Westpac Banking Corporation v Southern Environmental Services Pty Ltd [2017] NSWSC 626

Westpac Banking Corporation v Southern Environmental Services Pty Ltd [2017] NSWSC 626

Security for costs was ordered because Environmental conceded it could not meet an adverse costs order and the jurisdictional prerequisites were established; the application was timely after the consent judgment in favour of Westpac; Environmental had not shown that its cross claim was particularly strong; the proposed security was reasonable; Paul Wenham's undertaking was of unproven practical value and did not address all persons or entities standing behind or benefiting from the litigation; and Environmental failed to prove that ordering security would stultify the proceedings.

Jurisdiction
Australia
Judgment Date
19 May 2017
Procedural Posture
Application for Security for Costs in Cross Claim Proceedings / Notice of Motion Filed by the Cross Defendants Seeking Security for Costs Against the Cross Claimant
Outcome
Application granted. The cross claimant was ordered to provide security for the cross defendants' costs, with the cross claim to be stayed if security is not provided.
Legal Topics
['security for Costs' 'impecunious Corporate Cross Claimant' 'undertaking by Person Standing Behind Company' 'delay' 'stultification of Proceedings']
['civil Procedure' 'corporations'] ['security for Costs' 'impecunious Corporate Cross Claimant' 'undertaking by Person Standing Behind Company' 'delay' 'stultification of Proceedings']

Case Brief

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Procedural Posture

Application for Security for Costs in Cross Claim Proceedings / Notice of Motion Filed by the Cross Defendants Seeking Security for Costs Against the Cross Claimant

Legal Issues

  1. 1 ["Whether the cross claimant should be ordered to give security for the cross defendants' future costs under UCPR r 42.21(1)(d) and/or (e) and s 1335(1) of the Corporations Act 2001 (Cth)." 'Whether the application for security for costs was made in a timely way or should be refused for delay.' "Whether the cross claimant's prospects of success, alleged delay in commencing the cross claim, and impecuniosity affected the discretion to order security." "Whether Paul Wenham's undertaking to accept liability for future adverse costs orders against the cross claimant removed or reduced the justification for security for costs." 'Whether an order for security would stultify the cross claim.']

Ratio Decidendi

Security for costs was ordered because Environmental conceded it could not meet an adverse costs order and the jurisdictional prerequisites were established; the application was timely after the consent judgment in favour of Westpac; Environmental had not shown that its cross claim was particularly strong; the proposed security was reasonable; Paul Wenham's undertaking was of unproven practical value and did not address all persons or entities standing behind or benefiting from the litigation; and Environmental failed to prove that ordering security would stultify the proceedings.

Court Disposition

Application granted. The cross claimant was ordered to provide security for the cross defendants' costs, with the cross claim to be stayed if security is not provided.

Orders

  • ['Pursuant to r 42.21(1)(d) and/or (e) of the Uniform Civil Procedure Rules 2005 (NSW) and s 1335(1) of the Corporations Act 2001 (Cth), order the cross claimant to give security to the cross defendants by way of bank guarantee provided to the cross defendant or sums paid into Court as follows: $21,000 by the date...