Momentum Mortgages Ltd & Equity Trustees v Elmowy & Meehan [2010] NSWSC 950

Momentum Mortgages Ltd & Equity Trustees v Elmowy & Meehan [2010] NSWSC 950

There was credible testimony that the first plaintiff may be unable to pay the defendants’ costs if unsuccessful, satisfying the undemanding threshold in s 1335 of the Corporations Act. Although the presence of a solvent co-plaintiff and the overlap of issues (including the intended cross claim) are discretionary factors weighing against security, the allegation of misleading and deceptive conduct is directed only at the first plaintiff, and the defendants undertook not to pursue their cross claim if security was not provided. This justifies ordering the first plaintiff to provide security for part of the likely costs.

Jurisdiction
Australia
Judgment Date
01 September 2010
Procedural Posture
Civil / Interlocutory Application for Security for Costs and Leave to File Cross Claim
Outcome
Application for security for costs granted; leave to file cross claim granted
Legal Topics
['security for Costs' 'impecuniosity of Corporate Plaintiff' 'interplay of Co Plaintiffs' 'cross Claim Impact on Security' 'priority of Claims Under Deed of Company Arrangement' 'misleading and Deceptive Conduct']
['civil Procedure' 'corporate Insolvency' 'contract'] ['security for Costs' 'impecuniosity of Corporate Plaintiff' 'interplay of Co Plaintiffs' 'cross Claim Impact on Security' 'priority of Claims Under Deed of Company Arrangement' 'misleading and Deceptive Conduct']

Case Brief

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Procedural Posture

Civil / Interlocutory Application for Security for Costs and Leave to File Cross Claim

Legal Issues

  1. 1 ['Whether the first plaintiff should be ordered to provide security for costs under s 1335 of the Corporations Act 2001 (Cth)' "Whether there is credible reason to believe the first plaintiff may be unable to pay the defendants' costs if unsuccessful" 'How the existence and financial position of a co-plaintiff affects the discretion to order security for costs' 'Effect of proposed cross claim on exercise of discretion to order security']

Ratio Decidendi

There was credible testimony that the first plaintiff may be unable to pay the defendants’ costs if unsuccessful, satisfying the undemanding threshold in s 1335 of the Corporations Act. Although the presence of a solvent co-plaintiff and the overlap of issues (including the intended cross claim) are discretionary factors weighing against security, the allegation of misleading and deceptive conduct is directed only at the first plaintiff, and the defendants undertook not to pursue their cross claim if security was not provided. This justifies ordering the first plaintiff to provide security for part of the likely costs.

Court Disposition

Application for security for costs granted; leave to file cross claim granted

Orders

  • ['Leave granted to the defendants and Ezcape St Projects Pty Ltd to file a cross claim in these proceedings.' 'Cross claim to be filed and served within 21 days.' "First plaintiff to provide security for first and second defendants' costs in a form acceptable to the registrar: (a) $14,000 within 28 days; (b) further...