Dwyer & Maxted v Canning Vale - [2005] SASC 80

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

DWYER & MAXTED v CANNING VALE

Reasons of Judge Lunn a Master of the Supreme Court

11 March 2005

PROCEDURE - COSTS - SECURITY FOR COSTS - PRACTICE MATTERS

Plaintiffs as liquidators pursuing action in their own names to set aside alleged voidable preferences - application by defendant for security for costs - held plaintiffs not nominal plaintiffs under r 100.01(a) - held no special circumstances under r 100.01(e) for security to be ordered - held plaintiffs not shown to be in condition of poverty or impecunious - application dismissed.

DWYER & MAXTED v CANNING VALE
[2005] SASC 80

JUDGE LUNN
Reasons on the Defendant’s Application for Security for Costs

The plaintiffs were appointed joint and several liquidators of Harris Scarfe Limited (“Harris Scarfe”) on 3 January 2002. On 2 April 2004 they instituted this action under s 588FF of the Corporations Act2001 seeking recovery of alleged voidable preferential payments of $723,298.00 made by Harris Scarfe to the defendant. The defendant has filed a defence raising numerous grounds of opposition to the claim.
On 20 December 2004 the defendant issued an application seeking an order under r 100 that the plaintiffs provide security for the defendant’s costs of the action. The plaintiffs have instituted similar actions, inter alia, against KA Australia Pty Ltd trading as Kolotex (Action No. 365/04), Janome Sewing Machine Co. (Aust) Pty Ltd (Action No. 370/04), Chicago Boot Company Pty Ltd (Action No. 371/04), Hanimex Pty Ltd (Action No. 374/04) and Mediactive Pty Ltd (Action No. 372/04). The defendants in each of those actions have taken out similar applications for security for costs. All such applications were heard at the same time as the application in this action and all defendants were represented by the same counsel. My reasons for dismissing the application in this action apply equally to the applications in each of the other actions. There was nothing in the circumstances of any of the other applications which would have produced a different result.
The application is not brought under s 1335(1) of the Corporations Act2001 which only applies where the plaintiff is a corporation. If s 1335 had applied, different considerations would have been relevant. Here both plaintiffs are natural persons, albeit they are suing in their capacities as liquidators appointed pursuant to the Corporations Act2001. It was not disputed that the Court could make orders for costs against the plaintiffs personally, and was most likely to do so if the action was ultimately unsuccessful: re Wilson Lovatt & Sons Ltd [1977] 1 All ER 274 at 285; re Buena Vista Motors Pty Ltd [1971] 1 NSWLR 72 at 75. While the plaintiffs have a right to be indemnified against any such orders for costs out of the assets of Harris Scarfe, the defendant’s right of recovery is not limited to the extent of any such indemnity, and can be enforced against the plaintiffs’ personal estates: re Speedifix Building Products Pty Ltd (1987) 11…

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.

Continue reading Dwyer & Maxted v Canning Vale

Details

AGLC: Dwyer & Maxted v Canning Vale [2005] SASC 80
Case: [2005] SASC 80
Decision Date: 11 March 2005

CaseChat Overview and Summary

The case of Dwyer & Maxted v Canning Vale involves the plaintiffs, acting as liquidators, who are pursuing an action in their own names to set aside alleged voidable preferences. The defendant has applied for security for costs, a matter that was before the court to determine. The court's role was to consider the application under the relevant rules of court, specifically focusing on whether the plaintiffs were nominal plaintiffs and if there were any special circumstances warranting an order for security.

The legal issues before the court centred on the interpretation and application of the relevant rules of court. The court needed to decide whether the plaintiffs qualified as nominal plaintiffs under rule 100.01(a), and if there were any special circumstances under rule 100.01(e) that justified ordering security for costs. Additionally, the court examined whether the plaintiffs were in a condition of poverty or impecuniousness, which could be a factor in the decision-making process.

The court concluded that the plaintiffs did not fall under the definition of nominal plaintiffs as per rule 100.01(a). It also found that there were no special circumstances present that would warrant the ordering of security for costs under rule 100.01(e). Furthermore, the court determined that the plaintiffs were not shown to be in a condition of poverty or impecunious. Given these findings, the court dismissed the defendant's application for security for costs.

Orders