Pasdale Pty Ltd v Concrete Constructions [1995] FCA 642

Pasdale Pty Ltd v Concrete Constructions [1995] FCA 642

Leave under s440D(1) was not required because the applicant's administration had ended upon execution of the deed of company arrangement, and in any event a respondent's motion for security for costs in proceedings brought by a company under administration is not a proceeding in a court against the company within s440D(1). Security for costs was appropriate because the applicant was insolvent, the disputes and cross-claim were genuine, the respondent's conduct did not disentitle it to security, and creditors likely to benefit from the litigation had the capacity and notice to provide security so that any stifling of the application would result from their judgment rather than the...

Jurisdiction
Australia
Judgment Date
21 August 1995
Procedural Posture
Motion for Security for Costs in Federal Court Proceedings Arising Out of Contractual Dealings / Reasons on Amended Notice of Motion Seeking Leave Under S440 D(1) of the Corporations Law and a Stay Pending Provision of Security for Costs
Outcome
The Court held that leave under s440D(1) was unnecessary and that it was appropriate to order security for costs; the further hearing was stood over for formal orders as to security.
Legal Topics
['security for Costs' 'company Under Administration' 'deed of Company Arrangement' 'meaning of Proceeding' 'oppression' 'impecuniosity' 'creditors Funding Litigation']
['practice and Procedure' 'corporations' 'insolvency' 'civil Procedure'] ['security for Costs' 'company Under Administration' 'deed of Company Arrangement' 'meaning of Proceeding' 'oppression' 'impecuniosity' 'creditors Funding Litigation']

Case Brief

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Procedural Posture

Motion for Security for Costs in Federal Court Proceedings Arising Out of Contractual Dealings / Reasons on Amended Notice of Motion Seeking Leave Under S440 D(1) of the Corporations Law and a Stay Pending Provision of Security for Costs

Legal Issues

  1. 1 ['Whether leave was required under s440D(1) of the Corporations Law for the respondent to pursue a motion for security for costs against a company formerly under administration.' "Whether a respondent's motion for security for costs is a proceeding in a court against the company within s440D(1) of the Corporations Law." 'Whether security for costs should be ordered under s1335(1) of the Corporations Law and s56(1) of the Federal Court of Australia Act, 1976.' "Whether an order for security would be oppressive or stifle the applicant's litigation." "Whether the applicant's impecuniosity was caused by the respondent's conduct so as to weigh against security." 'Whether creditors standing behind the applicant were likely to benefit from the litigation and were in a position to provide security.']

Ratio Decidendi

Leave under s440D(1) was not required because the applicant's administration had ended upon execution of the deed of company arrangement, and in any event a respondent's motion for security for costs in proceedings brought by a company under administration is not a proceeding in a court against the company within s440D(1). Security for costs was appropriate because the applicant was insolvent, the disputes and cross-claim were genuine, the respondent's conduct did not disentitle it to security, and creditors likely to benefit from the litigation had the capacity and notice to provide security so that any stifling of the application would result from their judgment rather than the...

Court Disposition

The Court held that leave under s440D(1) was unnecessary and that it was appropriate to order security for costs; the further hearing was stood over for formal orders as to security.

Orders

  • ['The further hearing of the motion for security for costs be stood over to a date to be fixed for the purpose of making formal orders as to the provision of security.' 'The respondent file and serve, within 7 days, a draft of the orders it now seeks in accordance with these reasons.']