Lindsay Claude Alford v Mitre 10 (Qld) Ltd

[1991] FCA 872

C A T C H W O R D S

COSTS - application for security - undertaking of trustees not
Co exercise right of indemnity to recover costs a w a r d 4

against them - one applicant a natural pprson -- whether order

for fiecuri	ty must hp mad- aqainsL a1 l appliranLs.
Lindsav Claude ~ l f o ~ d	& . Ors.

v. U t r e 10 (Old.) Limited

No. QG 76 of	1 9 9 1
-	PINCUS J.
BRISBANE
14 NOVEMDER	1 9 9 1

I N T H E FEDERAL COURT O F AUSTRAL1.A ) No. QG 7 6 of 1 9 9 1

QUEENSLAND D I S T R I C T REGISTRY 1

GEENNEEr!A4D1-KJrS_IO.N )

BETWEEN : LIN-DS-AY CLAUDE AL-F9BP

First Applicant

-	PROPERTY PROMOTION AND DEVELOPMEW
S-ERXI$ E S x Y . . J L ' D -,-- ACN-0-10-5
-

Second Applicant

RABSOUARE P T Y . L T D . ACN 010 348 9 2 8

Third Appl icant

- FERNCAPE P T U T D . ACN 010 7 9 7 609

Fourth Applicant

AND:  E - 1 0 I OLD. ) L I M S W

Respondent:

MINUTES O F ORDER

JUDGE MAKING ORDER:	PTNCIJS J .
DATE O F ORDER:	1 4 NOVEMBER  1 9 9 1
-

WHERE MA-: B R I S B A N E

----.--p-.- THE COURT ORDERS THAT:

1 .    On the basis of the statement by Mr. Sheahan that an

appropriat-o undsrtaking wil l he ii led, the

appJiratinn for securit:y for post-s bs refusvd.

2.    Costs of today be rosts in the proceedings, except

insofar as t h o s ~ costs relate to the appljcation for

snc~irity for costs.

3 .          A s to the costs in relation to the applicatjon for

sernrity for costs, t h o s ~ costs hp the seconrl and

fourth respondents' costs in the proce~rliiigs.

4.    The application for directions he adjourned to

Monday 9 Dccpmb~r 1 9 9 1 a t 9 . 4 5 a.m.

NOTE ? Settlement and ent.ry of orders is (.lea1 t w i t-h in

Ordsr 36 nf Lli- Federal Col~rt R~~les.

I N THE FEDERALCOURT OF AUSTRALIA 1 N o . QG 76 o f 1 9 9 1

QUEWLAND DISTRICT REGIISJPR.Y

GENERAL DIVISION )

--	1
F i - r s t Appl i c a n t

PROPERTY PROMOTION AND DEVELOPMENT SERVJCS

--- - -- - - - -

-. - PTY. L'I'D. ACN 01-0-594975.

S e c o n d Appl i c a n t

RABSQUARE PTY. LTD. ACN 010 348 928

Thi r d Appl i c a n t

FERNCAPE-PTY.	LTD. AC-No10 797 609
-.

Fo1irt.h A p p l i c a n t

AND:  E T R E 1 0 mL.u.1 LIMITED

R e s p o n d e n t

C O : PINCIJS J .

PLACE:	URTSRANE
--
DATE:	1 4 NOVEMBER  1991

EX TEMPORE REASONS FOR JUDGMENT

- --

T h i s i s a n a p p 1 i r : a t i o n f o r s e c u r i t y f o r costs made

b y t h e r e s p o n d e n t i n t h e p r i n c i - p a l p r o c e e d i . n g s , Mitre 1 0

( Q l d . ) L i m i t e d . T h e p a r t i e s w i l l be g i v e n t h e d e s i g n a t i o n s

t h e y h e a r i n t -hose p r o c e e d i - n g s .

The r e s p n n d e n t a p p l i e s r a t h e r l a t e , b u t s e e k s t o

h a v e s e c u r i t y f o r costs i n < - u r r e d on1 y f r o m t h e p r e s e n t t i m e

o n . T h e a c t - i o n was b e g u n ahout. f i v e m o n t h s a g o . It. r e l a t e s

t o a l l e g e d l y u n l a w f u l r o n d u c t o n t h e p a r t o f t h e r - s p o n d e n t ,

c a l l s i n g c o m p a n i e s c o n t r o l l e d hy t h s f i rqt a p p l i c a n t t r , b ~ r o m o

involved in a certain enterprise. Some discussion took place

at the hearing as to t h ~ details of that rondurt and T have

read the pleading, hut it seems to mc unnecessary to set the

particulars nut here.

The respondent has cross-clajmed agajnst the first

applicant for money due under a guarantee. If the applicants

aucc~ed completely, the guarantee will presumably he held

ineffective and the respondent may, in addition, be held

liable in damages.

Of the four original applicants, one has

disrontjnued recently but., to my mind, nothing t-urns on that.

The other corporate applicants are apporent1.y control led by

the first applfrant It is unknown whether the first

applicant has any signf f icant funds. The remaining corporate applicants carry on bvsiness as trustees and the trust assets were, according to the material, quite substantial as at 30

Jilne 1991.

Ilowever, Mr Bajn, for the respondent, points o~lt

that unless restrained, the applicant trusteps mjght take
steps to remove assets from any danger of being taken to
satisfy an order for costs in this suit. Other events also
might deprive the respondent of the opport-unity of getting at

the trust assets, such RR loss of those assets in some other

v-nt-ure. Further events which hove occl~rred since t-he end of

June might significantly have altered the posi-tion of thc more

sr~bstantial trust, which is t h ~ Fprncapp Trust, of which tho

f o u r t h a p p l i c a n t i s t r u s t e e : h u t on t h e f a c e o f i t , t h e

respondent . j s n o t i n a p a r t i c u l a r l y p e r i l o u s p o s i t i o n a s

r ~ g a r d s e n f o r c e m e n t o f a n o r d e r f o r c o s t s . Tf t h e t - r u s t e e s

w i l l n o t e x e r c i - s e t l l e i r r i g h t o f i n d e m n i t y t o r e c o v e r c o s t s

awarded a q a i n s t them, t h e r e s p o n d e n t w i l l b e e n t i t l e d , a s a

c r e d i t o r , t o d o s o : I n R e J o h n s m ( 1 8 8 0 ) 15 C t 1 . D . 518 .

Ano the r c o n s i d e r a t i o n which t e l l s a g a i n s t t h e g r a n t

o f a n o r d e r f o r s e c u r i t y i s t h a t t h e f i r s t a p p l - i c a n t is a

n a t u r a l p e r s o n . I n P e a r s o n v . N a v d l e r [ l 9 7 7 1 1 W . L . R . 899 is

t o h e	found	a u t h o r i t y a g a i n s t	e x t e n d i n g ,	t o a p p l i c a t i o n s	f o r
s e c u r i t y a g a i n s t	a	p l a i n t i f f	company,	t h e p r i n c i - p l e which	had

been worked o u t i n r ~ l a t i o n t o a p p l i c a t i o n s aga ins t . p l a i n t i f f s

r e s i d e n t	o u t of	t.ho	j i l r i s d i c t j o n .	Megarry	V . C .	p o i n t e d	o u t
t h a t where	o n e	p1 a i n t i f f	is	r e s i d e n t	a b r o a d	and	a n o t h e r w i t h i n

t h e	j u r i s d i r t i - o n ,	t h e p l a i n t i f f	o u t s i d e t h e	j u r i s d i c t i o n	wi l1
n o t b e o r d e r e d	t o g i v e s e c u r i t y f o r c o s t s :	[ l 9 7 7 1	l	W.L.R.	899
at.	902 and 903;	b u t t h e r e was,	I	th i -nk , a d i s t i n c t r e f u s a l	t o

e x t e n d t h e r u l e t o c a s e s o f t h e p r e s e n t s o r t .

A judgment o f C o n n o l l y LT. i.n HarDur v. A r i d n - e

A u s t r a l i a L i m i t e d	[ l 9 8 4 1	2 Qd.R.	523 made	t h a t	e x t e n s i o n	and
a p p l i e d	t h e p r i n c i p l e	d e r i v e d	from S y k e s	v .	.Sy-kIres ( 1 8 6 9 )	I..R.

4 C .P . 645 a t 650 t h a t " u n l e s s t h e w i s ground for making a n

o r d e r f o r s e c u r i t y a g a i n s t a l l t h e p l a i n t i f f s , i t c a n n o t h e

made a g a i n s t a n y " . T r e s p e c t f u l l y doi lbt t h e u n i v e r s a l t r u t h

o f	t h a t s t a t e m e n t .	I n my	o p i n i o n ,	t-he b e t t - e r V ~ R W	may b e t.hat
t h e p r e s e n c e o f	a	n n t a r a l	p e r s o n	among	t h e a p p l i c a n t s o r
p l a i - n t i f f s i s a	c j r c u m s t a n c e whic-h,	i f	t:hat	ppr.;on	i s r e s i d e n t

w i t h i n	t h e	j u r i s d i c t i o n ,	shorl ld	i n c l i r r e o n e	a g a i n s t making	an
o r d e r	f o r	s e c u r i t y a g a i n s t	o t h e r	a p p l i c a n t s	o r p l a i n t i f f s ;	i t
i s n o t	d e c i s i v e .	H e r e ,	i t d o e s	n o t	a p p e a r t o m e t h a t	t h e
r e s p o n d e n t	s h o u l d	n e c e s s a r i l y b e	h e l d	o a t	of	s e c u r i t y b e c a u s e

o f t h e p r e s e n c e of t h e f j r s t p l a i n t i f f , a n a t r i r a l p e r s o n .

T h e r e i ~ n o t a c o m p l e t e o v e r l a p o f i n t e r e s t s , by any

mpans.	The	p r i n c i - p a l	i n t ~ r e s t	o f	t h e	n a t u r a l	p e r s o n	a p p l i c a n t
i s t o h a r e l i e v e d o f	t	h	bu rden	~	o f	a	g u a r a n t e e ,	a m a t t e r whi-ch

d o e s n o t c o n c e r n t h e o t h e r a p p l j c a n t s . I t is p o s s i b l e , as M r

Ba in p o i n t e d o u t , t h a t i f t h e a p p l i c a n t s a r e u n s u c c e s s f u l ,

o r d e r s f o r c o s t s migh t b e made d i s t i . n g o i s h i n g ha tween t h e

l i a b i l i t y o f t h e c o r p o r a t e a p p l i c a n t s and t h a t o f t h e f i r s t

a p p l i c a n t . The m a t t e r s which I have d i s c u s s e d w e r e men t ioned

b y .Jenlcinson J . I n Iiuqhes v . Canon A u s t r a l i a P t v . L t d . ( 1 9 9 0 )

0 A . C . I . . C . 209.

I r a i s e d w i t h M r Sheahan , c o u n s e l f o r t h e

a p p l i c a n t s , t h e q u e s t i o n j u s t t ouched o n . I I e h a s o b t a i n e d

i n s t r u c t i o n s t o t h e e f f e c t t h a t e a c h o f t h e a p p l i c a n t s wi l l .

s t a n d r e s p n n s i h l e f o r c o s t s o r d e r e d a g a i n s t a n o t h e r a p p l i c a n t .

T h i s c o u l d b e g i v e n p r a c t i c a l e f f e c t by s i m p l y making on o r d e r

f o r c o s t s , i f any is made.

I t a p p e a r s t o m e t h a t t h e p r a c t i c a l c o a r s e , s o f a r

a s t h e c o n t e n t o f p a r a g r a p h 7 o f M i s s 1 , i ndnn ' s a f f i d a v i t i s

c o n c e r n e d , i s t o a s k M r Sheahan w h e t h e r a n a n d e r t a k j n g a s

foreshadowed w i l l b e f i l e d . T t i s g e n e r a l 1 y t h o r ~ g h t b e t t e r t o

have i t i n wri t - i ng .

T t a k e i n t o a c c o u n t t h a t t h e a p p l i c a t i o n f o r

s e c i ~ r i t y i s mad? r a t h e r l a t e and t h e s l .a temcnt hy M r Shnahan,

nnw made, Lhat an u n d e r t a k i n g i n terms o f p a r a g r a p h 7 o f t h e

a f f i d a v i t o f M i q s 1,indorl w i l l h e f i - l e d .

T h i s i s n o t a c a s e j n wh ich , on t h e f i g u r e s p l a c e d

b e f o r e m e ,	an	o r d e r	f o r s e c u r i t y would	b e	l i k e l y t o p r e v e n t
t h e pu r su i t .	o f	t h e c l a i m ,	and	t h a t i s a	poi-nt emphasi-sed b y M r

n a i n . I t a p p e a r s t h a t a s s e t s a r e a v a i - l a b l e o v e r which

s e c u r i t y c o u l d b e g i v e n . However, i t a p p e a r s n o t t o b e , i n

t h e whole o f t h e c i r c u m s t a n c e s , n p r o p e r c a s e i n which t o

o r d e r	s e c u r i t y and	o n	t h e b a s i s o f	t h e	s t a t e m e n t	by M r Sheahan
t h a t	a n	a p p r o p r i a t e u n d e r t a k i n g	w j l l	b e	f i l e d ,	t h e a p p l i c a t i o n

w i l l b e r e f u s e d .

I w i l l o r d e r t h a t t h e c o s t s o f t o d a y h e co.;ts i n t h e

p r o c e e d i n g s , e x c e p t j n s o f a r a s t h o s e c o s t s r e l - a t e t o t h e

a p p l i c a t i o n	f o r s e c u r i t y	f o r c o s t s .	A s	t o t h e	l a t t e r c o s t s ,
t h e y w i l l h e	t h e c o s t s o f	t h e second	and	f o u r t h a p p l i c a n t s	i n

t h e p r i n c i p a l p r o c e e d i n g s .

The a p p l i c a t i o n f o r d i r e c t i o n s w i l l h e a d j o u r n e d

u n t i l Monday, 9 Derernber, a t 9 . 4 5 am.

I c e r t i f y Chat. t h i s and t h e

folly	p r e r e d i n g p a g e s	a r e a
t r u n copy o f	tthe	r e a s o n s

f o r juriyn~enL h ~ r n i n o f I t i s

Ilnnntir M r . Juc; 1.4 r'o Pi ncus

Counsel fnr the appl irants:	Mr ,T .C .	Sheahan
Solicltors for the applicants:	1,yoris

Counsel for the rn.spniirl~nt:	Mr R. G. nai.n
Solici tars for the respondent:	Blake D R W ~ O ~  Waldron
Date of IIearl nq:	1 4 Novrmher 1 99 1