In the matter of Azmac Pty Limited (in liquidation) (No 2)

Azmac Pty Limited (in liquidation) was the subject of litigation involving the liquidators appointed to the company. The dispute centred around the liquidators' personal liability for costs and whether they were entitled to pay these costs from the assets of the company in liquidation. The case was heard by the court, which had to determine several legal issues. Primarily, the court had to decide whether the liquidators were personally liable for the costs incurred during the litigation and, if not, whether it was fair for these costs to be paid from the remaining assets of the company.

The court addressed the legal principles governing the liability of liquidators for litigation costs, considering the circumstances under which such liability might arise. It examined whether the liquidators' actions had provoked the litigation, if their conduct was infused with self-interest, and whether their adversarial stance was unreasonable. The court concluded that the liquidators had indeed provoked the litigation, their actions were self-interested, and their adversarial conduct was unreasonable. Given that the liquidators' conduct had failed entirely, the court found it unjust for the creditors, including the plaintiff, to bear the costs through the remaining assets of the company.

In light of these findings, the court ruled that the liquidators were not personally liable for the costs incurred during the litigation. It was deemed unjust for the creditors, including the plaintiff, to bear these costs via the remaining assets of the company in liquidation. The court's decision provided clarity on the principles governing liquidators' liability for litigation costs and highlighted the circumstances in which such liability should not be imposed. The final orders reflected the court's determination that the liquidators were not personally liable for the costs, and the plaintiff was not entitled to recover these costs from the remaining assets of the company in liquidation.