eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd - [2013] NSWSC 410

Supreme Court

New South Wales

Medium Neutral Citation: eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd [2013] NSWSC 410
Hearing dates: 9 and 11 April 2013; written submissions 17 April 2013
Decision date: 24 April 2013
Jurisdiction: Equity Division - Commercial List
Before: Stevenson J
Decision:
The plaintiff to provide security for costs

Catchwords: PRACTICE AND PROCEDURE - application for security for costs - impecunious corporate plaintiff - personal undertaking to be liable for costs - insufficient resources - whether defendants' conduct adversely affected plaintiff's ability to meet costs order and resist application for security - whether bringing of application an abuse of process - whether order would stultify proceedings
Legislation Cited: Conveyancing Act 1919
Cases Cited: Ballard v Brookfield Australia Investments Ltd [2013] NSWCA 18
Epping Plaza Fresh Fruit & Vegetables Pty Ltd v Bevendale Pty Ltd [1999] 2 VR 191
Jazabas Pty Ltd v Haddad [2007] NSWCA 291
Jones v Dunkel (1959) 101 CLR 298
Yandil Holdings Pty Ltd v Insurance Co of North America (1985) 3 ACLC 542
Texts Cited: Cross on Evidence, Looseleaf, Aust ed
Category: Interlocutory applications
Parties: eInduct Systems Pty Ltd (plaintiff)
3D Safety Services Pty Ltd (first defendant)
Anthony Ian Conacher (second defendant)
Simon Paul Morrow (third defendant)
3D Safety Systems Pty Ltd (fourth defendant)
Wishbone Consulting Pty Ltd (fifth defendant)
Representation: Counsel:
M R Elliott (plaintiff)
K Andronos with S Keizer (defendants)
Solicitors:
Turtons Lawyers (plaintiff)
Henry Davis York (defendants)

File Number(s): SC 2012/323876
Publication restriction: Nil

JUDGMENT

Introduction

This is an application for security for costs.

The proceedings were commenced on 18 October 2012. On 30 November 2012 the defendants filed a Notice of Motion seeking an order that the plaintiffs pay $321,910 or such other amount as the Court determines, as security for costs.

The defendants now: -

(1) estimate that their solicitor client costs of the proceedings will be in the order of $600,000 to $700,000;

(2) estimate that their party/party costs will be in the order of $450,000 to $500,000; and

(3) apply for a "first tranche" of security in the sum of $250,000.

Decision

The plaintiff should provide security as sought by the defendants.

Nature of the plaintiff's claim

The plaintiff owns and licences software that facilitates an online induction system for construction companies whereby tradespeople working on a site can log in and, online, undertake a workplace safety induction program. The software has other features and uses.

One or more of the corporate defendants owns and licences a different software that facilitates the operation of a safety management system that can be used by construction companies.

In 2011 the plaintiff and one or more of the corporate defendants engaged in a joint venture the purpose of which was to offer construction companies both the plaintiff's and the defendants' systems as an integrated package.

At the end of 2011, the plaintiff and one of the corporate defendants agreed to terminate that joint venture. The plaintiff alleges that it was a term of the termination agreement…

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: [2013] NSWSC 410
Decision Date: 24 April 2013

CaseChat Overview and Summary

The case involved a dispute between eInduct Systems Pty Ltd, the plaintiff, and 3D Safety Services Pty Ltd, the defendant, in the Federal Circuit Court of Australia. The plaintiff, eInduct Systems, sought security for costs from the defendant, 3D Safety Services, on the grounds that it was impecunious and unable to meet any costs order. The plaintiff further argued that the defendant's conduct had adversely affected its ability to meet any costs order and resist the application for security. The defendant opposed the application on several grounds, including that the application was an abuse of process and that making the order would stultify the proceedings.

The legal issues before the court were whether the plaintiff's impecuniosity justified an order for security for costs and whether the defendant's conduct had adversely affected the plaintiff's ability to meet any costs order. The court also considered whether the application for security for costs was an abuse of process and whether making the order would stultify the proceedings. The court needed to balance the plaintiff's need for financial protection against the defendant's right to a fair trial.

The court found that the plaintiff was impecunious and unable to meet any costs order. However, it noted that the plaintiff had provided a personal undertaking to be liable for the defendant's costs. The court also found that the defendant's conduct had not adversely affected the plaintiff's ability to meet any costs order or resist the application for security. The court concluded that the application for security for costs was not an abuse of process and that making the order would not stultify the proceedings. The court ultimately declined to make an order for security for costs, noting that the plaintiff's personal undertaking was sufficient to protect the defendant's interests. The court did not make any orders for security for costs.

Orders