N.J. Cincotta P/L v Australia & New Zealand Banking Group Ltd

[1994] FCA 276

2 7 6 ~

JUDGMENT NO. .,.m.rn*sne s o w

NOT SUITABLE FOR DISTRIBUTTON

IN THE FEDERAL COURT OF AUSTRALIA )

1

NEW SOUTH WALES DISTRICT REGISTRY ) NG 708 of 1993

1

GENE= DIVISION )

BETWEEN :  N.J. CINCOTTA PTY LIMITED

Applicant

AND :  AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED

First Respondent

BARCLAYS BANK AUSTRALIA LIMITED

second ~espondent

C O N : Burchett J.
PLACE: Sydney

DATE : 31 March 1994

13 MAY l994

REASONS FOR JUDGMENT

BURCHETT J.:

This is an application for security for costs. It appears that, although last October some letters were written by the solicitors for the applicant for security seeking information, and threatening in the absence of information an application for security for costs, no further demand was made following the furnlshing of some information, of which complaint as to its adequacy is now made, until something of the order of six months later. The proceedings for security

were then instituted.

In the proceedings for security, substantial reliance is placed on the applicant company's returns, which certainly demonstrate that it has traded at a substantial loss for some considerable time. The other side of that coin is that they also demonstrate that, although incurring losses, it has for quite a significant period shown itself to be by no means defunct, and it has been able to secure and apparently to operate a substantial overdraft.

If one takes account of the large sum tied up in the transaction which has given rise to this proceeding, which is shown in the accounts as at 30 June 1993 at the sum of $476,000, it is obvious that the difficulty which appears on the face of the accounts in respect of ability to meet the estimated costs in this case, which are not of a very high order, must be regarded as owing a great deal to the very circumstances which have given rise to this litigation. It may of course be that, at the hearing, it will ultimately be determined that those circumstances are not the responsibility

of the particular respondent, in the principal proceeding, who

is an applicant here. On the other hand, it may be that

responsibility will be sheeted home. At any rate, it is a principle, which seems to me to be rooted in quite fundamental principles of justice concerned with the availability of the courts of the country to all persons who have need to call upon them, that if an impecuniosity which is relied upon as the basis for an application for security for costs is an impecuniosity for which the very circumstances alleged to raise the claim are in substantial measure responsible, that is a ground for declining an order for security for costs.

There is of course always in these cases a large discretionary element. In this case, a director of the company has given an undertaking to the court that he will not call upon the applicant company to repay a loan it owes to him of over a million dollars until after the completion of the principal proceedings, and should the applicant be unsuccessful in those proceedings until the costs lncurred by the second respondent, the applicant for security, have been paid. The undertaking is subject to a proviso which it is unnecessary to set out and which does not I think materially affect its influence on my discretion.

Having regard to the matters to which I have referred, it is appropriate in this case to decline an application which was only made after the lapse of a number of months, and without the prior request for the provision of appropriate

Taking that last matter into account, I think it is	security which I would have expected to have been made.
appropriate that the application be refused with costs.
AFTER HEARING FURTHER ARGUMENT, HIS HONOUR ADDED:
I have permitted counsel for the applicant in the motion to advance further arguments dealing with the issue of costs. It does not seem to me that they raise any new basis, or

indeed any basis, on which it is appropriate to do other than make the normal order that the costs follow the event, the application for security having been brought in the circumstances in which it was brought, and having regard to the matters to which I have already referred and the additional matters that have been mentioned in the course of argument. In particular, I refer to the considerable delay that occurred in the making of this application, which I have been informed from the bar table has involved the applicant in incurring considerable expense, as indeed one would normally assume, in preparing this case for trial, expense which could be thrown away if an order were made which could not be complied with.

I think the appropriate course is, as I have already indicated, to refuse the application, and to order that the applicant in the motion pay the costs of it. It is so ordered.

pages are a true copy of the Reasons for Judgment	I certify that this and the preceding three (3)
herein of his Honour Mr Justice Burchett.
Associate: f ? 0-
Date : ~ 7 / 4 /W
Solicitor for the Applicant:  Mr S. Della Marta of

Messrs Rockliffs

Counsel for the Second

Respondent:

Solicitors for the Second	Messrs Phillips Fox
Respondent:
Date of hearing:	31 March 1994