In the Matter of Metal Storm Limited (in liquidation) (Receivers and Managers Appointed) ACN 064 270 006 [2018] NSWSC 900

In the Matter of Metal Storm Limited (in liquidation) (Receivers and Managers Appointed) ACN 064 270 006 [2018] NSWSC 900

Security for costs was ordered because the cross-claimant, ASOF, is ordinarily resident outside Australia, failed to provide sufficient evidence of assets in Australia to satisfy a costs order, and the ability of limited partners to withdraw capital further impaired recovery prospects. The delay in seeking security was excused due to acceptable explanation and absence of significant prejudice to ASOF.

Parties
First Plaintiff: Adam Shepard (in his capacity as liquidator of Metal Storm Limited); Second Plaintiff: Metal Storm Limited (in liquidation); First Defendant / Cross Defendant: Equity Trustees Wealth Services Limited; Second Defendant / Cross Claimant: Australian Special Opportunity Fund, LP
Jurisdiction
Australia
Judgment Date
14 June 2018
Procedural Posture
Corporations List Proceedings / Cross Claim / Application for Security for Costs
Outcome
Application for security for costs granted.
Legal Topics
Security for Costs, Delay in Security for Costs Application, Assets Outside Jurisdiction, Limited Partnerships
Civil Procedure Corporations Law Security for Costs Delay in Security for Costs Application Assets Outside Jurisdiction Limited Partnerships

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Parties

Adam Shepard (in his capacity as liquidator of Metal Storm Limited)

First Plaintiff

Metal Storm Limited (in liquidation)

Second Plaintiff

Equity Trustees Wealth Services Limited

First Defendant / Cross Defendant

Australian Special Opportunity Fund, LP

Second Defendant / Cross Claimant

Procedural Posture

Corporations List Proceedings / Cross Claim / Application for Security for Costs

Legal Issues

  1. 1 Whether cross-defendant is entitled to security for costs against cross-claimant ordinarily resident outside Australia
  2. 2 Whether cross-claimant has sufficient assets in Australia to meet any costs order
  3. 3 Whether delay in making security for costs application bars grant of security

Ratio Decidendi

Security for costs was ordered because the cross-claimant, ASOF, is ordinarily resident outside Australia, failed to provide sufficient evidence of assets in Australia to satisfy a costs order, and the ability of limited partners to withdraw capital further impaired recovery prospects. The delay in seeking security was excused due to acceptable explanation and absence of significant prejudice to ASOF.

Court Disposition

Application for security for costs granted.

Orders

  • Cross-claimant to provide security for costs in the total amount of $920,000 by payment into court or as otherwise agreed, by two instalments: $370,000 within 14 days, and $550,000 within 28 days after setting down cross-claim for hearing.
  • Cross-claim stayed unless security is provided as ordered.