In the matter of Eastmark Holdings Pty Limited (receivers and managers appointed) and 1 Denison Street Holdings Pty Ltd (receivers and managers appointed; In the matter of Eastmark Holdings Pty Limited (receivers and managers appointed) (subject to a deed of company arrangement) & ors [2015] NSWSC 2071

In the matter of Eastmark Holdings Pty Limited (receivers and managers appointed) and 1 Denison Street Holdings Pty Ltd (receivers and managers appointed; In the matter of Eastmark Holdings Pty Limited (receivers and managers appointed) (subject to a deed of company arrangement) & ors [2015] NSWSC 2071

Because the plaintiff's liabilities substantially exceeded its assets, there was reason to believe it may be unable to pay the defendants' costs. The plaintiff's duty to raise an additional levy from unit holders did not answer the application, because the defendants would have no direct process of execution against unit holders and could not enforce the right or duty without the plaintiff's cooperation or winding up; the productivity of any levy was also uncertain. Security for costs was therefore appropriate, with the amount assessed robustly rather than as a perfect indemnity.

Jurisdiction
Australia
Judgment Date
25 June 2015
Procedural Posture
Security for Costs Application / Interlocutory Application
Outcome
Order for security for costs made.
Legal Topics
['security for Costs' 'plaintiff Corporation Unable to Pay Costs' 'owners Corporation Levies' 'right of Indemnity to Trust Fund or Similar' 'party Party Costs']
['procedure' 'corporations' 'costs'] ['security for Costs' 'plaintiff Corporation Unable to Pay Costs' 'owners Corporation Levies' 'right of Indemnity to Trust Fund or Similar' 'party Party Costs']

Case Brief

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Procedural Posture

Security for Costs Application / Interlocutory Application

Legal Issues

  1. 1 ["Whether there was reason to believe that the plaintiff corporation would be unable to pay the defendants' costs if judgment went against it." "Whether the plaintiff's duty to strike a further levy on each owner to contribute to the administrative fund answered the application for security for costs." 'What amount of security for costs should be ordered.']

Ratio Decidendi

Because the plaintiff's liabilities substantially exceeded its assets, there was reason to believe it may be unable to pay the defendants' costs. The plaintiff's duty to raise an additional levy from unit holders did not answer the application, because the defendants would have no direct process of execution against unit holders and could not enforce the right or duty without the plaintiff's cooperation or winding up; the productivity of any levy was also uncertain. Security for costs was therefore appropriate, with the amount assessed robustly rather than as a perfect indemnity.

Court Disposition

Order for security for costs made.

Orders

  • ["The plaintiff give security for the first and second defendants' costs in the sum of $150,000, and for the third and fourth defendants' costs in the sum of $75,000, in a form acceptable to the registrar." 'The defendants have liberty to apply for a stay of the proceedings if such security has not been given by 9...