Market Services International Pty Ltd v Nutri-Metics (International) Australia Pty Ltd [1995] FCA 202

Market Services International Pty Ltd v Nutri-Metics (International) Australia Pty Ltd [1995] FCA 202

The applicant had arguable claims, the order would not shut it out, the dispute was private, and the application for security was not unduly delayed because the position changed when the major part of the cross-claim was abandoned. The limited and dated financial material, non-production of relevant financial documents, charges over assets, current liabilities exceeding current assets, and uncertainty about the trust assets created a very real doubt that the applicant could meet an adverse costs order. The discretion was therefore exercised to order security, but only in the amount of $40,000 because security is not an indemnity and should relate to anticipated pre-trial costs with...

Jurisdiction
Australia
Judgment Date
04 April 1995
Procedural Posture
Motion for Security for Costs and Leave to Discontinue Part of Cross Claim / Interlocutory Motion Heard on 23 March 1995; Reasons and Orders Delivered 4 April 1995
Outcome
Respondent's motion granted in part: leave granted to discontinue part of cross-claim; applicant ordered to provide $40,000 security for respondent's costs; proceeding and cross-claim stayed until security is provided.
Legal Topics
['security for Costs Against a Corporation' 'partial Discontinuance of Cross Claim' 'exercise of Discretion Under S 56 of the Federal Court of Australia Act 1976 and S 1335 of the Corporations Law' 'ability of Corporate Applicant to Satisfy Adverse Costs Order' 'breach of Contract' 'breach of Confidence' 'infringement of Copyright' 'misleading or Deceptive Conduct']
['costs' 'corporations' 'federal Court Procedure' 'trade Practices' 'copyright' 'contract' 'equity'] ['security for Costs Against a Corporation' 'partial Discontinuance of Cross Claim' 'exercise of Discretion Under S 56 of the Federal Court of Australia Act 1976 and S 1335 of the Corporations Law' 'ability of Corporate Applicant to Satisfy Adverse Costs Order' 'breach of Contract' 'breach of Confidence' 'infringement of Copyright' 'misleading or Deceptive Conduct']

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Procedural Posture

Motion for Security for Costs and Leave to Discontinue Part of Cross Claim / Interlocutory Motion Heard on 23 March 1995; Reasons and Orders Delivered 4 April 1995

Legal Issues

  1. 1 ["Whether the applicant corporation should be ordered to provide security for the respondent's future costs of the proceeding." 'Whether the respondent should have leave to discontinue its cross-claim insofar as it pleaded causes of action under ss 52, 82 and 87 of the Trade Practices Act 1974.' 'What amount of security was appropriate having regard to the stage of the proceeding and estimated future costs.']

Ratio Decidendi

The applicant had arguable claims, the order would not shut it out, the dispute was private, and the application for security was not unduly delayed because the position changed when the major part of the cross-claim was abandoned. The limited and dated financial material, non-production of relevant financial documents, charges over assets, current liabilities exceeding current assets, and uncertainty about the trust assets created a very real doubt that the applicant could meet an adverse costs order. The discretion was therefore exercised to order security, but only in the amount of $40,000 because security is not an indemnity and should relate to anticipated pre-trial costs with...

Court Disposition

Respondent's motion granted in part: leave granted to discontinue part of cross-claim; applicant ordered to provide $40,000 security for respondent's costs; proceeding and cross-claim stayed until security is provided.

Orders

  • ['The cross-claimant have leave to discontinue its cross claim insofar as such cross claim pleads a cause of action arising under ss 52, 82 and 87 of the Trade Practices Act 1974.' 'The cross-claimant file and serve within 7 days an amended cross claim giving effect to such discontinuance.' "The cross-claimant pay...