Canterbury Heating and Cooling Pty Limited (In Liquidation) v Denham Constructions Pty Limited [2010] NSWDC 5

Canterbury Heating and Cooling Pty Limited (In Liquidation) v Denham Constructions Pty Limited [2010] NSWDC 5

An order for security for costs was appropriate where the plaintiff company in liquidation and its creditors (other than the liquidator and legal advisers) would not likely benefit from the proceedings, no realistic funding was available, and the only real beneficiaries would be the liquidators and legal advisers;...

Source-derived case information.

Parties
Plaintiff: Canterbury Heating and Cooling Pty Limited (In Liquidation); Defendant: Denham Constructions Pty Limited
Jurisdiction
Australia
Judgment Date
05 February 2010
Procedural Posture
Civil / Interlocutory Application for Security for Costs
Outcome
Application for security for costs granted. Proceedings stayed pending provision of security.
Legal Topics
Security for Costs, Company in Liquidation, Discretion to Order Security, Priorities on Liquidation
Civil Procedure Corporations Law Security for Costs Company in Liquidation Discretion to Order Security Priorities on Liquidation

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Parties

Canterbury Heating and Cooling Pty Limited (In Liquidation)

Plaintiff

Denham Constructions Pty Limited

Defendant

Procedural Posture

Civil / Interlocutory Application for Security for Costs

Legal Issues

  1. 1 Whether security for costs should be ordered against a company in liquidation
  2. 2 Whether an order for security would stultify prosecution of plaintiff's claim
  3. 3 Factors relevant to exercise of discretion to order security

Ratio Decidendi

An order for security for costs was appropriate where the plaintiff company in liquidation and its creditors (other than the liquidator and legal advisers) would not likely benefit from the proceedings, no realistic funding was available, and the only real beneficiaries would be the liquidators and legal advisers; in the exercise of discretion, the court ordered security for costs to avoid unfairness to the defendant.

Court Disposition

Application for security for costs granted. Proceedings stayed pending provision of security.

Orders

  • Order the Plaintiff to provide security for costs of the Defendant pursuant to Part 42, Rule 21 of the Uniform Civil Procedure Rules and section 1335 of the Corporations Act 2001 in the sum of $115,000 on or before 3 March 2009.
  • Order that the proceedings be stayed until such time as the Plaintiff complies with Order 1, subject to Orders 5, 6 & 7.