Smack On Time Pty Limited v Chubb Security Australia Pty Limited & Anor [2002] NSWSC 196

Smack On Time Pty Limited v Chubb Security Australia Pty Limited & Anor [2002] NSWSC 196

The Court was not persuaded that there was reason to believe the plaintiff would be unable to pay the projected amount of the defendants' costs. Although the plaintiff had traded poorly after losing the ANZ Bank business, its losses had been reduced, it had reasonable prospects of future profitability, and on a winding up sufficient funds would be available, including through Mr Hawes' repayment obligations, to meet any costs order. The jurisdictional requirement for security for costs was therefore not established; in any event, discretion would have been exercised against ordering security.

Jurisdiction
Australia
Judgment Date
26 February 2002
Procedural Posture
Commercial List Proceedings Concerning Alleged Misuse of Confidential Information, Breach of Confidentiality Agreement and Trade Practices Act Claims / Notices of Motion by the Defendants for Security for Costs
Outcome
Defendants' motions for security for costs dismissed; defendants ordered to pay the plaintiff's costs of the respective motions.
Legal Topics
['security for Costs' "corporate Plaintiff's Ability to Pay Costs" 'discretion to Order Security for Costs' 'confidential Information' 'costs of Motions']
['civil Procedure' 'corporations' 'contract' 'trade Practices'] ['security for Costs' "corporate Plaintiff's Ability to Pay Costs" 'discretion to Order Security for Costs' 'confidential Information' 'costs of Motions']

Case Brief

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Procedural Posture

Commercial List Proceedings Concerning Alleged Misuse of Confidential Information, Breach of Confidentiality Agreement and Trade Practices Act Claims / Notices of Motion by the Defendants for Security for Costs

Legal Issues

  1. 1 ["Whether there was reason to believe that the plaintiff corporation would be unable to pay the defendants' costs if the defendants were successful." 'Whether the Court had jurisdiction under s 1335(1) of the Corporations Act to order security for costs.' 'Whether, if jurisdiction existed, the Court should exercise its discretion to order security for costs.' 'What costs orders should be made on the motions.']

Ratio Decidendi

The Court was not persuaded that there was reason to believe the plaintiff would be unable to pay the projected amount of the defendants' costs. Although the plaintiff had traded poorly after losing the ANZ Bank business, its losses had been reduced, it had reasonable prospects of future profitability, and on a winding up sufficient funds would be available, including through Mr Hawes' repayment obligations, to meet any costs order. The jurisdictional requirement for security for costs was therefore not established; in any event, discretion would have been exercised against ordering security.

Court Disposition

Defendants' motions for security for costs dismissed; defendants ordered to pay the plaintiff's costs of the respective motions.

Orders

  • ['The motion is dismissed.' "The first defendant is to pay the plaintiff's costs of the motion, confined to the motion heard before McClellan J." "The second defendant is to pay the plaintiff's costs of the motion, including the costs of the hearing before Hunter J."]