PRACTICE AND PROCEDURE – abuse of process – multiple proceedings – previous proceedings in State court – same subject matter – previous proceedings terminated by default order – whether abuse of process to commence proceedings in Federal Court
PRACTICE AND PROCEDURE – costs – security for costs
1.The applicant provide security for the costs of the first and second respondents herein in a forum satisfactory to the District Registrar in the amount of $81,204.00.
2.Until such time as the applicant provides security for costs pursuant to order 1, the proceeding be stayed as against the first and second respondents.
3.If the security for costs provided for in order 1 has not been provided by 30 September 2006, the first and second respondents have leave to apply after that date for a further order for security limiting the time within which such security should be provided.
4.The first and second respondents’ motion of which notice was given on 14 April 2006 otherwise be dismissed.
Note: Settlement and entry of orders is dealt with in…
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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AGLC
Thirteenth Corp Pty Ltd v State [2006] FCA 979
Case
[2006] FCA 979
Decision Date
CaseChat Overview and Summary
The case of Thirteenth Corp Pty Ltd v State involved the applicant, Thirteenth Corp Pty Ltd, and the respondents, who were directors of Mactec. The dispute centered around a $500,000 loan made by the applicant to Mactec in April 2000, secured by a landfill mortgage. The applicant alleged that the respondents permitted Mactec to incur the debt while insolvent, in contravention of s 588G of the Corporations Act 2001 (Cth). The applicant sought compensation for the unpaid loan under s 588M(3) of the Corporations Act. The matter was heard in the Federal Court of Australia.
The primary legal issue was whether the applicant was required to provide security for the costs of the respondents before proceeding with the claim. The respondents argued that the applicant needed to provide such security as a condition to continue the proceedings. The applicant contended that it was not necessary to provide security for the respondents' costs before proceeding with the claim. The court had to determine whether the applicant was obligated to provide security for costs under the circumstances of this case.
The court held that the applicant was required to provide security for the costs of the respondents before proceeding with the claim. The court found that the applicant had not provided the necessary security, and as a result, the proceeding was stayed against the first and second respondents. The court also granted the respondents leave to apply for a further order for security if the applicant failed to provide it by a specified date. The court dismissed the respondents' motion in all other respects.
The final orders of the court were that the applicant must provide security for the costs of the first and second respondents in the amount of $81,204.00 in a forum satisfactory to the District Registrar. The proceeding was to be stayed as against the first and second respondents until such time as the applicant provided the required security. If the security was not provided by 30 September 2006, the respondents were granted leave to apply for a further order for security. The respondents' motion was otherwise dismissed.
Orders
Orders of the court
1. The applicant provide security for the costs of the first and second respondents herein in a forum satisfactory to the District Registrar in the amount of $81,204.00.
2. Until such time as the applicant provides security for costs pursuant to order 1, the proceeding be stayed as against the first and second respondents.
3. If the security for costs provided for in order 1 has not been provided by 30 September 2006, the first and second respondents have leave to apply after that date for a further order for security limiting the time within which such security should be provided.
4. The first and second respondents’ motion of which notice was given on 14 April 2006 otherwise be dismissed.
Background
Background to the litigation
At the hearing of this motion, I was informed by Mr Parncutt, who appeared for the applicant, that the third and fourth respondents have not yet been served. They did not participate in the hearing. In what follows, unless the context indicates otherwise, when I refer to the “respondents”, I mean the first and second respondents only.THE FACTS It will be convenient if I first provide a broad outline of the events of 1999 and 2000 which gave rise to this, and to certain other, proceedings. Although most of these events have not been proved as a matter of evidence, they either form the basis of the applicant’s allegations or were set out in affidavits filed in support of, or in opposition to, the motion, on which there was no cross examination. To the extent referred to below, unless otherwise stated, the facts appear to be uncontroversial. As I have indicated, the respondents were two of the directors of Mactec in 1999 and 2000. In July 1999, Mactec and certain other companies entered into an agreement called a landfill project operation agreement (“the landfill agreement”). It is not suggested that the applicant had anything to do with this transaction. The landfill agreement did, however, become relevant to the applicant in April 2000, when it lent the sum of $500,000 to Mactec, pursuant to an agreement (“the loan agreement”) which contained the following provision (cl 3.1 thereof):EMM agrees to offer as security for the Loan, a Charge in favour of TC over EMM’s contractual rights to dispose of waste at the National Landfill Technologies Pty Limited Landfill situated at New Chum, in the state of Queensland, as set out in the Landfill Project Operation Agreement dated July 1999 between EMM, National Landfill Technologies Pty Limited, Queensland Trade Waste Pty Limited, Environautics Waste Management Pty Limited and Environautics Pty Limited (“LPO Agreement’) In the mortgage to which this provision refers (“the landfill mortgage”), the “mortgaged property” was defined as “all of the present and future right, title and interest of the mortgagor [Mactec] as are comprised in, or arise under, the landfill agreement”. Clause 2.1 of the mortgage then provided:“The Mortgagor as legal and beneficial owner mortgages all of its right, title and interest in the Mortgaged Property to the Mortgagee [the present applicant] as security for the due and punctual payment of the Secured Money.” The $500,000 lent under the loan agreement should have been repaid on 23 May 2000. It was not, and shortly thereafter Mactec went into liquidation. On 18 April 2002, the applicant commenced an action in the Supreme Court of Victoria (No 5226 of 2002) (“the Victorian proceeding”) against five individuals, including the four respondents to the present proceeding. In its Statement of Claim in the Victorian proceeding, the plaintiff (ie the applicant in the present proceeding) referred to the $500,000 loan which it made to Mactec in April 2000 and alleged that, at the time when that loan ought to have been, but was not, repaid in May 2000, Mactec was insolvent. Alternatively, it was alleged that Mactec became insolvent by incurring the debt constituted by the non-repayment of the loan, or that there were reasonable grounds for suspecting that Mactec was, or would become, insolvent. It was alleged that the defendants (including all four respondents in the present proceeding) were, at the time, directors of Mactec, and in that capacity permitted Mactec to incur the debt whilst insolvent in contravention of s 588G of the Corporations Act 2001 (Cth). The Victorian proceeding had the object of recovering compensation against the directors pursuant to s 588M(3) of that Act which the plaintiff quantified at $643,836, being the $500,000 which was lent and not repaid, plus interest. It was also alleged by the plaintiff, and substantially admitted by the first and second defendants (the respondents here) that, in June 2000, an administrator was appointed by Mactec and that, in July 2000, a meeting of creditors of Mactec resolved that Mactec be wound up under s 439C(c) of the Corporations Act.