Welcome to today’s Chamberlains Selection, where we will discuss with James d’Apice on the matter of Azmac Pty Limited (No 2)  NSWSC 363. We will talk about how a company’s liquidator can be personally liable for costs as a result of unreasonable conduct.
Judgment was handed down confirming Co A was a secured creditor of Co B (in liq).  The next question was: who pays Co A’s legal costs? Co A sought to have Co B’s liquidator, in his personal capacity, pay. A liquidator will be personally liable for costs in “exceptional circumstances” due to unreasonable conduct.  The Court considered the facts to form a view about reasonableness. Early in the liquidation, the liquidator behaved as if Co A was a secured creditor including sending an email Co A described as an ‘undertaking’ to that effect. ,  Later, the liquidator pivoted from this position (apart from admitting that a nominal sum was secured). 
Land, which was Co B’s chief asset, was sold. The proceeds were applied to, among other things, the liquidator’s remuneration.  The liquidator’s change from first accepting Co A was secured creditor and then bitterly  resisting that suggestion was self-interested.  It was also unreasonable and unnecessary, meaning the litigation was provoked by the liquidator, such that Co A’s legal costs ought to be personal visited on him.