Knight & Anor v FP Special Assets

The appellants, Desmond William Knight and William Gerard Malone, appealed to the High Court of Australia concerning costs orders made against them as receivers and managers of companies that were unsuccessful parties in litigation. The respondents were FP Special Assets Limited, Keen Bay Pty Ltd, and Maindollar. The core of the dispute revolved around the basis upon which these costs orders were made against the receivers personally.

The High Court was required to determine two primary legal issues. First, whether section 58 of the Supreme Court Act of Queensland applied to award costs against the receivers, particularly in light of the existence of other powers to award costs regulated by the Supreme Court Rules. Second, the Court had to consider whether the power to award costs under Order 91 rule 1 of the Queensland Supreme Court Rules extended to non-parties such as the receivers, absent an abuse of process by them. The appellants also contended that the English decision in *Aiden Shipping Co Ltd v Interbulk Ltd* [1986] AC 965, which was relied upon by the lower court, was wrongly decided and should not be followed in Australia.

The appellants argued that section 58 of the Supreme Court Act of Queensland was not applicable because it only operated in the absence of other specific powers to award costs, and Order 91 rule 1 of the Supreme Court Rules provided such an alternative power. Furthermore, they submitted that the power under Order 91 rule 1 was generally limited to awarding costs against parties to proceedings, with exceptions only for cases involving an abuse of process. The appellants contended that the actions of the receivers and managers did not constitute an abuse of process and that they should not be considered "parties" for the purpose of these costs orders. The historical development of costs legislation and the common law and equitable powers of courts to award costs against non-parties were also considered in support of these submissions.