Togito Pty Ltd v Pioneer Investments & Conomos
[2008] QSC 348
•18 December 2008
SUPREME COURT OF QUEENSLAND
CIVIL JURISDICTION
[2008] QSC 348
FRYBERG J
No 5325 of 2008
| TOGITO PTY LTD ACN 003089192 | Applicant |
| and | |
| PIONEER INVESTMENTS and JAMES CONOMOS | Respondent Respondent |
BRISBANE
..DATE 18/12/2008
ORDER
HIS HONOUR: In this action the plaintiff sues James Conomos Lawyers and Pioneer Investments to recover money, allegedly wrongly paid out of trust by the lawyers to Pioneer, which was money to which the plaintiff was entitled.
The defendants have counter-claimed against the plaintiff on the basis that if the claim is correct, they were induced to make and receive the payment respectively by the fraud or misrepresentation of the plaintiff. The question of whether there is circularity in the pleadings not before me. I shall assume that the counter-claim is a valid counter-claim.
The plaintiff seeks security for costs against the defendant by reason of the counter-claim. The defendant seeks security for costs against the plaintiff by reason of the claim.
The plaintiff does not attempt to suggest that it is a company of substance. However, its director, Mr Smits, a solicitor, has offered an undertaking to be liable for any order for costs and in the course of the hearing, counsel on his behalf offered a further undertaking to, on his part, not to deal with any of his assets which are said to be substantial.
The first defendant is a company which has no land, has charges registered over it and has a solicitor as a director, a Mr Loel, who has recently been the subject of a Part 10 arrangement under the Bankruptcy Act. He does not offer any undertaking.
The defendant, however, has on previous occasions, been able to provide security for costs twice in the sum of $50,000. The merits of the claims are impossible to determine on an application such as this. The claims are clearly very dependant upon issues of credibility.
There is no particular reason to think that either side will be regarded as more credible than the other. Equally I have no reason to doubt the genuineness of the proceedings. The defendant submits that its counter-claim is to be described as a defensive action in the sense that it exists only to cover the contingency of success by the plaintiff and I think there is some force in that submission.
There is no suggestion that in either case an order for security for costs would be oppressive or would stifle the proceedings. No submissions are made regarding delay. The plaintiff submits that Mr Smits' undertaking ought to be sufficient to satisfy the defendant's application.
It submits that there has been no delay by the plaintiff that has prejudiced the defendant and I do not understand that submission to be contested.
It seems to me that the assets about which Mr Smits gives evidence are of such a nature that it is very difficult to value them and of such a type (being choses in action and other rights asserted against other parties) that I have little confidence in them as basis for supporting the undertaking which Mr Smits offers.
I therefore think that something more substantial ought to be provided if this is a case for provision of security, and I think that it is such a case. There are likely to be numerous skirmishes if the attitudes of the parties and other litigation is any guide, and the impecuniosity of the plaintiff, if it turned out to be so and unable to pay any orders made against it, would defeat any claim for costs by the defendant.
Equally, notwithstanding the fact that the counter-claim is dependant upon the claim, it seems to me that the defendant should be ordered to provide security for costs of the counter-claim.
Its financial position is insubstantial. It is likely to incur, or to cause the plaintiff to incur considerable costs in relation to the counter-claim. The costs, indeed, of each side's claim, given the relative similarity, are likely to overlap and to be equal, or approximately equal, in amount.
There is a dispute about what is a reasonable amount by way of provision of costs. The evidence by Mr Pitman on the one hand, and Mr Graham on the other, diverges by about $32,000.
Looking at the evidence of Mr Graham, I find the amount which he sets out in his affidavit convincing, despite the criticism which Mr Pitman offers of them. Certainly there is a degree of lack of particularity, but it seems to me that it is inevitable when one is predicting these things in advance that there will be a certain amount of rounding and a certain lack of particularity.
I think there is sufficient particularity to form a judgment. I think the amount which should be ordered is an amount of $90,000 in each case. On each application therefore‑‑‑‑‑
MR HACKETT: Could I interrupt, your Honour?
HIS HONOUR: Yes.
MR HACKETT: I don't know how to put this diplomatically. Could I dissuade your Honour from making that order and making this order instead, and I understand it will be by consent? Would your Honour dismiss both applications with no order as to costs? There had been a discussion that if‑‑‑‑‑
HIS HONOUR: I will dismiss your application if you ask me to.
MR HACKETT: Thank you, your Honour. That's both applications.
HIS HONOUR: Well, you can't ask me to dismiss somebody else's application.
MR HACKETT: Well‑‑‑‑‑
MR DELANEY: It's by consent, your Honour. We'll dismiss our application. We'll ask your Honour, sorry, to dismiss our application?
MR HACKETT: But no order as to costs in each case, your Honour. I'm sorry, your Honour. It was a difficult thing to do diplomatically, having put you through an hour and three-quarters of mind-numbing argument.
HIS HONOUR: I can't think of a way I can force the orders to be made. Did you say dismissed or dismissed with costs?
MR HACKETT: No order as to costs.
HIS HONOUR: By consent the applications are dismissed.
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