Cayenne Coal Pty Ltd as Trustee for Boardwalk Resources Trust v Whitehaven Coal Limited [2022] NSWSC 934

Cayenne Coal Pty Ltd as Trustee for Boardwalk Resources Trust v Whitehaven Coal Limited [2022] NSWSC 934

The threshold for security was satisfied because Cayenne had paid up capital of $1, no bank accounts, no apparent tax returns or financial statements, and was inferred to be a dormant company with no substantial assets. Cayenne's proceedings were not properly characterised as defensive because Cayenne was asserting a positive right to the Restricted Shares and Whitehaven was resisting that claim. There was no other discretionary basis to refuse security, and Whitehaven's broad-brush costs estimate supported an order for security in the amount of $250,000.

Jurisdiction
Australia
Judgment Date
15 July 2022
Procedural Posture
Security for Costs Application in Equity Commercial List Proceedings / Notice of Motion Filed on 17 June 2022
Outcome
Security for costs ordered in favour of the first defendant; proceedings to be stayed if security is not provided.
Legal Topics
['security for Costs' 'relevant Discretionary Factors' 'defensive Proceedings' 'quantification of Security' 'broad Brush Approach']
['costs' 'civil Procedure' 'corporations'] ['security for Costs' 'relevant Discretionary Factors' 'defensive Proceedings' 'quantification of Security' 'broad Brush Approach']

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Procedural Posture

Security for Costs Application in Equity Commercial List Proceedings / Notice of Motion Filed on 17 June 2022

Legal Issues

  1. 1 ["Whether there was reason to believe that Cayenne would be unable to pay Whitehaven's costs if ordered to do so." "Whether the Court should exercise its discretion to refuse security because Cayenne's claim was strong or defensive in nature." 'Whether the amount of security sought by Whitehaven was appropriate.']

Ratio Decidendi

The threshold for security was satisfied because Cayenne had paid up capital of $1, no bank accounts, no apparent tax returns or financial statements, and was inferred to be a dormant company with no substantial assets. Cayenne's proceedings were not properly characterised as defensive because Cayenne was asserting a positive right to the Restricted Shares and Whitehaven was resisting that claim. There was no other discretionary basis to refuse security, and Whitehaven's broad-brush costs estimate supported an order for security in the amount of $250,000.

Court Disposition

Security for costs ordered in favour of the first defendant; proceedings to be stayed if security is not provided.

Orders

  • ["Within 21 days of the date of this judgment, the plaintiff provide security for the first defendant's costs in the sum of $250,000 by way of payment into Court or bank guarantee;" 'The proceedings be stayed if security is not provided in accordance with order (1);' "Subject to order (4), the plaintiff pay the...