Properly contradictory or utterly adversarial?

Mackay Goodwin principal Domenic Calabretta is licking his wounds after being ordered to pay the costs of his unsuccessful intervention in an application where Hayes Advisory’s Alan Hayes sought leave of the court to distribute a surplus in his capacity as liquidator of Sirrah Pty Ltd.

Calabretta had intervened on the basis that he had standing as receiver appointed to Harris Health Care Pty Ltd (HHC), which was both a debtor to Sirrah and its largest shareholder.

But in seeking directions from the court as to the distribution, it became clear that Hayes would apply a methodology that would exclude HHC.

This was not to the liking of Calabretta’s appointor, lawyer Farshad Amirbeaggi, who had security by virtue – if such a term is appropriate – of a legal services agreement (LSA) executed in June 12, 2020 by Gregory and Michelle Harris, the second and fourth defendants in the proceedings.

But In the matter of Sirrah Pty Ltd (in liq) [2024] NSWSC 857 NSW Supreme Court judge Ashley Black recounted how he rejected Calabretta’s arguments and therefore wasn’t accepting submissions about how Calabretta had been a necessary contradictor.

He described submissions by Hayes’ legal team as carrying substantial weight.

“Mr Calabretta took the risk on those costs when he – as receiver of a hopelessly insolvent HHC – turned what would otherwise have been a non-adversarial application into an adversarial one,” Hayes’ barristers Ben Katekar and John Anderson said.

“Costs should follow this particular event, and should be ordered to be paid by the true antagonist, Mr Calabretta.”

His honour agreed.

“Here, it seems to me that the matters to which I have referred above have the consequence that a costs order should be made that Mr Calabretta pay the Plaintiff’s and the Second Defendants’ costs of the application,” the judge said.

“First, Mr Hayes’ application for leave to distribute the surplus should have been uncontroversial; a contested application was necessitated only by Mr Calabretta’s opposition to the course proposed by Mr Hayes; and the course that Mr Calabretta took was directed to advancing the economic interests of his appointor, Yates Beaggi. 

“It is plain that Mr Calabretta’s intervention significantly extended the length of the application, and imposed substantial costs upon the liquidation and, consistent with the approach in New Cap, such costs should not be borne by the creditors.”

Barring any challenge the judge’s decision leaves Calabretta and Amirbeaggi to work out which of them is going to lose skin in this failed game.

Further reading:

Primary Judgment: In the matter of Sirrah Pty Ltd (in liq) [2024] NSWSC 857