H and R Management Consulting Pty Ltd v Bickford

[2010] QSC 144

SUPREME COURT OF QUEENSLAND

CITATION:

H & R Management Consulting Pty Ltd v Bickford & another [2010] QSC 144

PARTIES:

H & R MANAGEMENT CONSULTING PTY LTD
ACN 085 377 000
(plaintiff)
v
JOHN LINDSAY BICKFORD
(first defendant)
and
RUSSELL AND COMPANY
(second defendant)
and
KENNETH IAN FOOTE
(third defendant)
and
TERRY GRANT VAN DER VELDE
(fourth defendant)
and
PAUL DESMOND SWEENEY
(fifth defendant)
and
KESKAY PTY LTD (IN LIQUIDATION)
ACN 010 849 788
(sixth defendant)

FILE NO/S:

BS 6644 of 2003

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

22 April 2010

DELIVERED AT:

Brisbane

HEARING DATE:

22 April 2010

JUDGE:

Daubney J

ORDER:

1.    There will be orders in terms of the amended draft that I now initial and place with the papers.

CATCHWORDS:

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER RULES OF COURT – JUDGMENTS AND ORDERS – where security for costs orders for the first and second defendant’s costs were made by this Court and, in one instance, by consent – where the security has not been paid in by the plaintiff – where the plaintiff does not have the funds to meet either of the orders for security for costs – where the plaintiff was unable to point to any special circumstance to support the application – where there is an application by the plaintiff that the security for costs orders be set aside or varied – where there are applications by each of the first and second defendants for the proceedings to be struck out by reason of the plaintiff’s failure to meet the respective orders for provision of further security for costs – whether the security for costs orders should be varied or set aside – whether the proceedings against the first and second defendants should be struck out

Uniform Civil Procedure Rules (1999) Qld, r 5, r 674, r 675

COUNSEL:

SA Briley appeared on behalf of the plaintiff, with leave of the Court
P Roney for the first, fourth and fifth defendants
D Clothier for the second defendants

SOLICITORS:

The plaintiff was self represented
Rodgers, Barnes and Green Lawyers for the first, fourth and fifth defendants
Coyne and Associates for the second defendants

HIS HONOUR:  In May of 2006, this Court made an order by
consent by which the plaintiff was ordered to put up $65,000
by way of security for the second defendant's costs in this
proceeding. That security was provided by the requisite moneys
being paid into Court.

In December 2009, the second defendant made application for
further security to be provided. After a contested hearing
before Margaret Wilson J, her Honour ordered on 14 December
2009 that the plaintiff provide further security for the
second defendant's costs of the proceedings in the amount of
$100,000 with that security to be provided by 21 December
2009. There was no appeal from her Honour's order.

The security which was ordered to be provided by 21 December
2009 has not been paid in by the plaintiff.

Subsequent upon that application by the second defendant, the first defendant on 26 February 2010 made application for the plaintiff to provide further security for costs in respect of the first defendant's costs of the proceeding. At that time, the plaintiff was represented by the firm of solicitors which had represented throughout the proceedings and was also represented by Counsel. The first defendant's application was resolved by agreement, and on 9 March 2010, Philippides J ordered by consent of the parties that the plaintiff provide further security for the first defendant's costs in an amount of $75,000. That further security was to be paid by 15 March 2010.
The plaintiff has not paid that security and shortly after
Philippides J made her order on 9 March 2010, the plaintiff's
solicitors withdrew as the solicitors on the record for the
plaintiff.

There are then a number of applications before me today. One
is an application by the plaintiff under rule 675 seeking that
each of the orders of Margaret Wilson J and Philippides J be
set aside or varied. The other applications are applications
by each of the first defendant and second defendant for the
proceeding against those two defendants to be struck out by
reason of the plaintiff's failure to meet the respective
orders for provision of further security for costs.

The plaintiff was represented at the hearing today by its
director, Ms Briley. The plaintiff is now not legally
represented, and I gave Ms Briley leave, limited solely to
today's appearance, to appear on behalf of the corporate
plaintiff.

Ms Briley frankly conceded on behalf of the plaintiff that the
plaintiff simply did not have the funds to meet either of
these further orders for security for costs. It would seem
that there was a prospect, or perhaps a wish, that a creditor who stands to gain from the outcome of this litigation if the plaintiff is successful would support the plaintiff financially by coming to aid of the plaintiff in enabling these orders for further security for costs to be met. Regrettably for the plaintiff, that assistance has not been forthcoming.

In the course of argument, I sought to elicit from Ms Briley
the statement of the special circumstances upon which the
plaintiff would rely for the purposes of obtaining an order
under rule 675 that each of these orders for security for
costs be set aside or varied. Ms Briley was, with respect,
unable to point me to any change of circumstance between the
time of the making of each of those orders and now such as
would constitute the necessary special circumstances to
enliven an exercise of the jurisdiction under rule 675.

As I discussed with her in the course of argument, that task
was made even more difficult in respect of the order made by
Justice Philippides because that order, made only some six
weeks or so ago, was made with the consent of the plaintiff. In effect, nothing has changed so far as the circumstance of the plaintiff is concerned since the time it consented to that
order six weeks ago. Indeed, as Ms Briley told me, it didn't have the money then to meet the order, and it doesn't have the money now to meet the order.

What Ms Briley did do was focus, both in her written
submission and in her oral submissions to me, on her claims
made on behalf of the plaintiff of injustice. She contends
that the claim has merit. She contends that the matters
alleged in these proceedings raise very serious issues, and
pointed out on several occasions that these are matters which
should be heard and determined for the benefit of the public
at large.

I do not doubt for one minute that Ms Briley genuinely adheres
to those views; but that is not the test which I am required
to apply for the purposes of determining whether or not the
orders for security for costs made by Justice Wilson and
Justice Philippides ought be set aside or varied.

There are, of course, two sides to the coin with which we are
presently concerned. The fundamental reason why security for costs orders are made is because of an apprehension that a plaintiff, if unsuccessful in an action, will not have the wherewithal resources to meet the successful defendant's costs in the proceedings; indeed, so much is clear from the terms of section 1335 of the Corporations Act.

Just is there is a public interest in aggrieved plaintiffs
having their cases heard and determined by the Courts, so too
there is a public interest in ensuring that the Court process
is not misused in anyway by impecunious plaintiffs bringing
proceedings against defendants without there being any concern
on the part of impecunious plaintiffs as to the financial
consequences that flow from their conduct.

It is unnecessary for me to delve further into the philosophy
underlying orders for security for costs because, as I have
said, the orders with which I am presently concerned
were, in the case of Justice Philippides order, made by
consent by the parties and in the case of Justice Wilson's

order, made after her Honour heard a contested hearing in
relation to that application.

It is clearly not appropriate for me on today's application to
embark on some sort of quasi-appeal against the circumstances
under which either of those orders were made or to revisit or
permit re-argument of matters which were, or should have
been, ventilated in those hearings.

As I have said, at the end of the day, the plaintiff has
failed to discharge the requirement under rule 675 of
demonstrating that there are special circumstances in this
case to warrant a setting aside or variation or those orders,
and the plaintiff's application for relief under rule 675 will
be dismissed.

There remains then the applications by each of the first
defendant and the second defendant for the proceeding against
each of those defendants to be dismissed. I have already noted
that the plaintiff has failed to meet either of the orders for
the provision of further security for costs. It is also, with
respect, clear from the admissions frankly made today by
Ms Briley that the plaintiff simply does not have the capacity
to meet those orders.

The best that Ms Briley was able to do was to offer to try and
come up with a time payment plan, with her to attempt over the
next couple of years to save enough money from her own work to
be able to meet these existing orders for the provision of
security for costs. For obvious reasons, it is quite
inappropriate for the Court even to contemplate what would in
effect be a stay of these proceedings for a period of two
years (that being the period of time suggested by Ms Briley)
to enable her to save enough money to put up the money to
cover these orders for security for costs.  That sort of regime would completely cut across the philosophy
underlying the pursuit of litigation in this Court as
manifested in rule 5 of the Uniform Civil Procedure Rules.
There is no suggestion that were I, for example, to give a short extension of time within which the plaintiff could meet the orders for security, that that would serve any useful purpose.

In all the circumstances then, and having regard to what
appears to be the uncontested inability of the plaintiff to
meet these orders for security for costs either now or at any
time within the reasonably short-term future, it seems to me that this is an appropriate case in which an order should be made under rule 674, sub rule (c) for the dismissal of the claims against each of first defendant and the second defendant.

...

HIS HONOUR:  For the reasons I have just given, there will be
an order in terms of the amended draft that I now initial and
place with the papers.

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