Waldon v Mowen Margaret River Estate Pty Ltd [2003] FCA 871

Waldon v Mowen Margaret River Estate Pty Ltd [2003] FCA 871

The Court refused to exercise the discretion to order security for costs because the cross-claimants' claims were bona fide and arguable, the evidence did not definitively establish that they would lack assets to meet a costs order despite present cash-flow difficulty, an order would likely shut them out of or stultify their litigation, the cash-flow impecuniosity arose from the acts in respect of which relief was sought, and there was evidence making it arguable that the second cross-respondents were closely bound up with the claims and cross-claims between the applicants and the Mowen Group.

Jurisdiction
Australia
Judgment Date
21 August 2003
Procedural Posture
Security for Costs Motion in Federal Court Proceeding With Cross Claim / Interlocutory Motion
Outcome
The second cross-respondents' notice of motion for security for costs was refused, with costs payable by the second cross-respondents to the cross-claimants.
Legal Topics
['security for Costs' 'exercise of Discretion' 'corporate Cross Claimants' 'impecuniosity' 'cross Claims']
['civil Procedure' 'corporations' 'costs'] ['security for Costs' 'exercise of Discretion' 'corporate Cross Claimants' 'impecuniosity' 'cross Claims']

Case Brief

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Procedural Posture

Security for Costs Motion in Federal Court Proceeding With Cross Claim / Interlocutory Motion

Legal Issues

  1. 1 ['Whether the second cross-respondents should obtain security for costs from the cross-claimants under s 56 of the Federal Court of Australia Act 1976 (Cth), O 28 r 2 of the Federal Court Rules and, for corporate cross-claimants, s 1335 of the Corporations Act 2001 (Cth).' 'Whether there was a sufficient risk that the cross-claimants would be unable to satisfy a costs order if the cross-claim failed.' 'Whether an order for security would shut out or stultify the cross-claimants in pursuing a bona fide cross-claim that was closely connected with their defence of the principal action.' "Whether the cross-claimants' present cash-flow impecuniosity arose out of the acts in respect of which relief was sought." 'Whether the alleged connection of the second cross-respondents with the claims and cross-claims between the applicants and the Mowen Group affected the discretion.']

Ratio Decidendi

The Court refused to exercise the discretion to order security for costs because the cross-claimants' claims were bona fide and arguable, the evidence did not definitively establish that they would lack assets to meet a costs order despite present cash-flow difficulty, an order would likely shut them out of or stultify their litigation, the cash-flow impecuniosity arose from the acts in respect of which relief was sought, and there was evidence making it arguable that the second cross-respondents were closely bound up with the claims and cross-claims between the applicants and the Mowen Group.

Court Disposition

The second cross-respondents' notice of motion for security for costs was refused, with costs payable by the second cross-respondents to the cross-claimants.

Orders

  • ["The second cross-respondents' notice of motion dated 19 March 2003 be refused." 'The second cross-respondents pay the cross-claimants costs on the motion.']