In the matter of Elsmore Resources Ltd [2014] NSWSC 1247

In the matter of Elsmore Resources Ltd [2014] NSWSC 1247

There is reason to believe the plaintiff may be unable to pay the third defendant's costs if ordered to do so. The claim is arguable but not certain to succeed. Discretionary factors do not favour withholding security, especially since ordering security will not stultify the proceedings and major shareholders can provide funding. Security is therefore reasonable and is to be ordered in tranches, with proceedings stayed if not provided.

Jurisdiction
Australia
Judgment Date
08 September 2014
Procedural Posture
Interlocutory Application / Security for Costs Application
Outcome
Security for costs ordered in tranches; proceedings stayed if security not provided; plaintiff to pay costs of application.
Legal Topics
['security for Costs' 'interlocutory Applications' 'costs' 'breach of Trust' 'knowing Assistance' 'impecuniosity of Plaintiff Corporation']
['civil Procedure' 'corporations Law' 'trusts'] ['security for Costs' 'interlocutory Applications' 'costs' 'breach of Trust' 'knowing Assistance' 'impecuniosity of Plaintiff Corporation']

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Procedural Posture

Interlocutory Application / Security for Costs Application

Legal Issues

  1. 1 ['Whether the jurisdiction to order security for costs is established under Uniform Civil Procedure Rules 2005 (NSW) r 42.21 and Corporations Act 2001 (Cth) s 1335' 'Whether there is reason to believe that plaintiff company would be unable to pay costs of third defendant if ordered' "Whether discretionary considerations favour an order for security for costs, including merits of the plaintiff's case, potential stultification, and causation of impecuniosity" 'Quantum and breakdown of security to be ordered']

Ratio Decidendi

There is reason to believe the plaintiff may be unable to pay the third defendant's costs if ordered to do so. The claim is arguable but not certain to succeed. Discretionary factors do not favour withholding security, especially since ordering security will not stultify the proceedings and major shareholders can provide funding. Security is therefore reasonable and is to be ordered in tranches, with proceedings stayed if not provided.

Court Disposition

Security for costs ordered in tranches; proceedings stayed if security not provided; plaintiff to pay costs of application.

Orders

  • ["Plaintiff to provide security for Third Defendant's costs in a form agreed by parties or determined by Registrar, in two tranches: (a) $40,000 within 28 days, and (b) $40,000 no later than 21 days prior to commencement of final hearing." 'Proceedings to be stayed if security is not provided when due.' 'Plaintiff...