Interchase Co Ltd v Colliers Jardine

The case of Interchase Co Ltd v Colliers Jardine involved a claim by Interchase Corporation Limited (in liquidation) against several defendants, including Colliers Jardine, Michael George Tidbold, Grosvenor Hill (Queensland) Pty Limited, and Brian Moffat Waghorn. The plaintiff sought damages for breach of contract and negligence in the valuation of the Myer Centre. The third and fourth defendants applied for security for costs under section 1335 of the Corporations Law, arguing that the plaintiff would be unable to pay their costs if they were successful in their defence. The plaintiff opposed the application. The key legal issues were whether there was credible evidence suggesting the plaintiff might be unable to pay the defendants' costs if successful and whether the court should exercise its discretion to order security for costs.

The court examined the financial position of the plaintiff, noting that the liquidators held $3.116 million in cash funds. The third and fourth defendants estimated their costs at $1.8 million, while the plaintiff and the first and second defendants estimated their costs at $450,000 and $463,000 respectively. The court found that there was a credible basis to believe that the plaintiff might be unable to pay the defendants' costs if successful, primarily due to the significant costs estimated by the third and fourth defendants and the relatively limited available funds. The court also considered the complex and lengthy nature of the trial, the dispute over the likely duration of the trial, and the potential for the plaintiff's funds to be insufficient to cover all costs.

In exercising its discretion, the court noted the purpose of section 1335 to protect defendants from the risk of plaintiffs being unable to pay costs if unsuccessful. The court ordered the plaintiff to provide security for the costs of the third and fourth defendants in the sum of $750,000 up to the first day of the trial and $7,500 for each succeeding day of the trial. The court emphasised that the order was not to prevent the plaintiff from having its day in court but to ensure that the defendants could defend themselves adequately without undue financial risk.