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CDLC Pty Ltd v Capital Estate Developments Pty Ltd (No 4)

CDLC Pty Ltd v Capital Estate Developments Pty Ltd (No 4)

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SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	CDLC Pty Ltd v Capital Estate Developments Pty Ltd (No 4)
Citation:	[2024] ACTSC 345
Hearing Date:	27 September 2024
Decision Date:	1 November 2024
Before:	McWilliam J
Decision:	(1) The application filed 3 September 2024 seeking security for costs is dismissed. (2) The costs of the application are to be paid by the first defendant, with such costs not to be recovered until the conclusion of the proceeding.
Catchwords:	PRACTICE & PROCEDURE – security for costs – where plaintiffs are corporations – where prima facie evidence of an inability to pay an adverse costs order – where delay in application for security of more than a year – where counterclaim and third-party action raise overlapping issues with plaintiffs’ claim – application dismissed
Legislation Cited:	Court Procedures Rules 2006 (ACT) rr 1900, 1901, 1902, 1904(3) Corporations Act 2001 (Cth) s 1335
Cases Cited:	Acohs Pty Lt v Ucorp Pty Ltd [2006] FCA 1279; 155 FCR 181 All Class Insurance Brokers Pty Ltd (in Liq) v Chubb Insurance Australia Ltd [2020] FCA 840 Andrews v Caltex Oil (Aust) Pty Ltd (1982) 40 ALR 305 Anutech Pty Ltd v Latent Energy Systems Pty Ltd (Unreported, ACT Supreme Court, Gallop J, 3 February 1997) Bell Wholesale Co Pty Ltd v Gates Export Corp (No 2) (1984) 2 FCR 1 Benjamin v GB Franchising Pty Ltd [2008] ACTCA 11; 1 ACTLR 287 Bruce Pie & Sons Pty Ltd v R H Mainwaring, English and Peldan (1985) 1 Qd R 401 Brundza v Robbie & Co (No 2) (1952) 88 CLR 171 Canberra Data Centres Pty Ltd v Vibe Constructions (ACT) Pty Ltd [2010] ACTSC 20; 173 ACTR 33 CDLC Pty Ltd v Capital Estate Developments Pty Ltd (No 2) [2023] ACTSC 321 CDLC Pty Ltd v Capital Estate Developments Pty Ltd (No 3) [2024] ACTSC 304 Churchills Ltd v Pilcher (1940) 57 WN (NSW) 109 Civil & Civic Pty Ltd v Nova Builders Pty Ltd [2024] ACTCA 5 Concrete Constructions Pty Ltd v Dalma Formwork Pty Ltd [1999] NSWCA 16 Dalma Formwork Pty Ltd v Concrete Constructions Group Ltd (Unreported, Supreme Court of New South Wales, Rolfe J, 19 June 1998) Darelvale Holdings Australia Pty Ltd v Waterjet Designs Pty Ltd [2003] FCA 863 Davey v Herbst (No 2) [2012] ACTCA 19 Fiduciary Ltd v Morningstar Research Pty Ltd (2004) 208 ALR 564 Green (as liquidator of Arimco Mining Pty Ltd) v CGU Insurance Ltd [2008] NSWCA 148; 67 ACSR 105 Jet Corp of Australia Pty Ltd v Petres Pty Ltd (1983) 50 ALR 722 Jornad Pty Ltd v Sapme Pty Ltd [2018] ACTSC 147 Lucas v Yorke (1984) 58 ALJR 20 M A Productions Pty Ltd v Austarama Television Pty Ltd (1982) 7 ACLR 97 Master Club Consultants Pty Ltd v Stanbritt Pty Ltd [2000] ACTSC 18 Matsebula v Reynolds [2016] ACTSC 55 Memutu Pty Ltd v Lissenden (1983) 8 ACLR 364 Merribee Pastoral Industries Pty Ltd v Australia 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: [2024] ACTSC 345
Decision Date

CaseChat Overview and Summary

CDLC Pty Ltd and Pouring Pty Ltd, the first and second plaintiffs, have brought claims against Capital Estate Developments Pty Ltd as trustee for Capital Estate Developments Trust, the first defendant, alleging breach of contract and seeking damages. The first defendant has counter-claimed against the plaintiffs and joined Arthur Choi, the sole director and shareholder of the plaintiffs, as a third party, alleging misleading and deceptive conduct and a breach of the deed of settlement that provided for the interim leases. The first defendant has sought security for costs from the plaintiffs.

The court was required to decide whether it should order security for costs and, if so, what form that order should take. The court identified that the plaintiffs did not have the means to pay an adverse costs order. However, the application for security for costs was delayed by over a year, the litigation involved overlapping issues between the claims and counterclaims, and the plaintiffs had already incurred significant costs.

The court found that the delay in making the application for security for costs was a significant factor. The first defendant had raised the issue of security for costs in October 2023, but did not bring an application until September 2024. The court noted that the delay caused prejudice to the plaintiffs, who had incurred significant costs in the meantime. The court also considered that the overlapping issues between the claims and counterclaims and the uncertainty about the costs going forward meant that it was not persuaded that a case had been made out for ordering security for costs at this stage of the litigation.

Accordingly, the application for security for costs was dismissed and the costs of the application were to be paid by the first defendant, with such costs not to be recovered until the conclusion of the proceeding.

Orders