Caratti v Boban Pty Ltd (Administrators Appointed) [No 2]

In Caratti v Boban Pty Ltd (Administrators Appointed) [No 2], the applicant sought an order for the winding up of two companies, Boban Pty Ltd and Pineview Pty Ltd, on the grounds that it was just and equitable to do so. The respondents, the liquidators of the companies, opposed the application and argued that it should be dismissed. The matter was heard in the Supreme Court of New South Wales, where Justice Hamill was the presiding judge. The central legal issue was whether the court should dismiss the application for winding up the companies on the just and equitable ground and, if so, whether costs should follow the event in favour of the respondents.

The court considered the principles for determining costs orders in cases where there had been no hearing on the merits. Justice Hamill noted that where both parties have acted reasonably throughout the proceedings and the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. However, the court may make an order for costs in appropriate cases, such as where one party has acted so unreasonably that the other party should obtain the costs of the action, or where one party was almost certain to have succeeded in the matter. In this case, Justice Hamill found that neither party had acted unreasonably, and there was no clear indication that one party was almost certain to have succeeded. Therefore, the court declined to make an order for costs in favour of either party.

The court also considered whether it should adjourn the issue of costs until the liquidators delivered their report as to the solvency of the companies. Justice Hamill rejected this suggestion, stating that a report of liquidators is not a determination by the court and is not limited to considering the evidence which has been produced in court to date. The court held that it should not use a report of liquidators as a substitute for a determination of the court for the purposes of awarding costs.

In conclusion, the court dismissed the applicant's application for the winding up of the companies on the just and equitable ground and made no order as to the costs of the proceedings. The final orders were that the application be dismissed with no order as to costs.