Chand v Azurra Pty Ltd (In Liq)

The applicant, Chand, sought to continue litigation against Azurra Pty Ltd (in liquidation). The primary judge had granted leave to continue the proceedings but ordered that the applicant pay the liquidator's costs of the application. Chand appealed this costs order to the Court of Appeal.

The central legal issue before the Court of Appeal was whether the primary judge had erred in exercising their discretion by ordering the applicant to pay the liquidator's costs of the application for leave to continue litigation, rather than making the costs "in the cause" (meaning the costs would be determined at the conclusion of the main proceedings).

The Court of Appeal held that an application for leave to continue litigation against a company in liquidation, pursuant to section 500(2) of the Corporations Act 2001 (Cth), is an application for a privilege or dispensation. The court reasoned that liquidators are entitled to be indemnified for their reasonable costs incurred in dealing with such applications. The primary judge's decision to order the applicant to pay the liquidator's costs was within the proper exercise of their discretion, as it reflected the general principle that an applicant seeking such leave should bear the costs of the liquidator's involvement.

The appeal was dismissed, and the applicant was ordered to pay the costs of the appeal.