Harris Health Care Pty Ltd (receivers and managers appointed) (in liq) v Hayes (No 2)

The appeal concerned the costs of an unsuccessful appeal brought by Harris Health Care Pty Ltd (in liq), represented by its receivers and managers, against Hayes (in liq). The primary judge had previously ordered a departure from a pro rata distribution of assets, a decision which Harris Health Care sought to overturn. The Court of Appeal was asked to determine whether the receivers, despite the company being in liquidation, should be ordered to pay the costs of the successful respondent.

The central legal issue before the Court of Appeal was whether to depart from the usual rule that a successful party in litigation should recover their costs from the unsuccessful party, particularly in circumstances where the unsuccessful party was a company in liquidation represented by receivers. The court also considered the implications of the receivers' acknowledgement of potential liability for adverse costs and the fact that security for costs had not been sought by the respondent.

Leeming JA noted that while a company in liquidation is generally liable for costs, the position of receivers and managers appointed privately, who are not officers of the court, requires careful consideration. His Honour observed that the receivers had not provided the requested acknowledgement of liability for adverse costs. However, given the circumstances, including the fact that security for costs had not been sought, the Court determined that it was appropriate to depart from the usual order.

Accordingly, the amended notice of motion was dismissed. No order was made as to the costs of the motion concerning costs, meaning each party was to bear their own costs in that regard. However, Mr Calabretta was ordered to pay the parties’ costs of the directions hearing held on 6 March 2025.