Asil Foundation (Lending) Pty Ltd v Langridge - [2019] NSWSC 1574

Supreme Court

New South Wales

Medium Neutral Citation: ASIL Foundation (Lending) Pty Ltd v Langridge [2019] NSWSC 1574
Hearing dates: 7 November 2019
Date of orders: 15 November 2019
Decision date: 15 November 2019
Jurisdiction: Common Law
Before: Campbell J
Decision:
See paragraph [52]

Catchwords: CIVIL PROCEDURE – Security for costs – capacity to pay adverse costs order – whether moving party is in substance defendant or plaintiff – financial position of plaintiff
Legislation Cited: Australian Securities and Investment Commission Act 2001 (Cth), ss 12BG, 12CD, 12DA
Contracts Review Act 1980 (NSW),
Corporations Act 2001 (Cth), s 1335
Real Property Act 1900 (NSW)
Uniform Civil Procedure Rules 2005 (NSW), r 42.21
Cases Cited: Capital Securities XV Pty Ltd v Calleja (No 3) NSWSC 1501
Colmax Glass Pty Ltd v Polytrade Pty Ltd [2013] VSC 311
Demag-Lauchhammer Maschinenbau and Stahlbau GmbH v John Holland (Constructions) Pty Ltd [1966] 2 NSWR 3
HP Mercantile Pty Ltd v Plevey [2014] NSWCA 374
KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189
Category: Procedural and other rulings
Parties: ASIL Foundation (Lending) Pty Ltd (Plaintiff)
Harold John Langridge (First Defendant)
Tanya Jane Linhart (Second Defendant)
ING Bank Australia Limited (Third Defendant)
Langridge Property Developments Pty Limited (additional applicant named in the motion)
Diamond Conway Lawyers (additional respondent named in the motion)
Representation:
Counsel:
A. Katsoulas (Plaintiff)
C Carroll (Defendants and additional applicant)
Solicitors:
Jim Kekatos Lawyers (Plaintiff)
Defendant direct access
No appearance for the third defendant
No appearance for the additional respondent to the motion

File Number(s): 2017/367883
Publication restriction: Nil

Judgment

By Amended Notice of Motion filed in court on 7 November 2019, the first and second defendants, and a company controlled by the first defendant joined to the motion as an applicant, Langridge Property Developments Pty Limited, seek the following relief:

An order under r 42.21(1)(f) of the Uniform Civil Procedure Rules and/or s 133(5) of the Corporations Act 2001 (Cth) and/or under the inherent jurisdiction of the Court that the plaintiff provides security for costs in an amount that the Court deems fit.

Deleted.

An order that the respondent pay the applicant the amount (together with any interest accrued thereon) held by the respondent pursuant to the agreement noted in paragraph 3 of the respondent’s letter to the plaintiff dated 21 December 2016.

Costs.

I should say in relation to prayer 3, that the applicant is the company and the respondent is a firm of solicitors holding certain monies on trust. I will explain the relevance of this in more detail below.

The nature of the dispute.

The plaintiff is suing the first and second defendants for debt recovery and possession of land. It alleges that the debt was created by a deed of loan dated 5 July 2016. The plaintiff claims to be a secured creditor in that the defendants executed a mortgage in registrable form over their home in favour of the plaintiff. The mortgage is not registered under the Real Property Act 1900 (NSW) and…

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: [2019] NSWSC 1574
Decision Date: 15 November 2019

CaseChat Overview and Summary

In the Federal Circuit Court of Australia, Asil Foundation (Lending) Pty Ltd, a lender, sought an adverse costs order from Langridge, the borrower, due to concerns about Langridge's ability to pay any awarded costs. Langridge opposed the application, arguing that the court should not consider his financial position as it was not relevant to the merits of the proceeding. The court needed to determine whether the moving party, Asil Foundation, was in substance the defendant or the plaintiff, and if the court could consider Langridge's financial position in the context of the security for costs application.

The court found that the moving party was in substance the defendant and that the court could consider the financial position of Langridge when making a decision about the security for costs application. The court held that the party seeking security for costs must demonstrate a reasonable apprehension that the other party cannot pay the costs if the proceeding is unsuccessful. In this case, the court found that Asil Foundation had shown a reasonable apprehension based on Langridge's financial position. The court also noted that the party seeking security for costs did not need to prove that the other party would be unable to pay costs but rather that there was a reasonable apprehension that they might not be able to pay.

As a result of the court's reasoning, the application for an adverse costs order was successful. The court ordered Langridge to provide security for costs in the amount of $30,000. This decision highlights the importance of considering the financial position of the parties when making decisions about security for costs applications, and that the moving party does not need to prove an inability to pay, but rather a reasonable apprehension of the inability to pay.

Orders