Avspares Pty Ltd v Skywest Aviation Pty Ltd

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NG 707 of 1996

BETWEEN:

AVSPARES PTY LIMITED
APPLICANT

AND:

AVIATION PTY LIMITED
RESPONDENT

JUDGE:

TAMBERLIN J

DATE:

19 SEPTEMBER 1997

PLACE:

SYDNEY

REASONS FOR JUDGMENT
(Ex-tempore Judgment)

In this matter, in my opinion, the costs should follow the event. The question is, what was the event. There were several propositions advanced but I think the significant matter which arises from the chronology is that the offer of security over the personal assets of the directors of the applicant did not arise until the proceedings had been substantially carried through. It was not until 19 June 1997 that an offer was made by the directors of the applicant to give personal undertakings in relation to any costs order. I found that this was not sufficient and that there ought be security in the nature of a charge over personal assets to support those undertakings.

Accordingly, in my view, the critical matter in the decision was whether there should be security over the personal assets. Having regard to the late stage at which this question arose and the lack of any communication prior to early June in 1997 in relation to personal undertakings, in my view, the applicant ought to pay the costs of the respondent in relation to this application.

An application has been made on behalf of the respondent for an order that leave be granted to take out the order for costs immediately and that the costs be taxed so that they can be recovered forthwith. In my view, in the circumstances of this case, it is not appropriate to take out the order immediately. A charge over personal assets has been given, or will be given when the parties agree on suitable terms. I therefore decline to accede to this request.

Accordingly, the orders of the Court are that the applicant should pay the costs of the respondent in relation to the application for security for costs.

I certify that this and the preceding one (1) page is a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin

Associate:

Dated: 19 September 1997

Counsel for the Applicant: Mr P W Larkin

Solicitor for the Applicant: Jenkins & Associates

Counsel for the Respondent: Mr S G Burley

Solicitor for the Respondent: Deacons Graham & James

Date of Hearing: 19 September 1997

Date of Judgment: 19 September 1997

CaseChat Overview and Summary

The Federal Court of Australia, New South Wales District Registry, delivered a decision in the case of Avspares Pty Ltd v Skywest Aviation Pty Ltd. The applicant, Avspares Pty Ltd, sought an order for the respondent, Skywest Aviation Pty Ltd, to provide security for costs. The central issue before the court was whether the applicant should be required to provide personal security over the assets of its directors in relation to the costs of the proceeding. The court was also asked to determine the appropriate costs order, given the timing and circumstances of the applicant’s offer to provide personal security.

Justice Tamberlin found that the significant factor was the timing of the offer of security over personal assets, which came late in the proceedings. The offer was made on 19 June 1997, after the proceedings had substantially progressed. The court held that this late offer was not sufficient and that a charge over personal assets was necessary to support the directors’ undertakings regarding costs. The judge concluded that the applicant's failure to provide adequate security in a timely manner warranted the respondent being awarded costs for the application.

The court determined that while the applicant should pay the respondent’s costs for the application, it was not appropriate to immediately enforce the costs order due to the recent provision of personal security. The judge declined the respondent’s request for an immediate order for costs and instead decided to await agreement on the terms of the charge over personal assets. Consequently, the court ordered that the applicant pay the respondent’s costs for the application, but deferred immediate enforcement pending the agreement on the terms of the security.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 707 of 1996

BETWEEN:	AVSPARES PTY LIMITED APPLICANT
AND:	AVIATION PTY LIMITED RESPONDENT

JUDGE:	TAMBERLIN J
DATE:	19 SEPTEMBER 1997
PLACE:	SYDNEY

Counsel for the Applicant:	Mr P W Larkin
Solicitor for the Applicant:	Jenkins & Associates
Counsel for the Respondent:	Mr S G Burley
Solicitor for the Respondent:	Deacons Graham & James
Date of Hearing:	19 September 1997
Date of Judgment:	19 September 1997