WRS Pacific Pty Ltd v Lunt [No 2]
[2011] WASC 60
•11 MARCH 2011
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: WRS PACIFIC PTY LTD -v- LUNT [No 2] [2011] WASC 60
CORAM: ALLANSON J
HEARD: 18 FEBRUARY 2011
DELIVERED : 11 MARCH 2011
FILE NO/S: CIV 1610 of 2001
BETWEEN: WRS PACIFIC PTY LTD
Plaintiff
AND
WILLIAM TREVOR LUNT
Defendant
Catchwords:
Practice and procedure - Security for costs - Lack of evidence - Turns on own facts
Legislation:
Nil
Result:
Application adjourned
Category: B
Representation:
Counsel:
Plaintiff: Mr S P Paonni
Defendant: Mr B W Duckham
Solicitors:
Plaintiff: Vincent Partners
Defendant: B W Duckham & Co
Case(s) referred to in judgment(s):
Briggs v Lunt [No 2] [2010] WASCA 195
ALLANSON J: This is one of three matters in my list between Mr Lunt and the plaintiff - named in the application as WRS Pacific Pty Ltd. In 2005, the plaintiff changed its name to New Resource Holdings Pty Ltd (New Resource Holdings).
The proceedings began in 2001. The matter has been relatively inactive since 2005. I am told that, at least in part, this lack of progress is because the parties agreed to hold this action (and the others in my list) to allow the progress of three other matters between Mr Lunt, New Resource Holdings and Mr Peter Briggs.
In December 2010, New Resource Holdings said that it now intended to take steps to bring this claim to trial. That prompted a flurry of applications, including applications by Mr Lunt to amend pleadings, for particulars of the statement of claim, for further discovery, and this application for security for costs.
Three of the other matters between Mr Lunt, New Resource Holdings, and Mr Briggs (CIV 1489 of 2001, CIV 1501 of 2001 and CIV 1974 of 2001) have proceeded to trial, and on appeal. On 22 February this year, the Court of Appeal allowed the appeal by Mr Lunt against a judgment in favour of New Resource Holdings and ordered a retrial (in CIV 1489 of 2001). It also allowed in part appeals by Mr Briggs and New Resource Holdings against judgments in favour of Mr Lunt (in CIV 1501 of 2001 and CIV 1974 of 2001). In the appeal by Mr Briggs, the result is only a recalculation of the amount ordered to be paid. In the proceedings between New Resource Holdings and Mr Lunt, the appeal was allowed in part and returned to the trial judge to make further findings and then to enter judgment in accordance with the reasons of the Court of Appeal.
Following the delivery of judgment by the Court of Appeal, I invited the parties to make submissions about the effect of those judgments on the application before me. Only the defendant has done so.
The defendant relies on three affidavits. In an affidavit dated 13 January 2011, he attaches the reasons delivered by Pullin JA in an application brought by the defendant for security for costs in the Court of Appeal. The defendant relies on the finding by Pullin JA that there was before him credible testimony giving him reason to believe that New Resource Holdings would be unable to pay Mr Lunt's costs if Mr Lunt was successful in the appeal, but does not put forward any of the evidence that was before his Honour. Following the decision of Pullin JA, the solicitors for the defendant wrote to the solicitors for the plaintiff, inviting them to demonstrate why that finding should not apply in the present proceedings. The letter was sent on 17 December 2010. It does not appear that the plaintiff has responded.
The defendant relies on two other affidavits, both sworn by him, dated 1 February and 15 February 2011. None of them contain evidence about the financial position of the plaintiff.
The plaintiff relies on an affidavit of its solicitor, Mr Sam Peter Paonni. He produces no evidence regarding the financial position of the plaintiff.
Section 1335(1) of the Corporations Act 2001 (Cth) provides:
Where a corporation is plaintiff in any action or other legal proceeding, the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his, her or its defence, require sufficient security to be given for those costs and stay all proceedings until the security is given.
The principles to be applied in an application for security are well known and were conveniently summarised by Pullin JA in the decision referred to: Briggs v Lunt [No 2] [2010] WASCA 195 [4], [11] ‑ [14] and [20]. It is unnecessary to set them out in these reasons.
There are several cases on what is commonly referred to as the 'threshold question' - whether it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful. I am not, however, aware of any case on whether the word 'testimony' imposes any limitation. The word testimony is usually used to refer to the oral evidence or affidavit evidence of a witness. Such evidence may, of course, refer to and prove documents. But merely attaching reasons for judgment to an affidavit, as the defendant did here, does not, in my opinion, make findings in those reasons, or the reference to those reasons, testimony on which the court can act. I have no testimony before me on the threshold question I need to determine, and little evidence on the factors that I will need to consider in exercising my discretion should the threshold question be found in favour of the defendant.
It is quite unsatisfactory to allow an interlocutory application of this nature to be determined on such an evidentiary basis.
I propose to adjourn the application to give the defendant and the plaintiff the opportunity to put evidence before me about the issues raised. Neither party to date has done so.
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