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Maples v Hughes

Maples v Hughes

Case [2002] NSWSC 617 11 July 2002

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CITATION: Maples v Hughes [2002] NSWSC 617

CURRENT JURISDICTION: Common Law Division
Professional Negligence List

FILE NUMBER(S): SC 20116/00

HEARING DATE(S): 5 July 2002

JUDGMENT DATE: 11 July 2002

PARTIES :

Bruce John Maples (1st Plaintiff)
Novarest Pty Limited (2nd Plaintiff)
Colin Frederick Hughes (Defendant)

JUDGMENT OF: Studdert J

COUNSEL : Mr J.B. Whittle SC (Plaintiffs)
Ms M.L. Sneddon (Defendant)

SOLICITORS: Edward T. Davis & Co. (Plaintiffs)
Riley Gray-Spencer (Defendant)

LEGISLATION CITED: Corporations Law

CASES CITED: Southern Cross Exploration NL v Fire & All Risks Insurance Co. Limited (1985) 1 NSWLR 114
John Bishop (Caterers) Limited & Anor v National Union Bank Limited & Ors
Harpur & Ors v Ariadne Australia Ltd & Ors

DECISION: See para 23

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
PROFESSIONAL NEGLIGENCE list

STUDDERT J

Thursday 11 July 2002

20116/00 BRUCE JOHN MAPLES & ANOR v COLIN FREDERICK HUGHES
JUDGMENT

1 HIS HONOUR: By amended notice of motion filed on 3 May 2002, the defendant, Colin Frederick Hughes, sought orders as follows:

“1. The statement of claim pursued by the second plaintiff be struck out for want of prosecution.

2. The second plaintiff pay the defendant’s costs of this motion and the proceedings.

3. Further and in the alternative, the second plaintiff provide security for costs in the sum of $30,000 or other such amount required to be given to the satisfaction of the Registrar within twenty eight (28) days pursuant to Part 40 Rule (1) Sub-Rule (2)(a), (c) and Sub-Rule (4).

4. The second plaintiff’s action as against the defendant be struck out should the second plaintiff fail to provide security by payment into court within the time periods specified in paragraph 3 above.

5. The second plaintiff be stayed from continuing the proceedings until the payment for security costs referred to in paragraph 3 above is made to the Registrar.

6. The second plaintiff pay costs to the defendant of this motion and the costs in preparation of the motion by their solicitors.

2 When the motion came on to be heard, the defendant did not press for order 1 but he did pursue an order for costs and I will return to this presently.

3 The focus of the hearing on the motion was the application for security for costs against the second plaintiff and the defendant relied upon s 1335(1) of the Corporations Law and upon Pt 53 r 2(1)(e) in making the application. The latter sub-rule affords as a ground for the making of an order:

“That there is reason to believe that a plaintiff being a body corporate will be unable to pay the costs of the defendant if ordered to do so.”

4 The defendant relied upon a number of affidavits sworn by Paul Kozub, these being affidavits of 27 March 2002, 1 May 2002, 16 May 2002 and 3 June 2002. The second plaintiff read an affidavit sworn by Edward Davis on…

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.

Continue reading Maples v Hughes

Details

AGLC: Maples v Hughes [2002] NSWSC 617
Case: [2002] NSWSC 617
Decision Date: 11 July 2002

CaseChat Overview and Summary

In the case of Maples v Hughes, the plaintiff Bruce John Maples, along with Novarest Pty Limited, filed a claim against the defendant Colin Frederick Hughes, alleging professional negligence. The case was heard in the Supreme Court of New South Wales, Common Law Division, Professional Negligence List. The defendant sought various orders, including the striking out of the statement of claim, an order for costs, and security for costs. The primary focus of the hearing was on the application for security for costs, which was based on s 1335(1) of the Corporations Law and Pt 53 r 2(1)(e). The latter sub-rule provides a ground for ordering security for costs if there is reason to believe that a corporate plaintiff will be unable to pay the defendant's costs if the defendant is successful in their defence.

The legal issues centred around whether there was credible evidence to suggest that the second plaintiff, Novarest Pty Limited, would be unable to pay the defendant's costs if the defendant succeeded in their defence, and whether, in the exercise of the court's discretion, the relief sought should be granted. The defendant argued that the second plaintiff, a two-dollar company with receivers and managers appointed, and with the National Australia Bank as the chargee of both fixed and floating charges, was likely unable to pay costs. The second plaintiff, however, had not provided financial records to counter this assertion. Studdert J concluded that there was credible evidence to suggest that the second plaintiff would be unable to pay the defendant's costs if successful in his defence. The court then considered the discretionary factors, including whether the order would stifle the litigation, whether the inability to pay was due to the defendant's conduct, the nature of the claims, and whether there was any unreasonable delay in making the application. Ultimately, the court found that the claims of the first and second plaintiffs were interlocked, and the defendant would have recourse to the first plaintiff to recover costs if the action failed. Therefore, the court decided not to order security for costs against the second plaintiff.

The final orders were that the defendant's motion for security for costs was dismissed, the second plaintiff was to pay the defendant's costs of the notice of motion filed on 2 April 2002 and the costs incurred in the pursuit of the motion prior to 5 July 2002, excluding those related to the security for costs application. The defendant, on the other hand, was to pay the second plaintiff's costs of the hearing of the motion on 5 July 2002 and any earlier costs incurred by the second plaintiff in relation to the security for costs application.

Orders