Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd

[1995] FCA 553

CATCHWORDS

Practice and Procedure - security for costs - discretion

ALLSTATE LIFE INSURANCE CO. & ORS. v AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED & ORS

No. G381 of 1994

BEAUMONT J.

SYDNEY

6 JULY 1995

IN THE FEDERAL COURT OF AUSTRALIA  )
  )
NEW SOUTH WALES DISTRICT REGISTRY  )    No.  G381 of 1994
  )
GENERAL DIVISION                 )

BETWEEN:ALLSTATE LIFE INSURANCE CO. & OTHERS

Applicants

ANDAUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED & OTHERS

Respondents

CORAM:    Beaumont J.

DATE:     6 July 1995

REASONS FOR JUDGMENT
(On application for security for costs)

In the context of applications made on behalf of the respondents for security for costs, counsel for the applicants submitted that, in the exercise of its discretion, the Court should refuse to order security because of the action of some of the respondents in moving for a stay of similar proceedings brought by the applicants in New York.  The stay was successfully sought on the "forum non conveniens" ground.  The applicants submit that, those respondents having compelled them to litigate in this country, they should not now be able to require security on the footing that the applicants are foreign corporations. 

Counsel for the applicants referred to the decision given by Patterson J. in proceedings brought in the United States by several of the parties to these proceedings and to his orders and reasons for judgment dated 21 December 1992 (see Allstate Life Insurance Co. v Linter Group Ltd., unreported, 21 December 1992).  There, Patterson J. concluded (at A142-143):

For the reasons set forth above, the Linter Defendants' motion to dismiss this action on the basis of comity and the Bank Defendants' motion to dismiss this action on the ground of forum non conveniens are granted.  This entire action is dismissed.

The reasons for judgment disclose that the Court took into account a number of discretionary considerations for this conclusion.  However, it does not appear that the Court took into account the possibility that, if the United States proceedings were stayed with the consequence that it was necessary for the proceedings to be recommenced in an Australian court, then under the cost rules of this country, costs would be likely to follow the event of litigation; and that, in this connection, the Court has a further discretion to order security for costs in the case of a foreign party moving the court as a plaintiff.  There was no explicit reference by the United States Court to those considerations as potential discretionary factors to be taken into account. However, there is nothing before me to suggest, nor is it submitted, that there was put to that court any submission on behalf of the present applicants that the motion for the stay
of proceedings should be refused by the American Court on grounds it might be prejudicial to the interests of the applicants by reason of the different rule as to costs in the Australian jurisdictions.  In my opinion, no valid reason has been demonstrated why that submission could not then have been put on behalf of the present applicants.  That being so, even if I had considered that this was a material matter to be taken into account in the context of the present application for security, I am of the opinion that I should give the matter no weight, in terms of the exercise of the discretion vested in me in that behalf. 

For these reasons, on the security for costs question, I propose not to take into account the circumstance that some of the present respondents moved for a stay of the New York action.

I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Beaumont.

Associate

Dated:  6 July 1995