| IN THE COURT OF APPEAL | [1994] QCA 149 |
| SUPREME COURT OF | |
| QUEENSLAND | |
| Brisbane | Appeal No. 212 of 1993 |
| Before The Chief Justice |
Mr Justice Pincus
Mr Justice McPherson
[Impex v Crowner]
BETWEEN:
IMPEX PTY LTD
(Plaintiff) Respondent
AND
CROWNER PRODUCTS LTD
(First Defendant) Appellant
AND
JEYES OVERSEAS LIMITED
(Second Defendant)
AND
JEYES GROUP PLC
(Third Defendant)
REASONS FOR JUDGMENT - THE CHIEF JUSTICE
Judgment delivered 13.05.94
This appeal is against the refusal of a chamber judge to order that the respondent company, the plaintiff in a suit, provide security for the defendant's costs. The application for security was brought under s.1335 of the Corporations Law.
The primary claim of the plaintiff in the action was based on an alleged breach of a contract for the defendant, as supplier, to supply product to the plaintiff as a distributor of its products. The plaintiff alleged that there was in place a distribution arrangement for a term of five years but an anticipatory breach occurred when the defendant gave notice in July 1991 that it would continue to supply for only two more years, that being a period substantially less than the term which, on the plaintiff's contention, was still to run.
There appears to be no doubt that the respondent company, the plaintiff, was impecunious at relevant times and that if the appellant should succeed in obtaining an order for costs on a resolution of the litigation in its favour, it would have great difficulty in recovering those costs if security were not ordered.
The respondent's financial position was not exactly established but the material was sufficient to demonstrate the gravity of its situation. In the 1990 financial year, the year when the contract sued upon was said to have been entered into, the respondent had a large trading loss and in the next year an even greater one. A substantial deficiency in assets as compared with liabilities continued as part of its financial picture over this period. The success of the respondent in the pending litigation appears to be far from assured. The very existence of the contract on which the respondent sued was disputed by the appellant claiming that no final agreement in the terms alleged had been concluded. Although the likelihood of success in the action was not a matter for final resolution on the application for security (c.f. the observations of Rogers J. in Memutu Pty Ltd v. Lissenden (1983) 8 A.C.L.R. 364 at 365) the existence of substantial obstacles to be overcome by the plaintiff in proving its claim and in establishing its damage was one of the matters for consideration.
The judge below had a discretionary judgment to exercise and he was obliged to take into account all of the relevant circumstances: see Bell Wholesale Pty Ltd v. Gates Export (1984) 52 A.L.R. 176 at 180 and P.S. Chellaram & Co v. China Ocean Shipping Co. (1991) 65 A.L.J.R. 642 at 643.
In the present case it sufficiently clearly appeared that the judge's…
Keep reading for free
Create a free CaseChat account to read Impex Pty Ltd v Crowner Products Ltd and more:
- Read every judgment in full
- Ask AI and get answers linked to paragraphs
- See how each paragraph was cited in later cases
- Download judgments as PDF or Word
One click creates your free account or signs you in.
By continuing you agree to the Terms and Privacy Policy.
- Case
- [1994] QCA 149
- Decision Date
CaseChat Overview and Summary
The court considered the financial circumstances of Crowner Products Ltd and whether these were a direct result of the appellant's conduct. The respondent argued that Impex Pty Ltd had contributed to its financial difficulties by not fulfilling its contractual obligations, but the court found insufficient evidence to support this claim. The court also examined the merits of the case, focusing on the existence of a contract between the parties. The evidence presented did not establish a clear basis for the existence of such a contract, which impacted the likelihood of success in the proceedings.
Based on the analysis, the court decided that there was no arguable basis for the existence of a contract, and the respondent's financial situation was not attributable to the appellant's actions. Consequently, the application for security for costs was refused. The court held that the respondent's financial difficulties did not stem from the appellant's conduct, and there was no strong case for the existence of a contract that could justify the imposition of security for costs. The court's decision was grounded in the lack of a clear contractual relationship and the absence of evidence linking the respondent's financial woes to the appellant's actions.
Orders
Orders of the court
Full text does not contain this section.
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
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Full text does not contain this section.