mixed. By consent, leave granted to bring proceedings against company in liquidation under s 471B of the Corporations Act 2001 (Cth) on usual terms. Leave declined to bring proceedings against court-appointed...
Key principles
The Court will not grant leave under s 471B of the Corporations Act 2001 (Cth) to bring proceedings against a court-appointed liquidator personally where the plaintiffs have...
Leave to proceed against a court-appointed liquidator requires more than mere assertion of liability; the Court must be satisfied that there is a proper basis to expose the...
A liquidator does not incur personal contractual liability merely by authorising the sale of company assets through an agent; to establish personal liability, it must be shown...
Claims in conversion, equitable ownership, and inducement of breach of contract against a liquidator personally require specific pleading of material facts establishing the...
Issues before the court
Whether leave should be granted under s 471B of the Corporations Act 2001 (Cth) to bring proceedings against a company in liquidation
Whether leave should be granted to bring proceedings against a court-appointed liquidator personally
Plain English Summary
Three men who believed they had bought a classic car at auction wanted to sue both the company selling the car (which was in liquidation) and the liquidator personally. The Court allowed them to sue the company, but refused permission to sue the liquidator personally. The judge found that the men had not properly explained how the liquidator could be personally responsible - the liquidator was just doing his job selling the company's car, and didn't personally own or promise to deliver the vehicle. The claims were poorly written and legally weak. The judge also noted that if the liquidator had to personally defend the case, his legal costs would ultimately be paid from the company's limited money, leaving less for other creditors. The men were ordered to pay the liquidator's legal costs for this hearing, but not on the higher 'indemnity' basis because the warning letter they received wasn't detailed enough. They were allowed to rewrite their court documents to continue only against the company, not the liquidator.
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Judgment (9 paragraphs)
Whether the liquidator could be personally liable under the auction Terms and Conditions
Whether the claims in conversion, equitable ownership, and inducement of breach of contract were adequately pleaded against the liquidator
By Originating Process filed on 16 June 2021, the First, Second and Third Plaintiffs, Mr Reza Moradtabrizi, Mr Ben Moradtabrizi and Mr Adonis Sarkis (to whom I will refer respectively as "Reza", "Ben" and "Adonis", without any discourtesy) apply for leave, nunc pro tunc, for Reza and Ben to continue proceedings against the First and Second Defendants and for Adonis to commence such proceedings. The First Defendant is described as Horses for Harmony Ltd, but it is common ground that the correct name of the entity is Horses for Harmony Foundation Ltd and the parties have sensibly proceeded on the basis that the references to the incorrect entity should be understood as references to that company ("Company"). Leave is required, so far as the Company is in liquidation, and the Second Defendant, Mr Hayes as liquidator of the Company, is a Court-appointed liquidator. I will return to the applicable principles below.
By their Amended Statement of Claim filed in the substantive proceedings, number 2021/54586, in the Equity General List, Reza, Ben and Adonis in turn seek relief in respect of a sale by auction of a 1959 Chevrolet Corvette on or about 23 February 2021 and claim that one of them purchased the vehicle at auction. It appears the motor vehicle was ultimately resold to a third party and the auctioneers, Slattery Auctions Australia Pty Ltd and Slattery Auctions Victoria Pty Ltd (together "Slattery") contend that the auction had been affected by technical difficulties with the computerised auction process, and that a binding sale contract was not created with any of the Plaintiffs. The proceedings may involve a claim for a relatively small amount of money, likely at the lower end of the jurisdiction of the Local Court of New South Wales, since the amount of $176,930.29 paid to purchase the vehicle was repaid on 27 April 2021 by Slattery, after the transaction did not proceed. The amount in issue is likely to be the difference between the contracted purchase price and the true value of the vehicle, although I have not neglected the fact that the Plaintiffs seek exemplary damages in respect of their claim.
[3]
Leave to bring proceedings against the Company
It has now emerged that it is common ground that, irrespective of any difficulties with the pleadings who which I will refer blow, leave should be granted to the Plaintiffs under s 471B of the Corporations Act 2001 (Cth) to pursue proceedings against the Company, on the usual term that they may take no steps to enforce a judgment against the Company without leave of the Court. An undertaking has now been offered by the Plaintiffs to that effect but that was not necessary where the Court would impose that limitation upon the grant of leave, irrespective of whether that undertaking had been offered. It is not necessary for the Court, in dealing with that leave application, to determine whether there will ultimately be any utility for the Plaintiffs in those proceedings, so far as creditors' claims against the Company significantly exceed its assets. Any utility of the proceedings against the Company to the Plaintiffs may depend upon an indemnity that was previously offered by Slattery in respect of any judgment in favour of Reza and Ben against the Company.
The real issue in dispute is whether leave should be granted so far as the Plaintiffs seek to bring proceedings against Mr Hayes personally, albeit in his capacity as Court appointed liquidator of the Company. I will return to the applicable principles below, after I have addressed the relevant affidavit evidence.
[4]
Affidavit evidence
The Plaintiffs rely on the affidavit dated 15 June 2021 of their solicitor, Ms Hajje, which refers to the circumstances in which the proceedings were commenced and recognises that the proceedings were brought against the liquidator and the Company without leave having been obtained, and refers to an undertaking given by Slattery that they would indemnify the Company against any damages awarded against it in favour of Reza and Ben in the substantive proceedings. It is not apparent whether that undertaking would extend to any judgment in favour of Adonis, who was not party to the proceedings when that undertaking was given. The Plaintiffs also rely on a second affidavit of Ms Hajje dated 4 August 2021, which addresses overlapping matters, but also indicates the Plaintiffs' undertaking, to which I referred above, not to execute any judgment against the Company without leave of the Court.
The Defendants in turn rely on the affidavit dated 22 July 2021 of Mr Hayes, which refers to the circumstances in which he was appointed by the Court as liquidator of the Company, having been previously appointed as administrator by action taken by the Director of Investigations and Enforcement, NSW Fair Trading. He refers to the nature of the Company's activities and the circumstances of the sale of the vehicle which has given rise to the dispute. He indicates, in paragraph 14 of his affidavit (to which Mr Rogers, who appears for the Plaintiffs, draws attention) that he arranged for Slattery to sell the vehicle by way of auction for the benefit of the Company's creditors. That may be relevant to the terms of the auction arrangement, to which I refer below.
Mr Hayes in turn notes that a first auction and, after difficulties arose with the first auction, a second auction was conducted online by Slattery. His evidence is that, apart from requesting that the vehicle be sold at auction and setting its reserve, he did not have any input or control over the procedure of the first or second auction. Obviously, that evidence has not been tested by cross examination in an application of this kind. Mr Hayes also refers to the commencement of the proceedings, and to correspondence between his solicitors and the solicitors for the Plaintiffs which had drawn attention to the need for leave to bring proceedings against a Court appointed liquidator, some six months before the application for that leave was belatedly brought by the Plaintiffs.
[5]
Terms and conditions of the auction
Mr Rogers in turn draws attention to the Terms and Conditions applicable to an online auction using "Slattery Auctions Online". It appears that those Terms and Conditions would have become binding as between Slattery and Reza, who was the registered user of the relevant Slattery auction account, and it is not necessary to address the question as to whether they also extended to Ben or Adonis, who appeared to have had some involvement in the purchase of the vehicle, in order to determine this application. Clause 1.1 of those Terms and Conditions provided that the user, relevantly Reza, accepted the Terms and Conditions of the User's Agreement, prior to buying or bidding for goods, accessing the relevant website, or using any of the other services provided. Clause 3, in turn, provided for registration with Slattery, and I noted above, that it appears that Reza was the registered bidder.
Clause 4.1 provided that Slattery was acting as agent for the "Seller", and was not responsible for any default by the Buyer or the Seller, and also required the user to acknowledge that all Sellers instructed and authorised Slattery to sell the lot as the Seller's agent, in accordance with the Terms and Conditions. Mr Rogers draws attention to the definition of "Seller" as the owner of a lot, which would here be relevantly the Company, or the person authorising Slattery to sell that lot on the owner's behalf. He submits, and I accept that it is arguable, that that language might extend to Mr Hayes as liquidator of the Company, so far as his evidence is that he authorised the sale of the relevant vehicle. It remains that, as Mr Rogers, I think, conceded, the Terms and Conditions could only bind the parties to the relevant contract, Slattery and Reza, by their by their own terms, and that extended definition, in a contract between Slattery and Reza, will not have the effect in itself of imposing liability upon the liquidator. In order to do so, it would be necessary that Slattery contracted as agent for the liquidator personally, in respect of the relevant arrangement, rather than as agent for the Company as the owner of the relevant vehicle.
I should note, for completeness, that Mr Rogers also drew attention to the provisions dealing with when an obligation to purchase the relevant item arose, on which the Plaintiffs rely as against Slattery and the other parties, to seek to establish that they acquired an entitlement to buy the vehicle on the first auction. It appears that Slattery, in turn, relies on cl 7 of the online Terms and Conditions, which provides that it cannot guarantee continuous access to the website, and, in cl 7.3, that, if there are any technological or processing problems during an auction, Slattery may decide to close the auction and reopen the auction at a later time, or extend the conclusion time of the auction. There will be a dispute, in the substantive proceedings, as between Slattery and the Plaintiffs as to whether that term is sufficient to avoid an obligation to purchase, or a right to purchase, arising on the part of the Plaintiffs in the particular circumstances.
[6]
Whether leave should be granted for the proceedings against the liquidator personally
I return now to the question whether leave should be granted to bring the relevant proceedings against the liquidator personally. Mr Rogers, in submissions, outlined the background to the dispute, referring to the circumstances by which the Plaintiffs bid at auction, and were then advised, by an email sent by Slattery, possibly by an automated mechanism, that they had been successful and were the owner of the vehicle, and, subsequently, advised that a further auction would be undertaken. I have noted above that the amount paid by the Plaintiffs was then refunded to them.
Mr Rogers identifies the Plaintiffs' causes of action alleged as against the Company and the liquidator, which he describes as an action in conversion, by delivery of the vehicle to an unknown third party, a proposition which appears to assume that the liquidator personally delivered or authorised the delivery of the vehicle to that unknown third party; alternatively, a claim that the plaintiffs were owners of the vehicle in equity; and, thirdly, a claim that the Company and the liquidator committed the tort of inducement of breach of contractual obligations, by purporting to offer the vehicle for further auction and not delivering the vehicle to the Plaintiffs.
Mr Rogers also submits that one assumes that the liquidator says, in his capacity as liquidator, that he is exempt from any action and that any liability falls on the Company. That seems to me to invert the relevant question, which is of course whether the Plaintiffs have articulated an arguable case that liability would extend to the liquidator personally as distinct from the Company, which was, on the face of it, the owner and the seller of the vehicle. There is no occasion for the liquidator to displace such liability, unless the Plaintiffs first plead an arguable case to establish it. Mr Rogers submits, in a proposition which may well be oversimplified, particularly where a liquidator is a Court appointed liquidator, that the liquidator's role is as agent of the Company, and he in turn refers to the circumstances in which an agent may be held liable for conduct in respect of a principal's offers.
Mr Rose, who appears for the Company and the liquidator, addresses the principles applicable to leave to proceed against a Court appointed liquidator in written submissions. He refers to the summary of those principles by Rees J in Aardwolf Industries LLC v Riad Tayeh [2020] NSWSC 299 at [81] [89]. Her Honour's judgment was affirmed on appeal in Aardwolf Industries LLC v Tayeh [2020] NSWCA 301. Mr Rose rightly notes that leave of the Court is required to bring proceedings against a Court appointed liquidator, and that leave can be sought nunc pro tunc, as the Plaintiffs now do. He refers to the principle noted in Re Siromath Pty Ltd (No 1) (1991) 9 ACLC 1580 at 1582, to which Rees J referred, that the Court will not allow its officer to be subject to an action in another Court with reference to his conduct, in the discharge of the duties of his office, whether right or wrong, absent such leave, and that any proceedings should be brought against a Court appointed liquidator in the action in which he was appointed. Mr Rose also refers to Rees J's observation that the rationale for the requirement for leave includes the need to ensure that there is no wrongful interference in, and to protect the integrity of, a winding up under its supervision and control. Mr Rose accepts, by reference to Rees J's observations, that a plaintiff need not necessarily establish a prima facie case in order to establish leave, but that there must be more than mere assertion, and that the Court will exercise its discretion whether to grant leaves on grounds, including, but not limited to, the sufficiency of the evidence adduced as to the prospect of success of the action, on the application for leave.
[7]
Costs of this application
Mr Rose sought an order that the Plaintiffs pay Mr Hayes' costs of the unsuccessful application for leave to proceed against him, on the ordinary basis, up to 30 June 2021, and thereafter on the indemnity basis. He relied, in that respect, on a letter dated 30 June 2021 from Mr Hayes and the Company's solicitors to the Plaintiffs' solicitors, which had referred to earlier occasions on which they had expressed the views that the Plaintiffs had no viable claim against Mr Hayes, and that the proceedings against him should not have been brought; argued that granting leave to proceed on a claim that was doomed to fail would be futile and that the Court would not exercise its discretion to grant leave in the circumstances; and put the Plaintiffs on notice that that letter would be relied on for the claim as to indemnity costs.
Mr Rogers accepts that the Plaintiffs cannot oppose an order for ordinary costs, but submits that an order for indemnity costs should not be made where that was merely a letter from the liquidator's and the Company's solicitors asserting their view of the lack of strength in the Plaintiffs' application. He contends that the application was arguable, although recognising that it did not succeed.
I have summarised the circumstances in which the Court may make an order for indemnity costs, in my judgment in Sheridan v Colin Biggers & Paisley [2019] NSWSC 621 at [18], and I adopt that summary without repeating it here. Broadly, an order for indemnity costs may be made where a party's conduct in proceedings is plainly unreasonable or involves an element of delinquency. I have found this aspect of the application difficult, since it seems to me that it arguably ought to have been apparent to the Plaintiffs that, whatever the strength of their claim against the Company, it was not a claim that could sheet home liability to Mr Hayes in his capacity as liquidator, as a personal claim against him.
However, the letter dated 30 June 2021, is somewhat shorthand in its character, asserting the lack of viability of the claim against Mr Hayes, without seeking to establish that, although I bear in mind that it refers to earlier correspondence in that respect. It seems to me that, on balance, I should not make an order for costs where that letter does not lay out, in any detail, the difficulties which have led to the failure of the Plaintiffs' application. On balance, albeit with hesitation, it seems to me that the matter does not rise to the level where I should make an order for indemnity costs from 30 June 2021.
[8]
Orders in the substantive proceedings
The consequence is that, in the substantive proceedings 54586 of 2021, the Amended Statement of Claim should be struck out, with leave to replead. A question arises whether I can now make that order, or whether that should be left to be made by the Registrar to do so when the matter is listed before her and all parties in them, including Slattery, are present. Mr Rose has indicated that the liquidator's and the Company's solicitors have consulted with the solicitors for Slattery, and Slattery's solicitors have advised that they have no difficulty with an order being made in the substantive proceedings to give effect to the outcome of this application, that the Amended Statement of Claim be struck out with leave to replead on the usual basis that the Plaintiffs pay the costs thrown away. Mr Rogers also accepted that it will be convenient that I make that order and then relist the matter before the Equity Registrar in the Equity General List, to avoid an otherwise wasted appearance in those proceedings.
In proceedings 2021/54586, I make the following orders:
The Amended Statement of Claim be struck out.
Leave to the Plaintiffs to replead, omitting Mr Alan Hayes as liquidator of Horses for Harmony Foundation Ltd as a defendant and omitting all causes of action against him in that capacity, with a further Amended Statement of Claim to be filed and served by 4:00pm on 22 September 2021.
Vacate the listing of the proceedings before the Registrar at 9.30am on 13 September 2021 and relist the matter before the Registrar at 9.30am on 28 September 2021.
The Plaintiffs pay the costs thrown away by reason of the amendments.
The proceedings be dismissed as against Mr Hayes.
Order that the First and Second Plaintiffs pay Mr Hayes' costs of the proceedings on the ordinary basis, up to 8 July 2021, and the First,
Second and Third Plaintiffs pay Mr Hayes' costs of the proceedings on and from 8 July 2021, on the ordinary basis.
[9]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 17 September 2021
By consent, leave granted to bring proceedings against company in liquidation under s 471B of the Corporations Act 2001 (Cth) on usual terms. Leave declined to bring proceedings against court-appointed liquidator personally. Amended Statement of Claim in substantive proceedings struck out with leave to replead omitting liquidator as defendant. Costs awarded against plaintiffs on ordinary basis.
Mr Hayes also refers to the financial position of the Company, and it is apparent that the Company's assets, presently held as cash at bank, are not sufficient to meet the demands of its unsecured creditors, even excluding the Plaintiffs' claim against it. Mr Hayes indicates that he is concerned that, if leave is granted for the proceedings against the Company, or against him in his capacity as liquidator of the Company, it would expose him and the Company to substantial legal costs in defending the damages proceedings. It is implicit that Mr Hayes now accepts that the proceedings can continue against the Company, so far as he has not opposed leave for that to occur, presumably on the basis that the Company has insufficient assets to warrant defending the proceedings and will file a submitting appearance in those proceedings. That is likely to be less disadvantageous to creditors than the position if the proceedings continued against Mr Hayes personally, and he was required to defend the proceedings, relying on his right of indemnity against the Company's assets in order to do so.
The Company and the liquidator also rely on the affidavit dated 22 July 2021 of their solicitor, Mr Hedges, which refers to the likely costs of defending the proceedings.
I should add, to the observations I made orally in delivering judgment, that Macfarlan JA noted on appeal (at [40]) that:
"The primary judge first referred to the necessity for a plaintiff to obtain the Court's leave to sue a court - appointed liquidator. As her Honour's discussion at [81]-[89] of the principles involved was not challenged in this Court, it is sufficient for present purposes to refer to the statement of McLelland J in Re Siromath Pty Ltd (No 1) (1991) 9 ACLC 1,580 at 1582 as follows that her Honour quoted:
It is well established that at least unless the Court's leave has been obtained, the Court 'will not allow its officer to be subject to an action in another court with reference to his conduct in the discharge of the duties of his office, whether right or wrong. The proper remedy for anyone aggrieved by his conduct is to apply to the Court in the action in which he was appointed".
I proceed on the same basis here where those principles were not challenged here, although the Plaintiffs seek to bring the proceedings against the liquidator in the same Court as appointed him. Several questions as to the applicable principles were also noted on appeal by Leeming JA (with whom Belll P agreed) (at [87]ff), including questions as to the underlying rationale for the requirement of leave; whether leave is in fact required to permit civil proceedings against a Court-appointed liquidator in the same court; how does a requirement of leave attach to a plaintiff's entitlement to vindicate a claim under a federal statute for damages for misleading or deceptive conduct in trade or commerce, an issue that does not arise here; and what amounts to sufficient prospects to warrant a grant of leave? It is not necessary to address them here where the parties did not seek to do so.
Mr Rose also refers, in submissions, to cl 7 of the Terms and Conditions to which I referred above, which addressed the consequences of technological or processing problems in the auction, as a matter that will be relevant to Slattery's liability and, to the extent that any claim against the liquidator depends upon a contract having been formed with Slattery, to that claim. He also refers to difficulties in respect of the pleading of the claim against the liquidator, so far as it is necessary to identify the claim that is brought against him, in order to determine whether leave should be granted. I will return to that question below. He also points to the liquidator's expressed concern that he, and through his right of indemnity, the Company's creditors, will be exposed to substantial legal costs if leave to proceed is granted against him. Mr Hedges' evidence, to which I have referred above, also addresses the question of costs in the proceedings.
Mr Rose submits that, in this case, no claim is pleaded with precision, and that would cause wasted costs in the proceedings against the liquidator; that the Terms and Conditions applicable to the online auction give rise to a significant difficulty for the Plaintiffs; that the Plaintiffs have not pleaded aspects of the relevant claim against the liquidator, in respect of the tort of inducement of breach of contract, and the basis for a relevant pleading is not established; and that the amount of the damages claimed would, as I noted above, appear to be limited, or at least highly uncertain, where they depend upon any difference between the true value of the vehicle and the price which one of the Plaintiffs contracted to pay for it and, I should add, upon the prospects of any claim for exemplary damages in the relevant circumstances.
With that background, I heard Mr Rogers in oral submissions, and those submissions identified a number of difficulties which seem to me to exist in the articulation of the Plaintiffs' case against the liquidator, which would have the consequence that the Court cannot be satisfied that it is an appropriate case in which to grant leave to proceed against the liquidator as its officer. Having heard Mr Rogers as to those matters, it was not necessary to hear Mr Rose in oral submissions. It is sufficient to identify the difficulties with the claim, as presently articulated, in several steps.
The Plaintiffs' first claim is, in paragraph 4 of the Amended Statement of Claim, that a bid by Ben on behalf of Reza (although I interpolate, the intent may have been to plead a bid by Reza on behalf of Ben, since Reza was the registered user) was the highest bid at the auction and the Plaintiffs, or alternatively Reza, were contractually entitled to purchase the vehicle upon payment of the purchase price. That pleading in turn contends, by assertion, that the liquidator and Company became contractually bound to that arrangement. The difficulty with that proposition seems to me that, as I have observed above, the Terms and Conditions applicable to the online auction were formed by a dealing between Reza and Slattery and cannot, in themselves, impose liability upon the liquidator personally.
In order to impose liability upon the liquidator, it would be necessary to establish that Slattery was acting as agent, not for the Company, or not only for the Company, but also for the liquidator in his or her capacity as Court appointed liquidator, so that he personally was bound as principal by the agreement which Slattery had plainly entered as agent for the Company. There are it seems to me two substantial difficulties with that proposition. The first is that the pleading does not identify any material facts which would establish such an agency. That omission is not a mere pleading defect, but reflects the unlikelihood that the Plaintiffs could identify any material facts to indicate any intention that Slattery was acting as agent for the liquidator as Court appointed liquidator, as distinct from the Company which was the owner of the vehicle and seeking to sell it. There is no obvious reason, as a matter of fact or as a matter of principle, why a liquidator personally would enter into an arrangement with the auctioneer, where what was intended to be achieved was the sale of a Company's vehicle by the Company. The second difficulty, which was related, is the oddity of the proposition, which Mr Rogers fairly accepted was the proposition that he was seeking to establish by construction of the contractual terms, that a liquidator who did not own a vehicle, because the Company and not he owned it, was contracting to sell it. The unlikelihood of that proposition is relevant here, because it points to the difficulty of establishing it.
It seems to me that that proposition in turn has two consequences, both that leave should not be granted for proceedings against the liquidator, at least so far as that claim is concerned, both because of the difficulty with the present pleading of it, and because of the unlikelihood that it would ultimately be established. That difficulty in turn flows into subsequent aspects of the pleading, which assume, for example, that the liquidator personally was bound to deliver the vehicle to the Plaintiffs, although he did not own it, and that he breached an obligation to deliver the vehicle that he did not own to them.
A second alternative pleaded case is that, on or about 24 or 25 February 2021, the liquidator and the Company induced Slattery, in breach of the contractual obligations of Slattery, not to deliver the vehicle to the Plaintiffs and not to take such steps as were available to them to convey title to the vehicle to the Plaintiffs. This claim appears to be a claim for inducement of breach of contract, as between Slattery and Reza, or Slattery and Reza and Ben, as the contracting parties. Again, it seems to me that the fundamental difficulty with this provision, for present purposes, is that there is no pleading of any material fact amounting to any step taken by the liquidator personally, as Court appointed liquidator, to induce such a breach. There is also no evidence, in the material that is led before me, to suggest that the Plaintiffs have a proper basis to plead such a breach against the liquidator personally. It is simply not apparent that the liquidator personally took any step, at that point, to prevent the sale of the vehicle being completed.
I have not neglected that, in the course of submissions, Mr Rogers appeared to develop an alternative case that, by a later point, 5 March 2021, when the Court declined to extend an injunction to prevent the completion of the sale, the liquidator personally permitted it to go forward. However, the difficulties with that case are that, first, it is not the pleaded case, which is that the inducement of breach took place on 24 and 25 February 2021, second, it is not pleaded; and third, there is also no evidence that the liquidator personally was involved in making that decision at that point. For that reason, it seems to me that leave would not be granted to pursue the proceedings on that basis.
There is also a further alternative pleading, introduced by the amendment to the Amended Statement of Claim on 8 July 2021, which advances overlapping propositions on the alternative basis that Reza and/or Ben were acting as agent for Adonis in bidding for the vehicle at the auction. Again, this claim depends upon an asserted contract binding upon the liquidator personally, and has the same difficulties as the earlier assertion of that character. It repeats a claim for inducement of breach of contract against the liquidator personally, and has the same difficulties in that respect. It adds what appears to be a further claim, unencumbered by any identification of the material facts on which it is based, that each of the Defendants including the liquidator personally, unlawfully and without the consent of Adonis delivered the vehicle to a person unknown to whom they had purported to sell it. Again, a moment's thought would identify that, in order to make good that claim against the liquidator personally, it would be necessary to identify why that conduct was said to be unlawful, which is not there done, but also, perhaps more fundamentally, that the liquidator personally delivered the vehicle to the person unknown. There is again no pleaded or identified evidentiary basis for that contention.
For all these reasons, it seems to me that the weakness of the case, as against the liquidator personally, the difficulties with the way in which it is pleaded and the limited damages that would apparently be recovered, at least on the evidence as it stands, are such that the Court's officer, a Court appointed liquidator, should not be vexed with the need to personally defend a claim which, as against him personally, appears to have little apparent basis. Nor should the creditors of the Company be exposed to the risk that, when the liquidator does personally defend that claim and relies on an indemnity against the Company's assets for the costs of doing so, any recovery that would otherwise be available to them would be lost.
For these reasons, I decline the leave that is sought to pursue proceedings as against the liquidator personally.
Accordingly, in proceedings 2021/00172636, I order that the Plaintiffs pay Mr Hayes' costs of the proceedings, as agreed, or as assessed.