Appleglen Pty Ltd v. Mainzeal Corporation Pty Ltd & Anor [1988] FCA 38

Appleglen Pty Ltd v. Mainzeal Corporation Pty Ltd & Anor [1988] FCA 38

Security for costs was ordered because the applicant was a trustee company with no assets in its own right, the financial material did not justify confidence that the trust assets or right of indemnity would meet the second respondent's costs, and a $20,000 amount was reasonable; in the particular circumstances, a deed of guarantee by the directors was a reasonably just form of security.

Jurisdiction
Australia
Judgment Date
03 February 1988
Procedural Posture
Application for Security for Costs / Ex Tempore Reasons and Orders on the Second Respondent's Application for Security for Costs
Outcome
The second respondent's application for security for costs was granted; the applicant's proceedings against the second respondent were stayed until the directors' guarantee was filed and served.
Legal Topics
['security for Costs' 'applicant Trustee Company' 'right of Indemnity From Trust Assets' "directors' Guarantee as Security" 'consideration of Prospects of Success' 'companies (queensland) Code, S.229 A']
['practice and Procedure' 'costs' 'trusts' 'corporations' 'trade Practices'] ['security for Costs' 'applicant Trustee Company' 'right of Indemnity From Trust Assets' "directors' Guarantee as Security" 'consideration of Prospects of Success' 'companies (queensland) Code, S.229 A']

Case Brief

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Procedural Posture

Application for Security for Costs / Ex Tempore Reasons and Orders on the Second Respondent's Application for Security for Costs

Legal Issues

  1. 1 ["Whether the applicant trustee company should provide security for the second respondent's costs." "Whether the applicant's right of indemnity from trust assets was sufficient to answer any likely costs order." "Whether the Court should consider the applicant's prospects of success on the security for costs application." "Whether security could be provided by a deed of guarantee executed by the applicant's directors."]

Ratio Decidendi

Security for costs was ordered because the applicant was a trustee company with no assets in its own right, the financial material did not justify confidence that the trust assets or right of indemnity would meet the second respondent's costs, and a $20,000 amount was reasonable; in the particular circumstances, a deed of guarantee by the directors was a reasonably just form of security.

Court Disposition

The second respondent's application for security for costs was granted; the applicant's proceedings against the second respondent were stayed until the directors' guarantee was filed and served.

Orders

  • ['Security be given to cover the costs of the second respondent in these proceedings, by deed of guarantee executed by the directors, Mr and Mrs Oram, in a form satisfactory to the Registrar, limited to $20,000.' "The applicant's proceedings against the second respondent be stayed until such a deed is filed and it...