Copson v DCM Coffee and Donuts Pty Ltd [1996] FCA 510

Copson v DCM Coffee and Donuts Pty Ltd [1996] FCA 510

DCM Coffee and Donuts Pty Ltd's cross-claim was properly characterised as offensive in substance and as a separate and distinct claim, so DCM was to be regarded as a plaintiff within s 1335(1) of the Corporations Law. Given DCM's admitted present inability to meet an order for costs, the lack of evidence of assets, and the absence of discretionary reasons to refuse relief, security for costs should be ordered, but limited to $10,000.00 because much of the work on the cross-claim overlapped with the principal proceedings and security was not intended to be a perfect indemnity.

Jurisdiction
Australia
Judgment Date
04 June 1996
Procedural Posture
Application for Security for Costs in Relation to a Cross Claim / Interlocutory Application
Outcome
Application for security for costs granted in part; DCM Coffee and Donuts Pty Ltd's cross-claim stayed unless security is provided.
Legal Topics
['security for Costs' 'cross Claim by Impecunious Company' 'misleading and Deceptive Conduct' 'franchise Profitability Forecasts']
['civil Procedure' 'corporations Law' 'trade Practices'] ['security for Costs' 'cross Claim by Impecunious Company' 'misleading and Deceptive Conduct' 'franchise Profitability Forecasts']

Case Brief

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Procedural Posture

Application for Security for Costs in Relation to a Cross Claim / Interlocutory Application

Legal Issues

  1. 1 ['Whether DCM Coffee and Donuts Pty Ltd should be treated as a plaintiff for the purposes of security for costs in relation to its cross-claim.' "Whether there was reason to believe that DCM Coffee and Donuts Pty Ltd would be unable to pay the applicants' costs if the applicants successfully defended the cross-claim." 'Whether discretionary matters justified ordering security for costs and, if so, in what amount.']

Ratio Decidendi

DCM Coffee and Donuts Pty Ltd's cross-claim was properly characterised as offensive in substance and as a separate and distinct claim, so DCM was to be regarded as a plaintiff within s 1335(1) of the Corporations Law. Given DCM's admitted present inability to meet an order for costs, the lack of evidence of assets, and the absence of discretionary reasons to refuse relief, security for costs should be ordered, but limited to $10,000.00 because much of the work on the cross-claim overlapped with the principal proceedings and security was not intended to be a perfect indemnity.

Court Disposition

Application for security for costs granted in part; DCM Coffee and Donuts Pty Ltd's cross-claim stayed unless security is provided.

Orders

  • ['The cross-claim of DCM Coffee and Donuts Pty Ltd be stayed, unless within sixty days of 4 June 1996 it provides security in the sum of $10,000.00 to the satisfaction of the Registrar for the prosecution of its cross-claim.' 'The costs of the applicants on the application for security for costs should be their...