Federal Court of Australia

Newman (Trustee) v El-Sheikh Investment Holdings, in the matter of El-Sheikh Investment Holdings (Costs) [2026] FCA 512

ORDERS

THE COURT NOTES THAT:

A.    In these orders, the Interested Party means Mr Nicholas Cooper, in his capacity as trustee of the estate of Ms Kylie El-Sheikh pursuant to the personal insolvency agreement dated 29 October 2024.

THE COURT ORDERS THAT:

1.    Pursuant to ss 466(2) and 556(1)(b) of the Corporations Act 2001 (Cth), the Plaintiff’s costs in the proceeding be costs in the winding up of the Defendant.

2.    Pursuant to ss 466(2) and 556(1)(b) of the Corporations Act, the Interested Party’s costs in the proceeding be costs in the winding up of the Defendant.

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

REASONS FOR JUDGMENT

NESKOVCIN J:

1    By originating process filed on 14 February 2025, the Plaintiff, Philip Newman in his capacity as trustee of the Bankrupt Estate of Mr Khaled Mohamed El-Sheikh, sought orders, inter alia, that El-Sheikh Investment Holdings Pty Ltd (ACN 103 988 772) (the Company) be wound up pursuant to s 461(1)(k) of the Corporations Act 2001 (Cth) (Winding Up Order), that the Plaintiff be appointed as liquidator of the Company (Appointment Order) and that the register of shares of the Company be corrected to record that the shares registered in the name of Mr El-Sheikh, be registered in the name of the Plaintiff (Share Register Order).

2    Mr Nicholas Cooper, in his capacity as trustee of the estate of Ms Kylie El-Sheikh pursuant to the personal insolvency agreement dated 29 October 2024, was joined to the proceeding as an interested party (Interested Party). Ultimately, the Interested Party consented to the Winding Up Order and took no position in relation to the Share Register Order, however, he opposed the Appointment Order and instead sought the appointment of Ms Renee Di Carlo as liquidator of the Company.

3    The proceeding was listed for hearing on 11 June 2025. As set out in the reasons delivered on 25 June 2025, I found in favour of the Plaintiff in respect of the Winding Up Order and the Share Register Order, however, I refused the appointment of the Plaintiff as liquidator and instead appointed Ms Di Carlo as liquidator of the Company: Newman (Trustee) v El-Sheikh Investment Holdings, in the matter of El-Sheikh Investment Holdings [2025] FCA 681.

4    The Plaintiff now seeks the following orders as to costs:

(a)    that the Plaintiff’s costs in the proceeding be reimbursed in accordance with s 466(2) of the Corporations Act; and

(b)    that the costs of the Interested Party in the proceeding be costs in the winding up of the Company.

5    The Interested Party submitted that the Plaintiff’s costs of the proceeding incurred in the period up until 1 April 2025 should be costs in the winding up of the Company, but not the Plaintiff’s costs from 2 April 2025 until 11 June 2025. The Interested Party submitted that, by 1 April 2025, the only issue in contention was whether the Plaintiff had a relevant conflict that precluded him from being appointed as the liquidator. The Plaintiff, however, failed to appreciate or concede that point, and ultimately it was determined adversely to the Plaintiff. The Interested Party otherwise agreed that his costs in the proceeding should be costs in the winding up of the Company.

6    By consent of the parties, the question of costs was determined on the papers, without the need for an oral hearing, pursuant to s 20A(2)(c) of the Federal Court of Australia Act 1976 (Cth). The Plaintiff and the Interested Party each filed written submissions on the question of costs and relied on written submissions and affidavits filed for the purpose of the hearing on 11 June 2025.

7    The background and matters in issue in the proceeding are set out in the reasons, which it is unnecessary to repeat. Relevantly for present purposes, the Interested Party initially claimed that a limited receivership of the Company would be more appropriate than a liquidation. However, on 23 May 2025, the Interested Party filed submissions which appeared to support the appointment of a liquidator to the Company, and a receiver only in the alternative. As a result, the real issue in dispute for the purpose of the hearing was the identity of the appointee.

8    Section 466 of the Corporations Act relevantly provides:

(1)    The persons, other than the company itself or the liquidator of the company, on whose application any winding up order is made must, at their own cost, prosecute all proceedings in the winding up until a liquidator has been appointed under this Part.

(2)    The liquidator must, unless the Court orders otherwise, reimburse the applicant out of the property of the company the taxed costs incurred by the applicant in any such proceedings.

9    Section 556(1)(b) of the Corporations Act also relevantly provides that in the winding up of a company, the costs “in respect of” the application for the winding up order must be paid as priority. The expression, “in respect of”, in s 556(1) of the Corporations Act expressly contemplates that the costs recoverable in a winding up application may include costs in addition to the applicant’s taxed costs under s 466 of the Corporations Act: Re bCode Pty Ltd and Re bCode Middle East Africa Holdings Ltd [2012] NSWSC 1530 at [12] (Black J).

10    Under s 43(1) of the Federal Court of Australia Act 1976 (Cth), the Court has a broad discretion as to costs. The Court has power to determine by whom, and to what extent, the costs are payable. The discretion is unfettered, except that it must be exercised judicially: Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 72 FCR 151 at 152 (Black CJ); Djunaedi v Mohor [2024] FCA 1073 at [14] (Collier J).

11    It is uncontroversial that a successful applicant is ordinarily entitled to be reimbursed for the costs incurred by the applicant in a winding up application, out of the property of the company: s 466(2).

12    Other than in respect of the Appointment Order, the Plaintiff was successful in his application, which ultimately is for the benefit of the winding up and the creditors. Although the Plaintiff did not succeed in obtaining the Appointment Order, I am not satisfied that matter ought to deprive the Plaintiff of the costs orders that he seeks, for the following reasons:

(a)    until the Interested Party filed his submissions on 23 May 2025, shortly prior to the final hearing on 11 June 2025, his position had been that a receivership of the Company, as opposed to the liquidation (as sought by the Plaintiff), was appropriate;

(b)    as a result, the application was necessary at the time it was brought, in order to seek the Winding Up Order and the Share Register Order, which the Plaintiff obtained; and

(c)    although the Plaintiff was unsuccessful in seeking the Appointment Order because of the potential for a conflict to arise (reasons at [37]–[43]), the plaintiff submitted, and I accept, that he sought the Appointment Order in the interests of cost-effectiveness and efficiency given the Plaintiff’s background arising from his appointment as the trustee in Mr El-Sheikh’s bankruptcy.

13    The Plaintiff’s costs of the application are costs incurred “in respect of” the winding up of the Company for the purposes of ss 466(1) and 556(1) of the Corporations Act: Re bCode at [12][15].

14    The Plaintiff also submitted, and I accept, that the costs of the Interested Party in the proceeding should be costs payable in the winding up of the Company. The Interested Party was ultimately successful in respect of the question of the identity of the appointed liquidator. The Interested Party’s costs are referable to the winding up and are costs incurred “in respect of” the winding up of the Company for the purpose of ss 466(1) and 556(1) of the Corporations Act: Re bCode at [12]-[15].

Conclusion

15    For the foregoing reasons, there will be orders that the costs of the Plaintiff and the Interested Party in the proceeding, be costs in the winding up of the Company, pursuant to ss 466(2) and 556(1)(b) of the Corporations Act.

Associate:

Dated:    24 April 2026