DJ Fry Developments Pty Ltd v Permanent Mortgages Pty Limited

In the case of DJ Fry Developments Pty Ltd v Permanent Mortgages Pty Limited, the plaintiff, DJ Fry Developments, sought to develop land into residential lots and took out a loan from the first defendant, Permanent Mortgages, which was managed by La Trobe Financial. The plaintiff alleged that the defendant failed to properly advertise the property as having development approval, which resulted in the plaintiff defaulting on the mortgage prior to commencing development. The plaintiff sought summary judgment against the defendant for their alleged failure to properly discharge their duties in relation to their power of sale as mortgagee. The court was required to decide whether summary judgment should be granted and if the plaintiff should provide security for the defendant's costs of and incidental to the proceeding up to the first day of the trial.

The court considered the principles governing an application under Rule 292 of the Uniform Civil Procedure Rules 1999, which provides for summary judgment for the plaintiff. The court noted that the plaintiff must demonstrate that there is no real prospect of the defendant successfully defending the claim and that there is no need for a trial of the claim or part of the claim. The court found that many of the allegations between the parties were admitted and that there was no contest as to the relationship between the parties and their business transactions. However, the court found that there were genuine issues of fact and law that needed to be resolved at trial and that there was a real prospect that the defendant could successfully defend the claim. The court also found that the plaintiff and directors of the plaintiff claimed to be impecunious and that any order for security for costs would stifle litigation. However, the court found that the defendants had a real prospect of succeeding in their claim for indemnity costs and that security for costs should be ordered.

The court dismissed the plaintiff's application for summary judgment and ordered that the plaintiff provide security for the defendants' costs of and incidental to the proceeding up to the first day of the trial in the amount of $100,000.00, by way of payment into Court by 31 January 2022. The court further ordered that if the security requested was not provided, the proceeding was stayed until the security was provided. The court also ordered that the plaintiff pay the defendants' costs on the standard basis in respect of both the application filed by the defendants on 23 August 2021 and the application filed by the plaintiff on 1 October 2021.