Genman Pty Ltd v Beneficial Finance Corporation

[1990] FCA 529

IN THF FFDPRAT. COTIRT O F ATISTRAI I A	)	No G 213 of 1990
NEW SOUTH WALES DISTRICT REGISTRY	1
GENERAL DIVISION	)

BETWEEN:	GENMAN PTY LIMITED
First Appl~cant
JACOUES BONNET Sccond Applicant
BENEFICIAL FINANCE CORPORATION
Respondenl

-:	Davies J.
Date:
-	17 August 1990
Place	Sydney

REASONS FOR JUDGMENT
EX TEMPORE

These procccdings were initiated in April in the name of Jean New~ngton, the Official Receiver in Bankruptcy, Genman Proprietary Limited ("Genman") and Jacques Bonnct. At the time Jean Newington was, and still is, a bankrupt

Corporation Limitcd CBeneiicial Finance") for an order that there bc security for costs. I t is

After thc proceedings were instituted it appeared that the Official Rece~ver had not

agreed to the institution of the proceedings and subsequently the names of Jean Newington and of the Official Receivcr were struck out from the proceedings leaving Gcnman and Jacques Bonnct as the appl~canls.

The present application is an appl~catior~ by the respondent, Bcncf~cial Finance

conceded by hlr J. Harris, counsel for Gcnman and Mr Bonnet that Mr Bonnet is impecunious

and that Genman is a two-dollar company which hns not filed a return since 1981.

The subject matter for dispute concerned properties which were held by either MS

Newington, Genman or Mr Bonnet in about 1981. Development took placc on those properties.

I t appears that Benef~cial Finance provided finance and ultimately took possession of the

properties, took steps in relal~on to the development and sold the properties. The dispute arises

out of that matter.

The strength of the case is something that I am unable to judge. Mr Harris has referred

to various matters but it seems to mc that I know too littlc about the matter to be able to form

any view as to the strength of thc claim

The application is put on the footing that Gcnman is impecunious and reliance is placed

upon s.533 of the Comuanies (New South Walec) Code.

The application is brought against hlr Bonnet on the basis of Order 28, rule 3(l)(b),

namely that he is suing not for his own benetit but for the benefit of some other person.

a property which is involved in the dispute and which was in the name of Mr Bonnet, is property	Evidence in favour of that is an affidavit which attaches a search of real property and shows that
over w h ~ c h MS Newington lodged a caveat on the footing that she was the sole beneficial owner. In support of the view that M r Bonnet IS not personally interested, in the sense of having a
beneficial interest in these proceedings, is the fact that othcr proceedings were initiated in the
Court in 1983 by MS Ncwington against Bcnefic~al Finance and that that litigation took place in
the names of Newington and Bencf~cial Finance, apparently without Genman and Mr Bonnet
being parties.

M r Bonnet has not put on an affidavit nor has an affidavit on bchalf of Mr Bonnet and

Gcnman been put on by anyone other than MS Ncwinglon. In this motion, as in earlier motions,

affidavits of MS Newington have been relied upon I am left wit11 the impression that the proccedlngs are being carried on by an und~scharged bankrupt in the name of two parties who

have little or no personal interest in the procecdings

I t seems to me that the matter calls for an order for security of costs. This is not a case

where some individual who has been made impecunious and who has some gcnuinc and real interest in the proceedings is suing, or a case whcre a company has been made impecunious by

action taken by the rcspondcnt.

I propose to make an ordcr that security be granted and that, if it 1s not providcd, thc application be dismissed Holvcver, I think that I should not attempt to deal wlth all thc costs which might arise in the procecdings and I ought to give the parties and MS Newington tlme to look at the matter. If thcre is some appropriate person such as thc Official Trustce who is

prepared to fund the procecdings and take on the matter in the interests of MS Ncwlngton, or

in the inlercsts of creditors, then it ought to procced. I have in mind therefore to limit the order

for costs at the moment, giving the respondent libcrty to apply for a furthcr order a t a

subsequent time.

I order that the applicants provide security for costs in the sum of $15,000, such security to be provided by way of bond in a form to be approved by thc Registrar, thc sccurity to be provided on or before 18 October 1990. 1 rescrvc liberty to the partics to apply with respect to

any problem that may arlsc in tllc working out of that order. I also order that, if that sccurity is not provided, that the application bc dismissed. I rcserve liberty to the respondent to apply

for an ordcr for further security of costs should the proceedings continue and I will adjourn thc

directions hearing untll Monday 22 October at 9.15 I will stay the proceedings otherwise unlil

that tlme I will grant the rcspo~idcnt the costs of the application

I certify that this and thc 3
preceding pages are a true copy
of the reasons for judgment of

the Honourable Mr Justice Davies

Datc 17 August 1990