Town & Country Sport Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd

Town & Country Sport Resorts (Holdings) Pty Ltd and others brought an application against Partnership Pacific Ltd for security for the payment of costs. This was the second such application, the first having been unsuccessful. The applicants sought to establish that there had been a material change in circumstances to justify the second application. The primary issue before the court was whether there had been a material change in circumstances warranting a second application for security for costs, particularly given that the respondents had claimed financial hardship in the first instance but appeared to have the resources to continue the litigation.

The court examined the evidence presented and concluded that the fact that the parties had found funds to support the litigation did not constitute a material change in circumstances. The court found that the applicants had not sufficiently demonstrated any significant change in the financial situation of the respondents that would justify a second application for security for costs. Additionally, the court considered whether it was appropriate to order the directors of a company in receivership to indemnify the company against costs. The court found that in certain circumstances, such as where the directors were personally involved in the litigation, it was appropriate to require them to indemnify the company.

The court dismissed the application for security for the payment of costs and ordered that the 6th and 7th named applicants, Barbara Joy Hunt and Sophia Karounos, jointly and severally indemnify the first three named corporate applicants in respect of costs incurred in the continued prosecution of the proceedings. All proceedings were to be stayed until such time as indemnity was given in terms agreed by the parties or otherwise taxed by the court. The parties were granted liberty to speak to the terms of these orders, including the terms of any indemnity, and the question of costs was reserved.