LSKF Holdings Pty Ltd v Shield Lifestone Holdings Pty Ltd [2018] NSWCA 109

LSKF Holdings Pty Ltd v Shield Lifestone Holdings Pty Ltd [2018] NSWCA 109

Although the parties proceeded on the basis that the discretion under s 1335 was engaged, security for costs should not be ordered because the 13 March agreement created valuation and share acquisition mechanisms that would provide a practical measure of security if the appeal were dismissed, the agreement and LSKF's payment of $530,500 indicated that the risk of non-recovery was considerably less than otherwise, and the appeal was very small and confined to pure questions of law. The realistic estimate of future costs was about $25,000, not the $60,000 sought.

Jurisdiction
Australia
Judgment Date
14 May 2018
Procedural Posture
Appeal; Notice of Motion for Security for Costs / Procedural Ruling in Pending Court of Appeal Proceedings
Outcome
Notice of motion filed 4 May 2018 dismissed; notice of motion filed 14 May 2018 dismissed; directions made for further submissions and concurrent hearing.
Legal Topics
['security for Costs' 'corporate Trustee' 'appeal Directions' "shareholders' Agreement" 'costs']
['civil Procedure' 'corporations' 'trusts'] ['security for Costs' 'corporate Trustee' 'appeal Directions' "shareholders' Agreement" 'costs']

Case Brief

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Procedural Posture

Appeal; Notice of Motion for Security for Costs / Procedural Ruling in Pending Court of Appeal Proceedings

Legal Issues

  1. 1 ['Whether security for costs should be ordered under s 1335 of the Corporations Act 2001 (Cth) against LSKF Holdings Pty Ltd in the pending appeal.' "Whether, given LSKF Holdings Pty Ltd's position as a corporate trustee and the evidence about its assets, the precondition to s 1335 was satisfied." "Whether the Court should exercise its discretion to order security, and in what amount, having regard to the likely costs of the appeal, delay, and the parties' agreement providing valuation and share acquisition mechanisms."]

Ratio Decidendi

Although the parties proceeded on the basis that the discretion under s 1335 was engaged, security for costs should not be ordered because the 13 March agreement created valuation and share acquisition mechanisms that would provide a practical measure of security if the appeal were dismissed, the agreement and LSKF's payment of $530,500 indicated that the risk of non-recovery was considerably less than otherwise, and the appeal was very small and confined to pure questions of law. The realistic estimate of future costs was about $25,000, not the $60,000 sought.

Court Disposition

Notice of motion filed 4 May 2018 dismissed; notice of motion filed 14 May 2018 dismissed; directions made for further submissions and concurrent hearing.

Orders

  • ['Dismiss the notice of motion filed 4 May 2018.' "The applicants on the motion, Shield Lifestone Holdings Pty Ltd and Mr Feng Ye, pay LSKF Holdings Pty Ltd's costs of the notice of motion." 'Dismiss the notice of motion filed 14 May 2018, with no order as to costs of that motion.' 'Respondents to file and serve any...