Stanbury & Stanbury

In the matter of *Stanbury & Stanbury*, Altobelli J of the Family Court of Australia considered an application for costs brought by the First and Second Applicants against the respondents, who were the non-party liquidators of B Pty Ltd. The liquidators had sought to be joined to the proceedings but subsequently filed a Notice of Discontinuance before they were formally joined. The Applicants sought costs against the liquidators in relation to the discontinued application.

The central legal issue before the court was whether the Applicants were entitled to an order for costs against the liquidators, notwithstanding the liquidators' discontinuance of their application to be joined. This involved considering the general principles of costs in family law proceedings and the specific circumstances of non-party costs orders, particularly in relation to liquidators and their rights of indemnity.

Altobelli J reasoned that while liquidators generally have a right of indemnity against the assets of the company they are liquidating, this right does not automatically shield them from personal liability for costs in all circumstances. The court applied the principles governing costs, noting that a party seeking costs against a non-party, such as a liquidator, must demonstrate a sufficient basis for such an order. In this instance, the court found that the Applicants were entitled to their costs of and incidental to the application filed by the Respondent on 25 March 2021.

The court ordered that the Respondent liquidators pay the First and Second Applicants’ costs of and incidental to the application filed by the Respondent on 25 March 2021, as agreed or as assessed. Crucially, the order noted that the Respondent liquidators were entitled to a right of indemnity against the assets of B Pty Ltd, thereby acknowledging the source from which those costs would ultimately be drawn.