Liquidator’s bid for indemnity costs backfires

The moral of this story might be that no matter how much you doubt that a person can’t comply with an obligation due to illness, you’re going to struggle to persuade a judge to agree with you.

“There was no expert evidence about the state of COVID infections and medical advice in South Australia and New South Wales at the relevant time. Nor were submissions made about the government policies and health advice at the relevant time.” Justice Elisabeth Peden.

In the matter of Mawson Flinders Cook Global Capital Pty Ltd [2022] NSWSC 1369 liquidator Domenic Calabretta sought indemnity for costs thrown away when one individuals applied to have his examination adjourned for six months on the first day of the scheduled examination.

Justice David Hammerschlag refused that application with costs and the examination proceeded via audio visual link (AVL) given the examinee was in South Australia and given that he had contracted COVID, had not been able to travel to Sydney to be examined in person.

As explained by newly minted NSW Supreme Court judge Elisabeth Peden, it was during this remote examination that conduct allegedly occurred that Calabretta felt justified his application for indemnity costs.

“During that examination, it appeared to the applicant that Mr Thomas may have used his mobile phone and stored company records on it,” the judge said.

“Hammerschlag CJ in Eq made orders that Mr Thomas not remove any information from the phone and to allow it to be examined by an independent technology expert.

“The report provided that the expert’s opinion was: It is my opinion that the actions between 12 and 13 July 2022, would indeed have either deleted, removed or overwritten existing data from the device, assuming this device was in normal use prior to 12 July 2022.

“On the basis of those matters, the applicant submitted that I ought to infer that Mr Thomas breached Court orders and such conduct supports the application for indemnity costs.”

Well it would seem that Calabretta’s legal team, headed by Jonathan Nathan lacked the powers of persuasion necessary to sway the judge.

“There is no evidence of the costs agreements with counsel and solicitors that entitled the payment of costs thrown away for all of the examination dates,” she said.

“Further, there is no evidence that the costs incurred preparing for the examinations were “thrown away”, as the examinations did in fact proceed in September 2022,” she said.

Further, “Any alleged misconduct by Mr Thomas during the previous examinations and in relation to his phone do not, in my view, relate to costs thrown away by the applicant and do not provide a causal link to the costs claimed. The application is therefore dismissed with costs.”