Get Tonic Pty Ltd v Pocket Health Pty Ltd

The case of Get Tonic Pty Ltd v Pocket Health Pty Ltd involved a dispute between the plaintiff, Get Tonic, and the defendants, Pocket Health and others, regarding the amount and nature of security for costs in civil proceedings. Get Tonic had offered $140,000 in the form of company and personal guarantees, but the defendants argued that this amount was inadequate given the poor prospects of the claim. The case also addressed the issue of discovery and inspection of documents, specifically whether certain financial documents relating to Get Tonic's current trading were directly relevant to the allegations in the pleadings.

The court considered the relevant statutory and procedural provisions, particularly sections 1335 of the Corporations Act 2001 (Cth) and Rule 672 of the Uniform Civil Procedure Rules 2005 (Qld). It noted that the threshold for requiring security for costs was met, as Get Tonic did not contest the requirement and had offered security. The court then turned to the discretionary factors relevant to whether security should be ordered. It considered the offer of guarantees by the directors of Get Tonic as a discretionary factor in favour of not ordering security, given the principle established in Harpur v Ariadne that the purpose of ordering security is to prevent those standing behind a plaintiff company from protecting their own assets. The court also noted that the parties had provided different estimates of the past and future costs, and it was not possible to resolve these differences on the evidence.

The court ordered that security be provided in the sum of $140,000 for the costs of the defendants up to and including the first day of trial, by way of a deed of guarantee given by the directors of Get Tonic. It also ordered that Get Tonic provide disclosure of certain documents relating to its current trading, as these were directly relevant to the allegations in the pleadings. The parties were given liberty to apply if the terms of the deed could not be agreed, and the court reserved the question of costs for further consideration.

The final orders were that Get Tonic provide security in the form of a deed of guarantee for $140,000, that Get Tonic disclose certain documents relating to its current trading, and that the parties be heard on the question of costs.