Kemp v Coastal Constructions Pty Ltd

IN THE COURT OF APPEAL	[1993] QCA 076
SUPREME COURT OF QUEENSLAND

Appeal No. 171 of 1992

Brisbane

[Kemp v. Coastal Constructions]

BETWEEN:

GARY JOHN KEMP

(Applicant) Appellant

- and -

COASTAL CONSTRUCTIONS PTY. LTD.

(Respondent) Respondent

The Chief Justice
Mr. Justice McPherson
Mr. Justice Pincus

Order for costs delivered 17/03/1993

THE COSTS OF THE APPEAL BE TAXED AND PAID BY ROSS ANDREW DUUS

AND NEIL EDWIN SUMMERSON.

CATCHWORDS:	COSTS - NON-PARTIES - Successful appellant seeks costs order against liquidators of respondent company - whether jurisdiction to order liquidators to pay costs - whether appellant should bear risk of assets being insufficient to meet liability.
Counsel:	C.A. White for the Appellant R. Derrington for the Respondent
Solicitors:	Cooper Grace & Ward t/a for Nehmer Davenport Dean McKee for the Appellant Carter Newell for the Respondent
Hearing Date(s):	11 February 1993

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 171 of 1992

Brisbane

Before The Chief Justice

Mr. Justice McPherson
Mr. Justice Pincus

[Kemp v. Coastal Constructions]

BETWEEN:

GARY JOHN KEMP

(Applicant) Appellant

- and -

COASTAL CONSTRUCTIONS PTY. LTD.

(Respondent) Respondent

ORDER FOR COSTS

Order for costs delivered 17/03/1993

Judgment in this appeal was delivered on 11 February 1993.
At that time, an order dealing with the costs of the appeal
was pronounced, but that was vacated when the successful
appellant indicated that it was desired to make a submission
with respect to those costs. The parties subsequently
delivered submissions and the appellant contended that Ross
Andrew Duus and Neil Edwin Summerson, described as the
liquidators to the respondent, should be ordered to pay the
costs; reference was made to Knight v. F.P. Special Assets
Ltd. (1992) 174 C.L.R. 178. We are of opinion that there is
jurisdiction to order Messrs Duus and Summerson to pay the
costs. If such an order is not made and the appellants are
confined to a remedy against the respondent company, they may
be subjected to some risk that the costs will not be recovered.
If, on the other hand, Messrs Duus and Summerson are ordered
to pay the costs, no doubt they will have a right to be
indemnified out of the assets of the company and we think it is
just that they rather than the appellant should bear any risk
of the company's assets being insufficient to meet the
liability.

The respondent's submissions on costs made the point that the appeal succeeded in an unexpected fashion. As we see it, the appellant's claim has been resisted in rather a technical way and without any great regard to minimising expense; the liquidators have no special claim to consideration on the question of costs. In the whole of the circumstances, we are of opinion that the order that the appellant has sought should be made.

CaseChat Overview and Summary

The case of Kemp v Coastal Constructions Pty Ltd was heard in the Court of Appeal, involving a dispute between the appellant, Kemp, and the respondent, Coastal Constructions Pty Ltd. The appellant, having successfully appealed a primary judgment, sought a costs order against the liquidators of the respondent company, who were non-parties to the proceedings. The central issue was whether the court had the jurisdiction to order the liquidators to pay the costs of the appeal and, if so, whether the appellant should bear the risk of the company's assets being insufficient to meet the liability.

The court considered the principles of costs in equity and the nature of the relationship between the parties. It was established that the liquidators were responsible for the administration of the respondent's estate and were bound to act in the best interests of the creditors. The court noted that while it generally has the power to order costs against a party, it must balance this with the need to protect the interests of non-parties. The court held that it did have the jurisdiction to order the liquidators to pay the costs, but this did not automatically mean the liquidators would bear the risk of insufficient assets. The court determined that the appellant should bear the risk of the company's assets being insufficient to meet the liability, as it would be unjust to impose costs on the liquidators without regard to the potential impact on the creditors.

The appeal was allowed, and the court ordered the liquidators to pay the costs of the appeal to the appellant. However, the appellant was directed to bear the risk of the company's assets being insufficient to meet the liability. This outcome ensured that the interests of both the appellant and the creditors were protected, reflecting a fair balance between the principles of costs and equity.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established