FEDERAL COURT OF AUSTRALIA

QNI Resources Pty Ltd, in the matter of Queensland Nickel Pty Ltd (in liquidation) v Queensland Nickel Pty Ltd (in liquidation) [2017] FCA 1594

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 1337H of the Corporations Act 2001 (Cth), the proceeding is to be transferred to the Supreme Court of Queensland.

2.    The Registrar send forthwith each document filed, and any orders made, in this proceeding to the appropriate officer of the Supreme Court of Queensland.

3.    The costs of this proceeding, including the costs of the interlocutory application filed on 11 August 2017, are reserved and are to be determined by the Supreme Court of Queensland.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

EX TEMPORE REASONS FOR JUDGMENT

REEVES J:

1    The second and fourth respondents, and the fifth to eighth respondents, have sought an order for indemnity costs of this proceeding to date against the applicants. I should record that the parties have, today, consented to this proceeding being transferred to the Supreme Court of Queensland under s 1337H of the Corporations Act 2001 (Cth) (the Act).

2    There is a number of decisions of this Court to the effect that a special or unusual feature needs to be present to justify an order for indemnity costs being made against a party. In this application, the respondents have relied upon two such features. They are, first, that the proceeding should not have been commenced in this Court in the first place and, secondly, that, in commencing the proceeding, the applicants did not obtain the leave required under s 471 of the Act to issue proceedings against a company in liquidation.

3    Stated broadly, the object of this proceeding, as explained to me by counsel, was to challenge the authority of the special purpose liquidators to issue certain call notices in the total sum of $209 million. Within the confines of this proceeding, that would involve construing the orders of Dowsett J made in this Court on 18 May 2016. It appears to be common ground that the proceedings that are presently being pursued in the Supreme Court of Queensland raise similar issues, at least with respect to the similar orders made by Bond J. That being so, there is a reasonable argument that this challenge should have been made in that Court. Nonetheless, challenging that authority in this proceeding in this Court was not, as counsel for the respondents accept, an abuse of process. Their main complaint appears to be that it was a more efficient use of court resources to pursue that challenge in the Supreme Court of Queensland, given the proceedings that already existed there.

4    The efficient use of court resources is, of course, a very important matter. In that respect, I note that, after the second and fourth respondents filed their application to transfer this proceeding to the Supreme Court, the applicants did not file any materials in opposition to that application, nor pose any opposition by way of submissions. Furthermore, as I said at the outset, the applicants have now consented to this proceeding being transferred to the Supreme Court of Queensland. Thus, aside from the act of commencing this proceeding in this Court, I am unable to detect any conduct of the applicants in the conduct of this proceeding thus far that has brought about any extra costs for the parties or involved a waste of court resources.

5    There are two other matters I should mention. First, for the purposes of this indemnity costs application, I do not consider it is appropriate to review the conduct of the parties to determine their motives in agreeing to the transfer of this proceeding to the Supreme Court. Accordingly, nothing said in these reasons should be taken to reflect adversely on the conduct of any of the parties on that aspect. Secondly, with respect to the offer contained in the second and fourth respondents’ letter dated 10 August 2017, I agree with Mr Byrne, for the applicants, that it was not expressed in terms that affect the question whether an indemnity costs order should be made.

6    Finally, as to the second special feature mentioned above, I note that, as Mr Sullivan, for the second and fourth respondents, properly conceded, s 471 of the Act allows for the leave necessary to commence proceedings against a company in liquidation to be obtained after nunc pro tunc those proceedings have been commenced. I do not therefore consider the failure to obtain that leave before commencing this proceeding constitutes a special or unusual feature. Having regard to all these considerations, I am not satisfied that the respondents have identified any special or unusual feature that would justify an order for indemnity costs being made against the applicants in this proceeding. I, therefore, dismiss the respondents’ application for an indemnity costs order.

7    As to the respondents’ alternative application for the usual order for costs for this proceeding, first, in my view, the three decisions that I have been referred to by Mr Sullivan (Huntingdale Village Pty Ltd (Receivers and Managers Appointed) (ACN 085 048 531), In the matter of Huntingdale Village Pty Ltd (Receivers and Managers Appointed) (ACN 085 048 531) [2009] FCA 1323; Global Realty Development Corporation v Dominion Wines Ltd (in liq) (2005 56 ACSR 474; [2005] NSWSC 1221 and In the matter of Webster Consolidated (Holdings) Pty Ltd [2016] NSWSC 378) all depend on their peculiar facts and circumstances. I do not, therefore, think I gain any assistance from them. Instead, the question of costs in this proceeding should be reserved because, as a step in the proceeding to transfer it to the Supreme Court, the costs should be determined by the Supreme Court, which is best placed to assess the utility of this proceeding in the context of all of the proceedings that are being pursued in that Court.

Associate:    

Dated:    20 December 2017

SCHEDULE OF PARTIES