Mead v Watson

In *Mead v Watson*, the New South Wales Court of Appeal considered an appeal from orders made by Campbell J concerning the personal liability of a liquidator for costs. The liquidator, David Patrick Watson, had caused the company in liquidation to bring proceedings to recover corporate assets. These proceedings were unsuccessful due to the defences of estoppel and *Ex parte James*. A personal costs order was sought against the liquidator.

The primary legal issues before the Court of Appeal were whether the liquidator's conduct of the litigation was "improper" or whether he acted unreasonably in opposing the *estoppel* and *Ex parte James* defences, thereby establishing "exceptional circumstances" to justify a personal costs order. The court also considered whether the conduct of the litigation warranted an award of indemnity costs against the liquidator.

The Court of Appeal found that the liquidator's conduct in pursuing the claims, particularly in the face of the *estoppel* defence, was unreasonable and constituted exceptional circumstances justifying a personal costs order. The court reasoned that the liquidator ought to have recognised the strength of the *estoppel* defence earlier and that his continued pursuit of the claims was not justified. Consequently, the court allowed the appeal, setting aside the orders of Campbell J and ordering that the liquidator, David Patrick Watson, pay the costs of the first defendant on an indemnity basis in the proceedings concerning the recovery of four properties. Further, the liquidator was ordered to pay the claimant's costs personally on an indemnity basis in relation to certain interlocutory processes heard with those proceedings.