Woodhouse v McPhee

[1997] FCA 1509

FEDERAL COURT OF AUSTRALIA

PRACTICE AND PROCEDURE - security for costs - representative proceedings under Part IVA of the Federal Court of Australia Act 1976- security for costs application against representative party - relevance to exercise of discretion of fact that applicant is bringing proceeding for the benefit of others - purpose of representative proceedings provisions considered.

Federal Court of Australia Act 1976 (Cth) ss 33C, s 33ZG(c)(v), 43(1A), 56, Part IVA
Rules of the Federal Court   O 28 r 3(b)

Bell Wholesale Co Pty Ltd v Gates Export Corp (1984) 2 FCR 1 - applied
Sent v Jet Corporation of Australia Pty Ltd (1984) 2 FCR 201 - cited
Pasdale Pty Ltd v Concrete Constructions (1995) 131 ALR 268 - cited
Acohs Pty Ltd v Merck Pty Ltd (Federal Court of Australia, Merkel J, 20 June 1997, unreported) - cited
Cunningham v Olliver (Federal Court of Australia, 21 November 1994, unreported) - considered

ROBERT WOODHOUSE v JOHN McPHEE, HELEN McPHEE & JOHN HAYES
VG 3237 of 1997

MERKEL J
MELBOURNE
24 DECEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 3237  of   1997

BETWEEN:

ROBERT WOODHOUSE
APPLICANT

AND:

JOHN MCPHEE
FIRST RESPONDENT

HELEN MCPHEE
SECOND RESPONDENT

JOHN HAYES
THIRD RESPONDENT

JUDGE:

MERKEL J

DATE OF ORDER:

24 DECEMBER 1997

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1. The notice of motion is dismissed.

1. The respondents pay the applicant’s taxed costs of and incidental to the motion.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 3237 of 1997

BETWEEN:

ROBERT WOODHOUSE
APPLICANT

AND:

JOHN MCPHEE
FIRST RESPONDENT

HELEN MCPHEE
SECOND RESPONDENT

JOHN HAYES
THIRD RESPONDENT

JUDGE:	MERKEL J
DATE:	24 DECEMBER 1997
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

INTRODUCTION

The respondents have applied for security for costs under s 56 of the Federal Court of Australia Act 1976 (Cth) (“the Act”) and Order 28 Rule 3(b) of the Federal Court Rules. The application raises the question of whether any special considerations arise on a security for costs application against an applicant in a representative proceeding under Part IVA of the Act.

BACKGROUND

The applicant, as a representative party, is claiming relief against the respondents on the ground that, as directors of Wodonga Meats Pty Ltd (“Wodonga”), they failed to prevent the company from incurring debts to its employees when they had reasonable grounds for suspecting the company was insolvent: see s 588G of the Corporations Law.

The relief claimed in the application, which is brought under Part IVA of the Act, is for payment of employee entitlements in respect of annual leave, sick leave, rostered days off, pay in lieu of notice, redundancy and long service leave, alleged to have accrued to Wodonga’s ninety-eight employees during the period Wodonga was insolvent but still trading.

The applicant’s case is that Wodonga defaulted in the payment of group tax in respect of its employees early in 1995 but continued trading…