Penale Pty Ltd ACN 009 071 523 & Anor v McLernon Group Ltd ACN009 399 099 & Anor [1997] FCA 1249

Penale Pty Ltd ACN 009 071 523 & Anor v McLernon Group Ltd ACN009 399 099 & Anor [1997] FCA 1249

The claim against McLernon Group was weak and required amendment to plead with greater particularity the conduct relied upon, but it was not so manifestly untenable as to justify summary dismissal because issues of promotion, special damage and causation could not be disposed of summarily. The claim against Williams and Hughes was manifestly untenable because uncontradicted affidavit material showed they were instructed and paid by CLC Corporation and the pleading that they had no lawful instructions had no factual basis. Security for costs was warranted because Penale was unlikely to be able to pay costs if unsuccessful, the application was prompt, Penale's liabilities exceeded assets...

Jurisdiction
Australia
Judgment Date
17 November 1997
Procedural Posture
Practice and Procedure Proceeding Alleging Maintenance and Champerty and Absence of Lawful Authority by Solicitors / Respondents' Motion for Summary Dismissal Under O 20 R 2 of the Federal Court Rules And, Alternatively, Security for Costs
Outcome
Application dismissed as against the Second Respondent; security for costs ordered against the First Applicant; proceedings stayed pending provision of security; leave given to the First Applicant to amend upon provision of security; motion otherwise dismissed.
Legal Topics
['pleadings' 'summary Dismissal' 'maintenance and Champerty' 'special Damage' 'security for Costs' "solicitors' Authority"]
['practice and Procedure' 'civil Procedure' 'torts'] ['pleadings' 'summary Dismissal' 'maintenance and Champerty' 'special Damage' 'security for Costs' "solicitors' Authority"]

Case Brief

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Procedural Posture

Practice and Procedure Proceeding Alleging Maintenance and Champerty and Absence of Lawful Authority by Solicitors / Respondents' Motion for Summary Dismissal Under O 20 R 2 of the Federal Court Rules And, Alternatively, Security for Costs

Legal Issues

  1. 1 ['Whether the claim against McLernon Group for maintenance and champerty was manifestly untenable and should be summarily dismissed.' 'Whether special damage was adequately arguable in the maintenance and champerty claim despite the CLC action having succeeded.' 'Whether the claim against Williams and Hughes based on absence of lawful authority to conduct the CLC action disclosed an adequate factual basis.' "Whether Penale Pty Ltd should provide security for the respondents' costs." 'Whether Penale Pty Ltd should be permitted to be represented by its Managing Director, Adam Conway.']

Ratio Decidendi

The claim against McLernon Group was weak and required amendment to plead with greater particularity the conduct relied upon, but it was not so manifestly untenable as to justify summary dismissal because issues of promotion, special damage and causation could not be disposed of summarily. The claim against Williams and Hughes was manifestly untenable because uncontradicted affidavit material showed they were instructed and paid by CLC Corporation and the pleading that they had no lawful instructions had no factual basis. Security for costs was warranted because Penale was unlikely to be able to pay costs if unsuccessful, the application was prompt, Penale's liabilities exceeded assets...

Court Disposition

Application dismissed as against the Second Respondent; security for costs ordered against the First Applicant; proceedings stayed pending provision of security; leave given to the First Applicant to amend upon provision of security; motion otherwise dismissed.

Orders

  • ['The application is dismissed pursuant to O 20 r 2 as against the Second Respondent.' "The First Applicant is, on or before 17 December 1997, to provide security for the Respondents' costs of the action in the sum of $20000 by bank guarantee or otherwise in a form acceptable to the Registrar or as agreed between...