Harlan Personalised Transport Services Pty Ltd v Asian; Pacific Property Investment Pty Ltd and Ors

[2009] VCC 71

IN THE COUNTY COURT OF VICTORIA Revised

(Not) Restricted

AT MELBOURNE

CIVIL DIVISION

Case No. CI-07-02419

HARLAN PERSONALISED TRANSPORT	Plaintiff
SERVICES PTY LTD
v
ASIAN PACIFIC PROPERTY INVESTMENT	Defendants
PTY LTD & ORS

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JUDGE:	HIS HONOUR JUDGE ANDERSON
WHERE HELD:	Melbourne
DATE OF HEARING:	18 February 2009
DATE OF JUDGMENT:	18 February 2009
CASE MAY BE CITED AS:	Harlan Personalised Transport Services Pty Ltd v Asian Pacific Property Investment Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2009] VCC 0071

REASONS FOR JUDGMENT

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Catchwords:  Practice and Procedure – Security for costs – Application by only some
defendants days before trial to start – Application refused

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M T Helman	Michael T Helman
For the First Defendant	Mr P L Ehrlich	Daniel Faigen (Corporate
Counsel)
For the second to fourth  defendants	Balbata & Associates
HIS HONOUR:

1          The trial of the action is due to commence on Monday 23 February 2009. The third and fourth defendants, by summons, filed 30 January 2009, seek an order that the plaintiff provide security for costs in the sum of $70,000.

2          On 29 January 2009, the third and fourth defendants changed solicitors. Their previous solicitors had also acted for the second defendant. The new solicitors have only in the last few days filed a notice that they also represent the second defendant. The second defendant has not filed an affidavit of documents. The parties conducted a mediation last week which was unsuccessful in resolving the dispute. I am therefore required to determine the application for security for costs in circumstances which include:

a.	The fact that this proceeding was issued in June 2007, and a substantial amended statement of claim was filed in September 2007;
b.	There are three interests represented in the proceeding, the plaintiff’s, the first defendant’s and the interests of the second, third and fourth defendants;
c.	The application for security for costs was not made until 30 January 2009 and requests for information about the financial position of the plaintiff were not made before November 2008;
d.	The ASIC records of the plaintiff disclose the existence of charges over the company’s assets which have been in existence since 2002 and 2006;
e.	The second defendant is yet to make discovery of documents;
f.	The parties participated in a recent mediation which, although unsuccessful in resolving the matter, I can assume, indicated a willingness on the part of the parties to attempt to reach resolution.

3          The attitude of the parties today is as follows:

a.	The plaintiff is prepared to proceed with the trial on Monday, although at present there is no discovery by the second defendant and there is the possibility that when and if discovery is provided, there may be documents which affect the capacity of the plaintiff to proceed with the trial. Further, if the plaintiff were required to provide security for the third and fourth defendants’ costs, that some time would be necessary in order for the plaintiff to provide that security;
b.	The first defendant wishes to proceed with the trial on Monday, including the counterclaim by it against the plaintiff. If the proceeding were adjourned with an order for the plaintiff to provide security for the third and fourth defendants, the first defendant would consider that security should also be provided for its costs. It does not presently seek such an order because it wishes to proceed with the trial on Monday;
c.	The second, third and fourth defendants wish the plaintiff to provide security for costs, otherwise apart from the issue of discovery by the second defendant, those parties are ready for trial. Though counsel for these defendants has no instructions, there would appear to be no reason why the first defendant could not immediately provide discovery to the plaintiff.

4          Apart from the pressure of the trial date, this does seem to me to be a case where there is some basis for the claim that security for costs should be provided by the plaintiff. The information that has been provided about the plaintiff’s financial affairs since November 2008 has been sparse and unsatisfactory. It has culminated with material attached to an affidavit sworn today by Mr Jorre, the sole director and shareholder of the plaintiff. The affidavit, exhibits profit and loss statements for the financial years 2004 -2005 through to 2007-2008. It is not clear what is the status of these documents. They certainly do not include the balance sheet of the company, and the only information about assets and liabilities is to be deduced from the registration details relating to vehicles which apparently are part of the assets of the plaintiff, valuation of those vehicles (non-sworn valuation prepared April 2008) and a statement that the amount owing in respect of the vehicles is “approximately $270,000”. The ASIC records refer to two charges. One is a fixed charge and the other is described as a “fixed and floating charge”. There is no explanation given in Mr Jorre’s affidavit as to why details of these liabilities have not been given. Further, it is also clear from the fact that Mr Jorre is the sole director and shareholder of the plaintiff that he is apparently funding the litigation. No information was provided by him in his affidavit as to his own personal means. Although Mr Jorre says that “the actions of the defendants have cause the company financial hardship”, the circumstances of the claim as disclosed by the pleadings do not make it obvious why this is necessarily so.

5          Notwithstanding these matters, I do not consider it appropriate to order security for costs at this stage of proceedings, days before the matter is fixed for trial. The situation would probably be different if application had been made by the defendants at an earlier date, or if the trial date was fixed at some stage in the future. It follows therefore, that if, for some reason, the trial date were to be adjourned, that there would be a basis for reconsidering the application by the third and fourth defendants and any applciaiton by the first defendant for security for costs. I am conscious that this proceeding has been on foot for a considerable time. Earlier trial dates have been vacated. I have not gone into the history of the earlier interlocutory stages of the proceeding or the reasons for earlier vacations of trial dates, and it may be that these matters have occurred without any fault on the part of the plaintiff.

6          In the circumstances, I consider that the most appropriate course of action is to:

a.	Confirm the trial date;
b.	Order the second defendant to forthwith make discovery;
c.	Make declaratory orders which alert the trial judge to the possibility that discovery by the second defendant may affect the plaintiff’s ability to proceed with the trial, and to the fact that if the trial were to be adjourned, that reconsideration may need to be given to the application for security for costs and any further application that might be brought by the first defendant.

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I certify that these 3 pages are a true copy of the reasons for decision of His Honour

Judge Anderson delivered on 18 February 2009.

Dated: 26 February 2009.

Julien Lowy

Associate to His Honour Judge Anderson