Allco Funds Management Ltd (Receivers and Managers Appointed) (in Liq) v Trust Company (RE Services) Ltd [2013] NSWSC 1450

Allco Funds Management Ltd (Receivers and Managers Appointed) (in Liq) v Trust Company (RE Services) Ltd [2013] NSWSC 1450

Further security was ordered because there was reason to believe Allco, a company in liquidation with substantial deficiency, would be unable to meet an adverse costs order; the asserted set offs did not provide an answer because no amount would be due by Trust Company to Allco if Allco failed in the proceedings, s 21 of the Civil Procedure Act 2005 did not apply to a future costs order, and any general law set off would not give ready and certain access to costs and was affected by the no-set-off clause. Security was appropriate as a matter of discretion, but the amount was limited to a further $125,000 because Trust Company had not adduced expert evidence proving likely recoverable...

Jurisdiction
Australia
Judgment Date
02 October 2013
Procedural Posture
Interlocutory Application for Security for Costs / Application by the Defendant to Increase Security for Costs Already Provided by the Plaintiff
Outcome
Plaintiff to provide further security for costs in the sum of $125,000.
Legal Topics
['security for Costs' 'set Off' 'corporation in Liquidation' 'mutual Dealings' 'quantum of Security for Costs']
['practice and Procedure' 'equity' 'corporations'] ['security for Costs' 'set Off' 'corporation in Liquidation' 'mutual Dealings' 'quantum of Security for Costs']

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Procedural Posture

Interlocutory Application for Security for Costs / Application by the Defendant to Increase Security for Costs Already Provided by the Plaintiff

Legal Issues

  1. 1 ["Whether there was reason to believe the plaintiff corporation would be unable to pay the defendant's costs if ordered to do so." "Whether the plaintiff's asserted entitlement to set off under s 553C(1) of the Corporations Act 2001 (Cth), s 21 of the Civil Procedure Act 2005 or at general law answered the application for security for costs." 'Whether the Court should exercise its discretion to order further security for costs.' 'What amount of further security for costs should be ordered.']

Ratio Decidendi

Further security was ordered because there was reason to believe Allco, a company in liquidation with substantial deficiency, would be unable to meet an adverse costs order; the asserted set offs did not provide an answer because no amount would be due by Trust Company to Allco if Allco failed in the proceedings, s 21 of the Civil Procedure Act 2005 did not apply to a future costs order, and any general law set off would not give ready and certain access to costs and was affected by the no-set-off clause. Security was appropriate as a matter of discretion, but the amount was limited to a further $125,000 because Trust Company had not adduced expert evidence proving likely recoverable...

Court Disposition

Plaintiff to provide further security for costs in the sum of $125,000.

Orders

  • ['Allco should provide further security in the sum of $125,000.' 'The parties were invited to bring in short minutes of order to give effect to the reasons.']