Basetec Services Pty Ltd v Leighton Contractors Pty Ltd [2014] FCA 991

Basetec Services Pty Ltd v Leighton Contractors Pty Ltd [2014] FCA 991

Although Basetec could presently provide security and meet an adverse costs order immediately, the relevant inquiry was whether there was reason to believe it would be unable to pay if its claim failed in about one year's time. Basetec had not provided up-to-date financial information, its redacted bank statements showed a substantial unexplained decline in account balance, its accountant's assertions about no major change were insufficiently explained, no evidence was given by key company personnel, and its cash-surplus business model made it vulnerable to significant cashflow fluctuation. Those matters gave reason to believe Basetec may be unable to pay Leighton's costs. The...

Jurisdiction
Australia
Judgment Date
12 September 2014
Procedural Posture
Application for Security for Costs / Interlocutory Application
Outcome
Application for security for costs granted in principle; Basetec was to provide security for costs in the amount of $300,000, with the form of security to be agreed or determined after relisting.
Legal Topics
['security for Costs' "corporate Plaintiff's Ability to Pay Costs" 'exercise of Discretion Under S 1335(1) of the Corporations Act 2001 (cth)' 'federal Court Power to Order Security for Costs' 'confidential Financial Information' 'misleading or Deceptive Conduct' 'unconscionable Conduct' 'construction Contract Dispute']
['practice and Procedure' 'corporations' 'costs' 'construction Law' 'australian Consumer Law'] ['security for Costs' "corporate Plaintiff's Ability to Pay Costs" 'exercise of Discretion Under S 1335(1) of the Corporations Act 2001 (cth)' 'federal Court Power to Order Security for Costs' 'confidential Financial Information' 'misleading or Deceptive Conduct' 'unconscionable Conduct' 'construction Contract Dispute']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Application for Security for Costs / Interlocutory Application

Legal Issues

  1. 1 ["Whether credible testimony gave reason to believe that Basetec Services Pty Ltd would be unable to pay Leighton Contractors Pty Ltd's costs if Leighton was successful in its defence." 'Whether the Court should exercise its discretion to order security for costs.' 'What amount of security should be ordered and for what period of the proceeding.']

Ratio Decidendi

Although Basetec could presently provide security and meet an adverse costs order immediately, the relevant inquiry was whether there was reason to believe it would be unable to pay if its claim failed in about one year's time. Basetec had not provided up-to-date financial information, its redacted bank statements showed a substantial unexplained decline in account balance, its accountant's assertions about no major change were insufficiently explained, no evidence was given by key company personnel, and its cash-surplus business model made it vulnerable to significant cashflow fluctuation. Those matters gave reason to believe Basetec may be unable to pay Leighton's costs. The...

Court Disposition

Application for security for costs granted in principle; Basetec was to provide security for costs in the amount of $300,000, with the form of security to be agreed or determined after relisting.

Orders

  • ["The respondent's interlocutory application dated 17 June 2014 be adjourned for further consideration to 19 September 2014 at 2.15 pm." 'The applicant should provide security for costs in the amount of $300,000.' "The application was to be relisted in seven days' time for the making of orders if the form of...