Arktos Pty Ltd v Idyllic Nominees Pty Ltd [2003] FCA 574

Arktos Pty Ltd v Idyllic Nominees Pty Ltd [2003] FCA 574

A costs order can be made against a director who, as a party, played an active role in the conduct of the litigation and had a significant financial interest in its outcome where the company is insolvent and unable to pay the costs, provided such an order is just and does not cause injustice.

Parties
First Applicant: Arktos Pty Ltd (ACN 093 410 247); Second Applicant: Linda Davies; First Respondent: Idyllic Nominees Pty Ltd (ACN 085 028 057); Second Respondent: Donald George Moore; Third Respondent: David Ian Price; Fourth Respondent: Skycorp Investments Pty Ltd (ACN 078 121 534); Non Party (application Considered for Costs Order): Jennifer Anne Price
Jurisdiction
Australia
Judgment Date
05 June 2003
Procedural Posture
Application for Supplementary Costs Order / Post Judgment, Costs Determination
Outcome
Application partly granted as to third respondent, refused as to others.
Legal Topics
Costs Orders, Non Party Costs Liability, Director Liability, Corporate Insolvency, Supplementary Orders
Civil Procedure Corporate Law Trusts Costs Orders Non Party Costs Liability Director Liability Corporate Insolvency Supplementary Orders

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Parties

Arktos Pty Ltd (ACN 093 410 247)

First Applicant

Linda Davies

Second Applicant

Idyllic Nominees Pty Ltd (ACN 085 028 057)

First Respondent

Donald George Moore

Second Respondent

David Ian Price

Third Respondent

Skycorp Investments Pty Ltd (ACN 078 121 534)

Fourth Respondent

Jennifer Anne Price

Non Party (application Considered for Costs Order)

Procedural Posture

Application for Supplementary Costs Order / Post Judgment, Costs Determination

Legal Issues

  1. 1 Whether a costs order can be made against a party (director) after entry of judgment when company is an entity of straw
  2. 2 Whether a non-party or party director can be required to pay costs owed by insolvent company
  3. 3 Effect of not seeking security for costs and not giving prior notice of application against directors

Ratio Decidendi

A costs order can be made against a director who, as a party, played an active role in the conduct of the litigation and had a significant financial interest in its outcome where the company is insolvent and unable to pay the costs, provided such an order is just and does not cause injustice.

Court Disposition

Application partly granted as to third respondent, refused as to others.

Orders

  • The third respondent (David Ian Price) pay to applicants the costs ordered to be paid by first respondent in paragraph 3 of orders made 11 April 2003.
  • Solicitors' undertaking regarding discharge of sums allowed on taxation to expert witnesses from costs recovered.