Charlwood Industries Pty Ltd v Cubitt, I.R. & Ors [1995] FCA 126

Charlwood Industries Pty Ltd v Cubitt, I.R. & Ors [1995] FCA 126

Given the applicant's complex corporate structure, fluid financial relations, reliance on unsecured inter-group loans, lack of fixed assets, and ongoing tax audit, there is a real risk that the successful respondents may encounter significant difficulty and delay in obtaining satisfaction of any costs order. It is therefore appropriate to order the applicant to provide security for the payment of costs in favour of the respondents.

Parties
Applicant: Charlwood Industries Pty Limited; First Respondent: Ian Raymond Cubitt; Second Respondent: Anne Christian; Third Respondent: Gregory Boggis; Fourth Respondent: Robert Edwards; Fifth Respondent: Roblyne Pty Limited
Jurisdiction
Australia
Judgment Date
15 March 1995
Procedural Posture
Application for Security for Costs / Interlocutory Order Before Trial
Outcome
Security for costs ordered; proceeding stayed until compliance
Legal Topics
Security for Costs, Costs, Corporate Structure, Fiduciary Duties, Copyright Infringement
Civil Procedure Security for Costs Costs Corporate Structure Fiduciary Duties Copyright Infringement

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Parties

Charlwood Industries Pty Limited

Applicant

Ian Raymond Cubitt

First Respondent

Anne Christian

Second Respondent

Gregory Boggis

Third Respondent

Robert Edwards

Fourth Respondent

Roblyne Pty Limited

Fifth Respondent

Procedural Posture

Application for Security for Costs / Interlocutory Order Before Trial

Legal Issues

  1. 1 Whether security for costs should be ordered against the applicant given its corporate structure and risk of non-payment to respondents
  2. 2 Whether the complexity and fluidity of the applicant's business structure presents a real risk of delay and difficulty in satisfying an adverse costs order

Ratio Decidendi

Given the applicant's complex corporate structure, fluid financial relations, reliance on unsecured inter-group loans, lack of fixed assets, and ongoing tax audit, there is a real risk that the successful respondents may encounter significant difficulty and delay in obtaining satisfaction of any costs order. It is therefore appropriate to order the applicant to provide security for the payment of costs in favour of the respondents.

Court Disposition

Security for costs ordered; proceeding stayed until compliance

Orders

  • The applicant provide security in the sum of $30,000 for the payment of costs that may be awarded to the first respondent.
  • The applicant provide security in the sum of $30,000 for the payment of costs that may be awarded to the second, third, fourth and fifth respondents.