Zaps Transport (Aust) Pty Ltd (in liquidation) (controller appointed) v Catlin Syndicate No 2003 [2020] FCA 1311

Zaps Transport (Aust) Pty Ltd (in liquidation) (controller appointed) v Catlin Syndicate No 2003 [2020] FCA 1311

Security for costs was ordered because the applicant company was in liquidation and admittedly unable to satisfy an adverse costs order, the s 1335(1) discretion was enlivened, the respondents had moved promptly, there was no sufficient evidence that the applicant's impecuniosity was caused by the respondents' conduct, and there was no evidence from those standing behind the applicant or standing to benefit from the litigation establishing that they could not contribute to security. Although the applicant's claim was not hopeless, it faced real difficulties, and a modest security amount of $40,000 for costs up to and including the first-instance determination of the separate issues was...

Jurisdiction
Australia
Judgment Date
11 September 2020
Procedural Posture
Application for Security for Costs in Insurance Proceedings / Interlocutory Application Filed on 17 August 2020
Outcome
Security for costs ordered in favour of the respondents.
Legal Topics
['security for Costs' 'applicant in Liquidation' 'third Party Claim Under Insurance Policy' 'marine Insurance' 'impecuniosity' 'separate Issues']
['practice and Procedure' 'corporations' 'insurance' 'customs'] ['security for Costs' 'applicant in Liquidation' 'third Party Claim Under Insurance Policy' 'marine Insurance' 'impecuniosity' 'separate Issues']

Case Brief

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Procedural Posture

Application for Security for Costs in Insurance Proceedings / Interlocutory Application Filed on 17 August 2020

Legal Issues

  1. 1 ['Whether security for costs should be ordered against an applicant corporation in liquidation under s 1335(1) of the Corporations Act 2001 (Cth).' "Whether the applicant's impecuniosity was caused by the respondents' conduct." 'Whether an order for security would stultify the proceeding, including whether those standing behind the applicant and standing to benefit from the litigation were unable to provide security.' 'What amount of security was reasonable for costs up to and including the resolution at first instance of the separate issues.' 'For the separate issues, whether the Marine Insurance Act 1909 (Cth) applies and, if not, whether the applicant was entitled by reason of section 48 of the Insurance Contracts Act 1984 (Cth) to make a claim for loss under the policy as an interested third party.']

Ratio Decidendi

Security for costs was ordered because the applicant company was in liquidation and admittedly unable to satisfy an adverse costs order, the s 1335(1) discretion was enlivened, the respondents had moved promptly, there was no sufficient evidence that the applicant's impecuniosity was caused by the respondents' conduct, and there was no evidence from those standing behind the applicant or standing to benefit from the litigation establishing that they could not contribute to security. Although the applicant's claim was not hopeless, it faced real difficulties, and a modest security amount of $40,000 for costs up to and including the first-instance determination of the separate issues was...

Court Disposition

Security for costs ordered in favour of the respondents.

Orders

  • ["On or before 30 October 2020, the applicant provide security for the respondents' costs up to and including the resolution, at first instance, of the separate issues in the sum of $40,000 in a manner and form that is acceptable to, in the first instance, the respondents and, if there is a dispute about the form,...