Modern Holdings Pty Ltd v Scentre Management Limited

Modern Holdings Pty Ltd, represented by its directors, Mr Al-Khatib and Mr Abdel Qadar, was the plaintiff in a dispute against Scentre Management Limited. The issue before the court was whether the plaintiff should provide security for costs in the event of an adverse costs order. The plaintiff had not provided financial records to the defendant and had not disclosed the source of income for its directors. The defendant argued that the plaintiff should provide security for costs due to the significant legal costs incurred and the potential risk of the plaintiff being unable to pay if an adverse costs order was made.

The court had to determine whether the plaintiff could meet an adverse costs order and whether it was appropriate to order the plaintiff to provide security for costs. The court noted that the plaintiff had not provided any financial records and had not disclosed the source of income for its directors. The court also noted that the plaintiff had incurred significant legal costs in the proceeding and in two other proceedings. The court considered the principles that apply to the exercise of the discretion under s 1335 of the Supreme Court Act 1935 (WA), which apply to applications made pursuant to the RSC O 25. The court held that the plaintiff had not demonstrated that it could meet an adverse costs order and that it was appropriate to order the plaintiff to provide security for costs.

The court ordered that the plaintiff provide security for costs in the sum of $200,000 within 14 days. The court held that the amount of security was appropriate given the significant legal costs incurred and the potential risk of the plaintiff being unable to pay if an adverse costs order was made. The court also noted that the plaintiff had not budgeted for the eventuality of having to provide security and that if security were ordered, it would stultify the plaintiff's ability to pursue its cases.