Commissioner of Australian Federal Police v Razzi (No 2)

[1991] FCA 267

JUDGMENT PI0 267 / ?(..,,,,,,,

IN THE FEDERAL COURT OF AUSTRALIA ) No. QG 22 of 1991

QUEENSLAND DISTRICT REGISTRY	)	I
GENERAL DIVISION	)

BETWEEN! BERLAZ PTY. LTD.

First Applicant

AND I BRUCE RICHARD TREVENA and
MARGARET ROSE FRY

Second Applicants

AND :  FINE LEATHER CARE PRODUCT5 LIMITED

Respondent

MINUTES OF ORDER

JUDGE MAKING ORDE4:	PINCUS J.
DATE OF ORDER:	22 MAY 1991
WHERE MADE:	BRISBANE
THE COURT ORDERS THAT:

1.   The priricipal application be stayed until the first applicant provides security for the respondent's costs, to the satisfaction of the Registrar, in the sum of $12,000.

2.   The costs of and incidental to the motion for security bb the respondent's costs in the proceedingb.

R O S T R Y

Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.

RECEIVED

HOERM COURT OF

AUSTRAUA

PRLNClPAL

IN THE FEDERAL COURT OF AUSTRALIA	1	No. QG 22 of 1991
DUEENSLAND DISTRICT REGISTRY	1
GENERAL DIVISION	)

BETWEENr BERLAZ PTY. LTD.

First Applicant

AND: BRUCE RICHARD TREVENA and

.MAROARET ROSE FRY

Second Applicants

AND* FINE LEATHER CARE PRODUCTS LIMITED

Respondent

-t PINCUS J.

PLACE: BRISBANE

DATE! 22 MAY 1991

REASONS FOR JUDGMEUT

This is a motion for security for costs in a suit uhder the Trade Practices Act 1974. The nature of the principal proceedings appears from reasons I gave on 24 April last, refusing the applicants interlocutory relief: in brief, the applicants complain of termination of a distribution

arrangement as being a breach of 66.46 and 46A of the Trade	Practices Act. As may be discerned from reading those
reasons, the view I then took was that the evidence presented in support of the application for interlocutory relief did not demonstrate a cdse o* any strength against the respondent. The applicants now wish to proceed with the suit, claiming damages only, not an injunction.
No statement of claim has been delivered. The originating application which was filed in February claimed a declaration that the termination of two agreements in writing was conduct in breach of the sections I have mentioned, an order having the effect of obliging the respondent to continue to honour the two agreements and further relief. The second applicants (who are natural persons) are parties to one of the two agreements mentioned, but only as guarantors. It was not explained how, as guarantore, the second applicants might have a cause of action in dmages and it does not appear to me that they cdn have any. It may be that if the respondent cross- claims against the second applicants as guarantors, seeking to enforce their obligations, they may raise the alleged breaches of the Trade Practices Act in answer to the cross-claim; but khdt is not the suit.1 presently have to consider.
It was argued by Mr. M.D. Martin of counsel for the respohdent (the party applying for security) that, as the second applicants had no claim for damages, the case should be
considered as if the only applicant were the first applicant, a company. On that basis, h. Martin sought to distinguish
the decision of the Full Court of the Supreme Court of Queeneland in HarDur v. wiadne Australia Limited [l9841 2
Q~.R. 523. That, like the present case, was one in which
security for cobts was sought against corporate bodies in a suit in which a claim was also made by a natural person. In the principal judgment in HarDurfS case, Connolly 3. emphasised the rule that an honest and impecunious litigant is

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entitled to his day in Court. His Honour went on to consider the case where one plaintiff was out of the jurisdiction, referred to authority against giving security in such matters and remarked:

"I take the underlying reason to be that the defendant was really in no worse position than if he had been sued by a single plaintiff resident within the jurisdiction and insolvent

. . . the cases show that, unless there is

ground for making an order for security against all the plaintiffe, it cannot be made against anyn (p.531).

His Honour distingllished Pearson v. Navdler [l9771 1 W.L.R.

899  L

It was argued that Pearson v. Navdler was not properly distinguishable. That appears to me, with respect, to be correct. In JIarDurts case, the Queensland Supreme Court applied to applications for security against a plaintiff company a principle which had been worked out in respect of applications for security against a plaintiff out of the

accept that such an extension of the principle is a proper	jurisdiction; Megarry V.C. in Pearson v. Navdler did not
one.
Here, although the contrary position was contended for, it seems to me improbable that the respondent, if successful at the trial, would be able to recover costs ordered in its favour. I think I am entitled to take into account that the evidence in the interlocutory application decided last month suggested that the first applicant has had difficulty in meeting its obligations. The second applicants, on the evidence before me, have assets of quite modest value. The case is not one in which the second applicants are the real claimants (as was Mr. Harpur in the Queensland case), nor are they individuals of financial substance, as was Mr.
h he notice of motion speaks of security against "the appiicant". As I understand the matter, security is sought only against the corporate applicant; it appears to me that such security should be granted. 1 do not think there is any rule that if as well as the corporate applicant, there are nathkiil persons as applicants, that that necessarily defeats the Bpplication for security.
In my opinion, the presence of natural persons as CO-tipplicants, at least where the natural persons have a genuine claim and are the people behind the corporate
against the corporate appiicdnt. The principal reason for applicant, will commonly defeat an application for security
holding, as I do, that security for costs should be ordered herb is that the claim that ss.46 and 46A of the Trade Practices Act have been breached appeared to me, on the fairly substantial evidence advanced last month, to be of a rather tenuous kind. I also take into account that the applicants who are natural persons seem to have no claim to the relief now being pursued, viz. damages.
There is evidence as to the quant& of costs and I have taken that into account. What I propose to do is to order that the principal application be stayed until the first applicant provides security for the respondent's costs, to the satisfaction of the Registrar, in the sum of $12,000. That sum is intended to cover costs up to the date on which the application ie set down for trial when the respondent may, if go advised, apply for further security. The costs of the motion for security will be the respondent's costs in the proceedings.

I certify that this and the four preceding pages are a true copy of the reasons for judgment herein of his

Honour b. Justice Pincus.

Associate

Date 22 May