Arena Management Pty Ltd (Receiver & Manager Appointed) v Campbell Street Theatre Pty Ltd

This case concerned an appeal from an order of the Supreme Court of New South Wales that a liquidator, Randall Joubert, personally pay the costs of certain litigation without a right of indemnification from the company's assets. The dispute arose from claims brought by Arena Management Pty Ltd (in liquidation) and its liquidator against Campbell Street Theatre Pty Ltd (CST). The claims involved allegations of unfair preference, uncommercial transactions, and other breaches of the Corporations Act 2001 (Cth), as well as claims concerning the validity of a charge and a debt owed to Arena.

The Court of Appeal was required to determine whether leave to appeal was necessary against the costs order, specifically considering whether the order was one "as to costs only" within the meaning of section 101(2)(c) of the Supreme Court Act 1970. It also had to consider whether an order denying a liquidator a right of indemnity for costs constituted an order as to "costs... which are in the discretion of the court," and whether the liquidator, in his dual capacity as plaintiff in statutory claims and as a non-party in relation to other claims, was subject to the court's general power to make costs orders.

The Court reasoned that the order denying the liquidator a right of indemnity was not merely an order as to costs within the court's discretion, but rather a determination that the costs were not "properly incurred" due to the liquidator's conduct. This distinction was crucial in determining the right of appeal. The Court noted that the liquidator was a party to the statutory claims, where costs would ordinarily follow the event and be indemnified from company assets if available. However, in relation to other claims, he acted in substance as a non-party, and the denial of indemnity stemmed from findings of imprudent or unreasonable conduct in prosecuting the proceedings, drawing on principles established in cases concerning trustees and liquidators.

The Court declared that Randall Joubert was entitled to appeal as of right against the Costs Judgment, insofar as it held that he should bear personally the costs of the litigation in the court below. It directed that a Notice of Appeal be filed within 21 days, modifying the existing draft to name Arena as a respondent and allowing for the inclusion of a ground of appeal concerning procedural fairness. The Court also extended the time for filing such a Notice of Appeal and ordered that the costs of the application for leave to appeal be costs in the appeal.