Jazabas Pty Ltd v Haddad

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.