Ly, Trai v Minister for Immigration & Ethnic Affairs

[1993] FCA 1073

JUDGMENT ,vo 103 3 , 3

' . * ' * ) t ' *a. .o . .....

IN THE FEDERAL COURT OF AUSTRALIA)

DUEENSLAND DISTRICT RECXSTRY	) QG 160 of 1992
GENERAt DIVISION	1

Between: LANTON PRODUCTIONS PTY

LIMITED

Applicant

And: EDWARD RUSHTON PTY LIMITED

First Respondent

ELECTRONIC LEARNING SYSTEMS

INTERNATIONAL PTY LIMITED

Second Respondent

GRAEMB CHARLES PITTS

Third Respondent

MOORGATE FINANCE PTY

LIMITED

Fourth Respondent
FRANK EDGE

Fifth Respondent

EX TEMPORE JUDGMENT

EINFELD J BRISBANE 26 FEBRUARY 1993

the file is already threateningly large, I cannot see any relatively early stage in the proceedings, although I must say

This application for security for costs by the fifth respondent Frank Edge case raises the types of difficulties that quite often occur where the applicant attributes a loss due to misrepresentations by the separate and combined conduct of a number of different parties. There is little evidence before the Court as to the facts of the matter. At this

other way of approaching the matter other than on the basis of
the applicant's statement of claim.

It is true, as has been submitted for the fifth respondent, that there could have been sworn evidence to support the principal claims made by the applicant against him, and there is certainly authority which suggests that in an appropriate case some evidence should be brought, but I do not think the Court is anxious to encourage the parties to constitute a type of mini-trial of the main issue(s) in dispute in security for costs applications.

Ultimately these matters are discretionary in any event, and an assumption has to be made that the applicant has some sort of a claim. As a matter of fact, security applications are often a little puzzling because they proceed upon an assumption that the applicant's claim may be lost, yet it is said to be necessary to consider, on a preliminary interlocutory basis, whether the applicant has a good chance

of winning. At the stage at which security of costs	applications are usually brought, that is often simply not
possible, because all the Court has is the statement of claim containing the allegations and the defence which, in most cases, merely denies the allegations.
In this particular case, what the statement of claim reveals is a significant interlocking between the various responsibilities of the respondents who have been joined in the action. As against all the respondents other than the fifth, a form of security has been offered and accepted, and orders have been made, to embody the agreements of the parties in this respect. These orders are in the file and on the transcript and there is no point in repeating them. The fifth respondent has rejected the offer in the past on the basis that those who are offering the security are hardly more able to meet an order for costs than the applicant. He seeks an order that:

the Applicant w i th in 21 days g ive s e c u r i t y f o r the

F i f t h Respondent's c o s t s i n the sum o f $50,000.00 i n

a form acceptab le t o the Court f o r the c o s t s o f t h e

F i f t h Respondent.

As the facts have emerged, nothing better than the security offered to the other respondents, and now made by way of an open offer to the fifth respondent, is likely to be obtained or obtainable. In other words, that is the best security for the fifth respondent's costs that exists. The only choices for the Court in these circumstances are to make an order in

the offered terms or in a form which it is clear neither the	applicant nor anyone on its behalf could meet, with the
consequence that the action would be stayed and could not proceed. As the authorities show, this would be a rare occurrence and could only be contemplated if the applicant's chances of making out an arguable claim were very poor indeed.
As the facts of the matter stand, it seems to me that this is not a case in which it would be just to exclude the applicant's action against the fifth respondent completely. I realise that the statement of claim seems to have the fifth respondent as a relatively minor player in the matter, although this may in fact seclude the extent of the allegation in this regard. More importantly, it seems that the weight of the preparation of the case, and therefore the incurring of most of the costs, will be carried by parties other than the fifth respondent and can in large measure be left to them. No doubt the fifth respondent will have some legal costs but as I see it at the moment at least, it should not be of an order which should demand security of the kind sought.
To order a cash payment into court or a bank guarantee of payment would not in fact put any money in the hands of the fifth respondent or his lawyers at this time. If and as long as the applicant succeeds against someone, at least to the extent of $50,000, the fifth respondent will have a fund from which his costs may be obtained if he succeeds. Thus to form the view that the fifth respondent will be prevented from
present, that assumption is not warranted. applicant will succeed against nobody. On what I know at obtaining his costs, the assumption must be made that the
There is another matter which is quite important in this regard. There is a controversy concerning whether, in the event that a company goes into liquidation or even into receivership, moneys lodged with the Court in respect of security of costs are immune from seizure by the receiver or
liquidator. If it be the fact, and there are points of view suggesting that it is, then even an order that cash or a bank guarantee be lodged by impecunious or poor companies such as the applicant and its supporters would not secure the costs of the successful respondent.
Both parties agree that the applicant is impecunious. As it seems to me, it would be more just to the respondent, even if marginally so, to have security given by persons other than the applicant, as has been done here for the other respondents and has been offered to the fifth respondent. I shall therefore order that security for the costs of the fifth respondent be given in the form and subject to the conditions and other terms which were announced in respect of the other respondents as contained in the transcript.

.-l"..cmc" m...-.mm " . * ~ - ~ , " ~ s s ,

1 certify that this arid the

preceding pages are a true COPY of the

Reasons for Judgment herein of his Honour
, ..	S Justice Einfeld

Associa