Gensco Laboratories, LLC v Care A2 Plus Pty Ltd (receiver appointed) (No 2) [2024] FCA 23

Gensco Laboratories, LLC v Care A2 Plus Pty Ltd (receiver appointed) (No 2) [2024] FCA 23

The Court found there is reason to believe Care A2 could not meet an adverse costs order due to its receivership and lack of rebuttal evidence. The cross-claim was not purely defensive, raising new legal and factual issues, including against new parties and asserting substantial damages. Security for costs was therefore appropriate, fixed at $675,859.05 in staged tranches, with an initial tranche to be paid promptly and further security to be agreed or determined by the Court, with a stay/dismissal mechanism linked to compliance.

Parties
First Applicant/cross Respondent: Gensco Laboratories, LLC (doing business as Gensco Pharma); Second Applicant/cross Respondent: Gensco Nutrition LLC; First Respondent/cross Claimant: Care A2 Plus Pty Ltd (ABN 98 631 178 115) (Receiver Appointed); Second Respondent: Ausmore Dairy Pty Ltd; Third Respondent: Kerry Hyland; Fourth Respondent: Pablo-Omar Vasquez
Jurisdiction
Australia
Judgment Date
22 January 2024
Procedural Posture
Interlocutory Application for Security for Costs in Cross Claim / Determination of Security for Costs and Stay/dismissal Pending Compliance
Outcome
Application granted. Orders made for provision of security for costs in staged tranches; cross-claim stayed pending payment; cross-claim to be dismissed if initial security not provided by deadline, with costs to Gensco.
Legal Topics
Security for Costs, Cross Claim, Interlocutory Applications, Corporations – Security for Costs, Discretionary Orders, Quantum of Security
Commercial Law Corporations Law Contract Law Security for Costs Cross Claim Interlocutory Applications Corporations – Security for Costs Discretionary Orders +1 more

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Parties

Gensco Laboratories, LLC (doing business as Gensco Pharma)

First Applicant/cross Respondent

Gensco Nutrition LLC

Second Applicant/cross Respondent

Care A2 Plus Pty Ltd (ABN 98 631 178 115) (Receiver Appointed)

First Respondent/cross Claimant

Ausmore Dairy Pty Ltd

Second Respondent

Kerry Hyland

Third Respondent

Pablo-Omar Vasquez

Fourth Respondent

Procedural Posture

Interlocutory Application for Security for Costs in Cross Claim / Determination of Security for Costs and Stay/dismissal Pending Compliance

Legal Issues

  1. 1 Whether there is reason to believe the first respondent/cross-claimant could not meet an adverse costs order
  2. 2 Whether the cross claim is purely defensive or an independent claim
  3. 3 Quantum and tranching of security for costs

Ratio Decidendi

The Court found there is reason to believe Care A2 could not meet an adverse costs order due to its receivership and lack of rebuttal evidence. The cross-claim was not purely defensive, raising new legal and factual issues, including against new parties and asserting substantial damages. Security for costs was therefore appropriate, fixed at $675,859.05 in staged tranches, with an initial tranche to be paid promptly and further security to be agreed or determined by the Court, with a stay/dismissal mechanism linked to compliance.

Court Disposition

Application granted. Orders made for provision of security for costs in staged tranches; cross-claim stayed pending payment; cross-claim to be dismissed if initial security not provided by deadline, with costs to Gensco.

Orders

  • The first respondent/cross-claimant to provide security for the applicants'/cross-respondents' costs of and incidental to the statement of cross claim in the amount of $675,859.05, to be paid into Court by way of: (a) an initial tranche of $50,000 by 4.30 pm on Monday, 19 February 2024; and (b) subsequent tranches...
  • The cross claim is stayed pending provision of the initial tranche of security of $50,000.