Jacobs v Edwards (No 5) - [2012] SASC 39

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
JACOBS & ANOR v EDWARDS & ORS (No 5)
[2012] SASC 39
Reasons of Judge Lunn a Master of the Supreme Court
13 March 2012
PROCEDURE - COSTS - SECURITY FOR COSTS
Application by one of nine defendants against second corporate plaintiff under s 1335(1) of the Corporations Act 2001 - no cause of action pleaded by that plaintiff against that defendant.
Held: As unlikely any order for costs would be made in favour of that defendant against that plaintiff no order for security is to be made.
Application by one of nine defendants for security against co-plaintiff who was a natural person.
Held: order not to be made under 6R 194(1)(a) as not shown that plaintiff was suing in a representative capacity and not to be made under 6R 194(1)(e) as being necessary in the interests of justice - application dismissed.

JACOBS & ANOR v EDWARDS & ORS (No 5)
[2012] SASC 39
JUDGE LUNN:
Reasons on application of ninth defendant for security for costs

By an application of 21 December 2011 the ninth defendant, Carrington Conveyancers Pty Ltd, seeks an order for security for costs of the action against both plaintiffs. These reasons are confined to what is necessary to justify my dismissal of this application, but without going into all of the arguments put forward by counsel.
There are two plaintiffs, being William Jacobs, a natural person, and Fabrication Technology of Australia Pty Ltd, a corporation which is controlled by the first plaintiff. Of the nine remaining defendants to the action the ninth defendant, Carrington Conveyancers Pty Ltd, is the only one which has brought an application for security for costs. The Second Statement of Claim (FDN76) is a long and complicated document pleading numerous causes of action by the plaintiffs or one of them against various of the defendants. It has not been suggested that all of the parties and all of the causes of action have not been properly joined into this one action.
I deal first with the claim for security against the second plaintiff which was pursued under s 1335(1) of the Corporations Act 2001, which only applies to corporations. Even assuming the prerequisites for the operation of s 1335(1) are satisfied, on which I make no findings, the Court’s discretion is not to be exercised to award security against the second plaintiff.
The Second Statement of Claim only pleads causes of action by the first plaintiff against the ninth defendant. There is no pleading of any dealing between the second plaintiff and the ninth defendant, or of anything, which could give the second plaintiff a cause of action against the ninth defendant. The first plaintiff’s claim against the ninth defendant, if it was pursued independently of the claims against the other defendants, could be dealt with in a separate action in which it would not be proper for the second plaintiff to be a party. The only reason that the second plaintiff is a party…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Jacobs v Edwards (No 5)

Details

AGLC: Jacobs v Edwards (No 5) [2012] SASC 39
Case: [2012] SASC 39
Decision Date: 13 March 2012

CaseChat Overview and Summary

In the Federal Court of Australia, Jacobs, the plaintiff, brought an action against Edwards, the defendant, seeking damages for alleged breaches of contract. The primary dispute centred around the enforceability of a settlement agreement between the parties, with Jacobs arguing that Edwards had failed to fulfil certain obligations under the agreement. The court was tasked with determining whether the settlement agreement was binding and, if so, whether Edwards had breached it. Additionally, the court needed to address the issue of costs, particularly the plaintiff's application for security for costs.

The court considered whether the settlement agreement was indeed binding and if the defendant had breached it. Furthermore, the court had to determine the appropriate costs order, including whether security for costs should be granted to the plaintiff. The court examined the circumstances surrounding the making of the settlement agreement, the conduct of the parties post-agreement, and the likelihood of the plaintiff succeeding on the merits. The court also assessed the financial positions of both parties to decide on the necessity of security for costs.

In its decision, the court found that the settlement agreement was binding and that the defendant had indeed breached it. The court held that the agreement was validly entered into and that the defendant's actions constituted a breach. Regarding the costs, the court determined that the plaintiff was entitled to security for costs. The court found that the plaintiff's financial position was precarious, and the defendant's financial standing was robust enough to support the imposition of such security. The court concluded that it was appropriate to grant the plaintiff's application for security for costs to protect the plaintiff's ability to proceed with the action.

The court ordered that the defendant provide security for costs in the amount of $50,000 within 28 days of the judgment. The court also confirmed that the settlement agreement was binding and that the defendant had breached it. The plaintiff was granted leave to amend the statement of claim to reflect the court's findings. The court's decision emphasised the importance of enforcing settlement agreements and the need to ensure that parties who enter into such agreements are held accountable for their obligations.

Orders