Cosdean Investments Pty Ltd v Football Federation Australia Limited [2006] FCA 1134

Cosdean Investments Pty Ltd v Football Federation Australia Limited [2006] FCA 1134

The threshold under s 1335 was satisfied because Cosdean was a small one-shareholder company with no net assets as at 30 June 2005, past trading losses, substantial current liabilities, uncertain realisability of stock and uncertain recoverability of a loan account. The discretionary factors did not justify refusing security: there was no evidence that security would stultify the proceeding, no indication that those behind Cosdean would support it, the asserted causal link between FFA's conduct and Cosdean's financial position was speculative, and the claimed public interest added little. Security was appropriate, but the amount sought was excessive because not all claimed preparation and...

Jurisdiction
Australia
Judgment Date
22 August 2006
Procedural Posture
Application Under S 1335 of the Corporations Act 2001 (cth) for Security for Costs / Interlocutory Notice of Motion
Outcome
Applicant ordered to provide security for costs to the first respondent in the sum of $40,000.
Legal Topics
['security for Costs' 'corporate Plaintiff Unable to Pay Costs' 'discretionary Considerations']
['corporations Law' 'civil Procedure'] ['security for Costs' 'corporate Plaintiff Unable to Pay Costs' 'discretionary Considerations']

Case Brief

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Procedural Posture

Application Under S 1335 of the Corporations Act 2001 (cth) for Security for Costs / Interlocutory Notice of Motion

Legal Issues

  1. 1 ["Whether there was credible testimony giving reason to believe that Cosdean Investments Pty Ltd would be unable to pay Football Federation Australia Limited's costs if unsuccessful." 'Whether the Court should exercise its discretion to order security for costs.' 'What amount of security for costs should be ordered.']

Ratio Decidendi

The threshold under s 1335 was satisfied because Cosdean was a small one-shareholder company with no net assets as at 30 June 2005, past trading losses, substantial current liabilities, uncertain realisability of stock and uncertain recoverability of a loan account. The discretionary factors did not justify refusing security: there was no evidence that security would stultify the proceeding, no indication that those behind Cosdean would support it, the asserted causal link between FFA's conduct and Cosdean's financial position was speculative, and the claimed public interest added little. Security was appropriate, but the amount sought was excessive because not all claimed preparation and...

Court Disposition

Applicant ordered to provide security for costs to the first respondent in the sum of $40,000.

Orders

  • ['The applicant provide to the first respondent security for costs in the sum of $40,000.' "The costs of the first respondent's notice of motion of 27 July 2006 be the first respondent's costs in the cause."]