Sides Engineering Pty Ltd v Energetech Australia Pty Ltd (No. 2)

[2007] FCA 1464

FEDERAL COURT OF AUSTRALIA

Sides Engineering Pty Ltd v Energetech Australia Pty Ltd (No. 2) [2007] FCA 1464

SIDES ENGINEERING PTY LIMITED v ENERGETECH AUSTRALIA PTY LIMITED
NSD 1280 OF 2005

EDMONDS J
14 JUNE 2007
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1280 OF 2005

BETWEEN:	SIDES ENGINEERING PTY LIMITED Applicant
AND:	ENERGETECH AUSTRALIA PTY LIMITED Respondent

JUDGE:	EDMONDS J
DATE OF ORDER:	14 JUNE 2007
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The applicant pay into Court the sum of $150,000 as security for the respondent’s costs of the proceedings.

2.The security be paid into Court within thirty days of this order.

3.The applicant pay the respondent’s costs of this motion.

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	NSD 1280 OF 2005

BETWEEN:	SIDES ENGINEERING PTY LIMITED Applicant
AND:	ENERGETECH AUSTRALIA PTY LIMITED Respondent

JUDGE:	EDMONDS J
DATE:	14 JUNE 2007
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On 14 June 2007 I made the following orders in response to the motion of the respondent (‘Energetech’) set out in a notice of motion dated 30 March 2007 and filed in the registry of the Court on the same day:

   “1.The applicant pay into Court the sum of $150,000 as security for the respondent’s costs of the proceedings.

   2.The security be paid into Court within thirty days of this order.

   3.The applicant pay the respondent’s costs of this motion.”

2. I was requested by the applicant (‘Sides Engineering’) to provide reasons for making the orders and I now publish my reasons.

3. There are two main reasons and they are:

   (1)By letter dated 26 April 2007 from Doyles, the solicitors for Sides Engineering, to Clark McNamara, the solicitors for Energetech, the following concession was made on behalf of Sides Engineering:

   “Sides does not contest for the purposes of the Respondent’s application for security for costs dated 30 March 2007 only and for no other purpose whether Sides has the financial resources to pay the costs of the Respondent of the proceedings should the Respondent be successful in its defence of Sides’ claim.”

   This concession was repeated and adhered to on the hearing of the motion.

   (2)There was no evidence before me going to the financial capacity of those who stand behind Sides Engineering to meet or support Sides Engineering in meeting such costs; importantly, no evidence to show that those persons were impecunious themselves: see Bell Wholesale Co Pty Ltd v Gates Export Corporation (1985) 2 FCR 1 at 4.

4. In opposing the motion, Sides Engineering put the following matters forward as to why I should not make an order that it provide security for Energetech’s costs:

   (1)The lateness of the application.

   (2)While Sides Engineering initiated the action, as events have evolved it has undergone a “transformation” and it is no longer the aggressor.

   (3)The merits, albeit untested, of Sides Engineering’s claims.

5. I came to the view that even if the matters in [4] above were relevant to the security for costs issue, they did not outweigh the matters in [3] above.  I therefore made the orders I did.

I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds.

Associate:
Dated:        18  September 2007

Solicitor for the Applicant:	Doyles
Counsel for the Respondent:	Mr G P McNally
Solicitor for the Respondent:	Clarke McNamara

Date of Hearing:	14 June 2007
Date of Judgment:	14 June 2007