Auto Panel Beaters & Radiators Pty Ltd (In liquidation) v Barclays Services Pty Ltd (formerly known as Auto Panel Beating & Radiators Pty Limited) & Ors (No. 2) [2009] NSWSC 1308 (3 December 2009)

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Auto Panel Beaters & Radiators Pty Ltd (In liquidation) v Barclays Services Pty Ltd (formerly known as Auto Panel Beating & Radiators Pty Limited) & Ors (No. 2) [2009] NSWSC 1308 (3 December 2009)

Last Updated: 8 December 2009

NEW SOUTH WALES SUPREME COURT

CITATION:
Auto Panel Beaters & Radiators Pty Ltd (In liquidation) v Barclays Services Pty Ltd (formerly known as Auto Panel Beating & Radiators Pty Limited) & Ors (No. 2) [2009] NSWSC 1308


JURISDICTION:
Equity

FILE NUMBER(S):
5462/08

HEARING DATE(S):


JUDGMENT DATE:
3 December 2009

PARTIES:
Plaintiff: Auto Panel Beaters & Radiators Pty Limited (in liquidation)
First Defendant: Barclays Services Pty Ltd (formerly known as Auto Panel Beating & Radiators Pty Limited)
Second Defendant: Registrar General
Third Defendant/Cross Claimant: Roger Whalebone
Fourth Defendant: A1 Catering Pty Limited

JUDGMENT OF:
Forster J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
Plaintiff: M. S. Henry
Second Defendant: submitting appearance
Third and Fourth Defendant/Cross Claimant: A.Reoch, J. Dowling

SOLICITORS:
Plaintiff: Luke Whiffen, Watson Mangioni Lawyers Pty Ltd
First Defendant: M. Barclay
Second Defendant: submitting appearance
Third Defendant/Cross Claimant: J. Dowling


CATCHWORDS:
Application for indemnity costs where party's evidence disbelieved
party's evidence not deliberately concocted
rather, party had persuaded himself as to the truth of his evidence
trial properly conducted
indemnity costs not awarded.

LEGISLATION CITED:
Civil Procedure Act 2005
Uniform Civil Procedure Rules 2005

CATEGORY:
Procedural and other rulings

CASES CITED:
Degmam Pty Ltd (in liq) Wright (No. 2) [1983] 2 NSWLR 354
Oshlack v Richmond River Council [1993] HCA 11; (1998) 193 CLR 72

TEXTS CITED:


DECISION:
See paragraph 13 of judgment.



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION



FORSTER J

THURSDAY, 3 DECEMBER 2009

(5462/08) AUTO PANEL BEATERS & RADIATORS PTY LTD (IN LIQUIDATION) ACN 000 417 590 v BARCLAYS SERVICES PTY LIMITED (FORMERLY KNOWN AS AUTO PANEL BEATING & RADIATORS PTY LIMITED) ACN 000 359 071 (NO. 2)

JUDGMENT

1 HIS HONOUR: I delivered my judgment in this matter on 17 November 2009. On that occasion, I indicated the orders that I proposed to make but invited any further submissions as to the form of those orders and as to the costs orders which I should make.

2 I have now received submissions made on behalf of the plaintiff and the third and fourth defendants.

3 None of those parties cavil with the substantive orders I indicated I proposed to make. The only dispute between the parties relates to costs. On behalf of the plaintiff it was submitted that the order that I should make is that the third defendant, Mr Whalebone, pay the costs of the plaintiff on the indemnity basis. On behalf of Mr Whalebone it was submitted that the costs order against him should be on the ordinary basis.

4 Part 42, rule 42.2 of the Uniform Civil Procedure Rules 2005 provides as follows:

“42.2 Unless the court orders otherwise or these rules otherwise provide, costs payable to a person under an order of the court or these rules are to be assessed on the ordinary basis.”

5 However, under section 98(1)(c) of the Civil Procedure Act, 2005, the Court has the power to order that costs are to be awarded on an indemnity basis.

6 It is clear that the circumstances in which an indemnity costs order may be made are varied and not closed, but I accept the submission made on behalf of the plaintiff that generally speaking, those circumstances involve some relevant delinquency on the part of the unsuccessful party: Oshlack v Richmond River Council [1993] HCA 11; (1998) 193 CLR 72 at 89. In the present case, the relevant delinquency relied upon by the plaintiff is that the allegations of fact forming the basis for Mr Whalebone’s defence “were false and deliberately concocted in an attempt to deny the successful party its rights”. The plaintiff relies in particular on what was said in that context by Holland J in Degmam Pty Ltd (in liquidation) Wright (No. 2) [1983] 2 NSWLR 348 at 354.

7 In support of that submission, the plaintiff points to various respects in which I rejected Mr Whalebone’s evidence and to other criticisms I made of that evidence. Reliance is also placed on my ultimate refusal to rely on it.

8 There is no doubt that I did not accept the evidence given by Mr Whalebone. Had I done so, the ultimate outcome of this litigation would probably have been different.

9 It is worth noting that in Degmam Holland J had before him a somewhat extreme case. What his Honour said was the following:

“The next question therefore is whether there is a case made out for a special order. I think that there is. I do not wish to repeat what I had to say, in my reasons for judgment, about the merits of the defences and causes of action put forward by the defendant or the manner in which she conducted herself in the course of the litigation and in the witness box. It is sufficient to say that the allegations of fact she made as the basis of her defences and causes of action were in my opinion false and deliberately concocted by her

in an attempt to deny the plaintiff its rights and to shift all blame and legal liability to the plaintiff from herself to the second cross-defendant. As well as that, she so conducted herself in the proceedings, by multiplying allegation upon allegation, and by prevaricating in the witness box, as grossly to prolong the litigation, thereby to cause the other parties to incur liability for solicitor and client costs far beyond what they could reasonably have expected to incur in litigation of genuine issues. The discretion which the court has as to costs is, as has been said many times, to be exercised judicially, that is to say upon proper grounds and the court will not lightly depart from standard practice in the awarding of costs. It is suggested that the absence of precedents for orders of the present is a reason for hesitating to make such orders.”

10 The case before me is, however, quite different. What I said in [22] of my judgment is as follows:

“22. By contrast, I cannot say the same about Mr Whalebone. While I accept that people who are skilled in other areas may not handle their “paperwork” particularly well, I do not accept Mr Whalebone’s evidence by which he sought to blame matters that he could not satisfactorily explain on sloppy paperwork on his part. I found his answers to be evasive, and it was my impression that Mr Whalebone was at least in some cases intentionally “bending” the truth. More often, it was my impression that Mr Whalebone had retrospectively convinced himself as to what his intentions had been in 1987, and persisted in that belief even if it caused him to answer questions in terms that were quite absurd. He was prone to blame others, particularly Mr York, for any matter that was inconsistent with his principal theme, and I am of the view that unless it is supported by objective or independent corroborative evidence, or unless it is inherently probable, I should not rely on his evidence.” [Emphasis added]

11 I did not find that Mr Whalebone deliberately concocted his story, nor have I any criticism of the manner in which he, through his legal representatives, conducted the trial. There was before me a genuine issue of fact which I resolved unfavourable to Mr Whalebone. I did not accept his evidence, and in certain respects, I was particularly critical of it.

12 Nevertheless, I do not consider that Mr Whalebone set about deliberately to concoct his evidence while knowing it to be false. He had persuaded himself that his evidence was true. In my opinion, there was no such “relevant delinquency” on his part as to justify an order for indemnity costs.

13 Accordingly, I make the following orders:

(1) I declare that the transfer registered on 22 July 1987 for the transfer of the whole of the property in Volume 4945 Folio 219, Botany ("the Transfer"), being the property known as 1507 Botany Road, Botany ("the Property"), intended to transfer the third defendant's interest in the Property to the plaintiff.

(2) I declare that the Transfer did not intend to transfer the third defendant's interest in the Property to the First Defendant.

(3) I declare that the Transfer did not intend to transfer the third defendant's interest in the Property to "Auto Panelbeating and Radiator Pty Limited ".

(4) I declare that the Transfer did not express the true agreement of the third defendant and the plaintiff and was executed under a common mistake.

(5) I order that the Transfer be rectified so as to express the true agreement between the third defendant and the plaintiff that the third defendant transfer his interest in the Property to "Auto Panel Beaters & Radiators Pty Limited".

(6) I order that the second defendant:

a) cancel the existing folio of the Register for the Property;

b) create a new folio of the Register for the Property;

c) remove "Auto Panelbeating and Radiator Pty Limited” as the registered proprietor of the Property and record "Auto Panel Beaters & Radiators Pty Limited (in liquidation)" as the registered proprietor of

the Property; and

(7) I order that the third defendant’s cross summons filed 4 February 2009 be dismissed.

(8) I order that the third defendant pay the costs of the plaintiff and of the first and second defendants, in each case both of the claim and of the cross claim.

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LAST UPDATED:
4 December 2009