Driwater Inc v Perre [2001] FCA 1264

Driwater Inc v Perre [2001] FCA 1264

Security for costs was warranted because the applicant was a foreign company with no assets in Australia and the tendered balance sheet was unreliable, giving the Court no confidence in the applicant's financial stability. However, the order was not made on the basis that the applicant was insolvent, and the respondents' proposed $108,000 was excessive because it did not separate the costs of the cross-claim, included unsubstantiated time estimates, and was subject to the usual discounting and the applicant's opportunity to better explain its financial position. The appropriate security was $25,000 with a stay pending provision of security.

Jurisdiction
Australia
Judgment Date
15 May 2001
Procedural Posture
Application for Security for Costs / Ex Tempore Reasons for Judgment and Interlocutory Orders
Outcome
Application for security for costs granted in part; proceedings stayed pending provision of security.
Legal Topics
['security for Costs' 'foreign Corporation With No Assets in Australia' 'stay of Proceedings Pending Security' 'assessment of Amount and Form of Security']
['civil Procedure' 'costs' 'corporations'] ['security for Costs' 'foreign Corporation With No Assets in Australia' 'stay of Proceedings Pending Security' 'assessment of Amount and Form of Security']

Case Brief

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Procedural Posture

Application for Security for Costs / Ex Tempore Reasons for Judgment and Interlocutory Orders

Legal Issues

  1. 1 ['Whether security for costs should be ordered against the applicant, a Californian company with no assets in Australia.' "Whether there was reason to doubt the applicant company's capacity to meet an adverse costs order." 'What amount and form of security for costs should be ordered.']

Ratio Decidendi

Security for costs was warranted because the applicant was a foreign company with no assets in Australia and the tendered balance sheet was unreliable, giving the Court no confidence in the applicant's financial stability. However, the order was not made on the basis that the applicant was insolvent, and the respondents' proposed $108,000 was excessive because it did not separate the costs of the cross-claim, included unsubstantiated time estimates, and was subject to the usual discounting and the applicant's opportunity to better explain its financial position. The appropriate security was $25,000 with a stay pending provision of security.

Court Disposition

Application for security for costs granted in part; proceedings stayed pending provision of security.

Orders

  • ['The applicant is to provide $25,000 by way of security for costs.' 'Security may be provided by cash deposit in court held in an interest-bearing deposit pending trial, by bank guarantee acceptable to the respondents or fixed by the Court, or by another form advanced by the applicant and accepted by the...