Ballantyne Suites Pty Ltd v Ballantyne Chambers Pty Ltd (In Liq)

[2014] VSCA 223

Victorian Court of Appeal

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Interrogate

Catchwords

1. Practice and Procedure
2. › Costs
3. › Non-party costs order
4. › Costs order against directors of insolvent plaintiff corporation
5. › Whether exceptional circumstances existed
6. › Whether directors' knowledge of or complicity in fraud required
7. › Whether failure to warn or seek security for costs precluded order
8. › Supreme Court Act 1986 (Vic), s 24
1. Appeal
2. › Leave to appeal
3. › Discretionary costs order
4. › Standard of appellate review
5. › Whether error of principle or manifestly erroneous view of facts
6. › House v The King (1936) 55 CLR 499
7. › Supreme Court Act 1986 (Vic), s 17A(1)(b)

Quick Take

A non-party costs order against directors of an insolvent plaintiff corporation does not require a finding that the directors personally knew of or were complicit in fraud. It is sufficient that the directors knew of circumstances creating a significant risk that the litigation would fail, authorised and actively participated in the litigation through an insolvent company, and stood to benefit from it. The failure to warn of a non-party costs application or to seek security for costs are relevant but not determinative factors, and the weight to be given to them is a matter for the trial judge.