A1 for Maintenance Pty Ltd v Lehal Pty Ltd

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FEDERAL COURT OF AUSTRALIA

A1 for Maintenance Pty Ltd v Lehal Pty Ltd [2018] FCA 1476

File number: WAD 162 of 2017
Judge: COLVIN J
Date of judgment: 2 October 2018
Catchwords: PRACTICE AND PROCEDURE - application for security for costs under s 1335 of the Corporations Act 2001 (Cth) - whether there is reason to believe the applicant will be unable to pay respondents' costs if it is unsuccessful in its claim - whether the Court should exercise its discretion to make an order for security for costs - whether adequate evidence to support an assessment of the quantum of security sought - order for security for costs made
Legislation:

Corporations Act 2001 (Cth) s 1335

Competition and Consumer (Industry Codes - Franchising) Regulation 2014 (Cth)

Cases cited:

Antonias Pty Ltd v Matthew Lepouris Pty Ltd [2004] NSWSC 654

Bell Wholesale Company Pty Ltd v Gates Export Corporation (No 2) [1984] FCA 34; (1984) 2 FCR 1

Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd [1987] FCA 102; (1987) 16 FCR 497

Carey-Hazell v Getz Bros & Co (Aust) Pty Ltd [2004] FCA 1334

Deltrend Pty Ltd v AST Australia Pty Ltd (1995) 16 ACSR 762

FFE Minerals Australia Pty Ltd v Mining Australia Pty Ltd [2000] WASCA 69; (2000) 156 FLR 116

IceTV Pty Ltd v Ross [2007] NSWSC 1232

Livingspring Pty Ltd v Kliger Partners [2008] VSCA 93; (2008) 20 VR 377

Madgwick v Kelly [2013] FCAFC 61; (2013) 212 FCR 1

Mecrus Pty Ltd v Industrial Energy Pty Ltd [2015] FCA 103

PS Chellaram & Co Ltd v China Ocean Shipping Company [1991] HCA 36

Sugarloaf Hill Nominees Pty Ltd v Rewards Projects Ltd [2011] WASC 19

Date of hearing: 26 September 2018
Registry: Western Australia
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Category: Catchwords
Number of paragraphs: 53
Counsel for the Applicant: Mr M Pirrie
Solicitor for the Applicant: Frenkel Partners
Solicitor for the First, Second, Third, Fourth, Fifth, Sixth and Seventh Respondents: Mr A Prime
Counsel for the First, Second, Third, Fourth, Fifth, Sixth and Seventh Respondents: MDS Legal
Table of Corrections
25 October 2018 At [52] the date '1 January 2017' has been amended to correctly state '1 January 2018'.

ORDERS

WAD 162 of 2017
BETWEEN:

A1 FOR MAINTENANCE PTY LTD (ACN 113 002 109)

Applicant

AND:

LEHAL PTY LTD (ACN 601 285 465)

First Respondent

RAVI INDER SINGH

Second Respondent

MAJINDER SINGH (and others named in the Schedule)

Third Respondent

JUDGE:

COLVIN J

DATE OF ORDER:

2 OCTOBER 2018

THE COURT ORDERS THAT:

1.The applicant do provide security for the first to seventh respondents' costs in the amount of $30,000 prior to 16 October 2018.

2.In default of compliance with order 1, the proceedings be stayed until further order.

3.There be liberty to the first to seventh respondents to apply for further security after the allocation of final hearing dates.

4.The applicant do pay the…

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Details
Case
[2018] FCA 1476
Decision Date

CaseChat Overview and Summary

A1 for Maintenance Pty Ltd, trading as A1 Maintenance, filed an application in the Federal Court against Lehal Pty Ltd and six other respondents. The applicant sought damages for breach of contract and sought an order for security for costs under section 1335 of the Corporations Act 2001 (Cth). The applicant argued that there was a reason to believe it would be unable to pay the respondents' costs if it was unsuccessful in its claim. The respondents opposed the application, arguing that the applicant had not provided adequate evidence to support an assessment of the quantum of security sought. The court was required to determine whether there was a reason to believe that the applicant would be unable to pay the respondents' costs if it was unsuccessful in its claim, and whether the court should exercise its discretion to make an order for security for costs. The court was also required to determine whether there was adequate evidence to support an assessment of the quantum of security sought.

The court found that there was a reason to believe that the applicant would be unable to pay the respondents' costs if it was unsuccessful in its claim. The court noted that the applicant had not provided any evidence of its financial position, and that the respondents had provided evidence of their own financial position which demonstrated that they would be unable to bear the costs of the proceedings if they were not successful. The court found that the applicant had not provided adequate evidence to support an assessment of the quantum of security sought, but noted that the respondents had not opposed the amount of security sought. The court exercised its discretion to make an order for security for costs in the amount of $30,000, and ordered that the applicant provide security for the first to seventh respondents' costs prior to 16 October 2018. The court also ordered that in default of compliance with this order, the proceedings be stayed until further order, and that the applicant pay the respondents' costs of the application for security for costs.

The final orders made by the court were that the applicant provide security for the first to seventh respondents' costs in the amount of $30,000 prior to 16 October 2018. In default of compliance with this order, the proceedings were to be stayed until further order. The court also granted liberty to the first to seventh respondents to apply for further security after the allocation of final hearing dates, and ordered that the applicant pay the respondents' costs of the application for security for costs. These orders were made under section 1335 of the Corporations Act 2001 (Cth) and Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The applicant do provide security for the first to seventh respondents' costs in the amount of $30,000 prior to 16 October 2018.

2. In default of compliance with order 1, the proceedings be stayed until further order.

3. There be liberty to the first to seventh respondents to apply for further security after the allocation of final hearing dates.

4. The applicant do pay the first to seventh respondents' costs of the application for security for costs dated 27 April 2018.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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