Costs orders against receivers not secured creditors

In the recent case of Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd [2011] WASCA 76, the court considered the situation where a receiver was appointed to the appellant by a secured creditor and the respondents sought an order that the receiver and secured creditor (despite not being parties to the appeal) be made jointly and severally liable for costs.

The court referred to its powers to make costs orders against non-parties and it was held that a costs order would be made against the receiver as the receiver had conduct of the appeal on behalf of the appellant. The court was satisfied that this would fully protect the interests of justice and did not extend the costs order to include the secured creditor. The court noted that this approach was consistent with section 419 of the Corporations Act which holds a receiver (not the secured creditor) liable for debts incurred in the court of the receivership.