Suchand Pty Ltd v Johnathon Kingsley Colbran & Richard Stone as Receivers & Managers of Suchand Pty Ltd [2024] NSWSC 201

Suchand Pty Ltd v Johnathon Kingsley Colbran & Richard Stone as Receivers & Managers of Suchand Pty Ltd [2024] NSWSC 201

The jurisdiction to order security for costs is engaged because there is credible testimony and reason to believe Suchand Pty Ltd is unable to pay the defendants’ costs if ordered to do so. Discretion does not require refusal of security in the circumstances, as neither the existence of an alleged debt claim, nor a proffered undertaking by an impecunious director, nor the alleged cause of impecuniosity, nor the risk of stultification, nor public interest, amounts to a sufficient reason to refuse ordering security for costs. Appropriate quantum for security is set at $165,000 for the Receivers and $135,000 for Robtamy, subject to staged provision to be agreed by the parties.

Jurisdiction
Australia
Judgment Date
04 March 2024
Procedural Posture
Security for Costs Application / Interlocutory (ruling on Security for Costs Motions)
Outcome
Security for costs ordered in favour of both defendants. Provision of security to be staged as agreed between the parties. Costs of the motions are likely to follow the event, subject to hearing the parties.
Legal Topics
['security for Costs' 'costs Orders' 'corporate Litigation' 'receivership' 'lease Disputes']
['civil Procedure' 'commercial Law' 'equity'] ['security for Costs' 'costs Orders' 'corporate Litigation' 'receivership' 'lease Disputes']

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Procedural Posture

Security for Costs Application / Interlocutory (ruling on Security for Costs Motions)

Legal Issues

  1. 1 ['Whether jurisdiction for security for costs is enlivened under UCPR 42.21 and Corporations Act 2001 (Cth) s 1335' "Whether defendants caused plaintiff's impecuniosity" 'Whether an undertaking from an impecunious director should be accepted as an alternative to security' 'Whether an order for security would stultify the proceedings' 'Amount/quantum of security to be ordered']

Ratio Decidendi

The jurisdiction to order security for costs is engaged because there is credible testimony and reason to believe Suchand Pty Ltd is unable to pay the defendants’ costs if ordered to do so. Discretion does not require refusal of security in the circumstances, as neither the existence of an alleged debt claim, nor a proffered undertaking by an impecunious director, nor the alleged cause of impecuniosity, nor the risk of stultification, nor public interest, amounts to a sufficient reason to refuse ordering security for costs. Appropriate quantum for security is set at $165,000 for the Receivers and $135,000 for Robtamy, subject to staged provision to be agreed by the parties.

Court Disposition

Security for costs ordered in favour of both defendants. Provision of security to be staged as agreed between the parties. Costs of the motions are likely to follow the event, subject to hearing the parties.

Orders

  • ['Security for costs in the sum of $165,000 in favour of the Receivers (First Defendant).' 'Security for costs in the sum of $135,000 in favour of Robtamy Pty Ltd (Second Defendant).' 'Provision of security to be staged according to milestones to be agreed by the parties.' 'Liberty to apply for further security if...