Kation Pty Ltd v Lamru Pty Ltd

This case involved an appeal and cross-appeal concerning a liquidator's actions and the winding up of a company. The parties were Kation Pty Ltd and others (appellants and cross-appellants) and Lamru Pty Ltd (respondent), the liquidator. The dispute centred on challenges to the liquidator's rejection of a proof of debt, the liquidator's accounts, and the liquidator's entitlement to costs. The proceedings were before the Court of Appeal of New South Wales.

The primary legal issues before the court included whether an *Anshun* estoppel applied to prevent the appellants from challenging the liquidator's accounts, whether the equitable defence of "unclean hands" barred the appellants from seeking relief, and whether the liquidator was entitled to costs given the nature of the proceedings and the appellants' active resistance. The court also considered issues relating to the application of specific accounting conventions, potential breaches of trust by the trustee, and the proper apportionment of trustee's costs.

The Court of Appeal reasoned that the appellants' challenge to the liquidator's accounts was not barred by *Anshun* estoppel, as the prior proceedings did not involve the same subject matter or a clear opportunity to litigate the current issues. However, the court found that the "unclean hands" defence was applicable, as the appellants had engaged in malpractice and dishonesty in preceding years, which was directly connected to the relief they sought. The court also determined that the liquidator was entitled to costs, despite the appellants' active opposition, due to the nature of the defence and the substantial costs incurred by the liquidator in defending the proceedings. The court applied principles of estoppel, equitable defences, and the law relating to liquidator's costs.

The Court of Appeal granted leave to appeal and cross-appeal, treating all steps taken as properly filed. However, the appeal itself was dismissed.