf. The matter was adjourned to 19 May 1994.

Submissions of Cape
192. Cape's costs of this application should be borne by Maidment as the necessity for obtaining an injunction was brought about by Maidment's actions to gain control of the company - subsequently ruled by Lockhart J to be invalid. Lockhart J's orders as to costs did not affect Cape's right to costs of obtaining the interim injunction.

Submissions of Maidment/Serendipity
193. Cape should be ordered to pay such costs as arose from these applications by way of indemnity costs to Maidment and Serendipity. Cape was cross-examined by counsel for Maidment. It is clear that Cape was aware that if the injunctions were granted, they would stop all distributions from the unit trust to unit holders. The injunctions were obtained for the purpose of damaging Maidment. Such a purpose is not a proper purpose and is an abuse of the court's process.

194. In reply to the submissions of Cape, Maidment/Serendipity point out that Cape never obtained a final order in relation to the injunction, nor were claims in relation to the land ever finally sustained.

Submissions of the Receiver
195. These injunctions pre-dated the appointment of the receiver and consequently no submissions are made.

Decision
196. Maidment has not persuaded me that when these remedies were sought, Cape was malicious or obsessive or motivated by other than a proper concern to protect his interests. The conduct of Maidment had provided him with some reasonable cause for concern. The remedies sought were appropriate in the circumstances. The comments of Lockhart J support the view that Cape was, at this stage, acting reasonably. He was substantially successful.

197. I consider Maidment/Serendipity should pay Cape's costs of this application.

"SECTION G" - SUBMISSIONS OF CAPE NOT YET DEALT WITH
198. In relation to all these outstanding submissions, Maidment/Serendipity and the receiver each say, in their submissions in reply, that they are not matters for reserved costs.

2.4 13 July 1989, Lockhart J
199. I am unable to find a bench sheet for this day. There are orders of Lockhart J in the agreed bundle of orders dated 13 June 1989. They are:

1. That the two proceedings SC 233/89 and SC 333/89 be heard
together.
2. That the evidence in one proceeding be evidence in the other,
including the evidence previously given as well as evidence to be
given.

200. Cape says that the parties should pay their own costs. If the other parties are correct about this not being a matter for reserved costs, then that would be the outcome in any event. The same will be part of the costs order, if any, on the substantive matter.

Decision
201. I make no order as to costs.

2.8 8 August 1989, Lockhart J
202. The orders made this day appointed the receiver to Redarb, thereby giving effect to the reasons for judgment of Lockhart J delivered on 21.7.89. When delivering judgment, Lockhart J stated that the parties should pay their own costs of the application to appoint a receiver.

Decision
203. No order for costs is necessary.

2.13 22 August 1989, Registrar Dingwall
204. I am unable to locate a bench sheet, but in the agreed bundle of orders is the order taken out for this day.

BY CONSENT IT IS ORDERED that all books and documents of the
Company on subpoena in this matter be released by the Court to
the Receiver and Manager, Mr R. J. Yeomans (the receipt for which
by any employee of his being sufficient) and returnable on demand.

205. Cape says that the orders made were procedural and the parties should pay their own costs.

Decision
206. The costs will be part of any order on the substantial matter. No order is necessary.

2.44 26 October 1990, Higgins J
207. On this day I ordered that

1. Robert John Yeomans, Receiver/Manager of the abovenamed second
defendant, be restrained until further order from accepting or
purporting to accept any offer of sale in respect of Lot 102 of
the Fernleigh Park Estate or signing any contract, note or
memorandum evidencing any such acceptance.
2. Leave be granted to notify the making of this order in the
first instance by telephone.
3. Leave be given to either or any party to apply on 24 hours
notice.

208. Cape says that his costs should be borne by the receiver. The other parties say that this is not a matter for reserved costs.

209. It is a matter in which no order was made. It seems to be a consequential order following on from the appointment of the receiver. It was sought by Cape to enable him to decide whether to seek orders from the Court. I do not consider it was inappropriate for Cape to seek a delay. However, nothing was shown to have been, in fact, inappropriate in whatever action the receiver took or was planning to take.

Decision
210. The costs would be part of the costs ordered generally. If none, there should be no order. The receiver will, however, be indemnified from the fund.

"SECTION H" - COSTS OF PREPARING SUBMISSIONS ON RESERVED COSTS MATTERS
Submissions of Cape
211. The costs of each individual submissions on costs should follow the event.

Submissions of Maidment/Serendipity
212. Cape should pay the costs of Maidment/Serendipity in preparing all of their submissions. The basis for arguing this appears to be that Cape has behaved badly in the proceedings.

Submissions of the Receiver
213. The costs of each individual submission should follow the event. Decision

214. The costs of each individual submission should follow the result.