John Raymond Gibbons & Anor as official liquidators of Deemah Marble & Granite Pty Ltd (in liq) v Deputy Commissioner of Taxation

The case involved the John Raymond Gibbons and another official liquidator of Deemah Marble & Granite Pty Ltd, acting as plaintiffs, versus the Deputy Commissioner of Taxation, as the defendant. The matter was brought before the court to address issues related to indemnity costs and the liability of a director to indemnify the Deputy Commissioner of Taxation in respect of judgment and costs. The plaintiffs sought indemnity costs on the basis that the loss or damage they suffered included costs and interest. The primary legal issue before the court was whether the plaintiffs were entitled to indemnity costs and if the director was liable to indemnify the Deputy Commissioner of Taxation in respect of the amount payable to the plaintiffs, including interest and costs, and the Deputy Commissioner's costs incurred in defending the plaintiffs' claim.

The court considered sections 588FF and 588FGA of the Corporations Act, which pertain to the liability of directors and indemnity costs in insolvency contexts. The plaintiffs argued that they should be entitled to indemnity costs, as they had suffered loss or damage that included costs and interest. However, the court found that indemnity costs were not applicable in this instance. Furthermore, the court determined that the director was liable to indemnify the Deputy Commissioner of Taxation in respect of the amount payable to the plaintiffs, including interest and costs, as well as the Deputy Commissioner's costs incurred in defending the plaintiffs' claim, pursuant to section 588FGA(2) of the Corporations Act.

In light of the court's reasoning, it was held that the plaintiffs were not entitled to indemnity costs. Instead, the director was liable to indemnify the Deputy Commissioner of Taxation in respect of the amount payable to the plaintiffs, including interest and costs, and the Deputy Commissioner's costs incurred in defending the plaintiffs' claim. The court's decision was based on the interpretation of relevant sections of the Corporations Act and the specific circumstances of the case.