Ovalglen Holdings Pty Ltd (in liq) v Viewnorth Investments Pty Ltd [2020] FCA 889

Ovalglen Holdings Pty Ltd (in liq) v Viewnorth Investments Pty Ltd [2020] FCA 889

The court had power under its supervisory and procedural powers to consider the return of the guarantees, but the plaintiffs did not show that it was necessary or desirable to disturb the status quo. The guarantees were provided as a compromise of Lawton Gillon's potential rights to security for costs, Bell Lawyers Pty Ltd v Pentelow did not remove the fundamental basis for that compromise, Lawton Gillon could still incur recoverable costs such as barristers' fees, expert evidence and disbursements, the total security was not excessive against the potential exposure, and the agreed terms did not require return of any guarantee, including the $12,500 guarantee referable to discovery.

Jurisdiction
Australia
Judgment Date
25 June 2020
Procedural Posture
Interlocutory Application for Return of Bank Guarantees Provided as Security for Costs / Determined on the Papers
Outcome
Plaintiffs' interlocutory application dismissed.
Legal Topics
['security for Costs' 'bank Guarantees' 'self Represented Incorporated Legal Practice' 'chorley Exception' 'interlocutory Orders' 'federal Court Procedural Powers']
['practice and Procedure' 'costs' 'corporations and Corporate Insolvency'] ['security for Costs' 'bank Guarantees' 'self Represented Incorporated Legal Practice' 'chorley Exception' 'interlocutory Orders' 'federal Court Procedural Powers']

Case Brief

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Procedural Posture

Interlocutory Application for Return of Bank Guarantees Provided as Security for Costs / Determined on the Papers

Legal Issues

  1. 1 ['Whether the court had power to order the return of bank guarantees provided by the plaintiffs to the fifth defendant as security for costs.' 'Whether Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29; (2019) 372 ALR 555 justified return of the bank guarantees because the fifth defendant, an incorporated legal practice representing itself, could not recover professional costs for time spent by its own lawyers.' 'Whether the bank guarantee of $12,500 referable to discovery should be returned because the fifth defendant was not required to provide discovery.' 'Whether the terms on which the bank guarantees were provided required their return in the circumstances.']

Ratio Decidendi

The court had power under its supervisory and procedural powers to consider the return of the guarantees, but the plaintiffs did not show that it was necessary or desirable to disturb the status quo. The guarantees were provided as a compromise of Lawton Gillon's potential rights to security for costs, Bell Lawyers Pty Ltd v Pentelow did not remove the fundamental basis for that compromise, Lawton Gillon could still incur recoverable costs such as barristers' fees, expert evidence and disbursements, the total security was not excessive against the potential exposure, and the agreed terms did not require return of any guarantee, including the $12,500 guarantee referable to discovery.

Court Disposition

Plaintiffs' interlocutory application dismissed.

Orders

  • ["The plaintiffs' interlocutory application dated 9 December 2019 is dismissed." 'The plaintiffs and the fifth defendant must briefly state their respective positions on the costs of the application by correspondence with the Chambers of Justice Jackson within five days of the date of publication of these reasons.']