Admiralty Resources Nl v Australis Mining Ltd - [2015] VSC 33

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI 2012 06774

ADMIRALTY RESOURCES NL	Plaintiff
v
AUSTRALIS MINING LTD BVI COMPANY NUMBER 1430155 & OTHERS	Defendants

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JUDGE:	ELLIOTT J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	6 FEBRUARY 2015
DATE OF RULING:	6 FEBRUARY 2015
CASE MAY BE CITED AS:	ADMIRALTY RESOURCES NL v AUSTRALIS MINING LTD
MEDIUM NEUTRAL CITATION:	[2015] VSC 33

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PRACTICE AND PROCEDURE – Security for costs – Application by plaintiff for security to defend allegations of defendants – Counterclaim by 1^st defendant – Allegations of 1^st defendant largely also pleaded as set-off – Whether security should be ordered with respect to allegations going beyond set-off defence ‑ Counterclaim by 2^nd defendant – No allegations independent of defence pleaded ‑ Corporations Act 2001 (Cth), s 1335(1), Supreme Court (General Civil Procedure) Rules 2005 (Vic), r 62.02(1).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr AP Trichardt	Hall & Wilcox
For the 1^st Defendant	Mr GT Bigmore QC with Mr P Fary	Kliger Partners
For the 2^nd Defendant	Mr J Kohn	Redvers Read

HIS HONOUR:

A. Introduction

The plaintiff, Admiralty Resources NL (“Admiralty”), seeks security for costs against each of the 1^st defendant, Australis Mining Ltd (“Australis”) and the 2^nd defendant, Corsair Capital Ltd (“Corsair”) in response to counterclaims filed by each of Australis and Corsair. This proceeding is set down for trial, which is due to commence on 10 March 2015. The application for security was only made recently.

B. Background

This proceeding was commenced on 5 December 2012. More significantly for the purposes of the present application, Australis filed a defence and counterclaim on 22 May 2013 and Corsair filed a defence and counterclaim on 24 May 2013.

Before considering the issues raised in the defences and counterclaims, the claims made by Admiralty should be canvassed. In very broad terms, Admiralty makes the following allegations in the statement of claim:

(1)Australis is, and was at all material times, incorporated in the Territory of the British Virgin Islands: paragraph 2.
(2)Corsair is, and was at all material times, incorporated in Hong Kong: paragraph 3.
(3)Inversiones Admiralty Resources Chile Limitada and Fortune Global Holdings Corporation (together referred to as "the Vendors"), are wholly-owned subsidiaries of Admiralty: paragraph 5.
(4)On or about 1 September 2010, Admiralty entered into a share sale agreement with Australis and Corsair (referred to as "the Share Sale Agreement") pursuant to which Australis was to acquire 10,000 fully-paid shares ("the Shares") in Sociedad Contractual Minera Vallenar Iron Company ("Vallenar") for $US4 million: paragraphs 6 and 7.
(5)The terms of the Share Sale Agreement included the following (paragraph 7):
(a)Admiralty agreed to ensure that the Vendors sold the Shares on the terms and conditions of the Share Sale Agreement: clause 2.1;
(b)Australis agreed to assume the indebtedness of Vallenar to Admiralty in the sum of $US4 million on completion and to repay the Vallenar debt in specified terms set out in clause 3.2…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] VSC 33
Decision Date: 6 FEBRUARY 2015

CaseChat Overview and Summary

Admiralty Resources Nl sued Australis Mining Ltd, and the defendants counterclaimed against the plaintiff. The plaintiff sought security for costs to defend the allegations of the defendants. The first defendant pleaded allegations that went beyond the defence, while the second defendant's counterclaim did not include any allegations independent of the defence. The court had to decide whether security for costs should be ordered with respect to allegations that went beyond the set-off defence.

The court considered the relevant statutory provisions and rules, including section 1335(1) of the Corporations Act 2001 (Cth) and rule 62.02(1) of the Supreme Court (General Civil Procedure) Rules 2005 (Vic). The court noted that the first defendant's allegations went beyond the defence, and that the second defendant's counterclaim did not include any allegations independent of the defence. The court concluded that security for costs should be ordered with respect to the allegations that went beyond the set-off defence.

The court ordered that security for costs should be provided by the plaintiff with respect to the allegations that went beyond the set-off defence. The court found that the first defendant's allegations were not purely defensive but rather went beyond the defence, and that the second defendant's counterclaim did not include any allegations independent of the defence. The court considered this to be an appropriate case for ordering security for costs, given the nature of the allegations and the potential financial risk to the defendants.

Orders