Mulwala Hotel Group Pty Ltd v Nyora1 Pty Ltd [2023] NSWSC 1514

Mulwala Hotel Group Pty Ltd v Nyora1 Pty Ltd [2023] NSWSC 1514

Security for costs was ordered because the plaintiff conceded the threshold that it could not meet an adverse costs order, there was no submission that security would stultify the proceedings, the proffered undertaking was questionable given the changing and incomplete picture of the director's assets and potential enforcement difficulties, and a re-draw facility provided a source of funds. The partly defensive nature of the relief against forfeiture claim was relevant to amount, but did not justify refusing security, especially where the claim also included damages.

Jurisdiction
Australia
Judgment Date
06 December 2023
Procedural Posture
Equity Proceedings Concerning Lease Termination, Relief Against Forfeiture and Damages; Defendant's Notice of Motion for Security for Costs / Interlocutory Application for Security for Costs
Outcome
Defendant's notice of motion for security for costs granted in part; security ordered in the sum of $50,000 with a stay for non-compliance and plaintiff to pay the costs of the motion, subject to leave to seek variation of the costs order.
Legal Topics
['security for Costs' 'defensive Claims' 'relief Against Forfeiture' 'undertaking to Meet Adverse Costs' 'stay for Non Compliance']
['civil Procedure' 'costs' 'equity' 'leases'] ['security for Costs' 'defensive Claims' 'relief Against Forfeiture' 'undertaking to Meet Adverse Costs' 'stay for Non Compliance']

Case Brief

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Procedural Posture

Equity Proceedings Concerning Lease Termination, Relief Against Forfeiture and Damages; Defendant's Notice of Motion for Security for Costs / Interlocutory Application for Security for Costs

Legal Issues

  1. 1 ['Whether security for costs should be ordered under r 42.21 of the Uniform Civil Procedure Rules 2005 (NSW) or s 1335 of the Corporations Act 2001 (Cth).' "Whether the plaintiff's claim was defensive, and the significance of that factor in the exercise of discretion." "Whether the undertaking proffered by the plaintiff's director was sufficient security." 'What amount of security should be ordered if security was appropriate.']

Ratio Decidendi

Security for costs was ordered because the plaintiff conceded the threshold that it could not meet an adverse costs order, there was no submission that security would stultify the proceedings, the proffered undertaking was questionable given the changing and incomplete picture of the director's assets and potential enforcement difficulties, and a re-draw facility provided a source of funds. The partly defensive nature of the relief against forfeiture claim was relevant to amount, but did not justify refusing security, especially where the claim also included damages.

Court Disposition

Defendant's notice of motion for security for costs granted in part; security ordered in the sum of $50,000 with a stay for non-compliance and plaintiff to pay the costs of the motion, subject to leave to seek variation of the costs order.

Orders

  • ['The plaintiff provide security for costs in the sum of $50,000 by payment of this sum into court or by bank guarantee within 28 days.' 'Failing compliance with Order (1), the proceedings be stayed until further order.' "The plaintiff is to pay the defendant's costs of the notice of motion filed on 30 October...