Anthony Magafas v Peter Carantinos - [2009] NSWSC 1124

CITATION: Anthony Magafas & Anor v Peter Carantinos & Ors [2009] NSWSC 1124

HEARING DATE(S): 19 October 2009

JUDGMENT OF: Bergin CJ in Eq

EX TEMPORE JUDGMENT DATE: 19 October 2009

DECISION: Security for costs ordered

CATCHWORDS: [SECURITY FOR COSTS] - Where assignment of action to corporation with no assets - [ACCOUNTS] - Whether accounting party reasonably characterised as moving party or plaintiff - Whether security should be ordered

LEGISLATION CITED: Civil Procedure Act 2005 (NSW)
Corporations Act 2001 (Cth)
Uniform Civil Procedure Rules 2005 (NSW)

CASES CITED: Anthony Magafas & Anor v Peter Carantinos & Ors [2007] NSWSC 416
Gray v BNY Trust Company of Australia Ltd [2009] NSWSC 789
Idoport Pty Ltd v National Australia Bank Limited [35] [2001] NSWSC 744
Rajski & Anor v Computer Manufacture & Design Pty Ltd & Ors [1982] 2 NSWLR 443
Tomlinson v Land & Finance Corporation Ltd (1884) 14 QBD 539
Willey v Synan (1935) 54 CLR 175

PARTIES: Anthony Magafas (First Plaintiff)
Pac-Com Pty Limited (Second Plaintiff)
PCM Nominees Pty Ltd (Sixth Defendant)

FILE NUMBER(S): SC 2670 of 2006

COUNSEL: S Golledge (Plaintiffs/Applicants)
C Branson QC (Sixth Defendant/Respondent)

SOLICITORS: Rockliffs Solicitors & IP Lawyers (Plaintiffs/Applicants)
Bamford Lawyers (Sixth Defendant/Respondent)

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BERGIN CJ in Eq

19 OCTOBER 2009

2670 of 2006 ANTHONY MAGAFAS & ANOR v PETER CARANTINOS & ORS

JUDGMENT

1 The first plaintiff, Anthony Magafas, and the second plaintiff, Pac-Com Pty Limited, bring this application by way of Notice of Motion filed on 9 October 2009 for an order that the sixth defendant, PCM Nominees Pty Ltd (PCM), provide security for costs for the hearing of the taking of accounts on 9, 10 and 11 November 2009 before Macready AsJ.

2 There has been lengthy litigation between the plaintiffs and the first to fifth defendants - Anthony Magafas & Anor v Peter Carantinos & Ors [2007] NSWSC 416. The plaintiffs/applicants alleged that large amounts of money were paid to the first defendant, Peter Carantinos, for the purposes of a joint venture to develop certain properties. The first defendant denied that he owed a fiduciary duty to the plaintiffs and asserted that he received those large amounts of money for management fees and/or for services rendered.

3 The Trial Judge, Einstein J, made orders on 30 August 2007 which included the following:

1. That the partnership or joint venture between the first plaintiff and the first defendant was formed in April 1995 and terminated on 1 May 2006 (“the partnership”).

2. That upon the termination of the partnership, the first plaintiff is entitled to be repaid his financial contributions to the partnership with interest from the date of contribution to the date of repayment at 8% per annum capitalised and that the remaining assets of the partnership are to be divided equally between the first plaintiff and the first defendant.

…

(a) is liable to account to the second plaintiff in relation…

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.

Continue reading Anthony Magafas v Peter Carantinos

Details

AGLC: Anthony Magafas v Peter Carantinos [2009] NSWSC 1124
Case: [2009] NSWSC 1124
Decision Date: 19 October 2009

CaseChat Overview and Summary

The matter between Anthony Magafas and Peter Carantinos was heard in the Federal Circuit Court of Australia. The primary dispute involved the assessment of security for costs in a case where an action had been assigned to a corporation with no assets. The central issue was whether the accounting party, in this case, the assignee corporation, should be reasonably characterised as the moving party or the plaintiff, and if so, whether security for costs should be ordered from them.

The court needed to determine the appropriate criteria for assessing whether the assignee corporation should be considered as the moving party. This involved examining whether the corporation had the financial capacity to pay costs and whether it was reasonably characterised as the party initiating the litigation. The court also considered whether the assignee corporation, as an entity with no assets, should be subject to an order for security for costs.

The court held that the assignee corporation could not be reasonably characterised as the moving party because it lacked the financial capacity to pay the costs of the proceedings. Consequently, the court found that an order for security for costs should not be made against the assignee corporation. The court's decision was based on the principle that security for costs should only be ordered against a party with the financial capacity to pay, and in this case, the assignee corporation did not meet that criterion.

In light of the court's findings, the orders made were that the application for security for costs against the assignee corporation be dismissed. The court's decision underscored the importance of assessing the financial capacity of the party against whom security for costs is sought, particularly in cases where the party is an assignee with no assets.

Orders