Caruso Australia Pty Ltd v Portec (Austtalia) Pty Ltd [1984] FCA 71

Caruso Australia Pty Ltd v Portec (Austtalia) Pty Ltd [1984] FCA 71

Because the corporate applicant was in liquidation and there was reason to believe it could not pay the respondent's costs if the respondent succeeded, sub-s.533(1) of the Companies (Western Australia) Code was available and its threshold was satisfied. In exercising the discretion, the Court accepted the claim was bona fide but found substantial issues remained, the respondent was not shown to have caused the applicant's impecuniosity, the delay did not preclude relief, the anticipated defence costs were substantial, and interested creditors might contribute to security. Security should therefore be ordered, but in an amount reflecting future costs, the applicant's expenditure already...

Jurisdiction
Australia
Judgment Date
30 March 1984
Procedural Posture
Motion for Security for Costs in Federal Court Proceedings / Interlocutory Motion
Outcome
Security for costs ordered; applicant's claim stayed until security is provided; costs reserved.
Legal Topics
['security for Costs' 'companies (western Australia) Code S.533' 'federal Court Rules Order 28' 'impecuniosity of Corporate Applicant' 'discretion to Order Security' 'delay' 'stay of Proceedings']
['practice and Procedure' 'corporations' 'trade Practices'] ['security for Costs' 'companies (western Australia) Code S.533' 'federal Court Rules Order 28' 'impecuniosity of Corporate Applicant' 'discretion to Order Security' 'delay' 'stay of Proceedings']

Case Brief

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Procedural Posture

Motion for Security for Costs in Federal Court Proceedings / Interlocutory Motion

Legal Issues

  1. 1 ['Whether sub-s.533(1) of the Companies (Western Australia) Code was available to a respondent in proceedings in the Federal Court.' "Whether there was reason to believe that the applicant would be unable to pay the respondent's costs if the respondent was successful in its defence." "Whether the Court should exercise its discretion to order security for costs, having regard to the bona fides and probability of success of the claim, whether the respondent caused the applicant's impecuniosity, delay in seeking security, costs already incurred, the existence of creditors interested in the litigation, and any public interest element under the Trade Practices Act." 'What amount of security should be ordered.']

Ratio Decidendi

Because the corporate applicant was in liquidation and there was reason to believe it could not pay the respondent's costs if the respondent succeeded, sub-s.533(1) of the Companies (Western Australia) Code was available and its threshold was satisfied. In exercising the discretion, the Court accepted the claim was bona fide but found substantial issues remained, the respondent was not shown to have caused the applicant's impecuniosity, the delay did not preclude relief, the anticipated defence costs were substantial, and interested creditors might contribute to security. Security should therefore be ordered, but in an amount reflecting future costs, the applicant's expenditure already...

Court Disposition

Security for costs ordered; applicant's claim stayed until security is provided; costs reserved.

Orders

  • ['The applicant give security in the amount of $25,000 for the costs of the respondent of and incidental to these proceedings, in a form to be agreed by the parties and, in default of agreement, to be determined by the Court.' "Further proceedings on the applicant's claim against the respondent be stayed until...