Ricochet Pty Ltd v Equity Trustees Executors & Agency Company Ltd

[1992] FCA 473

Re: RICOCHET PTY LTD; IAN BARRON and MORWEST INVESTMENTS PTY LTD as Trustee
for MORWEST TRADING TRUST
And: EQUITY TRUSTEES EXECUTORS AND AGENCY COMPANY LTD, AUSTORE PTY LTD and
AZELIA PTY LTD
No. WA G148 of 1990
FED No. 473 Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
French J.(1)

CATCHWORDS

Practice and Procedure - security for costs - delay in bringing motion - no proper basis for estimating amount of security - motion dismissed.

HEARING

PERTH

#DATE 24:6:1992

Counsel for the Applicants: Mr M.J. McPhee

Solicitors for the Applicants: Michell Sillar McPhee Meyer

Counsel for the Respondents: Mr D. Martino

Solicitors for the Respondents: Clayton Utz

Counsel for the Cross-Respondent: Mr I.R. Freeman

Solicitors for the Cross-Respondent: Phillips Fox

ORDER

THE COURT ORDERS THAT:

1. The respondents motion filed 8 June 1992 so far as it relates

to security for costs is dismissed.

2. The first and second respondents to pay the applicants' costs

of the motion so far as it relates to security for costs and to pay the costs thrown away by reason of the amendment.

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

JUDGE1

These proceedings were commenced by application filed on 18 December 1990. At that time, Ricochet Pty Ltd was the only applicant. Service was effected on the second respondent on 10 January 1991 and on the first respondent on 7 February 1991. The first directions hearing was held on 11 February 1991. At that time Ricochet and the first and second respondents were represented. An amended statement of claim was filed on 25 February and on 21 March 1991 a motion seeking the dismissal of the action as statute barred was filed. This motion was on the face of it misconceived as it invoked s.74J of the Trade Practices Act 1974. The time limitation point in relation to a claim for damages for contravention of s.52 arises under s.82 of the Act. The motion was dismissed on the application or with the consent of the respondents on 5 April 1991. A further amended statement of claim was filed on that day by leave. The defence was filed on 26 April 1991 and a reply on 10 May 1991. The matter then progressed to the provision of particulars and discovery and inspection of documents in June 1991.

1. The applicant moved on 8 August 1991 to join Morwest Investments Pty Ltd and Ian Barron as applicants. The motion was supported by a further re-amended statement of claim. On 9 August 1991, orders were made joining the additional parties and for leave to amend the statement of claim. Leave was also given to the respondents to cross-claim against Dunyack Pty Ltd. Further programming orders were made on 13 September 1991. On 21 October 1991, directions were made including the substitution of Azelia Pty Ltd for Dunyack Pty Ltd as cross-respondent. Directions with respect to interrogatories were given on 18 November 1991 and the matter then referred to the Registrar for a preliminary conference. On 4 March 1992 the application was listed for hearing for seven days commencing 3 August 1992.

2. On 8 June 1992, the respondent filed a motion seeking, inter alia, orders that the first and third applicants provide security for costs. The motion came before Sweeney J. on 10 June and his Honour then ordered that any affidavit to be used by the applicants in opposition to the motion be filed by 17 June. Any affidavits in reply were to be filed and served within a further 7 days. The motion was adjourned and came on for hearing today. The evidence adduced in support of the motion was an affidavit sworn by a solicitor employed by the solicitors for the respondents which exhibited annual returns filed with the Australian Securities Commission by the first and third applicants, hearsay testimony as to rental of some $500,000 said to be owed by the first applicant and a search of the first applicant identifying its shareholders.

3. The evidence may support an inference that the two corporate applicants would be unable to pay the costs of the application if it were unsuccessful. It also indicates that the second applicant, Mr Barron, is a director of each. There is no evidence of the quantum of the security thought to be necessary although there is an estimate in the respondents' written submissions that total costs of the respondents and cross-respondents are likely to exceed $250,000, being twice the total of the following amounts:
   

(a) Getting up $60,000

(b) Expert witnesses $10,000

(c) Trial, including counsel,

solicitor and clerk $50,000

(d) Other costs and disbursements $10,000

There was no evidence of the reason for the delay in making this application although it appears from statements made from the bar table that it is brought now because counsel recently briefed has adverted to the desirability of such an order.

1. The motion comes at a very late stage in an action listed for trial in about five weeks time. The security could only be sustained by an order for a stay which means that in these circumstances the Court would have to be prepared to contemplate either vacating the trial date or not allowing the first and third applicants to be heard even though they are represented jointly with the second applicant. The second applicant himself is a director of both companies and is personally exposed to costs in the event that his application is unsuccessful. It is apparent at this stage that all parties will have incurred substantial costs in preparing for trial.

2. In my opinion, in a case such as the present, the onus is on the respondents to give some good reason for their delay and some proper basis for estimating what would be an appropriate amount of security. In this Court, which proceeds on a judicially managed directions system, the efficient use of Court resources and time is compromised by late and disruptive motions of this kind. Parties are taken seriously when they say that a matter is ready for trial and that no further interlocutory steps are required. That was evidently the position when this matter was listed for trial in March. Of course, it is accepted that there will be occasions when subsequent interlocutory steps are necessary, but in each case that need must be weighed against the impact on the progress of the matter to trial and other parties to the proceedings.

3. At this stage, it seems to me that the applicants are entitled to maintain the expectation which would have been induced by the long inaction of the respondents on this issue, that they can proceed to the trial of their action without the additional hurdle of an order for security of costs. In my opinion the motion is simply too late in the day and is not supported by adequate material that would address the considerations to which I have referred. I do not consider that it is necessary for the applicants to respond and will dismiss the motion so far as it relates to security for costs.