Igloo Trading Pty Ltd v TMG Developments Pty Ltd
[2004] FMCA 853
•11 November 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| IGLOO TRADING PTY LTD v TMG DEVELOPMENTS PTY LTD & ORS | [2004] FMCA 853 |
| TRADE PRACTICES – PRACTICE & PROCEDURE – Security for costs – where applicant is an Australian company with no assets – where $9,000 by way of security for costs previously ordered – where further application for security made – where applicant claims to be experiencing difficulty transferring money from South Africa due to exchange control regulations – whether hearing date should be vacated. |
| Applicant: | IGLOO TRADING PTY LTD ACN 102 590 072 |
| First Respondent: | TMG DEVELOPMENTS PTY LTD ACN 038 021 849 |
| Second Respondent: | ROBERT MAGID |
| Third Respondent: | NATALIE HABIB |
| File No: | SYG 1380 of 2004 |
| Delivered on: | 11 November 2004 |
| Delivered at: | Sydney |
| Hearing date: | 11 November 2004 |
| Judgment of: | Raphael FM |
REPRESENTATION
| Solicitors for the Applicant: | Steingold Abel Lawyers |
| Counsel for the Respondent: | Mr B Hull |
| Solicitors for the Respondent: | Malcolm Johns & Company |
ORDERS
Applicant to file and serve an amended statement of claim on or before 12 November 2004.
The Respondents to file and serve their list of documents on or before 16 November 2004.
Inspection of discovered documents to be concluded by 19 November 2004.
Respondents to file and serve their affidavit evidence and amended defence on or before 25 November 2004.
On condition that the respondents comply fully with orders 2 - 4 above, Applicant shall, on or before 26 November 2004, provide the sum of $10,000 by way of further security for costs, the said sum to be paid to the applicant's solicitors to be held by them together with the sum of $9000 previously ordered as security in a controlled money account pending resolution of the proceedings or further order upon the same undertakings as contained in the orders of 6 July 2004.
If the sum of $10,000 is not paid as ordered, proceedings stayed and any hearing date will be vacated.
Hearing date of 24 November and 25 November 2004 vacated.
Hearing to be re-listed by discussion with the associate to Chief Federal Magistrate Pascoe for 3 + days upon a date not before 30 November 2004.
Liberty to apply on 2 days notice.
The costs of the application to be the respondents’ costs in the cause.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1380 of 2004
| IGLOO TRADING PTY LTD ACN 102 590 072 |
Applicant
And
| TMG DEVELOPMENTS PTY LTD ACN 038 021 849 |
First Respondent
| ROBERT MAGID |
Second Respondent
| NATALIE HABIB |
Third Respondent
REASONS FOR JUDGMENT
There comes before me today an application by the respondents to these proceedings for further security for costs from the applicant. On 6 July 2004 I made an order for the payment of $9,000 by way of security and noted that the respondents may make further applications for security as deemed appropriate.
Some time after making orders in the matter on 17 August 2004, it passed out of my docket into that of Chief Federal Magistrate Pascoe. A number of directions hearings have taken place before him including a directions hearing involving a notice of motion brought by the respondents that the applicant provide approximately $43,000 by way of further security for costs. No decision was made in that matter because at the last moment an affidavit was filed by the applicants concerning the ability of persons standing behind the applicant company to make payments from South Africa and the application itself was adjourned, to be heard before me today.
I note at this time that the original orders made by me for the filing of affidavits and provision of discovery were not complied with by either party. The situation as at today's date is that the respondents have not provided discovery although the applicant has. But the respondents have not provided their affidavits although the applicant has but the applicant was late, even according to the amended timetables, for the provision of those affidavits and list.
When the matter first came before me to consider the application for security in July, I took the view that as the applicant was an Australian company, which admittedly had no assets, security for costs should be provided pursuant to the provisions of the Corporations Act. However, I did not feel that the amount requested by the respondents at the time was appropriate for a case to be fought in this court where it is intended that the proceedings should be speedier, simpler and cheaper.
The respondents have filed in support of this application, a detailed affidavit setting out their calculation of the amount to be required by way of security. It is made up of the solicitor and client bills rendered already and an estimate of the cost of bringing the matter to final hearing. I have heard no evidence seriously disputing the figures but by the same token, they are solicitor and client figures and do not bear very much relationship to the type of costs awarded under Schedule 1 of the Federal Magistrates Court Rules. I will not consider ordering a sum as large as that claimed. On the other hand, the financial situation of the applicant company does not appear to have changed.
There was before me today two affidavits. The first by Mr Levinson who is a director of the applicant company and who is resident in South Africa. The purport of that affidavit was that he was unable to forward money from South Africa to Australia for this purpose because of certain exchange control regulations. The second affidavit was from a clerk in the employ of the respondent solicitors who provided by way of annexure a document produced by the Reserve Bank of Australia concerning the exchange control regulations in South Africa and by way of exhibit, a document that appeared to be an exchange control manual issued by the South African Reserve Bank.
Until Mr Carlisle, who appears on behalf of the applicants, objected to the admissibility of the second affidavit, Mr Hull had not objected to the almost completely hearsay affidavit of Mr Levinson, but thereafter he did. The correct situation in law is probably that neither affidavit is appropriately admissible; although in a court which prides itself on its informality, one would have hoped that the assertions of Mr Levinson could have been compared with what appears to be the slightly more official version produced by the respondents. As that was not to be, the situation is I really have no evidence about exchange controls in South Africa. I could have been provided with the relevant law and asked to make my own interpretation but I was not.
I am left in a situation where an Australian company admits in affidavits by its directors that it is without funds. Mr Carlisle does argue that one of the reasons that the applicant is without funds is that the sum of $100,000 deposited by way of security for rent has been taken by the first respondent so that, if the first respondent is successful, there will be a fund available. But the first respondent, if successful, will be entitled to that $100,000 in any event and it would not cover the costs. In all the circumstances, I remain of the view that, having regard to the authorities, most of which have been quoted by Mr Carlisle in his helpful and thorough written submissions, it is appropriate that a further order for security be made.
However, I think it is also appropriate that before the order for security comes into effect, the respondents comply with their obligations under the new timetable that I am about to promulgate. I was told by Mr Hull and provided with an affidavit establishing that Mr Isador Magid, the father of Mr Robert Magid, the second respondent, has died in Melbourne. There is no suggestion that this affidavit is in any way incorrect. It is not unreasonable in those circumstances for Mr Robert Magid to seek the indulgence of the court by way of vacation of the hearing date. As the parties know, I am aware of the situation of the Magid family and I know that Mr Isador Magid was a religious Jew. I can assume that not less than seven days of strict mourning will take place in Melbourne and a further 30 days of mourning will also be imposed upon Mr Robert Magid and his sister.
I believe in all the circumstances, and given the status of the proceedings and the orders which I propose to make, it is right and proper to vacate the hearing date. However, the vacation of the hearing date should only be done if the court can be satisfied that the parties will now make every effort to bring this case to finality by the time the next dates are fixed and that the next dates are fixed within a very short period of time given the constraints to which I have referred. I have therefore made the following consolidated orders which will have effect in place of the orders that are currently on foot.
(1)Applicant to file and serve an amended statement of claim on or before 12 November 2004.
(2)The Respondents to file and serve their list of documents on or before 15 November 2004.
(3)
Inspection of discovered documents to be concluded by
19 November 2004.
(4)Respondents to file and serve their affidavit evidence and amended defence on or before 25 November 2004.
(5)On condition that the respondents comply fully with orders 2 to 4 above, the applicant to the claim shall provide the sum of $10,000 by way of further security for costs, the said sum to be paid to the applicant’s solicitors to be held by them together with the sum of $9,000 previously ordered as security in a controlled moneys account pending resolution of the proceedings or further order. The said sum of $10,000 to be paid to the respondent's solicitors on or before 26 November 2004.
(6)If the sum of $10,000 is not paid as ordered, proceedings stayed and any hearing date will be vacated.
(7)Hearing date of 24 November and 25 November 2004 vacated.
(8)Hearing to be refixed by discussion with the associate to Chief Federal Magistrate Pascoe, for 3+ days upon a date not before 30 November 2004.
(9)Liberty to apply on 2 days notice.
(10)The costs of the application to be the respondents’ costs in the cause.
I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date: 22 November 2004
0
0
0