Hurworth Nominees Pty Ltd & 2 Ors v ANZ Banking Group Ltd & 1 Or [2005] NSWSC 1360

Hurworth Nominees Pty Ltd & 2 Ors v ANZ Banking Group Ltd & 1 Or [2005] NSWSC 1360

The court found that jurisdiction to order security for costs was made out because it was reasonably possible the plaintiffs would be unable to pay an adverse costs order, but a blanket security in the full amount sought by the defendants and by bank guarantee could frustrate the litigation and was not justified in the interests of justice given the uncertainty in the plaintiffs' financial position (partly due to lack of accounting by defendants), serious questions to be tried on the merits, and willingness of the principal behind the plaintiffs to provide a personal guarantee. Accordingly, a lesser security structure was ordered—a personal guarantee from Mr Daryl Lindsay Johnston...

Jurisdiction
Australia
Judgment Date
19 December 2005
Procedural Posture
Interlocutory Application for Security for Costs / Security for Costs Application in Ongoing Proceedings
Outcome
Orders for provision of security for costs granted in part; not in full sums or strictly by bank guarantee.
Legal Topics
['security for Costs' 'trustee Corporations' 'receivership' 'mortgages and Mortgagees in Possession']
['practice and Procedure' 'corporations Law' 'equity'] ['security for Costs' 'trustee Corporations' 'receivership' 'mortgages and Mortgagees in Possession']

Case Brief

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Procedural Posture

Interlocutory Application for Security for Costs / Security for Costs Application in Ongoing Proceedings

Legal Issues

  1. 1 ['Whether jurisdictional grounds for ordering security for costs under s 1335 of the Corporations Act 2001 (Cth) or r 42.21(d) or (e) of the Uniform Civil Procedure Rules 2005 (NSW) are met' 'How discretionary factors should be applied when determining the amount and form of security for costs' 'Whether alleged impecuniosity of the plaintiffs results from conduct complained of in the proceedings']

Ratio Decidendi

The court found that jurisdiction to order security for costs was made out because it was reasonably possible the plaintiffs would be unable to pay an adverse costs order, but a blanket security in the full amount sought by the defendants and by bank guarantee could frustrate the litigation and was not justified in the interests of justice given the uncertainty in the plaintiffs' financial position (partly due to lack of accounting by defendants), serious questions to be tried on the merits, and willingness of the principal behind the plaintiffs to provide a personal guarantee. Accordingly, a lesser security structure was ordered—a personal guarantee from Mr Daryl Lindsay Johnston...

Court Disposition

Orders for provision of security for costs granted in part; not in full sums or strictly by bank guarantee.

Orders

  • ['Plaintiffs to provide security for future costs by: (1) unlimited personal guarantee from Mr Daryl Lindsay Johnston (form to be settled by registrar if not agreed), and (2) $50,000 security, which can be by joint and several guarantee of Mr and Mrs Blake for that amount, or by bank guarantee for that amount, or by...