Commonwealth of Australia v Calabretta, in the matter of Condura Pty Ltd (in liq) (No 2) [2019] FCA 444

Commonwealth of Australia v Calabretta, in the matter of Condura Pty Ltd (in liq) (No 2) [2019] FCA 444

The Court had power under s 90-15 of the Insolvency Practice Schedule to order that the Commonwealth's costs in the liquidator removal proceeding be paid from Condura Pty Ltd's assets. The Commonwealth was a successful and proper party to litigation concerning the Company's liquidation, the application was uncontested, and the amount sought represented only about 40% of costs actually incurred. A lump sum order was appropriate because the proceeding was relatively simple and taxation would add cost and inconvenience where the Company's assets were almost exhausted. The proposed amount of $20,000 plus GST was reasonable and unlikely to exceed what would be recovered on formal taxation.

Jurisdiction
Australia
Judgment Date
01 April 2019
Procedural Posture
Costs Application in a Corporations and Corporate Insolvency Proceeding Concerning Removal of a Liquidator / Determined on the Papers After Consent Orders Removing the First Defendant as Liquidator and Appointing a Replacement Liquidator
Outcome
The Commonwealth's application for a lump sum costs order payable out of the assets of Condura Pty Ltd was granted, and the first defendant was ordered to bear his own costs without reimbursement from the Company's assets.
Legal Topics
['removal of Liquidator' 'lump Sum Costs Order' 'costs Payable Out of Company Assets' 'external Administration' 'trustee Indemnity']
['corporations Law' 'corporate Insolvency' 'costs'] ['removal of Liquidator' 'lump Sum Costs Order' 'costs Payable Out of Company Assets' 'external Administration' 'trustee Indemnity']

Case Brief

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Procedural Posture

Costs Application in a Corporations and Corporate Insolvency Proceeding Concerning Removal of a Liquidator / Determined on the Papers After Consent Orders Removing the First Defendant as Liquidator and Appointing a Replacement Liquidator

Legal Issues

  1. 1 ["Whether the Court had power under s 90-15 of Schedule 2 of the Corporations Act 2001 (Cth) to order that the plaintiff's costs be paid out of the assets of the second defendant" "Whether it was appropriate to order that the plaintiff's costs of the proceeding be paid out of the assets of the second defendant" "Whether it was appropriate to fix the plaintiff's costs by way of lump sum" "Whether $20,000 plus GST was an appropriate lump sum for the plaintiff's costs"]

Ratio Decidendi

The Court had power under s 90-15 of the Insolvency Practice Schedule to order that the Commonwealth's costs in the liquidator removal proceeding be paid from Condura Pty Ltd's assets. The Commonwealth was a successful and proper party to litigation concerning the Company's liquidation, the application was uncontested, and the amount sought represented only about 40% of costs actually incurred. A lump sum order was appropriate because the proceeding was relatively simple and taxation would add cost and inconvenience where the Company's assets were almost exhausted. The proposed amount of $20,000 plus GST was reasonable and unlikely to exceed what would be recovered on formal taxation.

Court Disposition

The Commonwealth's application for a lump sum costs order payable out of the assets of Condura Pty Ltd was granted, and the first defendant was ordered to bear his own costs without reimbursement from the Company's assets.

Orders

  • ['Pursuant to s 90-15(3)(d) of Schedule 2 of the Corporations Act 2001 (Cth) (Insolvency Practice Schedule), the first defendant bear his own costs in defending, or incidental to the defence of, this proceeding and is not entitled to be reimbursed from the assets of the second defendant.' "Pursuant to s 43(3)(d) of...