Zenith Corporation Australia Pty Ltd v Optus Mobile Pty Limited [2020] NSWSC 1110

Zenith Corporation Australia Pty Ltd v Optus Mobile Pty Limited [2020] NSWSC 1110

There was credible evidence Zenith could not pay defendants' costs if unsuccessful. While Optus contributed to Zenith’s impecuniosity by terminating the agreement and withholding commissions, Zenith did not prove stultification or that those standing behind it (Mr Wang) were unable (rather than unwilling) to provide security. Delay by Optus and lack of undertakings by Mr Wang were relevant factors but did not outweigh the risk to Optus if no security was ordered. The just order was that Zenith provide security for future costs of $190,000 by tranches, failing which the action would be stayed.

Jurisdiction
Australia
Judgment Date
21 August 2020
Procedural Posture
Security for Costs Application in Existing Commercial Proceedings / Interlocutory (application for Security for Costs Before Trial)
Outcome
Security for costs ordered against the plaintiff; staged payment required; plaintiff to pay defendant’s costs of the motion.
Legal Topics
['security for Costs' 'corporations Litigation' 'procedure in the Supreme Court of Nsw']
['civil Procedure'] ['security for Costs' 'corporations Litigation' 'procedure in the Supreme Court of Nsw']

Case Brief

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Procedural Posture

Security for Costs Application in Existing Commercial Proceedings / Interlocutory (application for Security for Costs Before Trial)

Legal Issues

  1. 1 ['Whether security for costs should be ordered against the plaintiff under r 42.21(1)(d) of the UCPR or s 1335(1) of the Corporations Act 2001 (Cth)' "Whether the plaintiff is unable to pay defendants' costs if unsuccessful" 'Whether delay by defendants disentitles them to security' "Whether the defendants' conduct caused or materially contributed to the plaintiff's impecuniosity" 'Whether an order for security would stultify the proceedings' 'What is a just and reasonable quantum for security']

Ratio Decidendi

There was credible evidence Zenith could not pay defendants' costs if unsuccessful. While Optus contributed to Zenith’s impecuniosity by terminating the agreement and withholding commissions, Zenith did not prove stultification or that those standing behind it (Mr Wang) were unable (rather than unwilling) to provide security. Delay by Optus and lack of undertakings by Mr Wang were relevant factors but did not outweigh the risk to Optus if no security was ordered. The just order was that Zenith provide security for future costs of $190,000 by tranches, failing which the action would be stayed.

Court Disposition

Security for costs ordered against the plaintiff; staged payment required; plaintiff to pay defendant’s costs of the motion.

Orders

  • ['Plaintiff to provide security for defendants’ costs to final hearing in the amount of $190,000 (excluding GST) in four tranches: $30,000 by 11 September 2020, $30,000 by 16 October 2020, $30,000 by 20 November 2020, $100,000 not less than 21 days before final hearing.' 'Security to be by payment into Court or...