Knight v FP Special Assets Ltd

Case [1992] HCA 28


HIGH COURT OF AUSTRALIA

Mason C.J., Deane, Dawson, Gaudron and McHugh JJ.

KNIGHT v. F.P SPECIAL ASSETS LIMITED AND OTHERS

(1992) 174 CLR 178

25 June 1992

Practice

Practice—Costs—Award Jurisdiction against non-party—Receiver and manager conducting litigation through insolvent company—Supreme Court Act 1867 (Q), s. 58—Rules of the Supreme Court of Queensland O. 91, r.1.

Decisions


MASON C.J. AND DEANE J. The question in this appeal is whether the Supreme Court of Queensland has jurisdiction to make an order for costs against the receivers of companies which were the unsuccessful parties in proceedings, the receivers themselves not being parties to those proceedings. The Full Court of the Supreme Court (Williams, Ryan and Dowsett JJ.) held that the Court had power under s.58 of the Supreme Court Act 1867 (Q.) to make such an order and further held (Dowsett J. dissenting) that, in the circumstances of the two particular cases, orders were properly made against the appellant receivers. The orders were made by Connolly and de Jersey JJ. at first instance in separate motions on the ground that the receivers had instituted, maintained and defended proceedings in the name of the relevant companies. Special leave to appeal to this Court from the decision of the Full Court was specifically confined to the question whether the Supreme Court had jurisdiction to make the orders. This Court is not concerned therefore to examine the exercise of any discretion to make an order, that being the point on which there was a division of opinion in the Full Court.

2. The facts of the matter and the course of the proceedings which led to the Full Court's decision have been fully related by McHugh J. in the reasons for judgment which he has prepared, so there is no occasion for us to traverse that ground. However, we should mention that the respondents contend that jurisdiction to make the order is conferred either by s.58 of the Supreme Court Act or by O.91 r.1 of the Rules of the Supreme Court.
The provisions

3. Section 58 provides: "The Supreme Court shall have power to award costs in all cases
lawfully brought before it and not provided for otherwise than by this section."

4. Order 91 r.1 provides: "Subject to the provisions of the Judicature Act and these Rules, the
costs of and incident to all proceedings in the Court, including the administration of estates and trusts, shall be in the discretion of the Court or Judge: Provided that nothing herein contained shall deprive an executor, administrator, trustee, or mortgagee who has not unreasonably instituted or carried on or resisted any proceedings of any right to costs out of a particular estate or fund to which he would be entitled according to the Rules heretofore acted upon in Courts of Equity: Provided also, that, subject to the next following Rule, when any cause, matter, or issue is tried with a jury, the costs shall follow the event, unless the Judge by whom such cause, matter, or…

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Details
AGLC
Knight v FP Special Assets Ltd [1992] HCA 28
Case
[1992] HCA 28
Decision Date

CaseChat Overview and Summary

The High Court of Australia considered an appeal from a decision of the Supreme Court of Queensland concerning an award of costs against a non-party. The dispute arose from litigation conducted by a receiver and manager through an insolvent company. The core issue was whether the Supreme Court had the jurisdiction to order a non-party, the receiver and manager, to pay the costs of the proceedings.

The High Court was required to determine the scope of the Supreme Court's power to award costs against a non-party, specifically in circumstances where a receiver and manager was controlling litigation on behalf of an insolvent company. This involved an examination of the relevant Supreme Court rules and legislation governing the award of costs.

The Court held that the Supreme Court possessed the inherent jurisdiction to make orders for costs against a non-party in exceptional circumstances. This jurisdiction is not limited by the fact that the non-party is a receiver and manager acting in that capacity. The Court reasoned that where a receiver and manager, by their conduct, has brought about a situation where it is just and equitable to make them personally liable for costs, such an order can be made. This is particularly so when the company is insolvent and the receiver and manager has effectively controlled the litigation. The Court affirmed that the power to award costs is a fundamental aspect of the court's jurisdiction to manage its own proceedings and ensure fairness.

The High Court allowed the appeal, setting aside the order for costs made against the receiver and manager.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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