North Queensland Aviation Services Pty Ltd v Shell Company of Australia Ltd

[1992] QCA 208

[1992] QCA 208

COURT OF APPEAL

PINCUS JA DAVIES JA DERRINGTON J

Appeal No 4083 of 1991

Appeal No 94 of 1992

NORTH QUEENSLAND AVIATION SERVICES

PTY LTD

(Plaintiff) Respondent

and

THE SHELL COMPANY OF AUSTRALIA LIMITED

(Defendant) Appellant

BRISBANE
..DATE 22/5/92

ORDER ORDER DAVIES JA: This is an application for leave for appeal to

this Court pursuant to s 92(2) of The District Courts Act of company, which, it was conceded, was insolvent.

1967. The applicant/defendant unsuccessfully applied in the

Acting Judge Hanson QC in the District Court refused the application. His main basis for refusal was that there were individuals against whom, if the applicant/defendant were successful, an order for costs could be made. Those individuals were individuals who had been joined by the applicant/defendant in a counterclaim. They were two men who had carried on a business in partnership which had apparently been taken over by the plaintiff company. One of the questions in issue in the case was whether the contract, in respect of which the plaintiff company sued and the defendant counterclaimed, was a contract between the plaintiff company and the defendant or a contract between the two individuals and the defendant. The other question in issue in the action was as to moneys due, an account and damages pursuant to that contract.

I do not think it is necessary to resolve whether His Honour was correct in deciding that in any event an order would have been made against the individuals or that an order could have been made against those individuals for costs if the applicant/defendant was successful.

The applicant/defendant argues that there were two possible bases for success by the applicant/defendant. One would have resulted in a successful judgment against the plaintiff company on the assumption that the applicant/defendant failed in its allegation that it was the two individuals rather than the plaintiff company with which the contract was made. The other would be a judgment against the individuals and it was only in that latter event that an order could have been made for costs against the individuals.

It is at least arguable, in my view, that even if the result in the case had been that the contract was made with the plaintiff company, that an order for costs could have been made against the individuals.

The question of law, which is said by the applicant/defendant to arise here, is whether, in circumstances where the power to order a corporate plaintiff to give security for costs is enlivened, a Court may, in the exercise of its discretion, take into account a possible final judgment in which a Court order is made on a counterclaim against persons not parties to the principal proceedings which is other than the usual costs order for the judgment upon which an order for security for costs is predicated. In my view, there is no important question of law involved here. The only question, in my view, is whether His Honour was correct or not in concluding that if the applicant/defendant succeeded an order for costs could have been made against the two individuals. In any event, that view, as I have already said, was arguably correct and, in my view, if the judgment had been in the action a judgment in which the defendant had been successful and if the judgment had been against the plaintiff company, it would have been a very sensible order to make in the circumstances, given that the individuals stood behind the plaintiff company.

It was then said in the alternative that there was an important question of justice involved. But it seems to me that in the end what was said to be an important question of justice was no more than the question whether when a defendant seeks security for costs against a plaintiff and fails, and that order is arguably wrong, there is necessarily an important question of justice involved in the correctness of that decision.

In my opinion, therefore, there is no important question of law involved and there is no important question of justice involved and I would refuse the application.

PINCUS JA: I agree.

DERRINGTON J: I agree.

DAVIES JA: The order of the Court then is that the application is refused with costs.

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