Derry Dew Pty Ltd v Mackinlay

[2010] WADC 97

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   DERRY DEW PTY LTD -v- MACKINLAY [2010] WADC 97

CORAM:   REGISTRAR KINGSLEY

HEARD:   14 JUNE 2010

DELIVERED          :   24 JUNE 2010

FILE NO/S:   CIV 2968 of 2008

BETWEEN:   DERRY DEW PTY LTD

Plaintiff

AND

ALISTAIR ROBERT MACKINLAY
Defendant

Catchwords:

Application for security for costs - Issue of how security to be provided

Legislation:

Nil

Result:

Security by payment of $50,000 ordered

Representation:

Counsel:

Plaintiff:     Mr A Houghton

Defendant:     Mr N Beech

Solicitors:

Plaintiff:     Arns & Associates

Defendant:     Mallesons Stephen Jaques

Case(s) referred to in judgment(s):

Harpur v Ariadne Australia Limited [1984] 2 Qd R 523

Rosebridge Nominees Pty Ltd v Commonwealth Bank of Australia & Ors [2004] WASC 60

1. REGISTRAR KINGSLEY:  By an application dated 10 February 2010, the defendant seeks an order that the plaintiff provide security for the defendant's costs up to trial by payment into the Court by the sum of $96,160. 

2. I have already determined on 14 June 2010 that the plaintiff do provide security in the form of $50,000.  The issue now before me is how the security is to be provided. 

3. The purpose behind an order for security is to remedy the mischief where an individual, by conducting their business by the medium of a corporation without assets is able to expose an opponent to a bill of costs without risking their own assets (see Harpur v Ariadne Australia Limited [1984] 2 Qd R 523). Alan Haslett stands behind the plaintiff, Derry Dew Pty Ltd, and has offered to provide security by way of a personal undertaking (Haslett's affidavit sworn 1 April 2010) and by charge over his interest in property at 8 Somerset Street, Forrestfield (Haslett's affidavit sworn 4 June 2010).

4. In his affidavit of 4 June 2010 Haslett's deposes that he has requested advice from the customer relations manager of the Bendigo Bank (High Wycombe branch).  Haslett deposes the Bank would agree to a bank guarantee provide an amount equal to the amount sought be placed in a term deposit, or the mortgage on the house being refinanced. 

5. Haslett deposes that in order to finance the Bank guarantee he would be required to either:

   •draw down on his superannuation;

   •refinance the mortgage on his house. 

6. Haslett also appears to have a shareholding as he deposes to the value of his shares and superannuation having decreased as a result of the global financial crisis.  Whilst Haslett has not deposed to the value of his assets, in a letter dated 6 November 2009 from his solicitors to the defendant's solicitors it appears:

   •Mr Haslett's income is $120,000 per annum.

   •He is a joint owner of 8 Somerset Street, Forrestfield which is estimated to be worth $350 – 400,000. 

   •The property is encumbered by a loan of approximately $90,000.

   •Mr Haslett owns shares valued at $50,000 (approximately). 

   •Mr Haslett has superannuation valued at $110,000. 

7. In my opinion Mr Haslett as the director of the plaintiff stands to benefit from the litigation.  As a corollary to that benefit Mr Haslett, in some form, has agreed to accept personal liability for any judgment for costs. 

8. I have considered Rosebridge Nominees Pty Ltd v Commonwealth Bank of Australia & Ors [2004] WASC 60 where an order for security for costs was made which included a personal guarantee of one of the directors being served over property. However in the Rosebridge case there was evidence of the value of the property and of the existence of agreements in relation to the land.  In the present action there is no evidence of the value of the land. 

9. I am of the opinion the appropriate order is for the sum of $50,000 to be paid into Court, or alternatively paid into an interest bearing account in the joint names of the solicitors for the plaintiff and defendant. 

10. To formalise this order I have relisted the chamber summons and the issue of costs for on 28 June at 2.45 pm.