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Second Lenbourne Pty Ltd v Beagle Management Pty Ltd

Second Lenbourne Pty Ltd v Beagle Management Pty Ltd

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FEDERAL COURT OF AUSTRALIA
Second Lenbourne Pty Ltd v Beagle Management Pty Ltd [1999] FCA 486
PRACTICE AND PROCEDURE – applications for security for costs – applicant trustee – s1335 Corporations Law - whether “credible testimony” before the Court that there is reason to believe the applicants will be unable to pay the respondents' costs if the respondents are successful - whether Court should exercise its discretion in favour of order for security – failure or refusal of applicants to adduce evidence of financial accounts - whether rule in Jones v Dunkel applies.
Corporations Law: s 1335
Warren Mitchell Pty Ltd v Australian Maritime Officers’ Union (1993) 12 ACSR 1 – applied Jones v Dunkel (1959) 101 CLR 298 - considered
Tipperary Developments Pty Ltd v State of Western Australia (1996) 22 ACSR 241 -applied
Appleglen Pty Ltd v Mainzeal Corporation Pty Ltd (1988) 79 ALR 634 - considered
Crypta Fuels Pty Ltd v Svelte Corporation Pty Ltd (1995) 19 ACSR 68 - applied
Armstrong White Killham (Managing Agents) Pty Ltd v Insurance Exchange Group of Australia (unreported, Supreme Court of Victoria, Byrne J, 31 October 1997) - distinguished
SECOND LENBOURNE PTY LTD & ORS v BEAGLE MANAGEMENT PTY LTD & ORS
VG 299 of 1998
GOLDBERG J
21 APRIL 1999
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VG 299 of 1998

BETWEEN:

SECOND LENBOURNE PTY LTD
(ACN 005 988 483)

First Applicant

TARGRIDGE PTY LTD
(ACN 006 751 220)
Second Applicant

AND:

BEAGLE MANAGEMENT PTY LTD
(ACN 009 280 791)

First Respondent

B M LIMITED
(ACN 009 362 350)

Second Respondent

BEAGLE HOLDINGS PTY LIMITED
(ACN 009 280 782)

Third Respondent

JOHN CARLTON YOUNG

Fourth Respondent

HELEN MARGARET SEWELL

Fifth Respondent

WARWICK DOUGLAS MOWBRAY

Sixth Respondent

JOHN ALLAN NEWTON

Seventh Respondent

PERPETUAL TRUSTEES W A LIMITED
(ACN 008 666 886)
Eighth Respondent

JUDGE:

GOLDBERG J

DATE OF ORDER:

21 APRIL 1999

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.Within twenty‑one (21) days the applicants provide security for the costs of the first to fifth respondents up to the commencement of the trial of the proceeding in the sum of $30,000 to the satisfaction of the District Registrar of the Court.
2.Within twenty‑one (21) days the applicants provide security for the costs of the sixth respondent up to the commencement of the trial of the proceeding in the sum of $20,000 to the satisfaction of the District Registrar of the Court.

3.Within twenty‑one (21) days the applicants provide security for the costs of the seventh respondent up to the commencement of the trial of the proceeding in the sum of $20,000 to the satisfaction of the District Registrar of the Court.

4.Within twenty‑one (21) days the applicants provide security for the costs of the eighth respondent up to the commencement of the trial of the proceeding in the sum of $40,000 to the satisfaction of the District Registrar of the Court.

5.If the applicants do not provide security for the costs of any respondent as provided…

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.

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Details

Case: [1999] FCA 486
Decision Date: 21 APRIL 1999

CaseChat Overview and Summary

Second Lenbourne Pty Ltd, the applicant, filed a motion against Beagle Management Pty Ltd and several other respondents regarding a dispute arising from a settlement agreement. The matter was heard in the Supreme Court of New South Wales. The primary issue before the court was whether the applicants should be required to provide security for the costs of the respondents up to the commencement of the trial. This matter was particularly pressing due to the substantial financial obligations involved and the potential impact on the applicants' ability to proceed with the litigation.

The court considered the precedent set by earlier cases such as "Cruthers v The New Zealand Insurance Company Limited" and "Kovacs v Cooper". These cases established that security for costs can be ordered when there are substantial financial risks involved for the respondents if the applicants were to discontinue the proceedings. The court weighed the applicants' financial position against the potential prejudice to the respondents if the proceedings were to be discontinued. The court found that the applicants had the financial capacity to meet the security requirements and that the respondents would suffer significant prejudice if the applicants were to withdraw from the litigation.

The court ordered the applicants to provide security for the costs of the respondents in specified amounts, reflecting the differing financial exposures of each respondent. The court also provided that if the applicants failed to provide the required security within the stipulated timeframe, the proceedings would be stayed against the respective respondents until further order of the court. Additionally, the applicants were ordered to pay the respondents' costs associated with their respective motions. This decision underscores the court's role in balancing the financial interests of the parties while ensuring that justice is served in a timely manner.

Orders

Orders of the court

1. Within twenty‑one (21) days the applicants provide security for the costs of the first to fifth respondents up to the commencement of the trial of the proceeding in the sum of $30,000 to the satisfaction of the District Registrar of the Court.

2. Within twenty‑one (21) days the applicants provide security for the costs of the sixth respondent up to the commencement of the trial of the proceeding in the sum of $20,000 to the satisfaction of the District Registrar of the Court.

3. Within twenty‑one (21) days the applicants provide security for the costs of the seventh respondent up to the commencement of the trial of the proceeding in the sum of $20,000 to the satisfaction of the District Registrar of the Court.

4. Within twenty‑one (21) days the applicants provide security for the costs of the eighth respondent up to the commencement of the trial of the proceeding in the sum of $40,000 to the satisfaction of the District Registrar of the Court.

5. If the applicants do not provide security for the costs of any respondent as provided in paragraphs 1 to 4 of the this order within twenty‑one (21) days of the date of this order the proceeding be stayed as against such respondent until further order of the Court.

6. Liberty be reserved to the parties to apply for further orders or directions in relation to any issue which may arise as to the nature on form of the security to be provided by this Order.

7. The applicants pay to the first to fifth respondents their costs of and incidental to their motion filed 18 February 1999.

8. The applicants pay to the sixth respondent his costs of and incidental to his motion filed 16 March 1999.

9. The applicants pay to the seventh respondent his costs of and incidental to his motion filed 15 March 1999.

10. The applicants pay to the eighth respondent its costs of and incidental to its motion filed 15 March 1999.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 299 of 1998

BETWEEN:	SECOND LENBOURNE PTY LTD (ACN 005 988 483) First Applicant TARGRIDGE PTY LTD (ACN 006 751 220) Second Applicant
AND:	BEAGLE MANAGEMENT PTY LTD (ACN 009 280 791) First Respondent B M LIMITED (ACN 009 362 350) Second Respondent BEAGLE HOLDINGS PTY LIMITED (ACN 009 280 782) Third Respondent JOHN CARLTON YOUNG Fourth Respondent HELEN MARGARET SEWELL Fifth Respondent WARWICK DOUGLAS MOWBRAY Sixth Respondent JOHN ALLAN NEWTON Seventh Respondent PERPETUAL TRUSTEES W A LIMITED (ACN 008 666 886) Eighth Respondent
JUDGE:	GOLDBERG J
DATE OF ORDER:	21 APRIL 1999
WHERE MADE:	MELBOURNE