Gothard, in the matter of AFG Pty Limited (Receivers and Managers appointed) (in liq) v Davey (No 2) [2011] FCA 59

Gothard, in the matter of AFG Pty Limited (Receivers and Managers appointed) (in liq) v Davey (No 2) [2011] FCA 59

Where receivers commence proceedings for directions under s 424 of the Corporations Act and join necessary contradictory parties to resolve issues central to the receivership, the costs incurred by those joined parties are to be indemnified from the receivership assets on an indemnity basis. This result is reinforced where the proceeding involves factual complexity and novel legal issues, and the joined parties acted as representatives rather than in their own personal interest.

Jurisdiction
Australia
Judgment Date
10 February 2011
Procedural Posture
Application for Costs (following Directions Proceedings Under Corporations Act) / Post Judgment Costs Determination
Outcome
Costs awarded to respondents on an indemnity basis, payable out of receivership property.
Legal Topics
['costs' 'receivership' 'indemnity Costs' 'priority of Employee Entitlements']
['corporations Law' 'insolvency' 'civil Procedure'] ['costs' 'receivership' 'indemnity Costs' 'priority of Employee Entitlements']

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Procedural Posture

Application for Costs (following Directions Proceedings Under Corporations Act) / Post Judgment Costs Determination

Legal Issues

  1. 1 ["Whether respondents' costs should be paid on an indemnity basis out of property in the hands of receivers" 'Whether costs should be on party/party basis or indemnity basis' 'Appropriate basis for awarding costs to representative/respondent parties in proceedings under s 424 of the Corporations Act']

Ratio Decidendi

Where receivers commence proceedings for directions under s 424 of the Corporations Act and join necessary contradictory parties to resolve issues central to the receivership, the costs incurred by those joined parties are to be indemnified from the receivership assets on an indemnity basis. This result is reinforced where the proceeding involves factual complexity and novel legal issues, and the joined parties acted as representatives rather than in their own personal interest.

Court Disposition

Costs awarded to respondents on an indemnity basis, payable out of receivership property.

Orders

  • ["The applicants pay the respondents' costs of and incidental to the proceedings and cross-claims, including the costs of this motion less $200,000 previously paid, as agreed or as taxed." 'The costs are to be calculated so as to fully indemnify the respondents except insofar as any amounts are unreasonable or...