Stuart v Mordialloc Sporting Club Inc (No 2)

In the matter of Stuart v Mordialloc Sporting Club Inc (No 2), the plaintiff sought an order for security for costs against the defendant, a natural person. The court was required to decide whether the circumstances of the case justified an order for security for costs, and whether the applicant had established that the plaintiff was impecunious. The court also needed to consider whether any other factors justified security for costs being ordered. The court noted that the situation in Candelbrush and the authorities referred to in the preceding paragraph concerned applications for security for costs brought under r 62.02 of the Rules and/or s 1335 of the Corporations Act 2001 (Cth) as the plaintiffs were companies. However, the court considered that a similar approach to impecuniosity could be taken in the context of natural persons. The court held that the onus was on the defendant to establish credible testimony or evidence for reason to believe that the plaintiff would be unable to pay the defendant’s costs. The court found that the plaintiff’s previous bankruptcy and Part X arrangement were not credible evidence for reason to believe that he was impecunious as both events were so long ago that it could not sensibly be said that they bore upon his current financial situation. The court also held that the plaintiff being a director of a number of companies which had now been de-registered did not give any indication, let alone credible evidence, of his financial situation.

The court further held that the plaintiff’s being a shareholder of a company which was wound up by the Court did not bear upon his financial situation. The court found that the plaintiff had not established that he was impecunious. The court also found that there were no other factors which justified security for costs being ordered. The court held that the plaintiff’s previous bankruptcy and Part X arrangement were not relevant to the security application. The court also held that the plaintiff being a director of a number of companies which had now been de-registered did not bear upon his financial situation. The court held that the plaintiff had not established that he was impecunious and that there were no other factors which justified security for costs being ordered. Therefore, the court dismissed the defendant’s application for security for costs.