Mila Properties Pty Ltd v Caldwell - [2009] WASC 282

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: MILA PROPERTIES PTY LTD -v- CALDWELL [2009] WASC 282

CORAM: MASTER SANDERSON

HEARD: 8 SEPTEMBER 2009

DELIVERED : 23 SEPTEMBER 2009

FILE NO/S: CIV 2691 of 2008

BETWEEN: MILA PROPERTIES PTY LTD
Plaintiff
AND
JAMES MICHAEL CALDWELL
DOROTHY OLIVER CALDWELL
First Defendants
DOWNSOUTH (WA) PTY LTD
Second Defendant

Catchwords:

Practice and procedure - Application by both defendants for security for costs - Application by second defendant for further and better discovery - Turns on own facts

Legislation:

Nil

Result:

All applications dismissed

Category: B

Representation:

Counsel:

Plaintiff:     Mr D H Solomon
First Defendants           :     Mr D F Beere
Second Defendant         :     Mr H M O'Sullivan

Solicitors:

Plaintiff:     Solomon Brothers
First Defendants           :     Mossensons
Second Defendant         :     SRB Legal

Case(s) referred to in judgment(s):

Buckley v Bennell Design & Constructions Pty Ltd (1974) 1 ACLR 301
Mulley v Manifold (1959) 103 CLR 341
Western Areas Exploration Pty Ltd v Streeter [No 2] [2008] WASC 217

MASTER SANDERSON: This was the return of applications by both defendants. The first defendants applied for security for costs. The second defendant applied for (effectively) further and better discovery and security for costs. During the course of the hearing I advised the parties that I would not order further and better discovery and that I would publish reasons for doing so. These reasons deal with the discovery question as well as the security for costs issue.
In relation to further and better discovery not a great deal needs to be said. The plaintiff has filed two affidavits of discovery and a starting point is to assume that it has complied with its obligations. The second defendant relies on a contentious affidavit sworn by Anthony Farris on 3 July 2009. The thrust of the affidavit is that certain documents 'must' exist. This claim is put on the basis of certain statements made by representatives of the plaintiff from time to time. It has been long established that further and better discovery cannot be ordered on the basis of a contentious affidavit. That principle was established by Mulley v Manifold (1959) 103 CLR 341 and 50 years later that case is still good law.
In short, there was no basis for ordering further and better discovery and I dismissed this aspect of the second defendant's application.
That leaves both defendants' application for security for costs. The application was brought under s 1335(1) of the Corporations Act 2001 (Cth). The plaintiff in this case is a trustee company. Paragraph 1 of the plaintiff's statement of claim pleads that the plaintiff is the trustee of the Mindarie Property Trust. Based on the affidavit of Andrea Georgina Rawson sworn 22 July 2009 and filed in support of this application for the second defendant, it is clear that the plaintiff owns a number of properties. However, Landgate searches of these properties do not indicate whether the plaintiff owns them in its own right or whether it owns them as trustee. The…

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: [2009] WASC 282
Decision Date: 23 SEPTEMBER 2009

CaseChat Overview and Summary

In the case of Mila Properties Pty Ltd v Caldwell, the defendants sought security for costs and further and better discovery from the plaintiff. The case was heard in a relevant Australian court, which did not specify which court it was. The defendants argued that the plaintiff should provide security for costs due to the significant increase in its liabilities, and they also sought further and better discovery to obtain more information about the plaintiff's assets. The plaintiff opposed these applications, arguing that the defendants had delayed in making them and that they were not justified. The court examined the defendants' reasons for the delay and the plaintiff's arguments, and ultimately decided not to grant the applications.
The court considered the defendants' submissions regarding the delay in making the security for costs application. The defendants argued that they did not make the application earlier because they believed it was in the best interest of the case to proceed to mediation first. However, the court found that case management principles did not support this approach, and that the application should have been made at the earliest possible opportunity. The court also considered the defendants' argument that the increase in the plaintiff's liabilities justified the delay. However, the court found that the defendants had no knowledge of the plaintiff's financial situation and that the increase in liabilities did not explain the delay in making the application.
The court concluded that the delay in making the security for costs application was significant and that the application should be refused. The court noted that the case was far advanced, and that it would be difficult for the plaintiff to take any further steps other than to file the necessary trial documents. The court found that the application was too late and that security should not be ordered. The court also dismissed the application for further and better discovery.
The court dismissed all of the defendants' applications, including the application for security for costs and the application for further and better discovery. The court found that the defendants had not provided adequate justification for the delay in making the applications, and that the applications were not justified on the facts of the case. The court's decision was based on the evidence presented and the principles of case management and security for costs. The court's decision was final and binding on the parties involved in the case.

Orders

Orders of the court

All applications dismissed

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

It is worth noting that this statement of principle was approved of and applied by Le Miere J in Western Areas Exploration Pty Ltd v Streeter [No 2] [2008] WASC 217. In that case, applying what was said by Moffitt P, his Honour refused to order security. For their part the defendants relied on two matters in explaining the delay in bringing their applications for security. The first had to do with case management principles. It was said the application was not made because it was thought best to progress the matter to mediation, before what might prove to be an unnecessary interlocutory step in the proceedings was taken. That approach suggests that what was said by Moffitt P in Buckley was to be modified in the light of case management principles. It was submitted this was particularly the case when, as at present, interlocutory applications were discouraged. In my view, there is nothing in the case management regime as it applies in this court, or in case management principles generally, which would support that submission. It remains the case that an application for security for costs ought be made at the earliest possible time. Of course, if circumstances change during the course of the litigation so that a plaintiff who may have had assets to meet a costs order consequent upon the happening of a certain event no longer has the wherewithal to meet the costs then there is an adequate explanation for the delay. But the starting point in any application for security for costs is that it ought be foreshadowed at the earliest possible opportunity and if no agreement is reached the application should be made promptly. A defendant who does not follow this practice runs a real risk that no security order will be made. The second basis of the defendants' claim in this case was that the position of the plaintiff had altered. It was said as at December 2008 the plaintiff's assets were subject to a charge in an amount of $4.2 million. As at 29 June 2009 notification of charge details were lodged with ASIC showing a liability of $8 million. It was submitted this increase in the plaintiff's liabilities justified the delay in making the application. That submission should be rejected. The simple fact is the defendants never had any idea as to the financial health or otherwise of the plaintiff, either in December 2008 or in June 2009. The plaintiff would not provide them with any information. There is nothing in the evidence to suggest the defendants held off making the security for costs application until they learned of the increase in the plaintiff's liabilities. In other words, the increase in the amount of the charge over the plaintiff's assets in no way explains the delay in making this application. In the circumstances I am satisfied the delay in bringing this application is such that security ought not be ordered. In my view, the action is just too far advanced. If the resumed mediation does not resolve the parties' differences the next step will be to enter the matter for trial. Given how far the matter has progressed, it is hard to see the plaintiff has anything left to do other than file the necessary entry for trial documents and the papers for the judge. To have got to this point the parties' witnesses must have been proofed, all the documents assembled and, even if an advice on evidence has not been drawn, in a case such as this, which so far as the plaintiff is concerned is relatively straight‑forward, that would not be an onerous step. So the application is too late. It should be refused.