Gurtler v Finance Now Pty Ltd - [2009] FCA 631

FEDERAL COURT OF AUSTRALIA
Gurtler v Finance Now Pty Ltd [2009] FCA 631
PRACTICE AND PROCEDURE - applications by respondents to vary an order for security for costs - whether material change of circumstances - relevance of discovery obligation, joinder of parties and re-pleading.
Corporations Act 2001 (Cth), s 1335
Federal Court of Australia Act1976 (Cth), s 56
Federal Court Rules Order 28 rule 3
Bell Wholesale Co Ltd v Gates Export Corporation (No 2) (1984) 2 FCR 1
Capital Webworks Pty Ltd v Adultshop.com.Limited [2002] FCA 1420
Crypta Fuels Pty Ltd v Svelte Corp Pty Ltd (1995) 19 ACSR 68
Chapman v Luminis Pty Ltd [2002] FCA 496
Darling Harbourside (Sydney) Pty Ltd v Sanirise Pty Ltd (unreported, Beaumont, Carr, Sackville JJ, 17 May 1996)
January Force Pty Ltd v Tricon Restaurants Australia Pty Ltd [1999] FCA 1746
Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2001] FCA 1603
Winnote Pty Ltd (In Liq) v Page (2005) 64 NSWLR 244
Wyong-Gosford Progressive Community Radio Inc v Australian Communications Media Authority (No 2) [2006] FCA 1043
CHRISTOPHER GURTLER and LOANPOS LIMITED (IN LIQUIDATION) (ACN 091 687 615) v FINANCE NOW PTY LTD (ACN 102 197 973), KOSTA PATSAN and MALCOLM BLIGH TURNBULL
WAD 222 of 2005
GILMOUR J
15 JUNE 2009
PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

WAD 222 of 2005

BETWEEN:
CHRISTOPHER GURTLER
First Applicant

LOANPOS LIMITED (IN LIQUIDATION) (ACN 091 687 615)
Second Applicant

AND:
FINANCE NOW PTY LTD (ACN 102 197 973)
First Respondent

KOSTA PATSAN
Second Respondent

MALCOLM BLIGH TURNBULL
Third Respondent

JUDGE:

GILMOUR J

DATE OF ORDER:

15 JUNE 2009

WHERE MADE:

PERTH

THE COURT ORDERS THAT:
1.The orders providing for security for costs contained in paragraphs 5.2 and 5.3 of the orders made by Justice Lee on 9 December 2005 be vacated.
2.In addition to the order providing for security for costs contained in paragraph 5.1 of the orders made by Justice Lee on 9 December 2005, the first and second applicants together provide the first and third respondents security for costs by way of Bank Guarantee in a form to be agreed between the parties and if not agreed in a form acceptable to the Registrar in two tranches as follows:
(a) $350,000 within 7 days;
(b) $200,000 within 7 days of the proceeding being listed for trial.
3.In addition to the order providing for security for costs contained in paragraph 6 of the orders made by Justice Lee on 9 December 2005, the first and second applicants together provide the second respondent’s security for costs by way of Bank Guarantee in a form to be agreed between the parties and if not agreed in a form acceptable to the Registrar in two tranches as follows:
(a)$100,000 within 7 days; and
(b)$50,000 within 7 days of the proceeding being listed for trial.

4.If the Bank Guarantee ordered to be provided pursuant to Orders 2(a) and 3(a) above is not provided by the applicants by…

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: [2009] FCA 631
Decision Date: 15 June 2009

CaseChat Overview and Summary

Gurtler v Finance Now Pty Ltd involves a dispute over security for costs in a legal proceeding. The respondents, Finance Now Pty Ltd and others, sought additional security for costs from the applicants, Gurtler and others. The court was required to determine the reasonableness of the amounts sought for the security and whether the applicants should provide further security as requested. The court also considered the applicants' contention regarding the allocation of costs in respect of the security for costs.

The court found that the amounts sought for security for costs were reasonable and that the applicants should provide additional security in the form of Bank Guarantees. The court ordered the applicants to provide the security in two tranches, with specific deadlines for each payment. If the applicants failed to meet these deadlines, the proceedings would be stayed until the security was provided. The court also addressed the issue of confidentiality and redacted materials, setting out a process for the parties to negotiate these matters and referring unresolved disputes to the court for determination.

The court made several orders, including vacating certain previous orders regarding security for costs and imposing new orders for Bank Guarantees. The court also set out a process for the parties to negotiate and resolve disputes over confidentiality and redacted materials, with a directions hearing scheduled for further proceedings. The costs related to the orders concerning confidentiality and redacted materials were to be in the cause, while the costs of the motion for security for costs were to be borne by the applicants.

This decision provides clarity on the security for costs requirements in the case and sets out a clear process for addressing issues of confidentiality and redacted materials, ensuring that the legal proceedings can continue in an orderly and efficient manner.

Orders

Orders of the court

1. The orders providing for security for costs contained in paragraphs 5.2 and 5.3 of the orders made by Justice Lee on 9 December 2005 be vacated.

2. In addition to the order providing for security for costs contained in paragraph 5.1 of the orders made by Justice Lee on 9 December 2005, the first and second applicants together provide the first and third respondents security for costs by way of Bank Guarantee in a form to be agreed between the parties and if not agreed in a form acceptable to the Registrar in two tranches as follows:

(a) $350,000 within 7 days;

(b) $200,000 within 7 days of the proceeding being listed for trial.

3. In addition to the order providing for security for costs contained in paragraph 6 of the orders made by Justice Lee on 9 December 2005, the first and second applicants together provide the second respondent’s security for costs by way of Bank Guarantee in a form to be agreed between the parties and if not agreed in a form acceptable to the Registrar in two tranches as follows:

(a) $100,000 within 7 days; and

(b) $50,000 within 7 days of the proceeding being listed for trial.

4. If the Bank Guarantee ordered to be provided pursuant to Orders 2(a) and 3(a) above is not provided by the applicants by 22 June 2009, these proceedings, including the operation of Orders 6 to 14 of these Orders, be stayed until those Bank Guarantees are provided.

5. If the Bank Guarantees ordered to be provided pursuant to Orders 2(b) and 3(b) are not provided by the applicants within 7 days of the proceedings being listed for trial, these proceedings be stayed until those Bank Guarantees are provided.

Confidentiality and Redacted Materials – Negotiation by the parties

6. The solicitors for each respondent, by email to the applicants’ solicitors to be delivered by 29 June 2009:

(a) identify each document a respondent still wishes to be treated as confidential for the purposes of paragraph 4 of the orders made on 27 August 2008;

(b) in relation to each document so identified, state the grounds and material facts on which the respondent contends the document should not be divulged to the applicants, their advisers and witnesses;

(c) provide copies to the applicants of all documents which previously contained redacted material but no longer contain redacted material;

(d) identify each document still containing redacted material, other than documents with portions masked pursuant to paragraph 5 of the orders made on 27 August 2008; and

(e) in relation to each document still containing redacted material, other than documents with portions masked pursuant to paragraph 5 of the orders made on 27 August 2008, state the grounds and material facts on which the redacted material in each document is alleged to be privileged.

7. The solicitors for the applicants, by email to the respondents’ solicitors to be delivered by 6 July 2009:

(a) identify each document, identified by a respondent as confidential, which the applicants contend should be divulged to the applicants, their advisers and witnesses;

(b) in relation to each document so identified, state the grounds and material facts on which the applicants contend the document should be divulged to the applicants, their advisers and witnesses; and

(c) in relation to each document still containing redacted material, other than documents with portions masked pursuant to paragraph 5 of the orders made on 27 August 2008, for which the applicants dispute the redaction, state the grounds and material facts for that dispute.

8. The solicitors for the parties confer on a “without prejudice” basis by telephone by 9 July 2009 and endeavour to resolve all differences (if any) then remaining as to confidentiality and redacted material.

Confidentiality and Redacted Materials - Referral to the Court

9. If following the telephone conference provided for in Order 8, the parties remain in dispute as to confidentiality or redacted material, the applicants to notify the party who gave discovery of the document by email no later than 15 July 2009, identifying the documents still under dispute by reference to the document identification number and whether the dispute is in relation to confidentiality or redaction.

10. In relation to each document remaining in dispute after 15 July 2009 as to confidentiality or redacted material:

(a) by 22 July 2009 the respondent file and serve:

(i) written submissions not exceeding 10 pages,

(ii) any further affidavit in support, and

(iii) an indexed book containing a copy of each such document which the respondent contends should not be divulged to the applicants, their advisers and witnesses on grounds of confidentiality;

(b) by 22 July 2009 the respondent file but not serve an indexed book in an envelope, to be marked with the words “Confidential and Privileged - Not to be opened without Court Order or written consent of all parties”, containing a copy of each document which the party contends contains privileged material, with that material clearly identified;

(i) written submissions not exceeding 10 pages, and

(ii) any further affidavit in support.

11. Any dispute as to confidentiality and redacted material thereafter be determined by the Court on the papers.

12. Exhibit “A” to the affidavit of Andrew John Mason sworn 26 March 2009 be placed in a sealed envelope to be marked with “Confidential - Not to be opened without Court Order or written consent of the First and Third Respondents”.

13. Until further order the book of documents containing allegedly privileged material and exhibit “A” to the affidavit of Andrew John Mason sworn 26 March 2009 are not to be accessed by any person except a judicial officer of this Court or the first or third respondent or their legal representatives, and there be liberty to apply in that regard.

Directions hearing

14. There be a directions hearing at 9.30 am on 10 September 2009.

Costs

15. The first and second applicants pay the first and third respondents’ costs of the motion for security for costs.

16. The first and second applicants pay the second respondents' costs of the motion for security for costs.

17. The costs related to these orders which concern confidentiality and redacted materials are to be in the cause.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

GILMOUR J

He adopts otherwise the submissions made by Finance Now and Turnbull to the extent that they are relevant to his position. CONCLUSION It seems to me appropriate that further security be provided to the respondents. I am satisfied that the amounts sought for the several tranches in respect of Finance Now and Turnbull together, and Patsan are reasonable. There will be orders on the motion in terms of the respondents’ revised short minute of proposed orders subject to some minor amendments sought by the respondents. OTHER ORDERS There will also be orders in terms of that minute concerning a regime for negotiation concerning confidentiality and redacted materials agreed to by the parties, other than as to costs. As to costs the applicants submit that they should have their costs in this respect. The respondents say that they are taken by surprise on that question and do not accept the applicants’ contention as correctly setting out the relevant background. It seems to me that justice is best served in these circumstances that the costs in this respect be in the cause.

Ratio Decidendi

Legal Principle Established

Established by: GILMOUR J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 222 of 2005

JUDGE:	GILMOUR J
DATE OF ORDER:	15 JUNE 2009
WHERE MADE:	PERTH