Kirwan v Cresvale Far East Ltd (In Liq) (No 2) [2003] NSWCA 29 (28 February 2003)

Last Updated: 3 March 2003

NEW SOUTH WALES COURT OF APPEAL

CITATION: Kirwan v Cresvale Far East Ltd (In Liq) (No 2) [2003] NSWCA 29

FILE NUMBER(S):

40188/01

HEARING DATE(S): On written submissions

JUDGMENT DATE: 28/02/2003

PARTIES:

Nigel Peter Kirwan (Appellant/4th Cross Respondent)

Cresvale Far East Limited (1st Respondent/1st Cross Respondent)

Cresvale Securities Limited (2nd Respondent/2nd Cross Respondent)

Vanda Russell Gould (3rd Respondent/Cross Appellant)

Cresvale Capital Pty Limited (4th Respondent/3rd Cross Respondent)

JUDGMENT OF: Meagher JA Giles JA Young CJ in Eq

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S): SC 3672/00

LOWER COURT JUDICIAL OFFICER: Austin J

COUNSEL:

D J Higgs SC & R J H Darke (Appellant)

M Cashion SC (1st Respondent)

P M Wood (2nd & 4th Respondents)

S D Rares SC & P J Dowdy (3rd Respondent)

SOLICITORS:

John A Glynn & Associates (Appellant)

Minter Ellison (1st Responent)

Blake Dawson Waldron (2nd & 4th Respondents)

Henry Davis York (3rd Respondent)

CATCHWORDS:

Costs - no question of principle.

LEGISLATION CITED:

DECISION:

On the appeal: (1) Appeal allowed in part. (2) Set aside declaration 7 made on 8 March 2001. (3) Vary declarations 5 and 6 made on 8 March 2001: (a) by adding at the commencement of declaration 5 "Upon condition that the first defendant repay to the fourth defendant the sum of $100,000 subscribed for the shares", and (b) by adding at the commencement of declaration 6 "Upon the same condition,". (4) Vary order 1 made on 10 September 2001 by adding at its conclusion, "save so far as those costs relate to the issue of whether the allotment of shares to Mr Kirwan should be set aside, on which issue the plaintiff and the third defendant are to pay the fourth defendant's costs". (5) Declare that the first defendant is also liable to pay the fourth defendant interest on the said sum of $100,000 in the amount of $23,500. (6) Order that the said sum of $23,500 be paid by the first defendant to the fourth defendant. (7) Order that the first, second and fourth respondents pay the appellant's costs of the appeal. On the cross-appeal: (1) Cross-appeal allowed in part. (2) Set aside Orders 3 and 4 made on 10 September 2001. (3) Vary the orders as to costs made on 10 September 2001 by ordering that the plaintiff and third defendant pay the costs of the second defendant of the issue of whether the second defendant should be ordered to pay the costs ordered to be paid by him personally (including the costs of the first defendant) and without a right to indemnity from the assets or funds of the first defendant.

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40188/01

SC 3672/00

MEAGHER JA

GILES JA

YOUNG CJ IN EQ

Friday 28 February 2003

KIRWAN v CRESVALE FAR EAST LTD (IN LIQUIDATION) (No 2)

Reasons

1 THE COURT: Reasons were delivered in the appeal and cross-appeal on 10 December 2002. Directions were given with a view to arriving at the orders to be made.

2 The parties have agreed on the orders to be made in the appeal.

3 In the cross-appeal there are two issues between Mr Gould and other parties. Both involve the contest over Mr Gould's entitlement to indemnity, determined in Mr Gould's favour by Meagher and Giles JJA, Young CJ in Eq dissenting. What follows in resolving the issues is the opinion of Meagher and Giles JJA; Young CJ in Eq's dissent would lead him to different orders.

4 The first issue is whether declarations should be made, in terms proposed by Mr Gould, as to his entitlement to indemnity out of the assets of Securities. Mr Gould submits that it would be appropriate to make declarations consistent with the reasons of the majority of the Court. Far East submits that the declarations should not be made because they were not sought in the proceedings and the orders of Austin J, as varied on appeal, speak for themselves. Securities and Capital add to this doubt that declarations in the terms proposed necessarily flow from the reasons and that Mr Gould's entitlement is sufficiently established in law. Mr Kirwan submits that the declarations "go beyond the judgment". We are not deterred by absence of a formal claim to the declarations, but we consider that the reasons for this Court overturning Austin J's orders to the effect that Mr Gould was not entitled to indemnity sufficiently make plain that he has the normal entitlement. We do not think that the declarations are necessary or warranted.

5 The second issue is whether an order should be made whereby Far East and Capital should pay Mr Gould's costs at trial -

" ... of their applications for [Mr Gould] to pay the costs ordered to be paid by him personally (including the costs of [Capital]) and without a right to indemnity from the assets or funds of [Securities]."

Mr Gould submits that he had relevant success on appeal and should therefore have his costs. Far East submits that there should be no special order for costs because there were no "applications" and the submissions to Austin J relating to Mr Gould's entitlement to indemnity were appropriate on the findings made by his Honour. Securities and Capital effectively make the same submission, adding rather obscurely that "certain of Austin ´J's orders continue to have effect". We consider that there was a sufficiently discrete question as to Mr Gould's entitlement to indemnity, albeit arising without formal applications, and that Mr Gould's ultimate success via different findings warrants an order in his favour, but would modify the proposed order to refer to the costs of the question of whether Mr Gould should be ordered to pay costs personally and without a right of indemnity.

6 The orders of the Court therefore are -

On the appeal -

(1) Appeal allowed in part.

(2) Set aside declaration 7 made on 8 March 2001.

(3) Vary declarations 5 and 6 made on 8 March 2001 -

(a) by adding at the commencement of declaration 5 "Upon condition that the first defendant repay to the fourth defendant the sum of $100,000 subscribed for the shares", and

(b) by adding at the commencement of declaration 6 "Upon the same condition,".

(4) Vary order 1 made on 10 September 2001 by adding at its conclusion, "save so far as those costs relate to the issue of whether the allotment of shares to Mr Kirwan should be set aside, on which issue the plaintiff and the third defendant are to pay the fourth defendant's costs".

(5) Declare that the first defendant is also liable to pay the fourth defendant interest on the said sum of $100,000 in the amount of $23,500.

(6) Order that the said sum of $23,500 be paid by the first defendant to the fourth defendant.

(7) Order that the first, second and fourth respondents pay the appellant's costs of the appeal.

On the cross-appeal -

(1) Cross-appeal allowed in part.

(2) Set aside Orders 3 and 4 made on 10 September 2001.

(3) Vary the orders as to costs made on 10 September 2001 by ordering that the plaintiff and third defendant pay the costs of the second defendant of the issue of whether the second defendant should be ordered to pay the costs ordered to be paid by him personally (including the costs of the first defendant) and without a right to indemnity from the assets or funds of the first defendant.

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LAST UPDATED: 03/03/2003