Cody v Live Board Holdings Ltd - [2015] NSWSC 1790

Supreme Court

New South Wales

Medium Neutral Citation: Cody v Live Board Holdings Ltd [2015] NSWSC 1790
Hearing dates: 18, 19 November 2014 and 7,8 July 2015
Date of orders: 01 December 2015
Decision date: 01 December 2015
Jurisdiction: Equity
Before: Robb J
Decision:
Refer to [174]

Catchwords:
PROCEDURE – cross claimants abandoned their amended cross claim and draft further amended cross claim – unsustainable pleadings – no cross claim remains on foot – remaining active cross claimant requires leave to file a new version of its further amended cross claim – application for leave unlikely to be successful if only remodelled version of abandoned defective pleading – if leave given to cross claimant, cross defendants’ application for security for costs will be relevant

PROCEDURE – costs – security for costs – whether court should have regard to merits and genuineness of proceedings – court should assume the claim is bona fides and not conduct detailed consideration of merits – if cross claimant is granted leave, it will have shown reasonable cause of action – inadequate evidence that cross claimant’s impecuniosity is attributable to cross defendants’ conduct – the cross claimant’s financial position shows inability to meet legal costs of the cross defendants irrespective of the latter parties’ conduct – inadequate evidence to establish whether security for costs order would stultify proceedings – cross claimant should be ordered to provide security for costs if granted leave to file further pleading – cross defendants should address quantum after considering any new claims
PROCEDURE – costs – departing from the general rule – whether cross defendants’ costs of proceedings should be payable by the cross claimant(s) forthwith – position taken by cross claimant(s) was unreasonable – if leave granted for the filing of new pleadings, proceedings likely to take a significant amount of time – order costs payable forthwith
Legislation Cited: Corporations Act 2001 (Cth)
Uniform Civil Procedure Rules NSW (2005)
Cases Cited: Advance Innovative Solutions Pty Ltd (in liq) v X-Dem Group (Aust) Pty Ltd [2012] NSWSC 1112
Cody v Live Board Holdings Ltd [2014] NSWSC 78; (2014) 97 ACSR 606
Fiduciary Ltd v Morningstar Research Pty Ltd [2002] NSWSC 432; (2002) 55 NSWLR 1
Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664; (2004) 208 ALR 764
HP Mercantile Pty Ltd v Plevey [2014] NSWCA 374
Jazabas Pty Ltd v Haddad [2007] NSWCA 291; (2007) 65 ACSR 276
Nonox Australia v Certain Underwriters at Lloyds Subscribing to Contract No CV0263CGL [2014] NSWSC 221
Northam v Favelle Favco Holdings Pty Ltd, unreported, 7 March 1995 BC9504276
Re Live Board Holdings Ltd (administrators appointed) [2014] NSWSC 161
Wollongong City Council v Legal Business Centre [2012] NSWCA 245
Category: Procedural and other rulings
Parties: Live Board Holdings Ltd (cross claimant)
Cody Live Pty Ltd ACN 168 364 403 (first cross defendant)
Cody Investments Pty Ltd ACN 100 588 903 (second cross defendant)
Brain Beyond Pty Ltd ACN 128 068 082 (third cross defendant)
Pierce Patrick Cody (fourth cross…

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: [2015] NSWSC 1790
Decision Date: 01 December 2015

CaseChat Overview and Summary

In Cody v Live Board Holdings Ltd, the dispute arose from a complex series of claims and counterclaims between multiple parties. The Court of Appeal was called upon to consider several procedural and costs-related issues, particularly concerning the ability of one of the cross claimants to amend its pleadings and the appropriateness of ordering security for costs and costs payable forthwith. The case involved significant procedural wrangling, with some cross claimants abandoning their claims and others seeking to amend their pleadings. The central issue before the court was whether the remaining active cross claimant should be granted leave to file a new version of its further amended cross claim, which had been remodelled from previously abandoned pleadings. The court held that the application for leave was unlikely to succeed unless the new version significantly departed from the abandoned defective pleadings. The court also considered the cross defendants' application for security for costs, ruling that while the court should assume the remaining cross claim was bona fide, it was not necessary to conduct a detailed examination of the merits. The court found that the remaining cross claimant's financial position demonstrated an inability to meet the legal costs of the cross defendants, irrespective of the latter's conduct. Consequently, the court ordered that if leave was granted, the remaining cross claimant would need to provide security for costs. The quantum of these costs was to be addressed after considering any new claims.

Further, the court examined whether the cross defendants' costs should be payable forthwith by the cross claimants. The court found that the position taken by the cross claimants had been unreasonable, particularly given that the proceedings were likely to take a significant amount of time if the remaining cross claimant was granted leave to file new pleadings. Therefore, the court ordered that the cross defendants' costs of proceedings would be payable forthwith by the cross claimants. This decision underscores the importance of procedural prudence and the court's role in managing the financial implications of protracted litigation.

Orders