Jianshe Southern Pty Ltd v Get Motor Cycles Pty Ltd (Formerly Turnbull Cooktown Pty Ltd) (3) [2007] FCA 1078

Jianshe Southern Pty Ltd v Get Motor Cycles Pty Ltd (Formerly Turnbull Cooktown Pty Ltd) (3) [2007] FCA 1078

Due to significant and unexplained delay by the respondents in bringing the security application and the resulting prejudice to the applicant—who had incurred substantial litigation costs in reliance on the absence of a security order—ordering security by cash deposit or bank guarantee would be unfair and inappropriate. However, considering the involvement of Mr Stewart as principal shareholder and funder, and absent evidence as to his means, a personal guarantee from him for security of costs is an appropriate compromise measure.

Jurisdiction
Australia
Judgment Date
27 July 2007
Procedural Posture
Notice of Motion in Principal Proceedings / Interlocutory Application for Security for Costs
Outcome
Interlocutory order for security for costs in form of personal guarantee
Legal Topics
['security for Costs' 'delay in Application for Security for Costs' 'discretion on Security for Costs Applications' 'prejudice to Applicant From Delay' 'nature and Sufficiency of Security' 'impecuniosity of Corporate Applicant' 'standing Behind Company']
['civil Procedure' 'corporations Law'] ['security for Costs' 'delay in Application for Security for Costs' 'discretion on Security for Costs Applications' 'prejudice to Applicant From Delay' 'nature and Sufficiency of Security' 'impecuniosity of Corporate Applicant' 'standing Behind Company']

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Procedural Posture

Notice of Motion in Principal Proceedings / Interlocutory Application for Security for Costs

Legal Issues

  1. 1 ['Whether security for costs should be ordered against a corporate applicant where there has been significant delay in making the application and trial is imminent' 'Form and quantum of security for costs where applicant is impecunious and directors/shareholders stand behind the company' 'Effect of prejudice from delay in application for security for costs']

Ratio Decidendi

Due to significant and unexplained delay by the respondents in bringing the security application and the resulting prejudice to the applicant—who had incurred substantial litigation costs in reliance on the absence of a security order—ordering security by cash deposit or bank guarantee would be unfair and inappropriate. However, considering the involvement of Mr Stewart as principal shareholder and funder, and absent evidence as to his means, a personal guarantee from him for security of costs is an appropriate compromise measure.

Court Disposition

Interlocutory order for security for costs in form of personal guarantee

Orders

  • ['Nicholas Jules Stewart on or before 23 July 2007 provide a personal guarantee to the respondents whereby he guarantees the payment of any costs the applicant is ordered to pay the respondents and incurred by the respondents on or after 5 July 2007 up to a sum of $200,000.']