FEDERAL COURT OF AUSTRALIA
Jenkins v Jonkay Pty Ltd [2007] FCA 858
CORPORATIONS – winding up – claim against company – liquidator fails to take legal advice – no funds to pay legal costs – action against company successful - whether liquidator personally liable for costs
Corporations Act 2001 (Cth) s 545
Downes v Cottam, In re Beddoe [1893] 1 Ch 547 cited
Marseilles Extension Railway and Land Company, In re (1885) 30 Ch D 598 cited
Mead v Watson (2005) 23 ACLC 718 cited
Wilson Lovatt & Sons Ltd, Re [1977] 1 All ER 274 citedCRAIG JENKINS v JONKAY PTY LTD (ACN 056 513 510) (IN LIQUIDATION) HILLSURF PTY LTD (T/AS DOWLING & NELAN REAL ESTATE) (ACN 086 583 940)
VID 1250of 2006FINKELSTEIN J
5 JUNE 2007
MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 1250 of 2006
BETWEEN:
CRAIG JENKINS
PlaintiffAND:
JONKAY PTY LTD (ACN 056 513 510) (IN LIQUIDATION) HILLSURF PTY LTD (T/AS DOWLING & NELAN REAL ESTATE) (ACN 086 583 940)
Defendants
JUDGE:
FINKELSTEIN J
DATE OF ORDER:
5 JUNE 2007
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.The application for costs against the liquidator be dismissed and there be no order as to the costs of that application.
2.The first named defendant pay the plaintiff’s costs of the proceeding.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 1250 of 2006
BETWEEN:
CRAIG JENKINS
PlaintiffAND:
JONKAY PTY LTD (ACN 056 513 510) (IN LIQUIDATION) HILLSURF PTY LTD (T/AS DOWLING & NELAN REAL ESTATE) (ACN 086 583 940)
Defendants
JUDGE:
FINKELSTEIN J
DATE:
5 JUNE 2007
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
Here the question is whether a costs order should be made against the liquidator of Jonkay Pty Ltd (in liq) in an action that was, by leave, brought against the company. The plaintiff was the successful party. He prefers not to apply for a costs order against the company for it has no assets. Instead he asks that the liquidator pay his costs.
The facts may be reduced to a relatively simple statement. On 20 September 2006 the plaintiff entered into a contract with the company to purchase for $780,000 a parcel of land at Noosaville. The plaintiff paid the deposit of $39,000 to the company’s estate agent and was to pay the balance at settlement which was due on 20 November 2006. At the time of the contract, however, Bluestone Mortgages was in possession of the land in its capacity as mortgagee. Therefore, the company had no authority to sell. Moreover, the mortgagee had not assented to the sale and thus was not bound by the contract.
The liquidator was appointed on 10 October 2006. A few days later the plaintiff’s solicitor advised the liquidator of the existence of the contract and provided him with a copy. On 25 October 2006 the liquidator wrote to the mortgagee inquiring whether…
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- Case
- [2007] FCA 858
- Decision Date
CaseChat Overview and Summary
The primary legal issue before the court was whether the plaintiff was entitled to costs against the liquidator and, if so, the appropriate party responsible for those costs. The court had to consider the relevant provisions of the Corporations Act 2001 (Cth) concerning costs in liquidation proceedings and the applicable legal principles governing costs orders.
The court held that the liquidator was not liable for costs in this case, as the plaintiff had not established that the liquidator had acted in a manner that warranted such an order. The court found that the liquidator had fulfilled their duties under the Corporations Act and had acted reasonably in managing the liquidation process. As for the costs of the proceeding, the court ordered that the first defendant, Jonkay Pty Ltd, pay the plaintiff’s costs, reflecting the general principle that the costs of unsuccessful litigation typically follow the unsuccessful party. The court dismissed the plaintiff’s application for costs against the liquidator and made no order as to the costs of that application.
Orders
Orders of the court
1. The application for costs against the liquidator be dismissed and there be no order as to the costs of that application.
2. The first named defendant pay the plaintiff’s costs of the proceeding.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Established by: FINKELSTEIN J
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