Success Capital Pty Ltd (ACN 091 989 874) v Hope Island Resort Holdings Pty Ltd (ACN 091 967 921) [2007] FCA 1562

Success Capital Pty Ltd (ACN 091 989 874) v Hope Island Resort Holdings Pty Ltd (ACN 091 967 921) [2007] FCA 1562

There was reason to believe the applicant would be unable to pay the respondents' costs if the respondents successfully defended the claim, given the applicant's low paid-up capital, substantial secured liabilities, absence of satisfactory evidence of beneficial assets available to meet a costs order, failure to...

Source-derived case information.

Jurisdiction
Australia
Judgment Date
11 October 2007
Procedural Posture
Notice of Motion for Security for Costs in Federal Court Proceedings / Interlocutory Application
Outcome
Security for costs ordered; valuation evidence not admitted; applicant's proceeding stayed pending compliance and liable to dismissal if security not provided within three months.
Legal Topics
['security for Costs' 'corporate Applicant Unable to Pay Costs' 'discretion to Order Security' 'expert Valuation Evidence' 'trust Assets and Guarantees']
['practice and Procedure' 'corporations' 'evidence'] ['security for Costs' 'corporate Applicant Unable to Pay Costs' 'discretion to Order Security' 'expert Valuation Evidence' 'trust Assets and Guarantees']

Source-derived case record

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Procedural Posture

Notice of Motion for Security for Costs in Federal Court Proceedings / Interlocutory Application

Legal Issues

  1. 1 ["Whether there was reason to believe that the applicant corporation would be unable to pay the respondents' costs if the respondents were successful in their defence." 'Whether the Court should exercise its discretion to order security for costs under s 1335 Corporations Act 2001 (Cth) or s 56 Federal Court of Australia Act 1976 (Cth).' "Whether the applicant's proposed Deed of Guarantee, involving assets of the Success Development & Property Group Unit Trust, was sufficient security." 'Whether the Executive Summary Valuation evidence concerning the Canning Road Development should be admitted.']

Ratio Decidendi

There was reason to believe the applicant would be unable to pay the respondents' costs if the respondents successfully defended the claim, given the applicant's low paid-up capital, substantial secured liabilities, absence of satisfactory evidence of beneficial assets available to meet a costs order, failure to satisfy an earlier costs order, and the fact that its apparent main assets were held on trust for an entity with no apparent interest in the litigation. The valuation evidence was inadmissible or should be excluded because there was no evidence of specialised knowledge, the report was not prepared for litigation use, and it did not comply with the Federal Court expert witness...

Court Disposition

Security for costs ordered; valuation evidence not admitted; applicant's proceeding stayed pending compliance and liable to dismissal if security not provided within three months.

Orders

  • ['The applicant provide security for the costs of the first and second respondents up to the end of the first day of trial in the amount of $114,120.63, by way of payment into Court or unconditional bank guarantee in that sum or otherwise to the satisfaction of the District Registrar of the Queensland District...