Tips for administrators to avoid costs orders in proceedings challenging the validity of appointment

This week's TGIF looks at the departure from the general costs rule considered in In the matter of Condor Blanco Mines Ltd (No. 2) in circumstances where the administrator was found not to have discharged the duty of essential neutrality.

In the matter of Condor Blanco Mines Ltd (No. 2) [2016] NSWSC 1304 considered the question of which party should pay the costs of proceedings brought at first instance by Condor Blanco Mines Ltd challenging the appointment of a voluntary administrator to that company. In those proceedings the court had made a declaration that the appointment of the administrator was invalid because one of the directors who was a party to the resolution for the appointment of the administrator did not hold a genuine opinion that the company was insolvent (or likely to become insolvent).