Sydney Exotic Aquariums - Case Update

The Federal Court has awarded indemnity costs against a company’s principal following his failure to attend a court-ordered examination in the context of the company’s liquidation.

Sydney Exotic Aquariums Casula Pty Ltd was established in 2021 and operated as a retail provider for aquariums and aquarium accessories from leased premises located in Casula, NSW. Teddy Panella was the company’s director and shareholder.

A liquidator was appointed to the company in November 2023. In a later report to creditors, Peter Krejci of BRI (who replaced the initial liquidator) reported that it appeared that the company had engaged in an illegal phoenix arrangement in the years leading up to the cessation of trade and the liquidator’s appointment. Two related companies, Richmond Lifts Pty Ltd and United Lifts Technologies Pty Ltd, were also placed in liquidation.

On this application, the liquidator sought indemnity costs following Mr Panella’s failure to appear in response to a summons on 9 December 2024. The liquidator argued that Mr Panella’s non-attendance caused wasted costs and necessitated an urgent interlocutory application for an arrest warrant. Mr Panella accepted that he should pay some costs but opposed an indemnity order, arguing that he had medical reasons for his absence and that any costs awarded should be assessed on a standard party/party basis.

The Court was not persuaded by Mr Panella’s arguments, finding that the medical certificate Mr Panella ultimately provided lacked sufficient detail to justify his absence and did not remotely explain why he was unfit to attend the examination. The Court further ruled that Mr Panella’s behaviour demonstrated a “deliberate disregard” for the Court’s summons. Mr Panella had been aware of the scheduled examination, had been warned multiple times about the potential for an arrest warrant, and yet failed to provide an undertaking to attend on a later date. Despite Mr Panella’s eventual appearance on 10 December 2024, the Court determined that the liquidator was entitled to indemnity costs due to the unnecessary expenses incurred.

Read the decision here.

Professionals involved:

• Michael Rose of 9 Wentworth Chambers (instructed by ERA Legal) for Peter Krejci of BRI as liquidator

• Nathan Li of 7 Wentworth Selborne (instructed by McEvoy Legal) for Mr Panella