Mastec Australia Pty Ltd v Trident Plastics (SA) Pty Ltd [2016] FCA 1448

Mastec Australia Pty Ltd v Trident Plastics (SA) Pty Ltd [2016] FCA 1448

The respondents failed to establish the threshold requirement under s 1335(1) because the evidence showed Mastec was a well-established company trading since at least 2003, conducting a substantial continuing business without indication of deterioration, having a substantial overdraft, and the trust's most recent tax return indicated very profitable trading and a considerable excess of assets over liabilities and trade debtors over trade creditors. Mastec's trustee status and lack of detailed evidence about its indemnity did not carry significant weight.

Jurisdiction
Australia
Judgment Date
25 November 2016
Procedural Posture
Application for Security for Costs / Interlocutory Application Filed 9 November 2016, Determined Before the Liability Trial Listed to Commence on 5 December 2016
Outcome
The interlocutory application for security for costs was dismissed.
Legal Topics
['security for Costs' 'plaintiff Trustee Company' 'inability to Pay Costs' 'corporations Act 2001 (cth) S 1335(1)' 'trustee Right of Indemnity']
['practice and Procedure' 'corporations' 'commercial and Corporations'] ['security for Costs' 'plaintiff Trustee Company' 'inability to Pay Costs' 'corporations Act 2001 (cth) S 1335(1)' 'trustee Right of Indemnity']

Case Brief

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Procedural Posture

Application for Security for Costs / Interlocutory Application Filed 9 November 2016, Determined Before the Liability Trial Listed to Commence on 5 December 2016

Legal Issues

  1. 1 ["Whether it appeared by credible testimony that Mastec Australia Pty Ltd would be unable to pay the respondents' costs if the respondents succeeded in their defence, as required by s 1335(1) of the Corporations Act 2001 (Cth)." "Whether Mastec's status as a trustee company, limited paid up capital, absence of detailed asset evidence and registered charge justified an order for security for costs."]

Ratio Decidendi

The respondents failed to establish the threshold requirement under s 1335(1) because the evidence showed Mastec was a well-established company trading since at least 2003, conducting a substantial continuing business without indication of deterioration, having a substantial overdraft, and the trust's most recent tax return indicated very profitable trading and a considerable excess of assets over liabilities and trade debtors over trade creditors. Mastec's trustee status and lack of detailed evidence about its indemnity did not carry significant weight.

Court Disposition

The interlocutory application for security for costs was dismissed.

Orders

  • ['The interlocutory application filed 9 November 2016 is dismissed.' "The Respondents are to pay the Applicants' costs of and incidental to the interlocutory application of 9 November 2016."]