Frigger v Kitay (No 2)

In the matter of Frigger v Kitay (No 2), the applicants sought to challenge the liquidator’s authority to enter into certain agreements and take certain steps in proceedings relating to the liquidation of CAT. The applicants also sought to set aside an order for security for costs, arguing that the solicitor who had made the application lacked the authority to do so on behalf of the company. The court was required to determine whether the liquidator needed approval to enter into certain agreements, whether a costs agreement between the liquidator and a solicitor was sufficient to confer authority on the solicitor to act on the company’s behalf, and whether the solicitor was authorised to make an application for security for costs on the company’s behalf. The court found that the liquidator did not need approval to enter into certain agreements, that the costs agreement was sufficient to confer authority on the solicitor to act on the company’s behalf, and that the solicitor was authorised to make an application for security for costs on the company’s behalf. The court held that the liquidator was entitled to enter into an agreement with a solicitor in his capacity as liquidator and that such an agreement did not require approval under s 477(2B) of the Corporations Act 2001 (Cth). The court also held that a costs agreement naming a company as a party to the agreement required approval, but that the costs agreement in question was approved to the extent that it was required. The court held that the liquidator was authorised to make an application for security for costs on the company’s behalf, and that any want of authority on the part of the solicitor was not a proper basis to set aside an order for security for costs. Finally, the court held that the proceedings should be dismissed if security for costs was not paid within the specified timeframe. The applicants’ application for an order in terms of paragraph 1 of their interlocutory application dated 7 January 2019 (as amended on 29 September 2019) was dismissed, as was their application for an order in terms of paragraph 3 of their interlocutory application dated 30 May 2019 (as amended on 29 September 2019). To the extent that the costs agreement forming annexure MJK-3 to the affidavit of Mervyn Jonathan Kitay sworn on 28 August 2019 was an agreement to which s 477(2B) of the Corporations Act 2001 (Cth) applied, the costs agreement was approved, effective as and from 27 November 2018. Pursuant to s 56(4) of the Federal Court of Australia Act 1976 (Cth) and r 5.21(a) and r 19.01(1)(c) of the Federal Court Rules 2011 (Cth), if the applicants did not comply with the order in paragraph 2 of the orders of 6 May 2019 on or before 15 May 2020, then, by this order, the originating application was dismissed, and the applicants were to pay such of the respondents’ costs of the originating application as were not presently the subject of an order for costs.