SUPREME COURT OF QUEENSLAND

Transcription

1 SUPREME COURT OF QUEENSLAND CITATION: Forsyth & Ors v Big Gold Corporation Ltd & Ors (No 2) [2017] QSC 314 PARTIES: FILE NO/S: No 9817 of 2016 DIVISION: PROCEEDING: ALEXANDER CAMERON FORSYTH (first plaintiff) DAMIAN JOHN WATERS (second plaintiff) DAMIAN JOHN WATERS AND JACQUELINE MICHAELA WATERS AS TRUSTEES FOR THE WATERS SUPER FUND ABN (third plaintiff) v BIG GOLD CORPORATION LTD (HONG KONG COMPANY NUMBER ) (first defendant) HUMANITERRA HOLDINGS LTD (HONG KONG COMPANY NUMBER ) (second defendant) INPOWERED PTY LTD ACN (third defendant) EMPROVE HOLDINGS PTY LTD ACN (fourth defendant) AMBITIOUS VENTURES PTY LTD ACN (fifth defendant) DENNIS KIM (sixth defendant) ANN-MARIE LOVEL (seventh defendant) JAMES ANDREW LOVEL (eighth defendant) ANDREW DAVID GRGURIC (ninth defendant) PETER DELANEY (tenth defendant) Trial Division Application on the papers DELIVERED ON: 15 December 2017 DELIVERED AT: HEARING DATE: JUDGE: ORDER: Brisbane On the papers Davis J The application is dismissed.

2 2 CATCHWORDS: EQUITY EQUITABLE REMEDIES INJUNCTIONS INTERLOCUTORY INJUNCTIONS INJUNCTIONS TO PRESERVE STATUS QUO OR PROPERTY PENDING DETERMINATION OF RIGHTS MAREVA INJUNCTION RELEVANT CONSIDERATIONS where the defendants recently had Mareva-type freezing orders varied to allow for sale of property to fund defence of the proprietary claim to that property made by the plaintiffs where the defendants apply for that variation to be amended to allow for further funds in their favour where the defendants lead fresh evidence to the end that their costs were higher than previously understood whether the order varying the freezing orders should be amended to provide for further use of the funds by the defendants COUNSEL: SOLICITORS: PROCEDURE CIVIL PROCEDURE IN STATE AND TERRITORY COURTS DETENTION, INSPECTION AND PRESERVATION FREEZING ORDERS where the defendants recently had Mareva-type freezing orders varied to allow for sale of property to fund defence of the proprietary claim to that property made by the plaintiffs where the defendants apply for that variation to be amended to allow for further funds in their favour where the defendants lead fresh evidence to the end that their costs were higher than previously understood whether the order varying the freezing orders should be amended to provide for further use of the funds by the defendants Australian Receivables Ltd v Tekitu Pty Ltd [2008] NSWSC 433, cited Forsyth & Ors v Big Gold Corporation Ltd & Ors [2017] QSC 277 Harrison Partners Constructions Pty Ltd v Jevena Pty Ltd [2006] NSWSC 317, cited Virgtel v Zabusky [2008] QSC 316, cited J W Peden QC for the plaintiffs M Trim for the third, fourth, fifth and eighth defendants Colin Biggers & Paisley Pty Ltd for the plaintiffs McCullough Robertson Lawyers for the third, fourth, fifth and eighth defendants [1] On 23 November 2017, I varied orders 1 made by the Chief Justice on 12 October 2016 (the original orders). The original orders restrained the third, fourth, fifth and eighth defendants (the defendants) from dealing with a number of strata title properties registered in the name of the fourth defendant. The original orders had, previously to 1 Forsyth & Ors v Big Gold Corporation Ltd & Ors [2017] QSC 277.

3 3 my orders, been varied on 2 August 2017 (the August 2017 orders) releasing one property 2 from restraint so that it could be sold and the proceeds used towards the costs of the defendants defence of the action. Conditions were imposed upon the disbursement of the proceeds. [2] My orders of 23 November 2017 authorised the sale of two further restrained properties and the release of some funds to be used by the defendants to fund their defence of the claim. The defendants seek to reopen the application which resulted in my orders made on 23 November 2017 and to secure the release of further funds from the sale of the properties. The application is made on new evidence. [3] By the August 2017 orders, the sale proceeds were to be utilised as follows: (c) (d) at completion of the sale of the property, the proceeds from sale shall be disbursed as follows: (i) in discharge of Mortgage No ; (iii) (iv) (v) (vi) in payment of real estate agent s sales commissions and marketing costs on the sale in a sum not exceeding $30,000 plus GST; as to an amount not exceeding $2,000 plus GST, in payment of reasonable conveyancing costs on the sale; as to the sum of $14,055.89, to Charles Wilson in payment of the balance of unpaid counsel s fees referred to at paragraph 61 of the affidavit of James Lovel filed 11 July 2017; as to the sum of $22,766.46, to Small Myers Hughes in payment of unpaid solicitors fees referred to at paragraph 62 of the said affidavit of James Lovel; as to the balance, in accordance with paragraph (d) or (e) below. in the event that the third, fourth, fifth and eighth defendants have, by the date of completion of the sale of the property, retained an external firm of solicitors at arms length with no prior business connection to those defendants but which may have provided legal professional services to them, the balance of the proceeds of sale be paid to the trust account of that firm to be disbursed as follows: (i) as to the sum of $ 15,500, in payment of the solicitor/own client costs of the third, fourth, fifth and eighth defendants (plus GST) 2 Being the residential unit at 10/251 Varsity Parade, Varsity Lakes.

4 4 (iii) for counsel s fees, and $3200 (plus GST) for Adam Bloom, with such sums to forthwith be paid upon completion of the sale of the property; as to the sum of $ per week (gross), to the eighth defendant by way of an allowance for his ordinary living expenses, starting from the date of this order, payable monthly in arrears; and as to the balance: [a] [b] up to $52,000 in payment of their costs and disbursements (including counsel s fees) of acting for the third, fourth, fifth and eighth defendants in this proceeding; any remaining balance to be held pending further order of the Court. [4] The eighth defendant, in an affidavit read before me on 16 November 2017, when I heard the application resulting in the orders of 23 November, swore this: 9 On or about 26 August 2017, I caused Empowered to enter into a contract to sell the Property at a price of $410, On 25 September 2017, the contract for the sale of the Property was completed and I caused the proceeds of sale to be disbursed in accordance with paragraphs 1(c) and (d) of the Variation Order In accordance with paragraph 1(d) of the Variation Order, I caused the balance of the proceeds of sale in the sum of $80, to be paid into the trust account of McCullough Robertson Lawyers. 12 I have since instructed McCullough Robertson Lawyers to make the following payments from the funds held in their trust account: (a) (b) the sum of $15,500 to the trust account of Byrne & Lovel Lawyers in accordance with paragraph l(d)(i) of the Variation Order; and the sum of $34, in payment of McCullough Robertson's fees for work completed up to 30 October 2017 for: (i) (iii) reviewing and considering the court documents and other material; exchanges of correspondence with the plaintiffs' solicitors regarding removal of the caveat over the Property; advising in respect of the defence and counterclaim; 3 Being the August 2017 Orders.

5 5 (iv) (v) briefing new counsel, Pat McCafferty, to prepare the amended defence and counterclaim and attending conference with counsel; preparing, in conjunction with counsel, the amended defence and counterclaim; and (vi) reviewing the plaintiffs' disclosure (in part only approximately 4 hours of solicitors time at an hourly rate of $430 plus GST). 13 I am informed by Guy Humble, Partner of McCullough Robertson, and believe that, after payment of McCullough Robertson's fees in the sum of $34,038.70, the current balance of the funds in their trust account will be $31, In respect of the balance, I understand that pursuant to paragraph l(d)(iii) of the Variation Order: (a) (b) the amount of $17, can be used for payment of future legal costs and disbursements, including counsel's fees, incurred by the Third, Fourth, Fifth and Eighth Defendants in respect of this proceeding; and the remaining amount of $13, is to be held pending further order of the Court. 4 (footnote added) [5] From that evidence I concluded that $17, (which is the balance of the $52,000 authorised to be paid by order 1(d)(iii)(a) of the August 2017 orders) represented the quantum of costs incurred since 30 October 2017, 5 and included the costs of the application. There was no other evidence that I could find which quantified the costs since 30 October 2017, so I assumed those funds were exhausted; hence the application to further vary the original orders. I took it that the balance of $13, (being the balance of the $31, held by McCullough Robertson) was not committed to any costs incurred to that point. New evidence filed in the present application however shows that the actual amount outstanding for fees to the defendants solicitors up to and including the application of 16 November 2017 is $72, This sum represents: (i) Costs of the application heard on 16 November 2017 $ 61, Costs of counsel settling the defendants amended defence and counterclaim 10, , (incl GST) 4 Affidavit of James Andrew Lovel filed 9 November 2017, CFI 90 at [9]-[14]. 5 Para 12(b) of the Affidavit.

6 6 [6] It is astonishing that in the application originally before me there was no evidence of actual costs incurred up to and including the application. In their most recent written submissions, the defendants point to no evidence that was before me on 16 November 2017 which suggested that the fees and expenses owed to the defendants solicitors exceeded $17, The present application seeks to vary the orders made on 23 November, effectively increasing the sums to be released by $54, being the difference between $72, and $17, Of course, the $17, is authorised to be appropriated to the defendants costs by the August 2017 orders. [7] The application is brought Pursuant to rules 388, 658 and 667(2)(d) of the Uniform Civil Procedure Rules 1999 or, in the alternative, the Court s inherent jurisdiction to vary a Mareva or Freezing Order. The plaintiffs resist the application. [8] The plaintiffs defence of the application (through the written submissions of Mr Peden QC) is in part based on submissions as to matters of procedure. The plaintiffs submit that none of rules 388, 658 and 667(2)(d) of the UCPR are engaged. While acknowledging the court s jurisdiction to vary a Mareva or other injunction, the plaintiffs submit that variations should be sought by fresh application rather than as a re-opening of my orders made on 23 November In the end, there is no need to determine those procedural issues as I do not intend to vary the orders. [9] The defendants submission (being a written submission of Mr Trim of counsel) is based on the premise that I would have ordered the release of $72, in payment of costs up to and including the application had evidence of those costs been before me. That premise is false. A major matter of argument before me on 16 November 2017 was as to whether the plaintiffs claim against the defendants should be regarded as a proprietary claim to the real property restrained. That mattered because if the plaintiffs claim was not a proprietary one, then the starting point for the exercise of discretion to release funds was that usually property (being the defendants property) would be released to pay the legal expenses of the defendants. 6 However, if the claim of the plaintiffs is a proprietary one, that assumption did not apply. 7 The reason is of course 6 Harrison Partners Constructions Pty Ltd v Jevena Pty Ltd [2006] NSWSC 317 at [11] [14], followed in Virgtel v Zabusky [2008] QSC 316 (at [35]). 7 Australian Receivables Ltd v Tekitu Pty Ltd [2008] NSWSC 433 at [29].

7 7 obvious, and that is because the property being released to pay the defendants costs in the action ultimately may be found to be the property of the plaintiffs. [10] It was made clear in my reasons of 23 November 2017 that I considered the plaintiffs claim to be a proprietary one 8 and that I then balanced the respective interests of the parties in fixing a sum to be released for the defendants costs. I certainly did not start from the point of any assumption that property ought be released and the proceeds appropriated to pay the defendants costs. 9 It does not follow that because I understood that the defendants costs up to and including the application were outstanding in the sum of $17, that I am prepared to order the release of a further $54, because the defendants now say that their actual costs were $72, [11] I now appreciate that the defendants costs of the application up to and including the application heard by me on 16 November 2017 are $54, more than I understood they were. However, the effect of the orders of 23 November 2017 was to authorise the sale of two of the restrained properties and to authorise the disbursement of the following moneys beyond that authorised to be disbursed by the August 2017 orders: (i) $13,386.59; 10 $19,613.41; 11 and (iii) $150,000.00; 12 totalling $183, Given that the plaintiffs claim is a proprietary one, so that the money ordered to be released for the defendants benefit may ultimately be found to be the plaintiffs property, if I reopened the application and relied upon the new evidence now provided, I would not be of a mind to vary the orders made on 23 November A fair balance, in my view, taking into account all the circumstances, has been struck by the orders of 23 November [12] I dismiss the application. 8 Forsyth & Ors v Big Gold Corporation Ltd & Ors [2017] QSC 277 at [30]. 9 At [43]. 10 Order Order 5(i). 12 Order Order 4(d)(i) catches the sum of $17,961.30, which is already appropriated to costs by the August 2017 orders.