Pestano v Madden - [2007] NSWSC 545

CITATION: Pestano & Anor v Madden & Ors [2007] NSWSC 545

HEARING DATE(S): 15 May 2007

JUDGMENT DATE :
30 May 2007

JURISDICTION: 20435/05

JUDGMENT OF: Smart AJ at 1

DECISION: See paras 58-60

CATCHWORDS: Application for Security for costs and stay - Co-plaintiffs - Individual and Corporation - Corporation unable to meet anticipated costs - Substantial overlapping of factual matters on liability - hearing actions together not materially increasing hearing time and costs - likely costs order against both plaintiffs if they lose - Security not ordered.

LEGISLATION CITED: Australian Securities and Investments Commission Act 2001
Corporations Act 2001
Defamation Act 2005 s 9
Defamation Act 1974 s 8A
Financial Services Reform Act 2002 (Cth)

CASES CITED: Fiduciary v Morning Star [2004] NSWSC
Harpur v Andrews Australia Limited 1984 1 Qd R
Interwest Ltd v Tricontinental Corp Ltds (1991) 5 ASCR
Roach & Ors v Page & Ors (No 1) [2003] NSWSC
Winnote Pty Ltd (In Liq) & Anor v Page & Ors (2005) 64 NSWLR

PARTIES: Douglas Pestano & Morgan Price Pty Limited v Madden & Ors

FILE NUMBER(S): SC 20435/05

COUNSEL: (P) Mr R Sheldon
(D1 & D2) Mr Nguyen (solr)
(D3) Mr R Beech-Jones SC

SOLICITORS: (P) Bryan Gorman & Co
(D1 & D2) Ebsworth & Ebsworth
(D3) Middletons

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

SMART AJ

Wednesday, 30 May 2007

DOUGLAS PESTANO & MORGAN PRICE PTY LIMITED v MADDEN & ORS

JUDGMENT

1 By their notices of motion all defendants applied for orders for security for costs against both the first and second plaintiffs, stated in the Amended Statement of Claim (ASC) to be Douglas Pestano and Morgan Price Pty Limited and stays pending the provision of such security.. There is a question as to the correct name of the second plaintiff. In some of the documents it appears to be “Morgan Price Limited”. If the latter is the correct name the Amended Statement of Claim should be further amended.

2 The first and second defendants relied on an affidavit of Mr M Nguyen, their solicitor, and adopted the submissions of the third defendants.

3 At an early stage of the hearing Senior Counsel for the third defendants told the Court that he did not press for an order that Mr Pestano provide security for costs nor for a stay of his action against them. He pressed for an order that Morgan Price Pty Limited or Morgan Price Limited, depending on the correct name, provide security for costs and that the proceedings by it against his clients be stayed pending such provision,

4 The first defendants were Phillip MacDonald Madden and Julia Anne Madden t/as Maddens Commercial Lawyers and/or Maddens Business & Property Lawyers. The second defendant was Maddens Lawyers Business & Property Pty Ltd. The third defendant comprised Mr A T Sutherland and six others t/as Eakin McCaffery Cox; they were solicitors.

5 By their amended Statement of Claim the plaintiffs, in summary, assert that:

(a) about 22 February…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Pestano v Madden

Details

AGLC: Pestano v Madden [2007] NSWSC 545
Case: [2007] NSWSC 545
Decision Date: 30 May 2007

CaseChat Overview and Summary

The case of Pestano v Madden involved an application for security for costs and a stay by the defendant, Madden, against the plaintiffs, Pestano, an individual, and a corporation. The plaintiffs sought damages for alleged breaches of contract and tortious claims. Madden argued that the corporation was unable to meet anticipated costs and that there was substantial overlap in the factual matters on liability between the two plaintiffs. The court was required to determine whether security for costs should be ordered and whether the actions should proceed together or be stayed. The court considered the extent of overlapping factual matters and the potential costs implications for both plaintiffs if they lost the case.

The court found that there was a significant overlap in the factual matters on liability, and proceeding with separate trials would not materially increase the hearing time and costs. Additionally, the court noted that if the plaintiffs lost the case, there was a likely costs order against both of them. Despite these considerations, the court decided not to order security for costs, reasoning that the corporation's inability to meet costs did not necessarily mean the individual plaintiff could not contribute to the costs. The court also recognised the potential unfairness of a costs order against both plaintiffs if they lost.

The court's decision not to order security for costs was based on the understanding that the individual plaintiff might be able to contribute to the costs and the potential unfairness of a costs order against both plaintiffs if they lost. The court concluded that proceeding with the actions together was appropriate given the substantial overlap in factual matters and the overall cost implications. There were no further orders made regarding the stay of the proceedings.

Orders