Liquidators’ liability for litigation costs

The longstanding view that liquidators are not personally liable for litigation costs has been reaffirmed in two recent decisions, one from the Supreme Court and the other from the High Court.

This Brief Counsel looks at the two cases.

Mana Property

At issue in Mana Property Trustee Limited v James Development Limited [2010] NZSC 124 was whether a liquidator can attract personal liability for costs by electing to continue with litigation.

James Development appealed against a High Court finding that it had invalidly cancelled a contract to purchase land from Mana. Prior to the Court of Appeal hearing, liquidators were appointed to James Development. The liquidators pursued the appeal, and won.