Skywillow P/L v Budget Rent a Car International Inc

[1993] FCA 339

I

339 (993 i

JUDGMENT No. ........ ....,,..,. I .,,.,..,,,, L.

IN THE FEDERAL COURT OF AUSTRALIA )

NEW SOUTH WALES DISTRICT REGISTRY )	1 No. NG 457 of 1992
i
GENERAL DIVISION	1

L .

BETWEEN:	SKYWILLOW PTY LIMITED	i.:
h ORS	I :
Applicants
AND :	BUDGET RENT A CAR INTERNATIONAL INC
First Respondent
BUDGET RENT A CAR PTP
L I M I T E D

LIQUIDATION)	( I N
Second Respondent

PETER LEONARD CROUCH
Third Respondent

JOHN IAN HOWARD

2 8 MAY 1993

FEDERAL COURT OF Fourth Respondent

AUSTRALIA

and
JOHN DUNPHY

Fifth Respondent

the amount should be quite small. There is no doubt that the	financial position of the various applicants is parlous. They
would have extreme difficulty in meeting any order for costs that might be made against them.
There are some general statements in the affidavits which have been read, which attribute their present condition to the conduct of the respondents. Unfortunately, those statements are so general that it is difficult to be satisfied that there is a causal relationship between the conduct complained of and the applicant's present financial position. Their position might have been equally difficult if the broadcast had not been made and the new licences entered into. This, of course, will be a matter for investigation at the trial. I say nothing about it; there is simply not the material to form an opinion one way or the other.
There is no doubt that the claim that, at material times, Budget Rent A Car Pty Limited was under-capitalised, is a strong one. This emerges from the internal documents of the company, to which reference has been made by Mr Hodgekiss. It is difficult for me to reconcile the financial position as
made by or on behalf of the varlous respondents. Once again, disclosed by those documents with the content of the broadcast
there may be an explanation and I express no final view. But prima facie, there appears to have been conduct which might be regarded as offending s.52 of the Trade Practices Act 1974 and, perhaps also giving rise to liability in other respects. As I say, the question whether damage occurred is another matter.
CORAM:	WILCOX J
PLACE :	SYDNEY
DATE :	19 MAY 1993

EXTEMPORE REASONS FOR JUDGMENT

WILCOX J: I think that it is appropriate to make an order for security for costs in favour of the second respondent but that

. In considering the application for security for

costs I have to bear in mind that there are a number of applicants who are individuals, and in relation to whom no order is sought. It seems to me that the critical issues in the case - in relation to the broadcast, and its truth or falsity, and the general financial condition of Budget Rent A Car - will have to be investigated in any event pursuant to those claims. There is no reason to doubt that these claims will continue, regardless of whatever order is made about security for costs against the corporate applicants. In that situation, it seems to me that it would be unfair for the corporate applicants, in effect, to require them to underwrite the general costs of the action or, guarantee the costs of the respondents in relation to those general matters. On the other hand, it is difficult to gainsay the proposition that the addition of each of the corporate respondents will add somewhat to the length of the trial.

I have indicated to counsel that I would expect that their financial losses will be calculated in a schedule and

supported by relevant financial material. There will need to

be affidavits of relevant people who are able to speak about the actions of the corporate applicants in order to prove matters such as reliance and causation. If the matter is efficiently handled, the addition of each of the corporate applicants ought not to add significantly to the length of the hearing; but it is difficult to doubt. that somethrng like half a day would be added because of each of the corporate

applicants. Bearing in mind the necessity for some out of court work in regard to each of those matters, it seems to me that to allow the sum of $3000 in respect of each of the corporate applicants, by way of security to the respondents in respect of the additional expenses to which they are put because of the addition of those corporate applicants, is a reasonable assessment. Should it turn out that the applicants do not conduct their case in the way that I have envisaged, and that the respondents are facing the prospect of a significant increase in the hearing time, it would be open to them to ask for reconsideration of this amount. However, I hope that that will not occur and I am confident in what has been said by counsel for the applicants that he will endeavour to deal with the matter in the way that I have indicated.

Accordingly, the order that I make is that each of the following applicants, namely Skywillow Pty Limited, Illawarra Car & Truck Rentals Pty Limited, Coffs Harbour Rent A Car Pty Limited, North Coast Car Rentals Pty Limited and P &	S Inkster Enterprises Pty Limited, deposit the sum of $3000 in	an interest bearing bank account to be opened in the joint
names of a member of the firm of solicitors acting for the applicants and a member of the firm of solicitors acting for the second respondent, such moneys to abide the further order of the court. Payment to be made within one month.
I grant leave to the applicants to further amend their Statement of Claim by filing a Further Amended Statement of Claim not later than Monday, 21 June 1993. I direct that
all affidavits on which any applicant will rely be filed and served by Monday, 5 July. All affidavits on which any respondent will rely are to be filed and served by Monday, 30 August.
I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment of the Honourable Justice Wilcox.
Associate:
Dated:  19 hay 1993

APPEARANCES

Counsel for the Applicant:  C Hodgekiss

Solicitors for the Applicant: Price Brent Counsel for the First Respondent: A J Meagher Solicitors for the First

Respondent:	Mallesons Stephen Jaques
Counsel for the Second
Respondents:	T Bannon
Solicitors for the Second
Respondents:	Minter Ellison Morris Fletcher

Dates of hearing:  19 May 1993