Kelly v Willmott Forests Ltd (in liquidation) (No 2)

The case of Kelly v Willmott Forests Ltd (in liquidation) (No 2) involved a complex dispute between the parties, which was heard before the court. The applicants sought security for costs from the respondents, who were in liquidation. The legal issues that arose from this dispute included the quantum and terms of security, as well as the fairness between the parties and case management considerations. The court had to balance the risk of injustice to the respondents against the risk of stultification if security was set unfairly or too high.

The court considered the evidence presented by both parties, including the financial capacity of the group members and their willingness to contribute to security. The court found that there were gaps in the evidence regarding the financial capacity and willingness of both the known and unidentified group members to contribute to security. The respondents sought that the total quantum of security be fixed at approximately $6.58 million, with approximately $4.83 million payable within 14 to 30 days. However, the court decided that it was not appropriate to fix the security at that time, and instead ordered a short regime to speedily commence, allowing the applicants to seek rateable contributions to security from the unidentified group members, and then the known group members.

In conclusion, the court ordered that the applicants seek contributions to security from the group members and obtain any explanation for any refusal to contribute. The court also ordered that the applicants pay the respondents' costs of the hearings of the security application before the court. The final orders will be determined at a case management conference.

The ratio of this case is that the applicants did not seek to reopen the application for security, but they may need to lead further evidence if they fail to obtain sufficient security. The court's decision highlights the importance of balancing the risk of injustice to the respondents against the risk of stultification if security is set unfairly or too high. The court also emphasised the need for case management considerations in fixing the quantum and terms of security.