Johns Perry Industries Pty Ltd v Troisi Steel Fabrications Pty Ltd (Receiver and Manager Appointed) No. SCGRG 91/2627 Judgment No. 3769 Number of Pages 7 Practice Costs

The case of Johns Perry Industries Pty Ltd v Troisi Steel Fabrications Pty Ltd (Receiver and Manager Appointed) involves a dispute over the costs of litigation. The plaintiff, Johns Perry Industries Pty Ltd, had appointed a receiver and manager to manage its affairs, and the defendant, Troisi Steel Fabrications Pty Ltd, sought an order for costs against both the plaintiff and its receiver and manager. The Supreme Court of South Australia was tasked with determining whether the court's discretion regarding costs could be exercised against a non-party, specifically the receiver and manager of the plaintiff. The court also had to decide if the circumstances justified making such an order.

The court's reasoning was grounded in the principles established in Knight v SP Special Assets Ltd. The Supreme Court Act and the Supreme Court Rules provided a broad discretion to the court regarding the allocation of costs. The court interpreted this discretion to extend to non-parties under certain circumstances, such as when the party to the litigation is insolvent or a man of straw, and the non-party has an interest in the subject matter of the litigation. The court found that the receiver and manager, who was effectively managing the plaintiff's interests in the litigation, fell within this category. The court concluded that the order for costs sought by the defendant was justified, as the receiver and manager, acting on behalf of the secured creditor Westpac, should bear the risk of costs if the action failed.

The final outcome was that the defendant was to have its costs of action against the plaintiff taxed, with the plaintiff and its receiver and manager jointly and severally liable for these costs, excluding those related to the counterclaim. The defendant's costs regarding the counterclaim up to the stage of the default judgment were to be borne solely by the plaintiff, while any further costs related to the counterclaim would be determined by the trial judge. The court also ordered that the costs of the present application would be heard separately.