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Yara Australia Pty Ltd v Oswal

Yara Australia Pty Ltd v Oswal

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Case Copied 20 June 2013 71 min read

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YARA AUSTRALIA PTY LTD v OSWALCARSON and Others v OSWALANZ BANKING GROUP LTD and Others v OSWALAPACHE FERTILISERS PTY LTD v OSWALCourt of AppealRedlich and Priest JJA and Macaulay AJA24 April, 20 June 2013[2013] VSCA 156Practice and procedure — Costs — Security for costs — Entitlement — Form — Sufficiency — Discretion — Plaintiffs resident abroad — Assets held in escrow accounts — Supreme Court (General Civil Procedure) Rules 2005rr 62.02, 62.03, 77.06..

The Supreme Court (General Civil Procedure) Rules r 62.02(1)(a) conferred on the court power in a case where the plaintiff was ordinarily resident out of Victoria, to order, on the application of a defendant, that the plaintiff give security for the costs of the defendant of the proceeding and that the proceeding as against that defendant be stayed until the security was given.

In applications for security for costs in two proceedings pending in the Commercial and Equity Division, the plaintiffs, who were ordinarily resident out of Victoria, argued that they had funds within the jurisdiction consisting of a total of US$20 million held in escrow accounts within the jurisdiction, in the joint names of three of the defendants. The defendants claimed that the security offered by those were not, or might not be, sufficient to meet an order for costs at the end of the escrow period. An associate judge ordered the plaintiffs to provide security for costs. The plaintiffs appealed. Whelan J (as his Honour then was) found that unless there was some substantial change in circumstances, or unless one defendant’s costs exceeded $US5 million and another’s exceeded $US15 million, they would be able to recover their costs from the escrow accounts, and substantial balances would be paid to a defendant bank at the end of the escrow period to meet the amount it claimed to be the outstanding debt, interest, its own costs, and the costs of the receivers. The judge found that the amounts held in the escrow accounts provided sufficient security and refused to order security for costs. The defendants sought leave to appeal.

Held, by Priest JA (Redlich JA and Macaulay AJA agreeing) refusing leave to appeal: (1) The following principles were to be derived from the cases [4], [115], [136]:

(a)
The purpose of ordering security against a plaintiff ordinarily resident out of Victoria, and with no assets within it, was so that a successful defendant would have a fund in Victoria against which it could readily enforce an order for costs;
(b)
To make or refuse an order for security was a discretionary judgment;
(c)
Since such a judgment was discretionary, the court must weigh all relevant circumstances;
(d)
The weight of any one circumstance must depend not only on its own persuasiveness, but must be considered against the impact other circumstances might have against it;
(e)
A circumstance of great weight, but not necessarily decisive, was that the plaintiff was…

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: [2013] VSCA 156
Decision Date: 20 June 2013

CaseChat Overview and Summary

The Court of Appeal heard four applications for leave to appeal against the decision of Whelan J refusing to order security for costs in proceedings in the Commercial and Equity Division. The applicants were ANZ Banking Group, the receivers, Apache Fertilisers, and Yara Australia. The respondents were Radhika and Pankaj Oswal. The respondents argued that they were ordinarily resident outside of Victoria and had no assets within it. They had offered to provide security for costs of the applicants. The applicants argued that the security offered was not sufficient. The Court of Appeal found that there was no error in the decision of Whelan J, and refused leave to appeal. The Court held that the discretion to order security for costs was to be exercised by weighing all relevant circumstances, and considering how justice was best served. The Court found that the applicants had not discharged the burden of persuasion that the security offered was not sufficient. The applicants were not shut out from making a fresh application for security whenever there was a change or anticipated change in the circumstances relating to the asset or a risk arose that the asset may be dissipated.

Orders