Liquidator not liable for costs

The First Respondent had successfully resisted an application made by the Official Receiver (at the request of the liquidator of both the company and its main creditor) for his public examination pursuant to s.133 IA 1986. He applied to join the liquidator, and sought a third-party costs order against him.

There was no known authority for the making of a third-party costs order following a failed application under s.133.

CPR 46.2 provides a process whereby a non-party could be added for purposes of costs only. Whether the liquidator should be joined as a party in his personal capacity turned upon whether there was a reasonable prospect of an order being made against him.

Chief ICC Judge Briggs held that the liquidator could not be described as the “real party” to the litigation. The request for a public examination was not made by him; only the Official Receiver could make the application. There was no evidence that he had requested the application for his own benefit. Further, the evidence was that it was the Official Receiver, not the liquidator, who controlled the application. Nor was it suggested that the liquidator had funded the application, or that he had acted otherwise than in good faith. There was no justification for making the liquidator personally liable in costs, and the First Respondent’s application was refused.

The Official Receiver v Johannes Christian Martinus Augustinus Marie Deuss, Stephen Hunt (Liquidator of OWL Limited) [2021] EWHC 1842 (Ch)

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