Deangrove Pty Ltd v Buckby

[2002] FCA 1544

FEDERAL COURT OF AUSTRALIA

Deangrove Pty Ltd v Buckby [2002] FCA 1544

DEANGROVE PTY LTD (RECEIVERS AND MANAGERS APPOINTED) & ANOR v RICHARD WILLIAM BUCKBY
N 501 of 2002

SACKVILLE J
SYDNEY
11 DECEMBER 2002

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 501 OF 2002

BETWEEN:

DEANGROVE PTY LIMITED (RECEIVERS AND MANAGERS APPOINTED)
APPLICANT

AND:

RICHARD WILLIAM BUCKBY
FIRST RESPONDENT

JOHN DENNIS
SECOND RESPONDENT

JUDGE:

SACKVILLE J

DATE OF ORDER:

11 DECEMBER 2002

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The applicant provide security for costs to the respondents, in the form of a bank guarantee from an Australian trading bank in favour of the respondents or in such other form as may be approved by a registrar of the Court, in the sum of $35,000.

2.The bank guarantee referred to in order 1 be provided on or before 30 January 2003.

3.If the applicant fails to provide security for costs in accordance with orders 1 and 2, the proceedings be stayed.

4.The applicant pay the respondents’ costs of the motion filed on 26 September 2002 to the extent that it seeks security for costs, provided that this order shall not extend to costs the subject of any existing orders in favour of the respondents.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1142 OF 2000

BETWEEN:

DEANGROVE PTY LIMITED (RECEIVERS AND MANAGERS APPOINTED)
APPLICANT

AND:

RICHARD WILLIAM BUCKBY
FIRST RESPONDENT

JOHN DENNIS
SECOND RESPONDENT

JUDGE:	SACKVILLE J
DATE:	11 DECEMBER 2002
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. By motion filed on 26 September 2002, the respondents seek an order for security for costs against the applicant.

2. The motion has been adjourned on two occasions at the request of the applicant.  On the second occasion (1 November 2002), directions were made for the applicant to file and serve affidavits and written submissions in opposition to the motion.  Those directions were not complied with.  I declined to permit the applicant to read an affidavit that was produced at the hearing without prior notice to the respondents.

3. The respondents rely on s 1335(1) of the Corporations Act 2001 (Cth), which provides as follows:

   “Where a corporation is plaintiff in any action or other legal proceeding, the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his, her or its defence, requires sufficient security to be given for those costs and stay all proceedings until the security is given”.

4. The evidence of Mr Coves satisfies me that there is reason to believe that the applicant (which is in receivership) will be unable to pay the costs of the respondents if they are successful in their defence: see Beach Petroleum NL v Johnson (1992) 7 ACSR 203, at 205, per von…