Pegasus Gold Australia Pty Ltd v Bateman Project Engineering Pty Ltd

FEDERAL COURT OF AUSTRALIA

Pegasus Gold Australia Pty Ltd v Bateman Project Engineering Pty Ltd
[2001] FCA 377

COSTS – security for costs sought in relation to cross-claim – the cross-claim is essentially defensive in nature – most issues raised in cross-claim already raised in proceedings – application refused.

PEGASUS GOLD AUSTRALIA PTY LTD V BATEMAN PROJECT ENGINEERING PTY LIMITED & ORS

NG 471 of 1998

MATHEWS J
5 APRIL 2001
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG471 OF 1998

BETWEEN:	PEGASUS GOLD AUSTRALIA PTY LIMITED APPLICANT
AND:	BATEMAN PROJECT ENGINEERING PTY LIMITED FIRST RESPONDENT
KINHILL PACIFIC PTY LIMITED  SECOND RESPONDENT
KILBORN ENGINEERING PACIFIC PTY LIMITED THIRD RESPONDENT
JUDGE:	MATHEWS J
DATE OF ORDER:	5 APRIL 2001
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1)   I decline to make the order sought in paragraph one of the Notice of Motion dated 5 October 2000.

2)   I order PGA to pay BKK’s costs of the application for security for costs.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG471 OF 1998

BETWEEN:	PEGASUS GOLD AUSTRALIA PTY LIMITED APPLICANT
AND:	BATEMAN PROJECT ENGINEERING PTY LIMITED FIRST RESPONDENT
KINHILL PACIFIC PTY LIMITED  SECOND RESPONDENT
KILBORN ENGINEERING PACIFIC PTY LIMITED THIRD RESPONDENT

JUDGE:	MATHEWS J
DATE:	5 APRIL 2001
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. By Notice of Motion dated 5 October 2000, the third applicant Pegasus Gold Australia Pty Limited (“PGA”) sought security for costs from the respondents (“BKK”) in relation to the seventh cross-claim which BKK had lodged against PGA.  In the cross-claim BKK sought contribution and/or equitable contribution in relation to any liability it might be found to have to the first and second applicants (“PGI/PGC”).

2. BKK has conceded that it would be unable to meet an adverse costs order if it were unsuccessful under the seventh cross-claim.  The primary basis upon which it resists an order for security is that the cross-claim is, in substance, a defensive one.  BKK has already raised, as a defence to PGA’s claim, that any damage suffered by PGA was the result of PGA’s contributory negligence.  There is a further defence that PGA has failed to mitigate its losses.  Most of the issues raised under the cross-claim will be traversed in any event pursuant to these defences, according to the submissions of BKK’s counsel, Mr McDougall QC.

3. Mr Gee QC, who appears for PGA, urges that there are a number of matters raised under the cross-claim additional to those which would need to be litigated in the principal proceedings.  In particular, the cross-claim is dependent upon the proposition that PGA owed a duty of care to PGI/PGC or otherwise had a co-ordinate liability to make good any loss suffered by PGI/PGC.  These are new issues which would not need to be ventilated without the cross-claim.

4. BKK’s solicitor, Michael Dawson, gave evidence on the application and was cross-examined by Mr Gee.…