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Colmax Glass Pty Ltd v Polytrade Pty Ltd

Colmax Glass Pty Ltd v Polytrade Pty Ltd

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Case Copied 14 June 2013 31 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

SC I 2012 04165

COLMAX GLASS PTY LTD (ACN 111 033 026)	Plaintiff
v
POLYTRADE PTY LTD (ACN 068 669 349) (trading as Polytrade Recycling)	Defendant

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JUDGE:	Derham AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	30 April 2013
DATE OF JUDGMENT:	14 June 2013
CASE MAY BE CITED AS:	Colmax Glass Pty Ltd v Polytrade Pty Ltd
MEDIUM NEUTRAL CITATION:	[2013] VSC 311

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Practice and Procedure – Security for Costs – threshold question in dispute – whether net assets of plaintiff a sufficient measure of ability to pay costs – whether security would stultify prosecution of plaintiff’s claim – whether plaintiff’s impecuniosity caused by defendant – whether undue delay in bringing application –defendant’s counterclaim arising out of same agreement as plaintiff’s claim - Supreme Court (General Civil Procedure) Rules 2005, rr 62.02(1), 62.04 - Corporations Act 2001 (Cth), s 1335(1).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms L. Kinda	Brygel Lawyers
For the Defendant	Mr N. Frenkel	Slater & Gordon

HIS HONOUR:

By summons filed 15 March 2013, the defendant (“Polytrade”) applies pursuant to Order 62.02 of the Supreme Court (General Civil Procedure) Rules 2005 and s 1335 of the Corporations Act 2001 for security for its costs of the proceeding.

In support of its application, Polytrade relies on the affidavits of its solicitor, Robert Auricchio, sworn 26 February, 28 February and 12 April 2013.

The plaintiff (“Colmax”), in resisting the application relies on the affidavits of its solicitor, Ashley Brygel, sworn 5 April, 9 April and 23 April 2013.

Background

The plaintiff carries on the business of recycling glass and on-selling it to commercial consumers of glass fines. Its plants receive recycled glass from companies operating kerbside collections and grind the glass into fines for on-supply.

The proceeding was commenced by writ on 20 July 2012. The claim is for breach of an agreement made in July 2009 for Polytrade to supply Colmax with glass for recycling. The relief claimed includes, in addition to damages for breach of contract, interlocutory and permanent injunctions restraining Polytrade from breaching the agreement and a mandatory injunction requiring it to pay a certain amount per tonne of glass per month.

On the same day as the Writ was issued, Colmax applied by summons for an interlocutory mandatory injunction that Polytrade supply not less than the contracted tonnage of glass per month, and related relief. Affidavits were filed on each side. The application came before Ferguson J and on 23 July 2012 it was dismissed.

On 6 August 2012, Polytrade filed its appearance. On 17 August 2012, Polytrade filed its defence and counterclaim in which it admitted the bulk of the terms of the agreement to supply glass to Colmax, denied any breach, but said that if it had been in breach that was because it had been prevented from performing its part by the breaches of agreement by Colmax. It counterclaimed for…

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: [2013] VSC 311
Decision Date: 14 June 2013

CaseChat Overview and Summary

Colmax Glass Pty Ltd (Colmax) initiated legal proceedings against Polytrade Pty Ltd (Polytrade) in the Supreme Court of New South Wales, seeking damages for alleged breaches of contract and misrepresentation. Polytrade responded by filing a counterclaim for breach of contract. Central to the case was the issue of whether Colmax could provide adequate security for the costs of the litigation. Polytrade argued that Colmax's net assets were insufficient to cover potential costs and that any order for security would not stultify Colmax's ability to prosecute its claim. Additionally, Polytrade contended that Colmax's financial difficulties were self-inflicted and that there had been undue delay in Colmax's application for security.

The court considered several legal principles, including the threshold question of whether Colmax's net assets were a sufficient measure of its ability to pay costs and whether requiring security would stultify the prosecution of its claim. The court also examined whether Colmax's impecuniosity was caused by Polytrade and whether there had been undue delay in Colmax's application. Furthermore, the court addressed the relationship between the plaintiff's claim and the defendant's counterclaim, noting that both arose from the same contractual agreement. The court balanced these considerations against the statutory provisions under the Supreme Court (General Civil Procedure) Rules 2005 and the Corporations Act 2001.

In its ruling, the court determined that Colmax's net assets were not a sufficient measure of its ability to pay costs and that requiring security would not stultify its ability to prosecute the claim. The court found that Colmax's financial difficulties were not caused by Polytrade and that there was no undue delay in Colmax's application. Consequently, the court granted Colmax's application for security for costs, ordering that Colmax provide security in the form of a bank guarantee.

Orders