Capital Securities XV Pty Ltd (in liquidation) v Calleja; Calleja PJC Furniture Freighters Pty Ltd v Capital Finance XV Pty Ltd (in liquidation) (No 2)

In this case, the liquidator of Capital Securities XV Pty Ltd sought costs from the liquidator of Capital Finance XV Pty Ltd and Mr. Calleja, a director of the latter company. The dispute arose from proceedings where the liquidator of Capital Securities XV sought to recover property from Mr. Calleja. The matter was heard in the Supreme Court of New South Wales. The primary issue for the court was whether it was appropriate to make a costs order against a non-party, in this case Mr. Calleja, and on what basis the costs should be quantified. Specifically, the court had to consider whether it was in the interests of justice to award costs against Mr. Calleja and whether the costs should be assessed on an indemnity basis.

The court noted that Mr. Calleja was not a party to the proceedings but had been involved in the dispute and had been represented by the same solicitor as Capital Finance XV Pty Ltd. The court considered the principles of indemnity costs and the discretion to award costs against non-parties. The court observed that it is in the interests of justice to make a third-party costs order where it is just and equitable to do so, particularly when the non-party has been involved in the litigation and has been represented by the same solicitor as a party to the proceedings. In this case, the court found that it was appropriate to make an order for costs against Mr. Calleja. The court also considered the appropriate basis for quantifying the costs. It held that because offers had been made relying on the principles in Calderbank v Calderbank, an order for costs on an indemnity basis was appropriate.

The court determined that it was just and equitable to make a costs order against Mr. Calleja on an indemnity basis. The court reasoned that Mr. Calleja had been involved in the litigation and had been represented by the same solicitor as Capital Finance XV Pty Ltd, which was a party to the proceedings. The court also considered the principles of indemnity costs and found that the liquidator had made an offer to settle on terms that were more favourable than the ultimate outcome, which supported an indemnity costs order. The court ordered that Mr. Calleja pay the costs of the liquidator on an indemnity basis.