Jenkins v Jonkay Pty Ltd [2007] FCA 858

Jenkins v Jonkay Pty Ltd [2007] FCA 858

The liquidator was not personally liable for the plaintiff's costs because, although the concerns about the mortgagee's entitlement to the deposit had no substance and legal advice would likely have led to refund of the deposit, the liquidator had no funds to obtain advice and was protected by s 545 unless it was obvious to any liquidator that the plaintiff was entitled to the money; the Court could not make that finding.

Jurisdiction
Australia
Judgment Date
05 June 2007
Procedural Posture
Corporations Winding Up Costs Application / Reasons for Judgment on Application for Costs Against the Liquidator After the Plaintiff Succeeded in the Proceeding Against the Company
Outcome
Application for costs against the liquidator dismissed; first named defendant ordered to pay the plaintiff's costs of the proceeding.
Legal Topics
['winding Up' 'liquidator Personal Liability for Costs' 'costs Orders' 'sufficient Available Property in Liquidation' 'leave to Proceed Against Company in Liquidation']
['corporations Law' 'insolvency' 'civil Procedure'] ['winding Up' 'liquidator Personal Liability for Costs' 'costs Orders' 'sufficient Available Property in Liquidation' 'leave to Proceed Against Company in Liquidation']

Case Brief

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Procedural Posture

Corporations Winding Up Costs Application / Reasons for Judgment on Application for Costs Against the Liquidator After the Plaintiff Succeeded in the Proceeding Against the Company

Legal Issues

  1. 1 ['Whether a costs order should be made personally against the liquidator of Jonkay Pty Ltd (in liq) in an action brought by leave against the company where the plaintiff was successful and the company had no assets.' "Whether the liquidator's failure to obtain legal advice or direct return of the plaintiff's deposit was unreasonable so as to justify personal liability for costs." 'Whether s 545 of the Corporations Act 2001 (Cth) protected the liquidator from liability to incur expenses where there were no funds in the liquidation.']

Ratio Decidendi

The liquidator was not personally liable for the plaintiff's costs because, although the concerns about the mortgagee's entitlement to the deposit had no substance and legal advice would likely have led to refund of the deposit, the liquidator had no funds to obtain advice and was protected by s 545 unless it was obvious to any liquidator that the plaintiff was entitled to the money; the Court could not make that finding.

Court Disposition

Application for costs against the liquidator dismissed; first named defendant ordered to pay the plaintiff's costs of the proceeding.

Orders

  • ['The application for costs against the liquidator be dismissed and there be no order as to the costs of that application.' "The first named defendant pay the plaintiff's costs of the proceeding."]