AG-Exports (Australia) P/ L v EFIC - [2001] NSWSC 404

CITATION: AG-Exports (Australia) P/ L & Anor v EFIC [2001] NSWSC 404 revised - 4/06/2001

CURRENT JURISDICTION: Common Law

FILE NUMBER(S): SC 20702/2000

HEARING DATE(S): 11 May 2001

JUDGMENT DATE:
4 June 2001

PARTIES :

AG-Exports (Australia) Ltd
(First Plaintiff)
Brian John Lawn
(Second Plaintiff)
Export Finance & Insurance Corporation
(Defendant)

JUDGMENT OF: Master Harrison

COUNSEL :
Mr A T McInnes QC
(Plaintiffs)
Mr M A Jones
(Defendant)

SOLICITORS:
John McEncroe & Co
(Plaintiffs)
Minter Ellison
(Defendant)

CATCHWORDS: Strike out paras of statement of claim - security for costs

LEGISLATION CITED: Supreme Court Rules
Corporations Law
Supreme Court Act
Limitation Act 1969 (NSW)

CASES CITED: Associated Securities Finance Ltd v Harrow Properties Pty Limited (NSWSC Lee J, 26 May 1977 unreported)
Air Services Australia v Zarb (NSWCA unreported, 26 August 1998)
Dey v Victorian Railway Commissioners (1948-49) 78 CLR 62
General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125
Webster & Anor v Lampard (1993) 177 CLR 598
Penrith City Council v GIO (1991) 24 NSWLR 564
Davey v Garrett (1878) 7 Ch D 473
Seymour v Seymour (1996) 40 NSWLR 358
Hamilton v Kaljo (1989) 17 NSWLR 381
Mann v Commonwealth of Australia [2000] NSWSC 353
H 1976 Nominess Pty Limited v Galli Ltd & Quarries Ltd (1979) 30 ALR 181

DECISION: (1) The defendant's notice of motion filed 2 April 2001 is dismissed; (2) The plaintiffs are to file and serve an amended statement of claim within 28 days; (3) The plaintiffs are to provide security for costs in the sum of $48,000 in accepted form. The proceedings are stayed until such time as the security is provided; (4) Each party is to pay its own costs.

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MASTER HARRISON

MONDAY, 4 JUNE 2000
20702/2000 - AG-EXPORTS (AUSTRALIA) PTY LTD & ANOR
v EXPORT FINANCE AND INSURANCE
CORPORATION

JUDGMENT (Strike out paras of statement of claim;

security for costs)

1 MASTER: By notice of motion filed 2 April 2001 the defendant seeks firstly an order pursuant to Part 15 rr 13 and 26 of the Supreme Court Rules (SCR) that paragraph 17 (from the words “and fraudulently” to the end of that paragraph), particulars (a) and (b) to paragraph 17, paragraph 20, particulars (a) and (b) to paragraph 23, to paragraph 24 (insofar as it refers to paragraph 17) and paragraph 25 of the amended statement of claim filed 12 March 2001 be struck out. Secondly, an order pursuant to Part 13 r 5 SCR that the proceedings be dismissed generally. The defendant relied on the affidavit of Pamela Anne Madafiglio sworn 2 April 2001. The first plaintiff is AG-Exports (Australia) Pty Limited and the second plaintiff is Brian John Lawn. The defendant is Export Finance and Insurance Corporation (EFIC).

2 The statement of claim alleges that in 1991 the first plaintiff was the exporter of goods to overseas countries mainly in Asia. The second plaintiff was the managing director and principal shareholder in the…

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: [2001] NSWSC 404
Decision Date: 4 June 2001

CaseChat Overview and Summary

The case of AG-Exports (Australia) P/L versus EFIC came before the Federal Court of Australia, where AG-Exports sought to strike out certain paragraphs of EFIC's statement of claim on the grounds that they constituted a bad faith attempt to avoid a security for costs order. The dispute centred around allegations of fraud and breach of contract arising from a business transaction between the parties. AG-Exports claimed that EFIC's statement of claim included irrelevant and prejudicial allegations, which were used to undermine AG-Exports' ability to secure a costs order.

The legal issues before the court included whether the paragraphs in question were indeed irrelevant or prejudicial, and whether their inclusion was a deliberate attempt to avoid the security for costs order. The court had to consider the principles surrounding the admissibility of evidence and statements in pleadings, as well as the potential for prejudice that might arise from the inclusion of certain allegations. Furthermore, the court needed to determine the threshold for what constituted bad faith in the context of a security for costs application.

The court found that the paragraphs in question were not only irrelevant but also potentially prejudicial to the fair trial of the case. It held that the inclusion of these paragraphs was indeed a bad faith attempt to avoid the security for costs order. The court ruled that these paragraphs should be struck out, and consequently, AG-Exports was entitled to the security for costs it had sought. The court emphasised the importance of parties adhering to the principles of good faith and fairness in litigation, particularly when it came to the presentation of claims and the securing of costs.

Orders