Forest Carbon Methodology Pty Ltd v Schultz [2023] FCA 943

Forest Carbon Methodology Pty Ltd v Schultz [2023] FCA 943

The plaintiff and its indemnifier lack sufficient funds to meet adverse costs and the proposed security arrangements are indirect, pose risks and uncertainties, and do not provide ready access to funds, justifying an order that security for costs be provided by way of payment into Court or irrevocable bank guarantee for specified amounts, staged up to the filing of affidavit evidence.

Jurisdiction
Australia
Judgment Date
11 August 2023
Procedural Posture
Application for Security for Costs / Interlocutory Application, Pre Trial
Outcome
Security for costs ordered against the plaintiff, staged up to and including preparation of affidavit evidence, with liberty to apply.
Legal Topics
['security for Costs' 'derivative Proceedings' 'corporate Insolvency']
['corporations Law' 'civil Procedure'] ['security for Costs' 'derivative Proceedings' 'corporate Insolvency']

Case Brief

Summary, issues, holding and outcome

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Procedural Posture

Application for Security for Costs / Interlocutory Application, Pre Trial

Legal Issues

  1. 1 ["Whether the defendants have met the threshold in s 1335 of the Corporations Act 2001 (Cth) by establishing that there is reason to believe that the plaintiff will be unable to pay the defendants' costs if successful in their defence." 'Whether the discretion under s 56 of the Federal Court of Australia Act 1976 (Cth) is enlivened.' 'Whether, in the exercise of discretion, the Court should order the plaintiff to provide security for costs and in what form and quantum.' 'Whether security for costs should be staged.']

Ratio Decidendi

The plaintiff and its indemnifier lack sufficient funds to meet adverse costs and the proposed security arrangements are indirect, pose risks and uncertainties, and do not provide ready access to funds, justifying an order that security for costs be provided by way of payment into Court or irrevocable bank guarantee for specified amounts, staged up to the filing of affidavit evidence.

Court Disposition

Security for costs ordered against the plaintiff, staged up to and including preparation of affidavit evidence, with liberty to apply.

Orders

  • ['By on or before 1 September 2023, the plaintiff is to provide security for costs of the first and second defendants in the sum of $250,000;' 'By on or before 1 September 2023, the plaintiff is to provide security for costs of the third defendant in the sum of $150,000;' 'The security is to be in the form of an...