Anthony Warner
It started in 2015 and maybe it’ll conclude this year. But given the potential for disagreement generated over almost 10 years of litigation, who the hell knows.
Since November 2018 when the principle issues were thought to be resolved in the plaintiff’s favour in Shazbot Pty Ltd v Warner Capital Pty Ltd [2018] NSWSC 1645 two warring Sydney liquidators have found new opportunities to perpetuate their rivalry on the battlefields of costs and interest.
“The problem with counsel’s argument about satisfaction of joint and several liabilities was that there has been no actual satisfaction of the companies’ liabilities; the figures will only work if Mr Warner actually pays, in full, the judgment debts that have been entered against him. If he does not (and I have been told that this is a possibility), then, unless it is possible to enforce full payment of their declared liabilities from the companies, the partnership’s receipts will be reduced and the calculations will need to be re-done.” Guy Parker, NSW Supreme Court.
In September last year Guy Parker, the NSW Supreme Court judge who’s had carriage of this burdensome matter made a range of orders – consented to by the parties – in respect of the enemies accounting to their former partnership.
Some of these orders have subsequently been appealed by the primary defendant, being liquidator Anthony Warner, and while he applied to have the orders set aside he didn’t seek to have them stayed.
That meant Judge Parker could still proceed on questions of things like interest on amounts owing, interest on costs and an application for indemnity costs sought by Warner’s nemesis and former insolvency practice partner Steve Kugel, who can claim to have had the lion’s share of wins in this torturous fracas.
On February 9, Judge delivered his fifth judgment, which deals with three points flowing from his November 2023 judgement in Shazbot Pty Ltd v Warner Capital Pty Ltd (No 5) [2023].
Those points include how the ex-partners are to account for their shares of the assets of what Judge Guy Parker had previously found was a partnership constituted by the pair way back when they were mates. There is also the question of costs and interest on those costs to be resolved.
In the latest edition of this saga – detailed in Shazbot Pty Ltd v Warner Capital Pty Ltd (No 6) [2024] NSWSC 81 – Judge Parker delivered a variety conclusions in respect of costs and of interest payable to the partnership by the pair.
Warner and corporate defendants he controls copped the heaviest impost, being $681,537.05 and $15,910.52. Kugel was ordered to pay amounts of $12,674.74 and $78,369.49.
The judge also ordered that the pair “cooperate” in respect of engaging a tax agent within 28 days to register a tax file number for the partnership, lodge “tax returns for the Partnership Firm as may be required for the current financial year and future financial years and obtain advice on whether lodgement of tax returns for the Partnership Firm for past financial years, going back to 2007-2008, or any of them, would be futile in that it would not result in any additional tax being exacted for the income of the Partnership Firm for the year in question”.
Over? Not by a long shot. The judge has ordered the tax office get involved.
Lawyers and parties have an obligation as to just quick and cheap: s 56 Civil Procedure Act 2005 and also proportionality of costs: s 60 Civil Procedure Act 2005. A serious question must arise where proceedings have gone on for 10 years with multiple judges as to whether these mandatory requirements have been satisfied. It ought not be for the Judge to suggest such compliance.