Suchand Pty Ltd v Jonathon Kingsley Colbran and Richard Stone as Receivers and Managers of Suchand Pty Ltd [2024] NSWCA 250

Suchand Pty Ltd v Jonathon Kingsley Colbran and Richard Stone as Receivers and Managers of Suchand Pty Ltd [2024] NSWCA 250

On provision of a signed unconditional undertaking by Mr Singh to be liable for respondents’ costs, the appeal is allowed and security for costs should not be ordered because (a) the undertaking, while insufficient as effective security, remains a powerful consideration; (b) there is an established risk of stultification; and (c) there is no third party who stands to benefit from the litigation. Discretion re-exercised against making a security for costs order in these circumstances.

Parties
Applicant: Suchand Pty Ltd; First Respondents: Jonathon Kingsley Colbran & Richard Stone as Receivers & Managers of Suchand Pty Ltd; Second Respondent: Robtamy Pty Ltd
Jurisdiction
Australia
Judgment Date
21 October 2024
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Leave and Appeal
Outcome
Leave to appeal granted (subject to undertaking); appeal allowed; orders for security for costs set aside; costs of the appeal to applicant; costs at first instance not disturbed.
Legal Topics
Security for Costs, Impecuniosity, Undertaking as to Costs
Civil Procedure Security for Costs Impecuniosity Undertaking as to Costs

Case Brief

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Parties

Suchand Pty Ltd

Applicant

Jonathon Kingsley Colbran & Richard Stone as Receivers & Managers of Suchand Pty Ltd

First Respondents

Robtamy Pty Ltd

Second Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Leave and Appeal

Legal Issues

  1. 1 Whether primary judge erred in ordering security for costs against applicant
  2. 2 Weight to be given to proffered director's undertaking as to costs
  3. 3 Assessment of risk of stultification and ability to meet adverse costs order

Ratio Decidendi

On provision of a signed unconditional undertaking by Mr Singh to be liable for respondents’ costs, the appeal is allowed and security for costs should not be ordered because (a) the undertaking, while insufficient as effective security, remains a powerful consideration; (b) there is an established risk of stultification; and (c) there is no third party who stands to benefit from the litigation. Discretion re-exercised against making a security for costs order in these circumstances.

Court Disposition

Leave to appeal granted (subject to undertaking); appeal allowed; orders for security for costs set aside; costs of the appeal to applicant; costs at first instance not disturbed.

Orders

  • On the proviso that Mr Singh provides a signed unconditional undertaking to the court to be liable for the respondents' costs of the proceedings, leave to appeal is granted.
  • The appeal is allowed.