Mad Axe Pty Ltd v Sunvid Super Property Pty Ltd

[2022] QDC 243

DISTRICT COURT OF QUEENSLAND

CITATION:

Mad Axe Pty Ltd v Sunvid Super Property Pty Ltd & Ors [2022] QDC 243

PARTIES:

MAD AXE PTY LTD

(plaintiff/respondent)

V

SUNVID SUPER PROPERTY PTY LTD

(first defendant/applicant)

SALES PROPERTY GROUP PTY LTD

(second defendant)

MATTHEW BEAUMONT

(third defendant)

DANNY ALAN CONSTABLE

(fourth defendant by Counterclaim)

FILE NO/S:

D76/2022

DIVISION:

Civil

PROCEEDING:

Application

DELIVERED EX-TEMPORE ON:

7 October 2022

DELIVERED AT:

Maroochydore

HEARING DATE:

7 October 2022

JUDGE:

Cash DCJ

ORDERS:

Application is dismissed.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – SECURITY FOR COSTS – where the first defendant seeks an order for security for costs from the plaintiff – consideration of discretionary factors in rule 672 UCPR

LEGISLATION:

Uniform Civil Procedure Rules 1999 (Qld), r 672

COUNSEL:

J-P Mould for the first defendant/applicant
G Barr for the plaintiff/respondent and fourth defendant by counterclaim

No appearance for the second and third defendants

SOLICITORS:

Greenhalgh Pickard Solicitors for first defendant/applicant
Clutch Legal for the plaintiff/respondent and fourth defendant by counterclaim

No appearance for the second and third defendants

1. HIS HONOUR:  The first defendant applies for security for costs from the plaintiff in the claim brought by the plaintiff against the first defendant, second defendant, and the third defendant.  The plaintiff sues the first defendant and others on the basis of what are asserted to be misrepresentations as to the permitted use of premises leased by the first defendant to the plaintiff.  The purported representations were as to the ability of the premises to be used for an indoor sports activity.

1. The plaintiff pleads that he was told that the premises could be used for that purpose by, in effect, the second and third defendants directly. The claim against the first defendant does not involve a claim that the first defendant personally made such a representation, but the first defendant is alleged to have engaged the second and third defendants as agents to lease the premises, and it is argued that he may be held responsible for the representations of the second and third defendants. It is argued by the plaintiff that statements in the offer of lease and the lease itself, for which the first defendant may be directly responsible, support the conclusion that he ought to be held liable for the purported representations of the second and third defendants. The plaintiff is a corporation, and it is conceded by the plaintiff that it is effectively insolvent. For that matter, it is conceded by the plaintiff that what might be called the jurisdictional threshold in Rule 671(a) of the Uniform Civil Procedure Rules 1999 (Qld) is met in this case. Nevertheless, the plaintiff resists the application, focusing upon the discretionary considerations contained in Rule 672 of the Rules.

1. A number of aspects of Rule 672 are invoked by the plaintiff in resisting the application.  I need mention only some of them.  Rule 672(b) requires consideration of the prospects of success or the merits of the proceeding, and 672(c) calls for consideration of the genuineness of the proceeding.  While it is, in the end, for the plaintiff to make good its case on the pleadings it is not, in my view, an unmeritorious claim, and there is no suggestion of an improper purpose being behind the claim itself.  Ultimately, the success or failure of the claim, it seems, will turn upon the evidence to be presented, and the assessment of that by the tribunal of fact. 

1. Rule 672(e) provides for consideration of whether the impecuniosity of the plaintiff is attributable to the conduct of the defendant.  As I have noted, the plaintiff is a company which lost its ability to trade and to derive income when told that it could not operate the indoor sporting venue that it alleges it had been told by the defendants it could operate.  The plaintiff’s case is that it began operating because of the representations, and in the circumstances, if the plaintiff’s case is made good, its impecuniosity may be directly attributed to the conduct of the defendants collectively.

1. Rule 672(h) calls for consideration of whether an order for security for costs would stifle the proceeding.  There can be no doubt that any order for a substantial amount of money to be provided as security for costs would prevent the plaintiff from pursuing its claim. 

1. Having regard to the material presented on this application, I am persuaded the plaintiff brings a genuine and a not unmeritorious claim against the first defendant.   If the plaintiff is right in its case, its impecuniosity may be directly attributed to the conduct of the defendants, and if the security were ordered, it would stifle the proceedings.

1. The fourth defendant by counterclaim is the person who stands behind the company.  He deposes to being someone of modest means, and there is, on my assessment of the evidence, no prospect that he could fund the company to pay any costs that might be ordered, or to fund the litigation on his own.  These matters are sufficient, in my view, to persuade me that I should not exercise the discretion to order security for costs on the application of the first defendant. The application is dismissed.