Jazabas Pty Ltd v Haddad

Case [2007] NSWCA 291

New South Wales


Court of Appeal


CITATION: JAZABAS PTY LTD & ORS v HADDAD & ORS [2007] NSWCA 291
HEARING DATE(S): 20 August 2007
 
JUDGMENT DATE: 
25 October 2007
JUDGMENT OF: Mason P at 1; Basten JA at 4; McClellan CJ at CL at 35
DECISION: 1. Grant leave to appeal; 2. Dismiss the appeal
CATCHWORDS: COSTS – Appeal from decision ordering claimants to give security for costs – whether an order for security will stultify proceedings – likelihood of claimant’s success in proceedings – undertaking by individual shareholder to meet opponent’s costs of proceedings – impecuniosity of plaintiffs – whether impecuniosity was caused by the opponents
LEGISLATION CITED: Corporations Act 2001
Environmental Planning and Assessment Act 1979
Fair Trading Act 1987 (NSW).
Interpretation Act 1987 (NSW)
CASES CITED: Alec Finlayson v Armidale City Council (1994) 51 FCR 378
Ariss v Express Interiors Pty Ltd (In liq) [1996] 2 VR 507
Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1
Bryan E Fencott and Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497
Buckley v Bennell Design & Constructions Pty Ltd (1974) 1 ACLR 301
Cameron’s Unit Services Pty Ltd v Kevin R Whelpton & Associates (Australia) Pty Ltd (1986) 13 FCR 46
Cowell v Taylor (1885) 31 Ch D 34
Epping Plaza Fresh Fruit & Vegetables Pty Ltd v Bevendale Pty Ltd [1999] 2 VR 191
Equity Access Ltd v Westpac Banking Corp (1989) ATPR 40-972
Erolen v Baulkham Hills Shire Council (1993) 10 ACSR 441
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 81 ALJR 1107
Fat-sel Pty Ltd v Brambles Holdings Ltd (1985) ATPR 40-544 at 46,428
Fiduciary Ltd v Morningstar Research Pty Ltd (2004) 208 ALR 564
Gentry Bros Pty Ltd v Wilson Brown & Associates Pty Ltd & Ors (1992) 8 ACSR 405
Harpur v Ariadne Australia Ltd [1984] 2 Qd R 523
House v The King (1936) 55 CLR 499
Intercraft Cabinets Pty Ltd v Sampas Pty Ltd (1997) 18 WAR 306
Irwin Alsop Services v Mercantile Mutual Insurance Co Ltd [1986] VR 61
Jazabas v Botany Council [2000] NSWSC 58
KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189
L Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1980) 150 CLR 225
Litmus Australia Pty Ltd (in Liq) v Paul Brian Canty [2007] NSWSC 670
M A Productions Pty Ltd v Austarama Television Pty Ltd (1982) 7 ACLR 97
Mallet v Mallet (1984) 156 CLR 605
Melville v Craig Nowlan & Associates Pty Ltd (2001) 54 NSWLR 82
Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274
Norbis v Norbis (1986) 161 CLR 513
Pacific Acceptance Corporation Ltd v Forsyth (No. 2) [1967] 2 NSWR 402
Pioneer Park (in liq) v ANZ [2005] NSWSC 832
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Prime Forme Cutting Pty Ltd v Baltica General Insurance Co (1990) 8 ACLC 29
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AGLC
Jazabas Pty Ltd v Haddad [2007] NSWCA 291
Case
[2007] NSWCA 291
Decision Date

CaseChat Overview and Summary

Jazabas Pty Ltd (the appellant) appealed to the Court of Appeal of New South Wales against an order made by a primary judge requiring it to provide security for the costs of the respondent, Mr Haddad. The dispute concerned an application for security for costs brought by Mr Haddad, who argued that Jazabas Pty Ltd was impecunious and that there was a likelihood of him being ordered to pay costs if unsuccessful.

The Court of Appeal was required to determine whether the primary judge erred in ordering security for costs. Specifically, the court considered whether the impecuniosity of Jazabas Pty Ltd was caused by Mr Haddad, the likelihood of Jazabas Pty Ltd succeeding in its proceedings, and the effect of an undertaking by an individual shareholder to meet Mr Haddad's costs.

The Court of Appeal, in dismissing the appeal, found that the primary judge had not erred in ordering security for costs. Mason P agreed with the reasons of McClellan CJ at CL, who concluded that the impecuniosity of Jazabas Pty Ltd was not caused by Mr Haddad and that the prospects of success were not sufficiently strong to outweigh the impecuniosity. The court also considered the undertaking by the shareholder, finding it insufficient to negate the need for security. Basten JA agreed with the orders but provided separate reasons.

Orders

Orders of the court

1. Grant leave to appeal; 2. Dismiss the appeal (Mason P agreeing with McClellan CJ at CL and his reasons, Basten JA agreeing with the orders but delivering separate reasons)

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

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