ACN 153 364 491 Ltd (in liq) v GP No 1 Pty Ltd (in liq), in the matter of GP No 1 Pty Ltd (in liq) (No 2) [2019] FCA 2112

ACN 153 364 491 Ltd (in liq) v GP No 1 Pty Ltd (in liq), in the matter of GP No 1 Pty Ltd (in liq) (No 2) [2019] FCA 2112

Because the plaintiff was in liquidation and had no funds available to meet a costs order, the power under s 1335(1) was engaged. The present application was not merely the result of a miscalculation; the dispute had become broader since the initial security order due to a significant shift in the plaintiff's case. Although further security might lead to abandonment of the proceeding, that risk was outweighed by the defendants' interest in not defending the proceeding without realistic prospect of recovering costs if successful. Further security of $10,000 was appropriate.

Jurisdiction
Australia
Judgment Date
02 December 2019
Procedural Posture
Application for Further Security for Costs in a Corporations Proceeding / Reasons for Orders Made on 2 December 2019 Requiring Further Security for Costs
Outcome
Application for further security for costs granted in part.
Legal Topics
['security for Costs' 'further Security for Costs' 'impecunious Plaintiff Corporation' 'costs Already Incurred' 'stultification of Proceedings']
['costs' 'corporations and Corporate Insolvency'] ['security for Costs' 'further Security for Costs' 'impecunious Plaintiff Corporation' 'costs Already Incurred' 'stultification of Proceedings']

Case Brief

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Procedural Posture

Application for Further Security for Costs in a Corporations Proceeding / Reasons for Orders Made on 2 December 2019 Requiring Further Security for Costs

Legal Issues

  1. 1 ['Whether the defendants should be granted further security for costs pursuant to s 1335 of the Corporations Act 2001 (Cth) and r 19.01 of the Federal Court Rules 2011 (Cth).' 'Whether the Court may order security for costs already incurred by the defendants.' 'Whether ordering further security would stultify the proceeding.']

Ratio Decidendi

Because the plaintiff was in liquidation and had no funds available to meet a costs order, the power under s 1335(1) was engaged. The present application was not merely the result of a miscalculation; the dispute had become broader since the initial security order due to a significant shift in the plaintiff's case. Although further security might lead to abandonment of the proceeding, that risk was outweighed by the defendants' interest in not defending the proceeding without realistic prospect of recovering costs if successful. Further security of $10,000 was appropriate.

Court Disposition

Application for further security for costs granted in part.

Orders

  • ["The plaintiff give further security for the defendants' costs in the proceeding in the amount of $10,000." 'The amount be paid into Court within 14 days.' 'The proceeding be stayed until the further security is paid into Court.']