Jaddcal Pty Ltd v Minson [No 2] - [2011] WASC 138

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: JADDCAL PTY LTD -v- MINSON [No 2] [2011] WASC 138

CORAM: LE MIERE J

HEARD: 20 JANUARY 2011

DELIVERED : 26 MAY 2011

FILE NO/S: CIV 2730 of 2010

BETWEEN: JADDCAL PTY LTD
First Plaintiff
ALEXANDER ANURIW
Second Plaintiff
DONNA MAREE ANURIW
Third Plaintiff
AND
DAVID SHANE MINSON
First Defendant
LOUISE ANNE MINSON
Second Defendant
JOHN ROBERT BRUSKE
Third Defendant
CHERYL BRUSKE
Fourth Defendant
ROSELINK ENTERPRISES PTY LTD
Fifth Defendant
DWIGHT ALEXANDER WILLIAMS
Sixth Defendant
BRENDAN JOHN LOWICK
Seventh Defendant
CASEY SHANE MINSON
Eighth Defendant
DONALD ALEXANDER McLELLAN
Ninth Defendant
ANDREW CHRISTOPHER BRUSKE
Tenth Defendant

Catchwords:

Costs - Application for security for costs - Relevant principles

Legislation:

Corporations Act 2001 (Cth), s 1335(1)
Property Law Act 1969 (WA), s 11(2)

Result:

Application granted

Category: B

Representation:

Counsel:

First Plaintiff                :     Mr J A Davies & Mr M N Caratti
Second Plaintiff            :     Mr J A Davies & Mr M N Caratti
Third Plaintiff               :     Mr J A Davies & Mr M N Caratti
First Defendant             :     Mr D A Lenhoff
Second Defendant         :     Mr D A Lenhoff
Third Defendant           :     Mr D A Lenhoff
Fourth Defendant          :     Mr D A Lenhoff
Fifth Defendant            :     Mr M Curwood
Sixth Defendant            :     Mr M Curwood
Seventh Defendant        :     Mr M Curwood
Eighth Defendant          :     Mr M Curwood
Ninth Defendant           :     Mr M Curwood
Tenth Defendant           :     Mr M Curwood

Solicitors:

First Plaintiff                :     Gary Rodgers
Second Plaintiff            :     Gary Rodgers
Third Plaintiff               :     Gary Rodgers
First Defendant             :     Holborn Lenhoff Massey
Second Defendant         :     Holborn Lenhoff Massey
Third Defendant           :     Holborn Lenhoff Massey
Fourth Defendant          :     Holborn Lenhoff Massey
Fifth Defendant            :     Curwood & Co Pty Ltd
Sixth Defendant            :     Curwood & Co Pty Ltd
Seventh Defendant        :     Curwood & Co Pty Ltd
Eighth Defendant          :     Curwood & Co Pty Ltd
Ninth Defendant           :     Curwood & Co Pty Ltd
Tenth Defendant           :     Curwood & Co Pty Ltd

Case(s) referred to in judgment(s):

Australian Quarry Holdings Pty Ltd (in liq) v Dougherty (1992) 8 ACSR 569
FFE Minerals Australia Pty Ltd v Mining Australia Pty Ltd [2000] WASCA 69; (2000) 22 WAR 241
Harpur v Ariadne Australia Ltd [1984] 2 Qd R 523
Heller Factors Pty Ltd v John Arnold's Surf Shop Pty Ltd (in liq) (1979) 4 ACLR 492
K & J Acquisitions Pty Ltd v Manauzzi [2009] NSWSC 279; (2009) 27 ACLC 512
Livingspring Pty Ltd v Kliger Partners (2008) 20 VR 377; (2008) 66 ACSR 455
Prynew Pty Ltd v Nemeth [2010] NSWCA 94
Sydmar Pty Ltd v Statewise Developments Pty Ltd (1987) 73 ALR 289
Uptown Sydney Development Corporation Pty Ltd v Bank of New Zealand (No 1) (1993) 11 ACLC 862

LE MIERE J: The first to fourth defendants and the fifth to tenth defendants have applied for an order that the first plaintiff, Jaddcal Pty Ltd (Jaddcal), give security for their costs and the action be stayed until the security is given.

The…

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.

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Details

Case: [2011] WASC 138
Decision Date: 26 MAY 2011

CaseChat Overview and Summary

The case of Jaddcal Pty Ltd v Minson [No 2] involved an application for security for costs made by the defendants against the plaintiffs. The plaintiffs in this case were two companies and a natural person. The court was required to determine whether it was appropriate to order the companies to provide security for costs given the presence of the natural person as a co-plaintiff. This decision follows the principles set out in Uptown Sydney Development Corporation Pty Ltd v Bank of New Zealand (No 1), where it was held that ordering security for costs in such circumstances is ordinarily inappropriate. The court considered whether the claims of the corporate and natural plaintiffs were substantially the same, and if so, whether the overlap justified ordering security for costs.

The legal issues before the court were whether the claims made by the corporate and natural plaintiffs were co-extensive, and if not, whether this justified ordering security for costs against the companies. The court examined the cases of K & J Acquisitions Pty Ltd v Manauzzi and Prynew Pty Ltd v Nemeth, where the extent of overlap in claims was considered. The court also considered the practical implications of ordering security for costs in cases where the claims are not entirely co-extensive. In this case, while the claims were similar, they were not entirely the same, leading to a consideration of the balance of convenience and the potential costs exposure.

The court held that the claims of the corporate and natural plaintiffs, while similar, were not entirely co-extensive. The court noted that if the corporate plaintiffs were to lose, they would only be liable for the costs arising from their involvement in the action, not the general costs. Given this, the court considered that the security already lodged by the corporate plaintiffs was sufficient. The court also noted that a significant portion of the time on appeal would be occupied by the challenges made solely by the corporate plaintiff. Therefore, the court exercised its discretion to order security for costs against the corporate plaintiffs. The final orders of the court included the requirement for the corporate plaintiffs to provide security for costs.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

In Uptown Sydney Development Corporation Pty Ltd v Bank of New Zealand (No 1) (1993) 11 ACLC 862 Kirby P said that where both companies and natural persons are suing together the authorities suggested that it is ordinarily inappropriate to order security for costs upon the basis that doing so would lead to a different treatment of the corporate moving party and the natural person. Relevant authorities relating to situations where both companies and natural persons are suing were considered by Kirby J in K & J Acquisitions Pty Ltd v Manauzzi [2009] NSWSC 279; (2009) 27 ACLC 512. Kirby J referred to Harpur v Ariadne Australia Ltd and to other cases where the court had declined to order a company to provide security for costs when there was a natural person as a co‑plaintiff. Counsel for the defendants in that case sought to distinguish the earlier cases upon the basis that the claim of each plaintiff was substantially the same and hence if the defendant succeeded against the corporate plaintiff he was also likely to succeed against the natural plaintiff and recover his costs from that plaintiff. In that case Kirby J considered that there was not a complete overlap between the cases to be presented by the corporate and natural plaintiffs but they appeared to be very similar, indeed substantially the same. One possibility was that the natural plaintiff might succeed and the corporate plaintiff fail, in which case the defendants would only be entitled to the particular costs arising from the joinder of the corporate plaintiff in the action, not the general costs. In that case the corporate plaintiff had already lodged security for costs and Kirby J held that the security already lodged was more than adequate to cover the possibility of costs to be paid by the corporate plaintiff. The issue arose again in Prynew Pty Ltd v Nemeth [2010] NSWCA 94, an appeal by an individual appellant (Tsu) and a corporate appellant (Prynew). Prynew contended that Tsu would be able to prosecute the appeal in any event so that no order for security should be made against Prynew. Beazley JA considered that the matter was not that simple:The fact that Mr Tsu is a co‑plaintiff is a relevant factor. However, in a particular case, it may be relevant to have regard to the extent to which the claims made by parties are co‑extensive. If the claims of each are co‑extensive, that may provide a strong basis for not ordering security. If the claims are not co‑extensive at all, that factor may point to the exercise of the court's discretion in the opposite manner. There are then a multitude of intermediate positions which may need to be considered in a particular case [56]. Beazley JA considered that the case would not be proceeding in any event against Piling, the defendant, at the instance of Mr Tsu. Mr Tsu's case was not co‑extensive with Prynew's and may not relate to Piling at all. Beazley JA considered that a substantial proportion of the time on appeal would be occupied by the challenges made solely by Prynew. In those circumstances her Honour considered that an order for security should be made against Prynew.