Valeba Pty Ltd v Mulpha Sanctuary Cove (Developments) Pty Ltd - [2012] QSC 286

SUPREME COURT OF QUEENSLAND

CITATION:

Valeba Pty Ltd v Mulpha Sanctuary Cove (Developments) Pty Ltd [2012] QSC 286

PARTIES:

VALEBA PTY LTD
(plaintiff)
v
MULPHA SANCTUARY COVE (DEVELOPMENTS) PTY LTD
(defendant)

FILE NO:

7140 of 2010

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

21 September 2012

DELIVERED AT:

Brisbane

HEARING DATE:

2 February and 9 February 2012
Written submissions

JUDGE:

Daubney J

ORDERS:

1. (a) That within 14 days of this order, the plaintiff shall cause to be lodged with the Registrar of the Court an irrevocable guarantee by Mark Donkin, in a form acceptable to the Registrar, in favour of the defendant whereby Mr Donkin irrevocably guarantees every obligation which the plaintiff may have to pay any costs order made against the plaintiff in this proceeding.

(b) Upon notification by the Registrar to the parties that the irrevocable guarantee in a form acceptable to the Registrar has been lodged, the defendant’s application for security for costs will stand dismissed.

2. If the plaintiff fails to comply with order 1(a) within the said 14 days of this order, then the plaintiff shall, within 21 days of this order, provide security, in a form satisfactory to the Registrar, for the defendant’s costs of and incidental to this proceeding, up to and including the first day of trial, in the amount of $35,000.

3. The costs of the application be reserved.

CATCHWORDS:

PROCEDURE – COSTS – SECURITY FOR COSTS – POVERTY – LACK OF MEANS – where plaintiff does not have capacity to meet an adverse costs order – where substantive proceedings are bona fide and have a reasonable prospect of success – where sole director and shareholder of plaintiff offered personal guarantee – where plaintiff contends defendant caused its impecuniosity – where plaintiff contends making of a security for costs order will stifle litigation – whether discretion should be exercised in favour of granting security for costs

Corporations Act 2001 (Cth), s 1335
Uniform Civil Procedure Rules 1999 (Qld), r 672

Specialised Explosives Blasting & Training P/L v Huddy’s Plant Hire Pty Ltd [2010] 2 Qd R 85; [2009] QCA 254

Intercraft Cabinets Pty Ltd v Sampas Pty Ltd (1997) 18 WAR

306

Memutu Pty Ltd v Lissenden (1983) 8 ACLR 364

Specialised Explosives Blasting & Training Pty Ltd v

Contamination Control Laboratories Pty Ltd v Reyer [2010]

QSC 1

COUNSEL:

L D Bowden for the plaintiff/respondent
S Nutley (sol) for the defendant/applicant

SOLICITORS:

Provest Law for the plaintiff/respondent
Cooper Grace Ward for the defendant/applicant

This is an application for security for costs. There is no issue that the plaintiff does not have the financial capacity to meet an adverse costs order, and accordingly the defendant seeks the exercise of the Court’s powers to order security under Chapter 17 Part 1 of the Uniform Civil Procedure Rules (“UCPR”), s 1335 of the Corporations Act, and the Court’s inherent jurisdiction.

The defendant is the registered proprietor of the land on which is constructed…

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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Details

Case: [2012] QSC 286
Decision Date: 21 September 2012

CaseChat Overview and Summary

In the matter of Valeba Pty Ltd v Mulpha Sanctuary Cove (Developments) Pty Ltd, the primary dispute centred on the issue of security for costs in the Federal Circuit and Family Court of Australia. Valeba, the plaintiff, contested an application from Mulpha, the defendant, seeking an order for security for costs due to Valeba's inability to meet an adverse costs order. Valeba argued that any order for security would stifle its litigation, as it lacked the financial means to satisfy such a costs order, despite the substantive proceedings being bona fide and having a reasonable prospect of success.

The court was tasked with determining whether the discretion should be exercised in favour of granting security for costs, considering that Valeba did not have the capacity to meet an adverse costs order and the substantive proceedings were deemed to have a reasonable prospect of success. The court also had to consider that the sole director and shareholder of Valeba had offered a personal guarantee, and Valeba's contention that Mulpha had caused its impecuniosity.

In its reasoning, the court found that Valeba's financial situation rendered it unable to meet an adverse costs order, and the substantive proceedings had a reasonable prospect of success. The court noted the personal guarantee offered by the sole director and shareholder of Valeba but also considered the potential stifling effect on Valeba's litigation if an order for security for costs was made. The court concluded that the discretion should be exercised in favour of granting security for costs, to protect the defendant from the risk of unrecoverable costs. The court ordered that within 14 days, Valeba must lodge an irrevocable guarantee by its sole director and shareholder, Mark Donkin, in a form acceptable to the Registrar. If this was not done, Valeba had to provide security for the defendant's costs of and incidental to the proceeding, up to and including the first day of trial, in the amount of $35,000. The costs of the application were reserved.

Orders

Orders of the court

1. (a) That within 14 days of this order, the plaintiff shall cause to be lodged with the Registrar of the Court an irrevocable guarantee by Mark Donkin, in a form acceptable to the Registrar, in favour of the defendant whereby Mr Donkin irrevocably guarantees every obligation which the plaintiff may have to pay any costs order made against the plaintiff in this proceeding.

(b) Upon notification by the Registrar to the parties that the irrevocable guarantee in a form acceptable to the Registrar has been lodged, the defendant’s application for security for costs will stand dismissed.

2. If the plaintiff fails to comply with order 1(a) within the said 14 days of this order, then the plaintiff shall, within 21 days of this order, provide security, in a form satisfactory to the Registrar, for the defendant’s costs of and incidental to this proceeding, up to and including the first day of trial, in the amount of $35,000.

3. The costs of the application be reserved.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Valeba Pty Ltd v Mulpha Sanctuary Cove (Developments) Pty Ltd [2012] QSC 286
PARTIES:	VALEBA PTY LTD (plaintiff) v MULPHA SANCTUARY COVE (DEVELOPMENTS) PTY LTD (defendant)
FILE NO:	7140 of 2010
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court of Queensland
DELIVERED ON:	21 September 2012
DELIVERED AT:	Brisbane
HEARING DATE:	2 February and 9 February 2012 Written submissions
JUDGE:	Daubney J
ORDERS:	1. (a) That within 14 days of this order, the plaintiff shall cause to be lodged with the Registrar of the Court an irrevocable guarantee by Mark Donkin, in a form acceptable to the Registrar, in favour of the defendant whereby Mr Donkin irrevocably guarantees every obligation which the plaintiff may have to pay any costs order made against the plaintiff in this proceeding. (b) Upon notification by the Registrar to the parties that the irrevocable guarantee in a form acceptable to the Registrar has been lodged, the defendant’s application for security for costs will stand dismissed. 2. If the plaintiff fails to comply with order 1(a) within the said 14 days of this order, then the plaintiff shall, within 21 days of this order, provide security, in a form satisfactory to the Registrar, for the defendant’s costs of and incidental to this proceeding, up to and including the first day of trial, in the amount of $35,000. 3. The costs of the application be reserved.
CATCHWORDS:	PROCEDURE – COSTS – SECURITY FOR COSTS – POVERTY – LACK OF MEANS – where plaintiff does not have capacity to meet an adverse costs order – where substantive proceedings are bona fide and have a reasonable prospect of success – where sole director and shareholder of plaintiff offered personal guarantee – where plaintiff contends defendant caused its impecuniosity – where plaintiff contends making of a security for costs order will stifle litigation – whether discretion should be exercised in favour of granting security for costs Corporations Act 2001 (Cth), s 1335 Uniform Civil Procedure Rules 1999 (Qld), r 672 Specialised Explosives Blasting & Training P/L v Huddy’s Plant Hire Pty Ltd [2010] 2 Qd R 85; [2009] QCA 254 Intercraft Cabinets Pty Ltd v Sampas Pty Ltd (1997) 18 WAR 306 Memutu Pty Ltd v Lissenden (1983) 8 ACLR 364 Specialised Explosives Blasting & Training Pty Ltd v Contamination Control Laboratories Pty Ltd v Reyer [2010] QSC 1
COUNSEL:	L D Bowden for the plaintiff/respondent S Nutley (sol) for the defendant/applicant
SOLICITORS:	Provest Law for the plaintiff/respondent Cooper Grace Ward for the defendant/applicant