Federal Court of Australia

Graham v Condon (Liquidator), in the matter of Silcocks Road Estate Pty Ltd (In Liquidation) [2026] FCA 1570

ORDERS

THE COURT ORDERS THAT:

1.    The plaintiff pay the costs of the receivers and managers (Mr Andrews and Mr Juzva) (the Receivers) in connection with the proceeding in a lump sum amount of $10,000, to be payable forthwith.

2.    The Receivers otherwise be excused from any further attendance in this proceeding.

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

REASONS FOR JUDGMENT

MOORE J:

1    By originating process dated 18 February 2026, the plaintiff, Mr John Graham (Mr Graham), made an application (the Application) under section 90-15 and section 90-20 of Schedule 2 of the Corporations Act 2001 (Cth), being the Insolvency Practice Schedule (Corporations) seeking relief from the Court in relation to the liquidation of Silcocks Road Estate Pty Ltd (in liq) (receivers appointed) ACN 647 360 530 (the Company). In particular, Mr Graham sought that:

(a)    the defendant (Mr Condon, in his capacity as liquidator of the Company) be removed as liquidator of the Company;

(b)    Mr Gregory Andrews and Mr Andrew Juzva of GS Andrews Advisory Pty Ltd, in their capacity as receivers and managers appointed to the Company (the Receivers), be appointed as replacement liquidators of the Company; and

(c)    the replacement liquidators provide him with various details regarding the proposed sale of the Company’s real property.

2    Mr Graham is a litigant in person. Mr Graham did not obtain or file a consent to act as liquidator from the Receivers. In those circumstances, as the relief sought in the proceedings would affect their rights, the Receivers quite properly took steps in connection with the proceedings and appeared at relevant hearings.

3    On 12 May 2026, by his further supplementary outline of submissions, Mr Condon indicated that he no longer sought the appointment of the Receivers as the replacement liquidators “due to their acknowledged conflict”. Mr Graham also sought to amend the relief initially sought by his Application. He now seeks that an independent registered liquidator or special purpose liquidator be appointed as liquidator of the Company as well as a variety of other orders relating to the powers of any replacement or special purpose liquidator, once appointed.

4    Given the withdrawal of any relief relating to the Receivers, during a case management hearing on 29 July 2026, the solicitors for the Receivers indicated that, as well as seeking to be excused from further participation in the proceedings, their clients now seek an order that Mr Graham pay their costs of the proceedings to date (Costs Application).

5    Mr Graham and the Receivers were subsequently given the opportunity to file and serve any evidence and written submissions in relation to the Costs Application, and both elected to do so. As indicated by an email to my Chambers on 14 August 2026, the Receivers rely on an affidavit of Adam Nahum Ayliffe affirmed 5 August 2026 (Ayliffe Affidavit) and their written submissions of the same date (RS), while Mr Graham relies on an affidavit of his affirmed 13 August 2026 and his written submissions dated 12 August 2026. There is, however, also additional evidence that provides background to the present dispute. I have had regard to other affidavits filed in the proceedings for this purpose.

6    Pursuant to Order 7 of the orders dated 29 July 2026, the Costs Application was to be determined on the papers unless my Chambers indicated otherwise. Following receipt of the parties’ materials, I proposed to deal with the Costs Application on the papers. These are my reasons with respect to the Costs Application.

Factual Background

7    On 24 August 2022, by special resolution, the Company resolved to enter voluntary liquidation and to appoint Mr Condon and Mr King as joint and several liquidators of the Company. Mr King later resigned as a liquidator of the Company in August 2024, leaving Mr Condon as the Company’s sole liquidator.

8    On 26 August 2025, the Receivers were appointed as receivers and managers of the Company by Pat Delaney Investments Pty Ltd, who holds registered mortgages over two of the Company’s properties and is thus a secured creditor of the Company.

9    Following Mr Graham’s Application to have Mr Condon removed as liquidator and replaced by the Receivers on 18 February 2026, the Receivers communicated with Mr Graham regarding why they could not be appointed as liquidators of the Company. On 27 March 2026, the Receivers’ solicitors sent a letter to Mr Graham which:

(a)    explained that Mr Graham had not sought, nor have the Receivers provided, their written consent to be appointed as liquidators of the Company and thus, pursuant to s 532(9) of the Corporations Act 2001 (Cth), they could not be appointed as replacement liquidators;

(b)    explained that the Receivers would not consent to any such appointment, as it would conflict with their existing role as receivers and managers of the Company appointed by a secured creditor of the Company;

(c)    requested that Mr Graham withdraw the Application to the extent it sought orders in respect of the Receivers; and

(d)    indicated that if Mr Graham did not discontinue his application, the Receivers’ solicitors were instructed to review all material filed in respect of it and appear at the hearing of the Application to oppose it. They also indicated that the Receivers would seek an order that Mr Graham pay their costs of the proceedings on an indemnity or standard basis.

10    Mr Graham wrote back to the Receivers’ solicitors on the same day stating that the Application was not directed to the Receivers, that it did not rely on their consent, and that “if [they] wish[ed] to be heard in relation to any orders affecting them, that is a matter for them”. Mr Graham also indicated that the Application would proceed as listed. That correspondence clearly failed to engage with the matters that had been raised by the Receivers in their letter.

11    The Application did proceed as listed on 31 March 2026 before Registrar Gronow, although the Application itself was not heard on this date and Registrar Gronow subsequently referred the proceedings to a Judge of the Court for determination. On 12 May 2026, the Receivers filed written submissions expanding on the conflict issued raised with Mr Graham and requesting that the aspects of his Application seeking orders against the Receivers be dismissed and that Mr Graham pay the Receivers’ costs in a lump sum amount. That same day, by his written submissions, Mr Graham withdrew his Application for the Receivers to be appointed as replacement liquidators. He also filed a consent to act as liquidator completed by Mr Henry Kazar and Mr Simon Cathro of Cathro & Partners Pty Limited.

12    On 3 June 2026, the Receivers’ solicitors attempted to contact Mr Graham to engage in without prejudice discussions about the receivership of the company. Another male (not Mr Graham) answered the phone and told the Receivers’ solicitors to make any proposal to Mr Graham in writing. Mr Graham then sent an email to the Receivers’ solicitors repeating the request that the proposal be in writing. The Receivers’ solicitors responded to this email on 3 June 2026, inviting Mr Graham to engage in a without prejudice discussion about the proceeding and the receivership of the Company. Mr Graham did not respond to the invitation in this email.

13    The Receivers have incurred costs in relation to the Application since its filing, including by preparing written submissions, preparing evidence and attending case management hearings. The Receivers claim costs on an indemnity basis from Mr Graham, in the lump sum of $11,059.00 (exclusive of GST). They also seek an order that they be excused from any further attendances in the proceeding.

14    The Receivers provide an itemised breakdown of their costs in Table A to the Ayliffe Affidavit. This table breaks their costs into five ‘stages’ of the proceedings, spanning the taking of initial instructions from the Receivers to the preparation of the material in relation to this Costs Application. The Ayliffe Affidavit indicates that the Receivers solicitors have spent slightly more than 28 hours in relation to the Application. The costs claimed by the Receivers have been reduced by $1,005 (plus GST) from the costs said to have been incurred: i.e. the Receivers do not claim the full amount of costs that they say have been incurred.

15    The amount of time taken by the lawyers involved appears to be reasonable having regard to the steps required to be taken as set out in the table. I have reviewed the table of the Receivers’ legal fees as claimed and consider them to be broadly reasonable in all the circumstances, albeit as set out below I consider there should be a slight discount to these costs.

The Receivers’ Submissions

16    The Receivers’ make their Costs Application pursuant to s 43 of the Federal Court of Australia Act 1976 (Cth) (the Act). The Receivers submit that it is “well-settled law that the Court’s power to award costs is discretionary, and ordinary costs follow the event” (RS, [9]). It was also submitted that in exercising its discretion under s 43 of the Act, the Court must consider any failure by a party to conduct the proceeding in a way that is consistent with the overarching purpose set out in s 37M – a duty which is imposed on a party by virtue of s 37N(1) of the Act.

17    Citing Cirillo v Consolidated Press Property Ltd (formerly known as Citicorp Australia Ltd) (No 2) [2007] FCA 179 at [3] and Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (No 2) [2017] FCAFC 116 (Melbourne City) at [5], the Receivers submit that some special or unusual feature must have arisen to warrant an award of indemnity costs.

18    As to examples of such circumstances, they refer to Melbourne City at [5], where it was held that a special or unusual circumstance which may warrant the award of indemnity costs may exist where:

… “the applicant, properly advised, should have known that he had no chance of success” (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401 (Woodward J)) or “persists in what should on proper consideration be seen to be a hopeless case” (J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (No 2) (1993) 46 IR 301 at 303 (French J)).

19    The Receivers submit that the Court may also exercise its discretion to award costs on an indemnity basis where a party withdraws their claims after the incurring of the costs in issue, and prior to judgment on the claims being given, citing Billingsley v Napoli, in the matter of Biometric Identity Systems Pty Ltd (administrators appointed) (No 2) [2021] FCA 526.

20    The Receivers submit that, in light of these matters, it would be fair and just to grant indemnity costs in the present circumstances because:

(a)    having regard to s 532(9) of the Corporations Act 2001 (Cth) and the absence of written consent from the Receivers, Mr Graham had a hopeless case and would have known it had no chance of success if he had been properly advised;

(b)    had Mr Graham engaged with the matter raised by the Receivers’ solicitors on 27 March 2026, the Receivers costs would largely have been avoided;

(c)    Mr Graham ultimately withdrew the aspects of the Application relating to the Receivers, but only after the majority of their costs had been incurred; and

(d)    despite attempts from the Receivers to engage constructively with Mr Graham about the proceedings and receivership, which may have avoided or limited the Receivers’ costs, he refused to engage in these discussions.

21    The Receivers also submit that if the Court exercises its discretion to grant costs on an indemnity basis, it would fulfil the purpose of indemnity costs in that it would allow the innocent party (here, the Receivers) to be compensated for their actual costs reasonably incurred in this proceeding.

The Plaintiff’s Position

22    Mr Graham’s submissions in relation to the Costs Application are relatively brief. Mr Graham submits that the Receivers’ Costs Application should be approached “in light of the actual procedural history” including that:

(a)    the Receivers “were not strangers involuntarily drawn into the Company’s affairs” and that they participated actively in matters concerning the administration of the Company following their appointment; and

(b)    the relief in his Application reflected “the practical position existing at that time”.

23    Mr Graham also emphasises that once this relief was amended to proposed independent replacement liquidators (as opposed to the Receivers being replacement liquidators) on 12 May 2026, no continuing substantive relief was sought requiring appointment of the Receivers and thus any subsequent decision by the Receivers to continue participating in the proceeding and pursuing their Costs Application “was its [sic] own forensic decision”.

24    Mr Graham submits that there should be no order requiring him to personally bear costs incurred by the Receivers after the relief he sought ceased to involve their appointment.

Consideration

25    The present case is a suitable case for an order for the payment of the costs of a third party. The Receivers were sought to be appointed as liquidators without their consent. They were entitled to be heard in relation to that relief and to appear at relevant hearings to protect their interests.

26    I have concluded that Mr Graham should pay the costs of the Receivers, but not on an indemnity basis. I am, however, satisfied that it is appropriate that I order the payment of a specified amount, and that this should be slightly less than the amount claimed by the Receivers. I have reached that conclusion for the following reasons.

27    Firstly, Mr Graham failed to obtain and file a written consent to act as liquidator of the Company from the Receivers prior to filing his application, and thus his application was misconceived from the outset. He may have been ignorant of that requirement at the time he filed the originating process, but he was not ignorant of it after it was pointed out in the letter from the Receivers’ solicitors of 27 March 2026.

28    Secondly, having pointed that out, the letter invited Mr Graham to withdraw the application and said that if the application was not withdrawn, the Receivers would incur costs and that the Receivers would seek to recover those costs: i.e. Mr Graham was given an opportunity to avoid the incurring of a liability for costs, which he did not take.

29    Thirdly, from the commencement of the proceedings, Mr Graham was aware of the Receivers’ appointment. Apart from the inherent difficulties with Mr Graham’s Application to have the Receivers appointed as replacement liquidators, it is the case that Mr Graham persisted with the Application as against the Receivers despite having receiving communications from them indicating their position of conflict. The Receivers raised their concerns with Mr Graham on two separate occasions, once prior to the Application being heard and once again following Mr Graham’s amendment to the relief sought on 12 May 2026.

30    I understand that Mr Graham’s position as to the involvement of the Receivers, based on his response to the Receivers’ solicitors of 27 March 2026, was that his Application “concerns the conduct of the liquidator Mr Condon” and is “not directed to [the Receivers]”. However, this misconceives the scope of the relief he sought and its potential implications for the Receivers, including the direct impact of the relief sought on the Receivers. Put simply, Mr Graham’s proceeding as filed sought an order that affected the position of the Receivers and they were required to engage with it.

31    The relief as originally sought was that the Receivers be appointed as liquidators in circumstances where they could not be so appointed due to their conflict, and where they had not provided consent so to act. The Receivers, despite efforts to engage with Mr Graham on this point, were unable to have this aspect of the Application removed until a later point in time and were then drawn into a dispute about costs.

32    Fourthly, these costs were increased by Mr Graham’s refusal to engage with the Receivers’ concerns at an earlier stage in the proceedings. His refusal to address the matters raised by the Receivers’ solicitors on 27 March 2026 resulted in them incurring substantial costs in preparing materials for the Court regarding their conflict. Further, Mr Graham only resiled from his position in relation to the Receivers after they had incurred such costs. This meant that the Receivers were forced to bring these issues to the attention of the Court and incur reasonable costs in doing so.

33    Fifthly, following Mr Graham’s foreshadowed amendment to his relief to seek the appointment of an independent replacement liquidator (as opposed to the Receivers), the Receivers were involved in the proceedings only to the extent that they wished to make the Costs Application. The costs incurred in this regard was not a “forensic decision” of the Receivers, as Mr Graham alleges, but a consequence of pressing this relief against the Receivers which was foreshadowed in their letter dated 27 March 2026. Further, Mr Graham resisted the making of any order that he meet any of the costs of the Receivers.

34    In those circumstances, it is appropriate that the Receivers receive their costs. I do not consider that there is sufficient basis in the conduct of the proceedings to support an award of indemnity costs. I take into consideration in that regard that Mr Graham is a litigant in person. I also take into account that Mr Graham modified his position on the relief which he sought once he understood the difficulties in appointing the Receivers as the liquidators, albeit he did not perfect that change of position by resolving the question of costs.

35    I consider that no further expense should be incurred by the Receivers in calculating and establishing their costs, and that a lump sum should be awarded. Having reviewed the evidence supporting the quantification of costs, I am satisfied that the costs as claimed are reasonable, but I will discount those costs by a modest amount to reflect that not all costs would be likely to be recoverable on a taxation. I allow costs of $10,000, which is a discount of slightly more than 10% from the amount sought, and also some $2,064 less than the costs said to be incurred.

36    Further, regarding the Receivers’ request that they be excused from any further attendances in this proceeding, Mr Graham has abandoned the relief sought against them (albeit not by amending his originating process but by his written submissions). As such, I propose to allow the Receivers to be excused from their attendance, and role as an interested person, in the proceeding. Given that the Receivers will have no further role in the proceeding, the costs ordered should be payable forthwith.

37    If Mr Graham continues to pursue an application to remove Mr Condon, then Mr Graham should apply for leave to amend the originating process so as to remove any relief directed to the Receivers, and if that is not done then it may be necessary to make a further order in that regard.

Associate:

Dated:    21 October 2026