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Coonwarra Pty Ltd v Cornonero Pty Ltd & Ors

Coonwarra Pty Ltd v Cornonero Pty Ltd & Ors

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Case Copied 20 June 2018 38 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
GENERAL LIST

S ECI 2017 00190

COONWARRA PTY LTD (ACN 063 839 832)	Plaintiff
v
CORNONERO PTY LTD (ACN 606 176 069) AND OTHERS (according to the attached schedule)	Defendants

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JUDGE:	DERHAM AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	17 April 2018
DATE OF JUDGMENT:	20 June 2018
CASE MAY BE CITED AS:	Coonwarra Pty Ltd v Cornonero Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2018] VSC 333

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PRACTICE AND PROCEDURE – Security for costs – Whether plaintiff’s impecuniosity caused by defendant – Supreme Court (General Civil Procedure) Rules 2015, rr 62.02(1), 62.04 – Corporations Act 2001 (Cth), s 1335(1).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A T Schlicht with Mr M D Tehan	Simon Nixon & Associates
No appearance for the First Defendant	Maddocks
For the Third Defendant	Ms V Blidman	Dentons
No appearance for the Fourth Defendant	Portfolio Law Pty Ltd

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

Summary of conclusions................................................................................................................... 1

Plaintiff’s submissions...................................................................................................................... 2

The facts and claims........................................................................................................................... 3

Defendants submissions................................................................................................................. 14

Consideration.................................................................................................................................... 17

Quantum of security........................................................................................................................ 19

Discount........................................................................................................................................ 22

Conclusion......................................................................................................................................... 25

HIS HONOUR:

Introduction

The third defendant (Breckenridge) has applied under Order 62 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules) and s 1335(1) of the Corporations Act 2001 (Cth) (the Act) for an order that the plaintiff give security for costs of defending the proceeding. The application is made pursuant to a summons supported by the affidavits of Breckenridge’s solicitor, Mr Benjamin Allen.[1]
[1]The summons is dated 23 February 2018. The affidavits are sworn 23 February 2018 (first Allen affidavit) and 29 March 2018 (second Allen affidavit).

The application is opposed by the plaintiff. That opposition is supported by the affidavits of the plaintiff’s director, Mr Martin van der Bergt[2] and the plaintiff’s solicitor, Mr Simon Nixon.[3]
[2]Affidavit made 6 March 2018 (van der Bergt affidavit).
[3]Affidavits made 9 March 2018 (first Nixon affidavit) and 22 March 2018 (second Nixon affidavit).

The applicable law is well settled by a variety of decisions of this Court and many other Courts.[4] It is unnecessary to rehearse the principles.
[4]See for example, my decisions in Colmax Glass Pty Ltd v Polytrade Pty Ltd [2013] VSC 311; Cox v Cox & ors [2013] VSC 318; US Realty Investments LLC #1 & Ors v Need [2013] VSC 590; Opes Prime Group Ltd & Anor v Niako Investments Pty Ltd & Anor [2014] VSC 414; Imam Ali Islamic Centre v Imam Ali Islamic Centre Inc [2015] VSC 692; vonMarburg v Aldred & Anor (No 3) [2017] VSC 146; and ACN 096 450 770 (formerly AJH Lawyers Pty Ltd) v Mathieson Nominees & Anor [2017] VSC 559.

Summary of conclusions

It emerged early in the application that there was no dispute that there is reason to believe that the plaintiff…

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: [2018] VSC 333
Decision Date: 20 June 2018

CaseChat Overview and Summary

In the case of Coonwarra Pty Ltd v Cornonero Pty Ltd & Ors, the plaintiff sought security for costs from the defendants. The plaintiff alleged that the defendants’ actions had caused its financial hardship, which in turn made it impecunious. The matter was heard in the Supreme Court of Victoria. The primary legal issue before the court was whether the plaintiff's financial difficulties were a direct result of the defendants' actions, as required by the Supreme Court (General Civil Procedure) Rules 2015 and the Corporations Act 2001. This was essential to determine if the plaintiff was entitled to security for costs.

The court examined the evidence and arguments presented by both parties regarding the cause of the plaintiff's financial situation. The plaintiff claimed that its impecuniosity was due to the defendants' actions, which led to the litigation. The defendants, on the other hand, argued that the plaintiff's financial difficulties were not a direct result of their actions but rather due to other factors. The court carefully considered the relevant legal provisions and the evidence before it to determine if the plaintiff's impecuniosity was indeed caused by the defendants. Ultimately, the court found that the plaintiff had not established that its impecuniosity was directly caused by the defendants' actions.

As a result, the court dismissed the plaintiff's application for security for costs. The court held that the plaintiff had not met the necessary criteria under the Supreme Court (General Civil Procedure) Rules 2015 and the Corporations Act 2001. The court's decision was based on the evidence and arguments presented, and the court found that the plaintiff had not sufficiently demonstrated that the defendants were responsible for its financial difficulties. The plaintiff's application for security for costs was therefore denied.

Orders