Background
Keybridge Capital Ltd entered voluntary administration shortly before a proposed shareholder meeting concerning the removal of directors including Nicholas Bolton. The Supreme Court ordered the administration to end. Mr Bolton appealed and obtained an interim stay from the Court of Appeal pending an expedited appeal.
The stay was conditional on Mr Bolton personally undertaking to pay the costs of the administration from 17 April to 8 May 2025 if his appeal failed, supported by $25,000 paid into court. The appeal was dismissed and the stay discharged. Keybridge then sought release of the whole security, relying on administration costs it said exceeded $25,000.
The Court’s Holding
Leeming JA held that Keybridge had established, on its evidence in chief, an entitlement to at least $18,500 from the security. After excluding costs not shown to fall within the relevant period, avoiding apparent double counting, and applying a proportional discount agreed with the administrator, the Court found administration costs exceeding $18,500.
Keybridge also sought to rely on later evidence of counsel’s and solicitors’ costs, which appeared capable of showing that the total costs substantially exceeded $25,000. Although that material was not strictly reply evidence, the Court did not finally determine release of the balance. It gave Mr Bolton seven days to file further submissions or evidence responding to that material, with costs submissions to follow.
Key Takeaways
- Security given for an undertaking may be released to the beneficiary to the extent its entitlement is established.
- The Court scrutinised whether claimed administration costs fell within the undertaking period and excluded apparent duplicate claims.
- A negotiated global discount was applied proportionally, rather than entirely against costs incurred during the relevant period.
Why It Matters
The decision illustrates that a party seeking release of security must prove its entitlement, but the Court will manage procedural disputes pragmatically where further evidence may avoid a fresh motion and unnecessary cost. It also confirms that an administrator’s costs can include GST for the purpose of a personal undertaking to pay the costs of an administration.