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Energy Drilling Inc v Petroz NL

Energy Drilling Inc v Petroz NL

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Re: ENERGY DRILLING INC.
And: PETROZ N.L.; PACIFIC SUPPLIER INC.; ENSEARCH CHARTERING PTY.
LIMITED and ZWEITE BETEILIGUNGSGESELLSCHAFT DAMMTORWALL mbh
No. G 1361 of 1988
FED No. 184
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Gummow J.(1)

CATCHWORDS

Practice and Procedure - Security for costs - applicant incorporated outside Australia - s. 56 (1) of Federal Court of Australia Act 1976 and Order 28 Rule 3 (1) of the Federal Court Rules - observations on matters relevant to exercise of discretion.

Trade Practices Act 1974

Federal Court of Australia Act 1976

Bell Wholesale Co. Ltd. v Gates Export Corporation (1984) 2 FCR 1

Cameron's Unit Services Pty. Ltd. v Kevin R. Whelpton & Associates (Australia) Pty. Ltd. (1986) 13 FCR 46

DSQ Property Co. Ltd. v Lotus Cars Ltd. (1987) 1 WLR 127

Porzelack KG v Porzelack (UK) Ltd. (1987) 1 WLR 420

Lord Aldborough v Burton (1834) 2 My. & K. 401; 39 ER 997

Ogilvie v Herne (1805) 11 Ves. Jun. 598; 32 ER 1220

Redondo v Chaytor (1879) 4 QBD 453

Crozat v Brogden (1894) 2 QB 30

In re T. Donnelly, deceased (1927) 44 WN (NSW) 72

Willey v Synan (1935) 54 CLR 175

Lines v Tana Pty. Ltd. (1987) VR 641

Elna Australia Pty. Ltd. v International Computers (Aust.) Pty. Ltd. (1987) 14 FCR 461

Kent Heating Ltd. v Cook-on Gas Products Pty. Ltd. (1984) 59 ALR 277

Barton v Minister for Foreign Affairs (1984) 2 FCR 463

CBS Records Australia Ltd. v Telmak Teleproducts (Aust.) Pty. Ltd. (1987) 72 ALR 270

HEARING

SYDNEY

#DATE 3:5:1989

Counsel and Solicitors for M.A. Pembroke Esq.
the Applicant: instructed by

Messrs. Hunt & Hunt.

Counsel and Solicitors for P.M. Biscoe Esq.
the First, Second and instructed by
Third Respondents: Messrs. Phillips Fox.

ORDER

The applicant provide security for costs of the first, second and third respondents in the amount of $20,000 in a form agreed between the solicitors for the parties, failing which in a form acceptable to the District Registrar.

Liberty be granted to the first, second and third respondents to apply to seek further security in respect of the prosecution of the proceedings after discovery and inspection of documents.

The proceedings be stayed until Order (1) has been complied with.

The costs of the present motion be costs in the substantive proceedings.

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

JUDGE1

This is a motion by the first, second and third respondents seeking an order that the applicant provide security for their costs in such sum as the Court considers appropriate.

This motion was heard on 29 April 1989, immediately after, on the motion of the fourth respondent, an order had been made dismissing the proceedings against the fourth respondent.
The applicant is duly incorporated in the Republic of Liberia. So is the second respondent. The first and third respondents are incorporated in the Australian Capital Territory.
Sub-section…

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: [1989] FCA 184
Decision Date: 03 MAY 1989

CaseChat Overview and Summary

Energy Drilling Inc, an entity incorporated outside Australia, sought to bring proceedings against Petroz NL, along with two other defendants, in the Federal Court of Australia. The nature of the dispute involved significant allegations and the applicant sought security for costs from the respondents, in line with statutory provisions and court rules governing such matters.

The primary legal issues before the court were whether the statutory and rule-based requirements for security for costs applied to an applicant incorporated outside Australia and, if so, what the appropriate exercise of discretion would be in the circumstances of this case. The court needed to interpret sections 56(1) of the Federal Court of Australia Act 1976 and Order 28 Rule 3(1) of the Federal Court Rules to determine the scope and application of these provisions.

The court found that the statutory provisions and court rules indeed applied to the applicant, given its incorporation outside Australia. The court emphasised the need for a cautious exercise of discretion when considering security for costs in such cases, taking into account the potential financial implications for the applicant and the respondents. The court determined that the applicant should provide security for the costs of the first, second, and third respondents in the amount of $20,000. Additionally, the court granted liberty to the respondents to apply for further security after the discovery and inspection of documents, and it stayed the proceedings until the applicant complied with the security requirement. The costs of the present motion were ordered to be costs in the substantive proceedings.

Orders

Orders of the court

The applicant provide security for costs of the first, second and third respondents in the amount of $20,000 in a form agreed between the solicitors for the parties, failing which in a form acceptable to the District Registrar.

Liberty be granted to the first, second and third respondents to apply to seek further security in respect of the prosecution of the proceedings after discovery and inspection of documents.

The proceedings be stayed until Order (1) has been complied with.

The costs of the present motion be costs in the substantive proceedings.

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

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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