Karralong Pty Ltd v Wickham Properties Pty Ltd

[1995] QCA 17

IN THE COURT OF APPEAL	[1995] QCA 017
SUPREME COURT OF QUEENSLAND

Appeal No. 206 of 1994

Brisbane

Before Fitzgerald P.
Davies J.A.
McPherson J.A.

[Karralong P/L v. Wickham Properties P/L.]

BETWEEN

KARRALONG PTY. LTD

(Plaintiff/Appellant) Respondent

AND

WICKHAM PROPERTIES PTY. LTD.

(First Defendant/Respondent)Applicant

AND

PHILLIP STUART CHURVEN

(Second Defendant)

REASONS FOR JUDGMENT - THE COURT

Judgment delivered the 20th day of February 1995

This is an application by the respondents to an appeal in this Court for an order that the appellant provide security for the costs of the appeal instituted by it. The order against which the appeal is brought is itself an order for security for costs in an action between the parties in the Supreme Court. In that action the appellant is the plaintiff and the respondents are the defendants, and it is convenient to refer to them in that way.

According to what we have seen of the pleadings, the plaintiff was formerly the lessee from the first defendant of premises used as a restaurant. The lease is said to have been terminated, and the plaintiff vacated the premises, which have since been re-let to, or have passed into the possession of, another restaurateur. The parting of the ways between plaintiff and the first defendant was not a happy affair and complaints of intimidation and other wrongful acts now appear among the plaintiff's claims for damages against the first defendant and the second defendant, who is a director of the first defendant.

In addition to being a corporation, the plaintiff conducts or conducted its business as a trading trust. It does not appear whether or not that was known to the defendants when the lease was entered into. What is more important, the learned judge below in making the order for security was satisfied that there was reason to believe the plaintiff would be unable to pay the defendants' costs if it was unsuccessful in the action. He accordingly ordered security to be given to cover those costs and, pending its provision, stayed the action. It is against that order that the plaintiff's appeal is now brought.

The material on the application before this Court suggests that the defendants' costs of appeal will be of the order of some $4,500. On the other hand, part of the plaintiff's claim in the action is for damages for detinue or conversion of certain chattels said to belong to the plaintiff. They consist of items of equipment and the like used by the plaintiff in conducting the restaurant on the leased premises. There is not much, if any, dispute that the first defendant detained those chattels, which are now being used in the restaurant business conducted on the premises by the successor in title to the lease. In the proceedings before the judge below, counsel for the defendants conceded that the defendants had possession of some of the plaintiff's chattels but not all of those that were claimed by the plaintiff.

In those circumstances it is on the material now before us difficult to say that the plaintiff will not, at least to some extent, succeed in its action for damages against the defendant. The reason why his Honour was evidently not impressed by this consideration as a factor weighing against an order for security was that on the application before him the value of the chattels was, as he said, "hotly disputed".

The plaintiff claimed they were worth $80,000; the second defendant that they were worth only some $7,500 or so. Neither side condescended, however, to place any proper evidence of current value before his Honour.

In this Court that difficulty has to some extent been cured, and there is now some material before us in support of the present application suggesting that the chattels have a value of some $57,000 or only a little less than that. On that footing, it seems reasonable to suppose that they represent a source of funds from which the defendants may, if necessary, recoup their costs of this appeal. It was contended, however, that, if the plaintiff were in the meantime ordered to be wound up, the liquidator would very likely claim the chattels. On the other hand, and without attempting to decide the point here, it may be that the defendants would in the event of insolvency be entitled to set off the amount of any order for costs in their favour against the amount of any judgment for damages for conversion which the plaintiff succeeded in obtaining against them.

The amount of the defendants' costs likely to be involved on the appeal is, on the defendants' estimate, not large. Unless the appeal succeeds, the existing order for security for the costs of the action remains and the action continues to be stayed. Because of these and the other matters referred to, we do not consider it appropriate to require the costs of the plaintiff's appeal to be secured.

The application of the respondents for security for the costs of appeal should accordingly be dismissed with costs.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 206 of 1994

Brisbane
[Karralong P/L v. Wickham Properties P/L.]

BETWEEN

KARRALONG PTY. LTD

(Plaintiff/Appellant) Respondent

AND

WICKHAM PROPERTIES PTY. LTD.

(First Defendant/Respondent)Applicant

AND

PHILLIP STUART CHURVEN

(Second Defendant)

Fitzgerald P.
Davies J.A.

McPherson J.A.

Judgment delivered 20/02/95

Reasons for judgment by the Court

APPLICATION FOR SECURITY FOR THE COSTS OF APPEAL DISMISSED
WITH COSTS.

CATCHWORDS COSTS - Security for - Application for security for costs of appeal - Possibility of defendant recouping costs from sale of plaintiff's chattels or setting off costs against amount of judgment for damages.

Counsel:  K. Mack for the respondent
R. Morton for the applicant

Solicitors: Cartwright Richardson & Stringer for the

respondent
Churven & Co. for the applicant

Hearing Date: 13 February 1995