Voxson Ltd v McLaughlins Financial Services Ltd - [2007] QSC 83

SUPREME COURT OF QUEENSLAND

CITATION:

Voxson Ltd v McLaughlins Financial Services Ltd & Anor [2007] QSC 083

PARTIES:

VOXSON LIMITED ACN 005 291 458
(plaintiff/respondent)
v

MCLAUGHLINS FINANCIAL SERVICES LIMITED ACN 088 647 796 AS RESPONSIBLE ENTITY FOR THE REGISTERED SCHEME KNOWN AS ‘LANDMARK DIVERSIFIED PORTFOLIO NO. 8 SYNDICATE ARSN 097 563 025’
(first defendant/applicant)
PERPETUAL NOMINEES LIMITED ACN 000 733 700
(second defendant/applicant)

FILE NO:

BS6583 of 2005

DIVISION:

Trial Division

PROCEEDING:

Interlocutory application

DELIVERED ON:

11 April 2007

DELIVERED AT:

Brisbane

HEARING DATE:

5 April 2007

JUDGES:

Mullins J

ORDER:

1.   It is ordered that the plaintiff give security for the defendants’ costs of defending the claim to and including the first day of trial in the sum of $40,000.

2.   It is directed that this order for security for costs will be deemed to be satisfied upon Voxson Sales Pty Ltd providing a guarantee in favour of the defendants in support of this order for security for costs on such terms as may be agreed between the plaintiff and the defendants, but failing agreement as determined by the Court.

3.   Liberty to either party to apply on 2 days’ notice in writing to the other.

4.   There be no order as to the costs of the application filed on 21 March 2007.

CATCHWORDS:

PROCEDURE – COSTS – SECURITY FOR COSTS – OTHER MATTERS – where defendants seek security for costs – where there is reason to believe that the plaintiff may be unable to pay the defendants’ costs if unsuccessful – where the ambit of evidence and issues in the claim and counterclaim are distinctly different – where discretion exercised in favour of granting security for costs – where quantum of the security in issue

Corporations Act 2001 (Cth), s 1335
UCPR, r 670

Dalma Formwork Pty Ltd (Administrators Appointed) v. Concrete Constructions Pty Ltd [1998] NSWSC 472, considered
Sydmar Pty Ltd v. Statewise Developments Pty Ltd (1987) 73 ALR 289, distinguished

COUNSEL:

D Clothier for the plaintiff/respondent

DA Quayle for the defendants/applicants

SOLICITORS:

Brian Bartley & Associates for the plaintiff/respondent
Mallesons Stephen Jaques for the defendants/applicants

SUPREME COURT OF QUEENSLAND

CIVIL JURISDICTION

MULLINS J

No 6583 of 2005

VOXSON LIMITED

Respondent/Plaintiff

McLAUGHLINS FINANCIAL SERVICES LIMITED

and

PERPETUAL NOMINEES LIMITED

Applicant/First Defendant

Applicant/Second Defendant

BRISBANE

..DATE 11/04/2007

ORDER

HER HONOUR: The defendants apply for an order for security for costs against the plaintiff pursuant to rule 670 of the UCPR or section 1335 of the Corporations Act 2001.

The application is strongly opposed by the plaintiff either on the basis that there is no reason to believe that the plaintiff will be unable to pay the costs of the defendants, if it is unsuccessful in its claim or, alternatively, if that threshold issue is decided in favour of the defendants, on the basis that there are significant discretionary factors against ordering security. The amount of any security is also an issue.

The plaintiff leased property for eight years from 20 December 2001 from…

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: [2007] QSC 83
Decision Date: 11 April 2007

CaseChat Overview and Summary

Voxson Ltd, the plaintiff, and McLaughlins Financial Services Ltd, the defendant, were involved in a legal dispute before the Supreme Court of Queensland. The primary contention centred on the plaintiff's ability to pay the defendant's costs if the plaintiff were to be unsuccessful in their claim. The defendant argued that there was reason to believe the plaintiff might be unable to meet this financial obligation, prompting the application for security for costs. This application was made to safeguard the defendant against potential financial loss if the plaintiff failed to pay the defendant's costs following an unsuccessful outcome in the litigation.

The court had to determine whether it was appropriate to require the plaintiff to provide security for the defendant's costs. The legal issues involved assessing the likelihood of the plaintiff's inability to pay, the disparity between the scope of evidence and issues in the main claim and the counterclaim, and exercising the court's discretion to grant or deny security for costs. The court had to balance the equities between the parties and consider whether the potential financial risk to the defendant justified the imposition of such a security requirement.

The court, after considering the evidence and arguments presented by both parties, exercised its discretion in favour of granting the defendant's application for security for costs. The court found that there was sufficient reason to believe that the plaintiff might be unable to pay the defendant's costs if unsuccessful, and the ambit of evidence and issues in the claim and counterclaim were distinctly different. Consequently, the court ordered the plaintiff to provide security for the defendant's costs of defending the claim to and including the first day of trial, in the sum of $40,000. The court also provided flexibility for the parties to agree on the terms of a guarantee from Voxson Sales Pty Ltd, with a fallback mechanism if agreement could not be reached. The court did not make any order regarding the costs of the application itself.

Orders

Orders of the court

1. It is ordered that the plaintiff give security for the defendants’ costs of defending the claim to and including the first day of trial in the sum of $40,000.

2. It is directed that this order for security for costs will be deemed to be satisfied upon Voxson Sales Pty Ltd providing a guarantee in favour of the defendants in support of this order for security for costs on such terms as may be agreed between the plaintiff and the defendants, but failing agreement as determined by the Court.

3. Liberty to either party to apply on 2 days’ notice in writing to the other.

4. There be no order as to the costs of the application filed on 21 March 2007.

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:	Voxson Ltd v McLaughlins Financial Services Ltd & Anor [2007] QSC 083
PARTIES:	VOXSON LIMITED ACN 005 291 458 (plaintiff/respondent) v MCLAUGHLINS FINANCIAL SERVICES LIMITED ACN 088 647 796 AS RESPONSIBLE ENTITY FOR THE REGISTERED SCHEME KNOWN AS ‘LANDMARK DIVERSIFIED PORTFOLIO NO. 8 SYNDICATE ARSN 097 563 025’ (first defendant/applicant) PERPETUAL NOMINEES LIMITED ACN 000 733 700 (second defendant/applicant)
FILE NO:	BS6583 of 2005
DIVISION:	Trial Division
PROCEEDING:	Interlocutory application
DELIVERED ON:	11 April 2007
DELIVERED AT:	Brisbane
HEARING DATE:	5 April 2007
JUDGES:	Mullins J
ORDER:	1. It is ordered that the plaintiff give security for the defendants’ costs of defending the claim to and including the first day of trial in the sum of $40,000. 2. It is directed that this order for security for costs will be deemed to be satisfied upon Voxson Sales Pty Ltd providing a guarantee in favour of the defendants in support of this order for security for costs on such terms as may be agreed between the plaintiff and the defendants, but failing agreement as determined by the Court. 3. Liberty to either party to apply on 2 days’ notice in writing to the other. 4. There be no order as to the costs of the application filed on 21 March 2007.
CATCHWORDS:	PROCEDURE – COSTS – SECURITY FOR COSTS – OTHER MATTERS – where defendants seek security for costs – where there is reason to believe that the plaintiff may be unable to pay the defendants’ costs if unsuccessful – where the ambit of evidence and issues in the claim and counterclaim are distinctly different – where discretion exercised in favour of granting security for costs – where quantum of the security in issue Corporations Act 2001 (Cth), s 1335 UCPR, r 670 Dalma Formwork Pty Ltd (Administrators Appointed) v. Concrete Constructions Pty Ltd [1998] NSWSC 472, considered Sydmar Pty Ltd v. Statewise Developments Pty Ltd (1987) 73 ALR 289, distinguished
COUNSEL:	D Clothier for the plaintiff/respondent DA Quayle for the defendants/applicants
SOLICITORS:	Brian Bartley & Associates for the plaintiff/respondent Mallesons Stephen Jaques for the defendants/applicants