Mantonella Pty Ltd v Grancroft Pty Ltd - [2015] QSC 191

SUPREME COURT OF QUEENSLAND

CITATION:

Mantonella Pty Ltd v Grancroft Pty Ltd & Ors [2015] QSC 191

PARTIES:

MANTONELLA PTY LTD (ACN 069 012 531)
(Plaintiff)

v
GRANCROFT PTY LTD (ACN 660 074 038)
(First Defendant)
and
MAINRACE PTY LTD (ACN 056 537 814)
(Second Defendant)
and
BRIAN JORGENSEN
(Third Defendant)

FILE NO/S:

SC 15 of 2015

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Cairns

DELIVERED ON:

30 June 2015

DELIVERED AT:

Cairns

HEARING DATE:

1 April 2015

JUDGE:

Henry J

ORDERS:

1.          The plaintiff give security for the defendants’ costs up to the close of pleadings and disclosure in the sum of $35,000 in a form satisfactory to the Registrar of the Court on or before 21 July 2015.

2.          Further proceedings are stayed pending compliance with order 1.

3.          Liberty to apply on the giving of two clear business days in writing.

4.          I will hear the parties as to costs at 10am 24 July 2015.

CATCHWORDS:

PROCEDURE – COSTS – SECURITY FOR COSTS – where the defendants seek an order for security for costs pursuant to r 671(a) – where the plaintiff company is impecunious – where the plaintiff company did not exist at the time of the alleged wrongdoing – whether the discretionary factors in r 672 favour the making of such an order – whether an order would stifle the proceeding – whether the plaintiff’s impecuniosity is attributable to the defendants – whether the plaintiff’s case lacks merit and prospects – where the order for security for costs is staged

Limitation of Actions Act 1974 (Qld) s 27, s 38
Uniform Civil Procedure Rules 1999 (Qld r 671, r 672

Bell Wholesale Co Pty Ltd v Gates Export Corp (No 2) (1984) 52 ALR 176, 179, cited

COUNSEL:

J Trevino for the 1^st, 2^nd and 3^rd Defendants

SOLICITORS:

Mr Alan Jorgensen in his capacity as Director of the Plaintiff

Miller Harris for the 1^st, 2^nd and 3^rd Defendants

By an application filed 26 March 2015, the defendants seek an order that the plaintiff provide security in the sum of $100,900.00 for the defendants’ costs of and incidental to the proceedings.

Background

The plaintiff company filed an originating application, in its capacity as trustee of the Jorgensen Family Trust, on 9 January 2015 seeking relief under r 643 of the Uniform Civil Procedure Rules (“UCPR”) with respect to the ownership of shares in the Rainbow Motor Inn Unit Trust.

The plaintiff’s claim relates to a historic dispute between the plaintiff’s director, Alan Jorgensen, and the third defendant Brian Jorgensen, who controls the first and second defendant companies. The plaintiff company, Mantonella Pty Ltd (“Mantonella”), did not exist in the era of the dispute.

Alan and Brian Jorgensen are twin brothers. Together, they purchased the Rainbow Motel in October 1977.[1] In 1985, the Rainbow Motor Inn Unit Trust was formed for the purpose of holding the brothers’ interests on trusts for their respective families.[2]
[1]Affidavit Alan…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] QSC 191
Decision Date: 30 June 2015

CaseChat Overview and Summary

Mantonella Pty Ltd, the plaintiff, commenced proceedings against Grancroft Pty Ltd, the defendant, in the Federal Circuit Court of Australia. The plaintiff alleged breaches of contract and misrepresentations by the defendant. The defendants sought an order for security for costs, claiming the plaintiff was impecunious and the proceedings were frivolous. The plaintiff, in turn, argued that the order would stifle its ability to pursue its claims. The court had to decide whether the discretionary factors in the relevant rule supported making such an order, and whether an order would stifle the proceeding, among other factors.

The court considered the plaintiff's impecuniosity and its inability to pay costs, as well as whether the plaintiff's case had merit and prospects. It also considered whether the plaintiff's impecuniosity was attributable to the defendant's conduct. The court concluded that the plaintiff's impecuniosity was not due to the defendant, and that the plaintiff's case had merit and prospects. However, the court found that the plaintiff's impecuniosity and the risk of stifling the proceeding were significant factors. The court also noted that the order for security for costs was staged, which reduced the risk of stifling the proceeding.

The court found that the discretionary factors in the relevant rule favoured making an order for security for costs. The court made an order for security for the defendants' costs up to the close of pleadings and disclosure in the sum of $35,000. The court also stayed further proceedings pending compliance with the order for security for costs. The court granted liberty to apply on the giving of two clear business days in writing and scheduled a hearing as to costs on 24 July 2015.

Orders

Orders of the court

1. The plaintiff give security for the defendants’ costs up to the close of pleadings and disclosure in the sum of $35,000 in a form satisfactory to the Registrar of the Court on or before 21 July 2015.

2. Further proceedings are stayed pending compliance with order 1.

3. Liberty to apply on the giving of two clear business days in writing.

4. I will hear the parties as to costs at 10am 24 July 2015.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Mantonella Pty Ltd v Grancroft Pty Ltd & Ors [2015] QSC 191
PARTIES:	MANTONELLA PTY LTD (ACN 069 012 531) (Plaintiff) v GRANCROFT PTY LTD (ACN 660 074 038) (First Defendant) and MAINRACE PTY LTD (ACN 056 537 814) (Second Defendant) and BRIAN JORGENSEN (Third Defendant)
FILE NO/S:	SC 15 of 2015
DIVISION:	Trial
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Cairns
DELIVERED ON:	30 June 2015
DELIVERED AT:	Cairns
HEARING DATE:	1 April 2015
JUDGE:	Henry J
ORDERS:	1. The plaintiff give security for the defendants’ costs up to the close of pleadings and disclosure in the sum of $35,000 in a form satisfactory to the Registrar of the Court on or before 21 July 2015. 2. Further proceedings are stayed pending compliance with order 1. 3. Liberty to apply on the giving of two clear business days in writing. 4. I will hear the parties as to costs at 10am 24 July 2015.
CATCHWORDS:	PROCEDURE – COSTS – SECURITY FOR COSTS – where the defendants seek an order for security for costs pursuant to r 671(a) – where the plaintiff company is impecunious – where the plaintiff company did not exist at the time of the alleged wrongdoing – whether the discretionary factors in r 672 favour the making of such an order – whether an order would stifle the proceeding – whether the plaintiff’s impecuniosity is attributable to the defendants – whether the plaintiff’s case lacks merit and prospects – where the order for security for costs is staged Limitation of Actions Act 1974 (Qld) s 27, s 38 Uniform Civil Procedure Rules 1999 (Qld r 671, r 672 Bell Wholesale Co Pty Ltd v Gates Export Corp (No 2) (1984) 52 ALR 176, 179, cited
COUNSEL:	J Trevino for the 1^st, 2^nd and 3^rd Defendants
SOLICITORS:	Mr Alan Jorgensen in his capacity as Director of the Plaintiff Miller Harris for the 1^st, 2^nd and 3^rd Defendants