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Colgate-Palmolive Co v Cussons Pty Ltd

Colgate-Palmolive Co v Cussons Pty Ltd

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Case Copied 6 August 1993 10 min read

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IN THE FEDRRAF. COURT OF AUSTRALIA

JUDGS.iB'iT No.

OIJRHNSLAND DISTRICT REGISTRY

GENERAL DIVISION

No. GI8 of 1993

BETWEEN-

STARTIJNE PTY. LTD. fACN 010 963 587)

Applicant

AND:	ULTRA TUNE SYSTEMS (AUSTRALIAN PTY. LTD, f ACN 006 406 622)

Respondent

AND:	ULTRA TUNE SYSTEMS fAUSTRALIA) PTY. LTD.
rACN one 406 6221

Cross-Claimant

AND:	STARTUNE PTY. LTD. fACN 010 963 587^

First Cross-Respondent

AND:	MICHELLE ANNE SCHLOITHE

Second Cross-Respondent

JUDGE MAKING ORDER:	Cooper .1.
W HERE MADE:	Brisbane
DATE OF ORDER	6 August, 1993

MINUTES OF ORDER

7H E COURT ORDERS:

1. The applicant provide security for the costs of the respondent of the pioceedings, excluding the cross-claim, in the sum of THIRTY THOUSAND DOLLARS ($30,000.00) in a form satisfactory to the District Registrar of the Court.

2. The proceedings instituted on the applicant’s application and statement of claim be stayed until security for costs is provided.

3. The applicant, Startune Pty. Ltd. pay the costs ot the respondent of and incidental to the notice of motion to be taxed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court

Rules.

IN THE FEOHRAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISION

No. G18 of 1993

BETWEEN:

STARTUNE PTY. LTD. (ACN 010 963 587)

Applicant

AND:

ULTRA TUNE SYSTEMS tAUSTRALIA') PTY. LTD.

rACN 006 406 622)

Respondent

AND:	ULTRA TUNE SYS1EMS TAUSTRALIA'I PTY. LTD. rACN 006 406 622'!

CrosS“Claimant

AND:	STARTUNE PTY. LTD. (ACN 010 963 587^

First Cross-Respondent

AND:	MICHELLE ANNE SCHLOITHE

Second Cross-Respondent

CORAM:	Cooper J.
PLACE:	Brisbane
DATE:	6 August, 1993
REASONS FOR JUDGMENT

This IS an application by the respondent for an order for security for costs. The material establishes that the applicant (in the principal proceedings) is impecunious and Counsel for the applicant does not suggest otherwise. There is no material to suggest and it was not submitted that the impeciiniosity was caused by the conduct complained of by the applicant in its statement of claim. The material establishes that the records of the Australian Securities Commission show two

directors of the applicant. One, Darryl Raymond Schloithe, was declared bankrupt on 22 October, 1992. There is no material before the court as to the financial circumstances of the other, Robert Arthur Ashely. The applicant has a paid up capital of $2.00.

I am satisfied that there is reason to believe that the applicant will be unable to pay the costs of the respondent if the respondent is successful in its defence of the applicant’s proceedings. The requirements of section 1335(1) of the Corporations Law are therefore established. Of course, the court is not bound to make an order under section 1335 of the Corporations Law or section 56 of the Federal Court of Australia Act 1976 and retains a discretion as to whether or not security for costs will be ordered. I ’he discretion is to be exercised having regard to whether the interests of justice will be best served in any particular case by making or refusing an…

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: [1993] FCA 536
Decision Date: 6 Aug 1993

CaseChat Overview and Summary

Startune Pty. Ltd. applied to the Federal Court of Australia seeking relief against Ultra Tune Systems (Australia) Pty. Ltd. The application raised both primary and cross-claims. Ultra Tune Systems (Australia) Pty. Ltd. sought an order for security for costs on the basis that the applicant was impecunious and there was no evidence to suggest that this was caused by the conduct complained of. Startune Pty. Ltd. opposed the application, arguing that there was an overlap in the issues and facts raised in the applicant’s claim against the respondent and in the applicant’s defence of the cross-claim by the respondent, that the applicant was forced into court to bring the proceedings by the "self help" action taken by the respondent, and that there had been delay in bringing the application for security for costs.

The Court held that the material established that the applicant was impecunious and there was no material to suggest and it was not submitted that the impecuniosity was caused by the conduct complained of by the applicant in its statement of claim. The Court was satisfied that there was reason to believe that the applicant would be unable to pay the costs of the respondent if the respondent was successful in its defence of the applicant’s proceedings. The Court considered the discretionary factors and held that the evidence of impecuniosity of the applicant totally outweighed any other possible countervailing factors in this case and the interests of justice required that security be ordered.

The Court ordered that the applicant provide security for the costs of the respondent of the proceedings, excluding the cross-claim, in the sum of THIRTY THOUSAND DOLLARS ($30,000.00) in a form satisfactory to the District Registrar of the Court. The proceedings instituted on the applicant’s application and statement of claim be stayed until security for costs is provided. The applicant, Startune Pty. Ltd. pay the costs of the respondent of and incidental to the notice of motion to be taxed.

Orders