BCI Finances Pty Limited (In Liq) v Binetter [2015] FCA 786

BCI Finances Pty Limited (In Liq) v Binetter [2015] FCA 786

The Deed of Indemnity was not a reasonable or effective means of securing the defendants' costs because it was only between the liquidators and the Commissioner, capped the indemnity, could be affected by termination of the Principal Deed of Indemnity, contained dispute mechanisms outside the defendants' control, created uncertainty about who was indemnified, and could be challenged by the Commissioner. Security for each defendant grouping should instead be provided, at the election of the plaintiffs and the Commissioner, by a $2,000,000 cash deposit, bank guarantees securing $500,000 for each grouping, or an undertaking by the Commissioner to pay directly any defendant who obtains a...

Jurisdiction
Australia
Judgment Date
31 July 2015
Procedural Posture
Security for Costs Applications in Federal Court Proceeding Involving Plaintiffs in Liquidation / Interlocutory Applications Decided Before Final Hearing
Outcome
Defendants' security for costs applications allowed in part; Nudie parties' application dismissed; sixth defendant's application for increased security dismissed.
Legal Topics
['security for Costs' 'form of Security' 'commissioner of Taxation Funding Litigation' 'joinder for Costs Purposes' 'freezing Orders Affecting Non Parties']
['costs' 'civil Procedure' 'corporations and Insolvency'] ['security for Costs' 'form of Security' 'commissioner of Taxation Funding Litigation' 'joinder for Costs Purposes' 'freezing Orders Affecting Non Parties']

Case Brief

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Procedural Posture

Security for Costs Applications in Federal Court Proceeding Involving Plaintiffs in Liquidation / Interlocutory Applications Decided Before Final Hearing

Legal Issues

  1. 1 ["Whether the Deed of Indemnity between the Commissioner and the liquidators provided adequate security for the defendants' costs." 'Whether security should be provided by cash deposit, bank guarantee, or an undertaking to the Court from the Commissioner.' "Whether the Commissioner should be joined as a party so as to render him amenable to the Court's costs jurisdiction." 'Whether the Nudie parties, as non-parties affected by freezing orders, made out a case for security for their costs.' 'Whether Michael Binetter had established a basis to increase security for his costs to $900,000.']

Ratio Decidendi

The Deed of Indemnity was not a reasonable or effective means of securing the defendants' costs because it was only between the liquidators and the Commissioner, capped the indemnity, could be affected by termination of the Principal Deed of Indemnity, contained dispute mechanisms outside the defendants' control, created uncertainty about who was indemnified, and could be challenged by the Commissioner. Security for each defendant grouping should instead be provided, at the election of the plaintiffs and the Commissioner, by a $2,000,000 cash deposit, bank guarantees securing $500,000 for each grouping, or an undertaking by the Commissioner to pay directly any defendant who obtains a...

Court Disposition

Defendants' security for costs applications allowed in part; Nudie parties' application dismissed; sixth defendant's application for increased security dismissed.

Orders

  • ['The application by Nudie Franchising Systems Pty Limited (ACN 102 561 923), Nudie Foods Pty Limited (ACN 107 914 554), Nudie Pty Limited (ACN 102 660 024), Real Juice Pty Limited (ACN 102 224 842), Nudie Foods Australia Pty Limited (ACN 110 000 265) and Tamarama Fresh Juices Australia Pty Limited (ACN 003 994 072)...