Precious 1 Pty Ltd v Chamberlain Early Learning Centre Pty Ltd [2017] NSWCA 259

Precious 1 Pty Ltd v Chamberlain Early Learning Centre Pty Ltd [2017] NSWCA 259

The precondition in s 1335(1) was not satisfied because the evidence showed that Precious 1 had a right of indemnity against a trust estate with substantial equity in the property, any likely costs liability would be small compared with that equity, and CEL could satisfy any costs liability by withholding rent; the probabilities strongly favoured the view that CEL's costs would be paid if Precious 1 failed on appeal.

Jurisdiction
Australia
Judgment Date
13 October 2017
Procedural Posture
Application for Security for Costs in Application for Leave to Appeal and Intended Appeal / Notice of Motion Before the Court of Appeal
Outcome
The respondent's notice of motion is dismissed with costs.
Legal Topics
['security for Costs' 'corporations Act 2001 (cth) S 1335(1)' 'corporate Trustee Right of Indemnity' 'set Off Against Rent' 'assignment of Reversion and Rent']
['civil Procedure' 'corporations' 'trusts' 'property Law'] ['security for Costs' 'corporations Act 2001 (cth) S 1335(1)' 'corporate Trustee Right of Indemnity' 'set Off Against Rent' 'assignment of Reversion and Rent']

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Procedural Posture

Application for Security for Costs in Application for Leave to Appeal and Intended Appeal / Notice of Motion Before the Court of Appeal

Legal Issues

  1. 1 ["Whether credible testimony gave reason to believe that Precious 1 Pty Ltd would be unable to pay Chamberlain Early Learning Centre Pty Ltd's costs if unsuccessful on the application for leave to appeal or appeal." 'Whether the Court should order security for costs against a corporate trustee whose only asset was a right of indemnity from a trust estate.']

Ratio Decidendi

The precondition in s 1335(1) was not satisfied because the evidence showed that Precious 1 had a right of indemnity against a trust estate with substantial equity in the property, any likely costs liability would be small compared with that equity, and CEL could satisfy any costs liability by withholding rent; the probabilities strongly favoured the view that CEL's costs would be paid if Precious 1 failed on appeal.

Court Disposition

The respondent's notice of motion is dismissed with costs.

Orders

  • ["The respondent's notice of motion is dismissed with costs."]