Cussen, in the matter of Monarch Tower Pty Ltd (in liquidation) (Costs)

This was a short Full Court judgment about costs after a set of insolvency-related appeals had already been decided. The parties on the appellants' side were Neil Robert Cussen, acting as liquidator of Monarch Tower Pty Ltd (in liquidation), and Monarch Tower itself. The respondents differed across the appeal files and included Zuccubarr Pty Ltd, Payton Capital Ltd, Timswee Pty Ltd and Rill Trading Resources Inc.

The Court was not deciding the underlying commercial dispute between these parties. It was dealing with what should happen on costs after the earlier appeal reasons had been delivered on 9 October 2025. That matters because a costs judgment often says very little about the original business conflict. Here, the reasons are especially brief. They focus on standard costs practice, one security for costs order, an unsuccessful indemnity costs application, and whether the liquidator should remain personally liable as a named appellant.

The Court also explained that some related appeal files had already been resolved by consent before these reasons were delivered. That left four appeal files for determination on the papers. So this judgment is best understood as a procedural clean-up decision following the main appeal outcome, not as a standalone statement of insolvency law.

Once the earlier appeals had been resolved, the Full Court had to decide what costs orders should follow in each remaining file. In practical terms, that meant asking whether the usual rule that costs follow the event should apply, whether any respondent should receive indemnity costs instead of standard costs, whether the liquidator should bear personal liability where he was personally named as an appellant, and whether security for costs already paid should be released to a successful respondent.

The Court also had to deal with different procedural settings in each file. In some matters, the respondents filed costs submissions and the liquidator filed no opposition. In another, the respondent sought a more aggressive order and the liquidator responded. In one file, no party filed any submissions at all. The Court made clear that even where there is no opposition, a costs order is not automatic. The Court still has to exercise its discretion.

That point is useful for businesses involved in litigation. A costs application is not simply a paperwork exercise. Even if the other side stays silent, the Court still asks whether the order sought is appropriate in light of the appeal result and the usual principles.

In VID 749 of 2024, involving Zuccubarr Pty Ltd, the Court ordered the appellants to pay the respondent's costs of and incidental to the appeal on the standard basis, to be taxed. It also ordered that the $40,000 security for costs, together with any accrued interest, be released forthwith to the respondent. The Court said it had rejected each of the appellants' arguments and dismissed the appeal. Because the likely costs exceeded the amount of the security, release of the money was appropriate in partial satisfaction of the costs liability.

In VID 751 of 2024, involving Payton Capital Ltd, the Court again applied the ordinary rule and ordered the appellants to pay the respondent's costs of and incidental to the appeal on the standard basis, to be taxed. The Court said there was no reason why costs should not follow the event.

In VID 752 of 2024, involving Timswee Pty Ltd, the respondent sought a stronger order. It wanted the liquidator to pay costs personally and sought indemnity costs. The Court rejected the indemnity costs application, but still ordered that the appellants pay the respondent's costs of and incidental to the appeal on the standard basis. The Court also said there was no reason the liquidator should be absolved from personal liability because he was personally named as the first appellant.

In VID 753 of 2024, involving Rill Trading Resources Inc, no submissions were made by the parties. In those circumstances, the Court ordered that each party bear their own costs of the appeal.

The most useful part of the judgment for non-lawyers is the Court's treatment of the Timswee costs application, because it separates concepts that are often confused.

First, indemnity costs are not the same as ordinary standard costs. The respondent argued that the liquidator had engaged in unreasonable conduct, including by commencing the proceeding in deliberate defiance of service rules and by starting it before conducting public examinations said to be necessary to determine whether there was a case to answer. The respondent also relied on the primary judge's conclusion that indemnity costs should be ordered.

The Full Court refused indemnity costs. Its reason was important and narrow. The Court said it was not concerned with the liquidator's conduct in commencing the proceeding. The relevant question for this costs application was the conduct of the appeal. The Court noted that the discretionary error grounds on appeal were not lacking in merit. On that basis, it held that the liquidator's conduct in commencing and prosecuting the appeal was not unreasonable so as to engage the indemnity costs discretion.

Second, personal liability is a different question from whether indemnity costs should be awarded. The Court said the liquidator was personally named as the first appellant and Monarch Tower was the second appellant. Because of that, and because no contrary submission was advanced, there was no reason he should be absolved from personal liability. The Court referred to Re Azmac Pty Ltd (in liq) (No 2) as stating the general position.

Third, personal liability is also different from losing any right of indemnity. The Court expressly said this was not a case to go further and deprive the liquidator of his right of indemnity because of unreasonable conduct in the conduct of the appeal. So the judgment draws a clear line: the liquidator remained personally liable as a named appellant, but the Court did not make the harsher finding needed to go further and strip away indemnity rights on the basis of unreasonable appeal conduct.

The Zuccubarr appeal shows how security for costs works in a straightforward way after an unsuccessful appeal. The liquidator had paid $40,000 into a controlled moneys account as security for the respondent's costs under an earlier order. Once the appeal failed, the Court ordered that amount, plus any accrued interest, be released to the respondent forthwith.

The Court's reasoning was practical. It had dismissed the appeal, there was no reason costs should not follow the event, and the likely costs were greater than the amount held as security. That meant the security could be released in partial satisfaction of the costs liability. This is not a special insolvency rule unique to Monarch Tower. It reflects ordinary litigation practice where security has been ordered and the party protected by that security succeeds.

For businesses, the commercial point is simple. Security for costs is not just a procedural inconvenience. It can become money immediately available to the successful party if the appeal fails. That can affect cash flow, settlement strategy and the real downside of continuing litigation.

This case should not be over-read. It does not explain the underlying Monarch Tower dispute in detail, and it does not announce a new principle. Its value is practical. It shows the Full Court applying ordinary costs rules after unsuccessful appeals in an insolvency setting.

If you are a director, creditor, funder or insolvency practitioner, the main message is that appeal strategy must include a realistic costs analysis from the start. If the appeal fails, standard costs are likely. If security for costs has been paid, it may be released. If an officeholder is personally named as a party, personal liability may remain in place even where the Court is not prepared to make a harsher indemnity costs order.

The case also shows that allegations of unreasonable conduct do not automatically produce indemnity costs. The Court looked at the conduct of the appeal itself and whether the grounds were lacking in merit. Because it did not see the appeal as unreasonably pursued, it stayed with standard costs. That is a useful reminder that courts distinguish between a weak result and unreasonable litigation conduct.

For most businesses, the practical response is to ask early questions: what is the likely adverse costs exposure, is security for costs likely, who is being named as a party, and what is the commercial upside if the appeal succeeds? Those questions often matter as much as the legal arguments themselves.