Krejci (liquidator) v Panella, in the matter of Richmond Lifts Pty Ltd

PETER KREJCI IN HIS CAPACITY AS LIQUIDATOR OF RICHMOND LIFTS PTY LTD (ACN 608 024 719) (IN LIQUIDATION)

SYDNEY EXOTIC AQUARIUMS CASULE PTY LTD (ACN 649 148 014) (IN LIQUIDATION)

RICHMOND LIFTS PTY LTD (ACN 608 024 719) (IN LIQUIDATION) (and others named in the Schedule)

ARMSTRONG SCALISI HOLDINGS PTY LTD (ACN 114 980 586) (and others named in the Schedule)

1. Mr Peter Krejci and Mr Jonathon Keenan, in their capacity as the former provisional liquidators of the fifth and sixth defendants and as the former receivers of the fourth defendant, the Marginata Securities Trust, the Reliance Discretionary Trust and the RFS Trust, pay the applicants' costs of the interlocutory process filed on 7 May 2025 (in the name of Mr Carmello Duardo, Ms Thi Linh Trinh and Mr Andrew Bruce Miller).

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

1. Following the delivery of judgment in Krejci (liquidator) v Panella, in the matter of Richmond Lifts Pty Ltd (in liq) (No 3) [2025] FCA 1114 (Krejci No 3), there was a dispute about the costs of the interlocutory process filed on 7 May 2025 (the application). These reasons should be read with that judgment, and terms defined in that judgment have the same meaning in these reasons and the accompanying order.
2. A case management hearing was held following judgment and there was a brief argument as to costs. Subsequently, short written submissions were provided by each side.
3. There were three costs issues that were raised:

(a) who should pay the costs, and in what capacity;

(b) whether costs in favour of the applicants should be limited to particular applicants or in respect of particular time periods; and

(c) whether costs should be payable forthwith.

1. Mr Krejci and Mr Keenan should pay the costs, in their capacity as the former provisional liquidators of Marginata and Reliance and as the former receivers of Accolade, the Marginata Trust, the Reliance Trust and the RFS Trust.
2. The application sought orders, relevantly, against Mr Krejci and Mr Keenan (and not the plaintiffs generally). The applicants sought orders that Mr Krejci and Mr Keenan be removed as the provisional liquidators of Marginata, Reliance and CAP Accounting, and that they be removed as receivers of Accolade, the Marginata Trust, the Reliance Trust, the RFS Trust and the ASH Trust.
3. Mr Krejci and Mr Keenan resisted the application, and were largely unsuccessful. They should bear the costs of the application. However, there was nothing in the conduct of Mr Krejci and Mr Keenan in defending the removal application that was improper or unreasonable so as to deprive them of their indemnity from the entities of which they were provisional liquidators and receivers. The issues involved were unusual and somewhat complex. There were respectable arguments against the relief sought, as considered in Krejci No 3. There were also practical reasons in the interests of creditors for opposing the relief sought, as observed in Krejci No 3 at [54].
4. The applicants contend that, given their success on the application, it is unreasonable for entities with which they are associated to bear the ultimate financial burden of the application. However, given that the application concerned who was appropriately acting in the role of provisional liquidator or receiver of those entities, there is no proper basis for concluding that Mr Krejci and Mr Keenan should bear the costs personally, or for shifting those costs onto other entities in liquidation or administration.

1. Although I raised this issue, as matters have transpired there is no opposition to an order for costs generally in the applicants' favour. There is therefore no occasion to consider any limitation on the costs order.

1. No proper basis has been identified by the applicants for an order that the costs be payable forthwith. The applicants rely on the fact that they raised the issue many months ago. However, equally, the applicants delayed significantly in bringing any application to ventilate the issue. The present interlocutory dispute is just one of numerous interlocutory disputes in the proceedings. There was no unreasonable conduct by the provisional liquidators that justifies an order that costs be paid now. There is no particular efficiency identified in dealing with costs now rather than later, and indeed there is likely to be additional costs and inefficiencies. There is no basis for any suggestion that the costs will be unrecoverable, and no such suggestion is made.

1. In the circumstances, there will be an order that Mr Krejci and Mr Keenan pay the costs of the application, in their capacity as former provisional liquidators of Marginata and Reliance and as the former receivers of Accolade, the Marginata Trust, the Reliance Trust and the RFS Trust.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Moore.

UNITED LIFT TECHNOLOGIES PTY LTD (ACN 659 501 532) (IN LIQUIDATION)

FINANCIAL ADVISORY AUSTRALIA PTY LTD (ACN 669 266 228) (ADMINISTRATOR APPOINTED)

CAPITAL FINANCIAL ADVISORY PTY LTD (FORMERLY KNOWN AS ACCOLADE ADVISORY PTY LTD) (ACN 604 214 100)

RELIANCE FINANCIAL SERVICES PTY LTD (ACN 146 317 919)

70 BATHURST STREET PTY. LIMITED (ACN 082 390 976)

WENTWORTH WILLIAMS AUDITORS PTY LTD (ACN 099 391 189)

FRASER HOLDINGS NSW PTY LTD (ACN 640 331 791) (IN LIQUIDATION)

DOMINIC STEPHEN CALABRIA & BEN DIBDEN IN THEIR CAPACITY AS INDEPENDENT SOLICITORS APPOINTED PURSUANT TO ORDERS MADE BY THE COURT ON 19 FEBRUARY 2025

GLENN IAN LIVINGSTONE IN HIS CAPACITY AS PROVISIONAL LIQUIDATOR OF RELIANCE FINANCIAL SERVICES PTY LTD (IN PROVISIONAL LIQUIDATION) (ACN 146 317 919) AND MARGINATA SECURITIES PTY LTD (IN PROVISIONAL LIQUIDATION) (ACN 610 129 630)

ALAN LEE WALKER IN HIS CAPACITY AS PROVISIONAL LIQUIDATOR OF RELIANCE FINANCIAL SERVICES PTY LTD (IN PROVISIONAL LIQUIDATION) (ACN 146 317 919) AND MARGINATA SECURITIES PTY LTD (IN PROVISIONAL LIQUIDATION) (ACN 610 129 630)