Palermo Seafoods Pty Ltd v Lunapas Pty Ltd

Palermo Seafoods Pty Ltd (the appellant) sought an adjournment of its appeal against Lunapas Pty Ltd (the respondent). The dispute concerned an application by the respondent for security for costs. The appeal was heard in the Court of Appeal of New South Wales, with Leeming JA presiding.

The primary legal issue before the Court was whether to grant the respondent's application for security for costs, notwithstanding that the appellant's solicitor had ceased to act for it and the appellant had a history of default judgments. The Court was required to determine if the circumstances warranted ordering security for the respondent's costs, even with limited evidence of actual and anticipated costs.

Leeming JA reasoned that the appellant's history of default judgments, coupled with the fact that its solicitor had ceased to act, created a sufficient risk that the appellant would be unable to pay the respondent's costs if the appeal were unsuccessful. The Court applied the principles governing security for costs, which allow for such orders where there is a real risk of impecuniosity or an inability to meet a costs order. The Court found that the risk of the appellant being unable to pay costs was sufficiently demonstrated to justify an order for security.

The Court dismissed the appellant's application for an adjournment and ordered that the appellant provide security for the respondents' costs in the sum of $20,000, payable into Court or otherwise secured to the respondents' satisfaction. Until this security was provided, the appeal was stayed. The appellant was also ordered to pay the respondents' costs of the notice of motion.