Melhelm Pty Ltd, in the matter of Boka Beverages Pty Ltd (in liquidation) v Boka Beverages Pty Ltd (in liquidation) (No 2) [2019] FCA 1809

Melhelm Pty Ltd, in the matter of Boka Beverages Pty Ltd (in liquidation) v Boka Beverages Pty Ltd (in liquidation) (No 2) [2019] FCA 1809

The general purpose liquidators did not act unreasonably in opposing the appointment of special purpose liquidators: their opposition was vindicated as to Icon Brewing, Melhelm was not entirely successful, the evidence did not support a finding that they acted for personal interests or for the director, and Mr Cvitanovic genuinely believed that standing and discretion issues should be raised in the company's interests. Therefore they were not deprived of the usual protection from personal liability, Melhelm's costs of the appointment application were payable by the company, the liquidators' costs were costs in the liquidation, Icon Brewing was not entitled to costs, and Melhelm had to pay...

Jurisdiction
Australia
Judgment Date
07 November 2019
Procedural Posture
Costs Application in Corporations and Corporate Insolvency Proceeding / Following Appointment of Special Purpose Liquidators; Plaintiffs Sought Further Orders as to Funding, Costs, and Confidentiality
Outcome
Costs orders made; application for costs by Icon Brewing dismissed; Melhelm's application for costs orders against the second and third defendants personally failed.
Legal Topics
['costs in Liquidation Proceedings' "liquidators' Right of Indemnity" 'personal Liability of Liquidators for Costs' 'appointment of Special Purpose Liquidators' 'confidentiality Orders']
['corporations Law' 'insolvency' 'civil Procedure'] ['costs in Liquidation Proceedings' "liquidators' Right of Indemnity" 'personal Liability of Liquidators for Costs' 'appointment of Special Purpose Liquidators' 'confidentiality Orders']

Case Brief

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Procedural Posture

Costs Application in Corporations and Corporate Insolvency Proceeding / Following Appointment of Special Purpose Liquidators; Plaintiffs Sought Further Orders as to Funding, Costs, and Confidentiality

Legal Issues

  1. 1 ["Whether the general purpose liquidators should pay the plaintiffs' costs of the proceeding personally." "Whether the general purpose liquidators should be denied recourse to their right of indemnity from the company's assets or recoveries for costs." 'Whether the general purpose liquidators acted unreasonably in opposing the appointment of special purpose liquidators.' 'Whether Icon Brewing was entitled to a costs order despite not being found to be a creditor.']

Ratio Decidendi

The general purpose liquidators did not act unreasonably in opposing the appointment of special purpose liquidators: their opposition was vindicated as to Icon Brewing, Melhelm was not entirely successful, the evidence did not support a finding that they acted for personal interests or for the director, and Mr Cvitanovic genuinely believed that standing and discretion issues should be raised in the company's interests. Therefore they were not deprived of the usual protection from personal liability, Melhelm's costs of the appointment application were payable by the company, the liquidators' costs were costs in the liquidation, Icon Brewing was not entitled to costs, and Melhelm had to pay...

Court Disposition

Costs orders made; application for costs by Icon Brewing dismissed; Melhelm's application for costs orders against the second and third defendants personally failed.

Orders

  • ["The first defendant pay the first plaintiff's costs of the application for appointment of special purpose liquidators." "The second plaintiff's application for costs be dismissed." "The second and third defendants' costs of the application for appointment of special purpose liquidators be costs in the liquidation...