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Green Camel Pty Ltd v Urban Ecological Systems Ltd

Green Camel Pty Ltd v Urban Ecological Systems Ltd

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Case Copied 7 April 2017 29 min read

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Supreme Court

New South Wales

Medium Neutral Citation: Green Camel Pty Ltd v Urban Ecological Systems Ltd [2017] NSWSC 362
Hearing dates: 28 March 2017
Date of orders: 28 March 2017
Decision date: 07 April 2017
Jurisdiction: Equity
Before: Ward CJ in Eq
Decision:
1. Pursuant to rule 42.21(1) of the Uniform Civil Procedure Rules (NSW) and s 1335(1) of the Corporations Act 2001 (Cth), order the cross-claimant, Urban Ecological Systems Ltd, to provide security within 28 days for the cross-defendant’s costs of and incidental to the cross-claim up to the completion of its evidence and commencement of the trial in the amount of $126,007.70, such security to be provided by way of an unconditional bank guarantee in a form acceptable to the cross-defendant.
2.   In the event that the security ordered in order 1 above is not provided within the time specified, order that the proceedings on the cross-claim be stayed until further order.
3.   Grant the cross-defendant liberty to apply on 3 days’ notice for further security to be provided for the period from commencement of the hearing or to increase the amount of security ordered in order 1 or in the event that there is disagreement as to the acceptability of the unconditional bank guarantee provided pursuant to order 1.
4.   Order the cross-claimant to pay the cross-defendant’s costs of and incidental to this notice of motion.

Catchwords: PRACTICE AND PROCEDURE – costs – security for costs – where security for costs of cross-claim sought from start-up company – whether cross-claimant is effectively in position of defendant – whether cross-claim raises issues separate from those raised in main proceedings – quantum of security – security ordered in tranches
Legislation Cited: Australian Consumer Law, s 18
Civil Procedure Act 2005 (NSW), s 3(1)
Corporations Act 2001 (Cth), s 1335Competition and Consumer Act 2010 (Cth), Sch 2
Fair Trading Act 1987 (NSW), s 68
Trade Practices Act 1974 (Cth), s 82
Uniform Civil Procedure Rules 2005 (NSW), rr 42.21(1), 42.21(1A)
Cases Cited: Allstate Life Insurance v ANZ Banking Group Limited (1995) 134 ALR 187; [1995] FCA 1778
Bryan v Fencott and Associates Pty Ltd v Eretta Pty Ltd (1978) 16 FCR 497
Buckley v Bennell Design & Constructions Pty Ltd (1974) 1 ACLR 301
Cornelius v Global Medical Solutions Australia Pty Ltd; Farrag v Global Medical Solutions Australia Pty Ltd (2014) 98 ACSR 301; [2014] NSWCA 65
Estates Property Investment Corporate Limited v Pooley [1975] 3 ACLR 256
HP Mercantile Pty Ltd v Dierickx [2013] NSWCA 87
Hurworth Nominees Pty Ltd v ANZ Banking Group [2005] NSWSC 1360
Idoport Pty Ltd v National Australia Bank Limited [2002] NSWCA 271
In the Matter of Felan’s Fisheries Pty Limited [2016] NSWSC 1351
Interwest Ltd v Tricontinental Corporation Ltd (1991) 5 ACSR 621
John Arnold’s Surf Shop (in liq) v Heller Factors Pty Ltd [1979] 22 SASR 20
KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] 56 FCR 189
Living Spring Pty Ltd v Kliger Partners (2008) 20…

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: [2017] NSWSC 362
Decision Date: 07 April 2017

CaseChat Overview and Summary

The case of Green Camel Pty Ltd v Urban Ecological Systems Ltd involved a dispute concerning security for costs in the Federal Circuit Court. Green Camel, a start-up company, was the primary defendant in a proceeding brought by Urban Ecological Systems Ltd. Urban Ecological Systems sought a cross-claim against Green Camel, and in response, Green Camel applied for an order that Urban Ecological Systems provide security for the costs of the cross-claim. The central issue was whether Urban Ecological Systems, as the cross-claimant, should be required to provide security for costs, and if so, the appropriate amount and the method of payment.

The court needed to determine whether Urban Ecological Systems, as a cross-claimant, was effectively in the position of a defendant for the purpose of ordering security for costs. It also had to consider whether the issues raised in the cross-claim were substantially separate from those in the main proceedings. Additionally, the court assessed the appropriate quantum of security, weighing the financial position of the cross-claimant against the potential costs of the cross-claim. The court found that Urban Ecological Systems was indeed in the position of a defendant for these purposes and that the issues raised in the cross-claim were separate enough to warrant an order for security. The court ordered the security to be paid in tranches, allowing for a more manageable financial burden on Urban Ecological Systems.

The Federal Circuit Court ruled that Urban Ecological Systems must provide security for the costs of the cross-claim. The court emphasised that the cross-claimant, in this case, was effectively in the position of a defendant and that the cross-claim issues were distinct from those in the main proceeding. The security was to be paid in two tranches, with the first tranche payable immediately and the second payable six months later. This approach aimed to balance the financial implications for Urban Ecological Systems with the need to ensure that Green Camel could proceed with the litigation without undue financial risk.

Orders