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Matthews v SPI Electricity Pty Ltd (No 9)

Matthews v SPI Electricity Pty Ltd (No 9)

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Case Copied 9 December 2013 73 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

SCI 2009 04788

CAROL ANN MATTHEWS	Plaintiff
v
SPI ELECTRICITY PTY LTD (ACN 064 651 118) & ORS (according to the schedule of parties)	Defendants

AND BETWEEN:

SPI ELECTRICITY PTY LTD (ACN 064 651 118)	Plaintiff by Counterclaim
v
ACN 060 674 580 & ORS (according to the schedule of parties)	Defendants by Counterclaim

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JUDGE:	Derham AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	6 & 7 June 2013 (written submissions 7 June and 12 June 2013)
DATE OF JUDGMENT:	9 December 2013
CASE MAY BE CITED AS:	Matthews v SPI Electricity Pty Ltd & Ors (No 9)
MEDIUM NEUTRAL CITATION:	[2013] VSC 671

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PRACTICE AND PROCEDURE — Costs — Group proceeding — Security for costs — Against plaintiff and insurers of group members — Whether power to order security against plaintiff and insurers of group members — Discretionary factors to be taken into account — solicitors acting under no win-no fee agreement — Insurers funding part of third party disbursements of plaintiff — Insurers standing behind plaintiff and to benefit from group proceedings — Balancing the factors — Application after commencement of trial — Where no stay of proceedings possible or, in the main, requested — Overwhelming balance against ordering security for costs against plaintiff — No reason to apprehend Insurers will be unable to pay defendant’s costs in the event they are ordered to do so — Power to order security against Insurers not enlivened — Discretionary balance against ordering security if power enlivened.

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr PW Collinson SC with Ms FK Forsyth	Maurice Blackburn Lawyers
For the First Defendant	Mr PH Solomon SC with Dr CO Parkinson	Herbert Smith Freehills
For the Hall & Wilcox Insurers	Mr MN Connock with Mr CP Young	Hall & Wilcox.
For the Suncorp Insurers	Mr RA Heath	Ligeti Partners
For R. J. Kiln & Co Ltd, Wesfarmers General Insurance Ltd and Calliden Insurance Ltd	Ms FJ Bentley	Ligeti Partners
Allianz Australia Insurance Ltd	Mr TR Messer	Hall & Wilcox

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Summary of Conclusions................................................................................................................. 3

Affidavits............................................................................................................................................. 3

Background......................................................................................................................................... 4

The Insurers – further background.............................................................................................. 11

The ‘alternative’ orders sought...................................................................................................... 12

Security for costs against the Plaintiff......................................................................................... 15

SPI Submissions........................................................................................................................... 15
Plaintiff’s submissions................................................................................................................ 17

Security for costs against the Plaintiff - Reasoning.................................................................. 22

Power............................................................................................................................................ 22
Is the power enlivened?............................................................................................................. 31
Discretion..................................................................................................................................... 32
Discretion - The relevant factors............................................................................................... 35

Whether there is reason to believe that the plaintiff will be unable to pay SPI’s costs if so ordered?.................................................................................................................................................. 35
Insufficiency of means not brought about by defendants........................................................ 35
Timing of the making of the application.................................................................................. 35
Strength and bona fides of the plaintiff’s claims...................................................................... 42
Whether plaintiff a person of straw deliberately selected......................................................... 43
Plaintiff suing for someone else’s benefit................................................................................. 43
Whether someone who stands to benefit from the litigation is funding the plaintiff?............. 46
If separate actions brought, would security have been ordered?............................................. 49
Stultification............................................................................................................................ 50
The form of…

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: [2013] VSC 671
Decision Date: 9 December 2013

CaseChat Overview and Summary

In Matthews v SPI Electricity Pty Ltd (No 9), the plaintiff, who is part of a group proceeding, sought to have the court determine whether it had the power to order security for costs against both the plaintiff and the insurers of the group members. The defendants, SPI Electricity Pty Ltd and others, applied for an order of security for costs against the plaintiff and the insurers. The case was heard in the Federal Court of Australia.

The legal issues before the court included whether the court had the power to order security for costs against the plaintiff and the insurers, and if so, what discretionary factors should be taken into account in making such an order. The court had to consider the nature of the proceeding, the nature of the parties, and the circumstances of the case. Specifically, the court needed to assess whether the solicitors were acting under a no win-no fee agreement, whether the insurers were funding part of the third party disbursements of the plaintiff, and whether the insurers were standing behind the plaintiff and would benefit from the group proceedings.

The court found that the power to order security for costs against the plaintiff and the insurers was not automatically activated. The discretionary factors weighed against ordering security for costs against the plaintiff, particularly because the application for security was made after the commencement of the trial and a stay of proceedings was not possible or requested in the main. The court also found that there was no reason to apprehend that the insurers would be unable to pay the defendants' costs if ordered to do so. The discretionary balance also favoured not ordering security if the power was enlivened. Ultimately, the court declined to order security for costs against the plaintiff and the insurers.

No specific orders were made in the decision regarding the costs, as the court found that the power to order security was not enlivened and the discretionary balance was against ordering security.

Orders