CATCHWORDS
COSTS - security for - factors relevant to exercise of discretion given by Federal Court of Australia Act 1976, s. 56 - circumstances of the particular case - complexity of applicant's corporate structure - real risk that successful respondents may meet an unacceptably high degree of difficulty and delay in obtaining satisfaction of costs order.
Bell Wholesale Co. Ltd v Gates Export Corporation (1984) 2 FCR 1
Equity Access Limited v Westpac Banking Corporation (1989) ATPR 40-972
Chester & Fein Property Developments Pty Ltd v Candam Investments Pty Ltd (1985) 9 FCR 419
Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319
Sandell v Porter (1966) 115 CLR 666
Re Sarina; Ex parte Council of the Shire of Wollondilly (1980) 43 FLR 163
Trojan v Corporation of Hindmarsh (1987) 16 FCR 37
Federal Court of Australia Act 1976, ss. 22, 56.
CHARLWOOD INDUSTRIES PTY LIMITED v
IAN RAYMOND CUBITT & ORS
No. NG838 of 1994
BEFORE: GUMMOW J.
PLACE: SYDNEY.
DATE: 15 MARCH 1995.
IN THE FEDERAL COURT OF AUSTRALIA)
NEW SOUTH WALES DISTRICT REGISTRY) No. NG838 of 1994
GENERAL DIVISION )
BETWEEN: CHARLWOOD INDUSTRIES PTY LIMITED
Applicant
AND: IAN RAYMOND CUBITT
First Respondent
ANNE CHRISTIAN
Second Respondent
GREGORY BOGGIS
Third Respondent
ROBERT EDWARDS
Fourth Respondent
ROBLYNE PTY LIMITED
Fifth Respondent
BEFORE: GUMMOW J.
PLACE: SYDNEY.
DATE: 15 MARCH 1995.
MINUTE OF ORDERS
THE COURT ORDERS THAT:
1. The applicant provide security in the sum of $30,000 for the payment of costs that may be awarded the first respondent against the applicant.
2. The applicant provide security in the sum of $30,000 for the payment of costs that may be awarded the second, third, fourth and fifth respondents against the applicant.
3. In respect of orders 1 and 2, security be provided within 21 days in a form agreed between the respective solicitors, and in default of such agreement, security be in a form fixed by the District Registrar.
4. The proceeding be stayed until the applicant has complied with the orders for security.
5. The costs of the respondents on their motions for security, up to and including 15 March 1995, be their costs in the cause.
6. Upon compliance with orders 1, 2 and 3 hereof, the proceeding (including the balance of the motions for security) may be restored to the list upon 7 days' written notice.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA)
NEW SOUTH WALES DISTRICT REGISTRY) No. NG838 of 1994
GENERAL DIVISION )
BETWEEN: CHARLWOOD INDUSTRIES PTY LIMITED
Applicant
AND: IAN RAYMOND CUBITT
First Respondent
ANNE CHRISTIAN
Second Respondent
GREGORY BOGGIS
Third Respondent
ROBERT EDWARDS
Fourth Respondent
ROBLYNE PTY LIMITED
Fifth Respondent
BEFORE: GUMMOW J.
PLACE: SYDNEY.
DATE: 15 MARCH 1995.
REASONS FOR JUDGMENT
By motion dated 15 December 1994, the first respondent seeks an order for provision of security for costs by the applicant. By motion filed 30 January 1995, the second respondent seeks such an order against the applicant ("Charlwood Industries") and in favour of herself and the third, fourth and fifth respondents.
The motions were heard together. The submissions of counsel for the first respondent were adopted by the solicitor for the second to fifth respondents.
The present proceeding was instituted by application and statement of claim filed 30 November 1994. The applications for security were made promptly and before the giving of any directions for the filing of defences.
The evidence for the first respondent, applicant on the first motion, is that on the basis of a five day hearing and allowing for costs already incurred and billed, some $35,000 costs and $28,000 disbursements would be recovered on a party and party basis. The evidence for the remaining respondents, prepared on a similar basis, produces a total of $57,000.
In the statement of claim, filed 30 November 1994, it is alleged (paras. 4 - 10) that the applicant, ("Charlwood Industries"), entered into oral contracts of employment with each of the first to fourth respondents. Various implied terms are then pleaded in each contract (para. 11). These are said to arise "by an ad hoc implication or by reason of law". These respondents are said (para. 12) to have been under a fiduciary duty to act with fidelity in the best interests of the applicant and not to place themselves in a position of conflict between their own interests and the duty owed to the applicant. Breach of contract and fiduciary duties by the first respondent, Mr Cubitt, are said (para. 13) to have been committed during the course of his employment and after termination of it. These breaches allegedly involved such matters as the secret development and conduct of his own business as a builder in the home improvement industry with a view to appropriating for himself and at the expense of Charlwood Industries the goodwill of Charlwood Industries. Allegations of similar nature are made against Miss Christian, the second respondent (para. 14), Mr Boggis, the third respondent (para. 15) and the fourth respondent, Mr Edwards (para. 16). It is then said that each knowingly participated in breaches by the others of fiduciary duty with the result that the business assets and undertakings of Mr Cubitt are held in trust for the applicant (paras. 17 - 21).
The fifth respondent, Roblyne Pty Limited, is said to have participated in the breaches of fiduciary duty by Mr Edwards. Allegations also are made that Mr Cubitt procured breaches of contracts of employment with the applicant (para. 34), that by unlawful means he intimidated and coerced such breaches (paras. 35 and 36), and that he infringed the copyright of the applicant in certain literary works such as specifications, plans, costing sheets and pricing lists (paras. 37 - 41). Finally, the first four respondents are alleged wrongfully to detain certain documents of Charlwood Industries.
On the present motions, reliance is placed upon s. 56 of the Federal Court of Australia Act 1976. This states:
"56.(1) The Court or a Judge may order an applicant in a proceeding in the Court or an appellant in an appeal to the Court to give security for the payment of costs that may be awarded against him.
(2) The security shall be of such amount and given at such time and in such manner and form, as the Court or Judge directs.
(3) The Court or a Judge may reduce or increase the amount of security ordered to be given and may vary the time at which, or manner or form in which, the security is to be given.
(4) If security, or further security, is not given in accordance with an order under this section, the Court or a Judge may order that the proceeding or appeal be dismissed.
(5) This section does not affect the operation of any provision made by or under any other Act or by the Rules of Court for or in relation to the furnishing of security."
The applications were hard fought and the hearing occupied the best part of a day and a half. Submissions were made which go to the heart of the operation of s. 56.
Charlwood Industries is an integer in a business entity comprising a partnership, trusts and other companies, all of which are said to be under the ultimate control of Mr C.S. Charlwood. The directors of Charlwood Industries are Mr and Mrs Charlwood. Mr Charlwood was born in 1942 and Mrs D.R. Charlwood in 1944. They have three sons. What in the evidence was described as the Charlwood Group ("the Group") carries on business in the Sydney area as a builder in the home improvement industry. One of the submissions for the respondents on their motions is that the pattern of transactions within this structure is such that, although there might then be assets elsewhere in the Group, there is a real risk that if the respondents had in their favour a taxed order for costs, Charlwood Industries would be unable to meet it, or difficulty and delay might be occasioned in obtaining satisfaction of such an order.
Evidence concerning the structure of the Group was given by Mr B.N. Treleaven, a partner in the firm of chartered accountants which has acted for the Group for over ten years. No final accounts for any members of the Group for the financial year ended 30 June 1994 were available. The Schedule to these reasons is a copy of the chart prepared by Mr Treleaven to show the structure of the Group. Charlwood Industries Wholesalers Pty Limited ("Wholesalers") is trustee of the two trusts identified in the Schedule as "Accord Trust" and "Charlwood Unit Trust". The precise terms of these trusts do not appear from the evidence.
The applicant, Charlwood Industries, has no fixed assets. The fixed assets are held by other entities within the Group. Charlwood Industries is the operating or trading entity in the Group. The monthly average turnover for the last calendar year of Charlwood Industries was more than $1m. Wholesalers appears to have no function other than to hold the title to several parcels of real estate and to act as trustee of the two trusts. The Accord Trust earns an entitlement to management fee by operating the administration of the Group, paying creditors, staff and all overheads.
The draft balance sheet for the C.S. and D.R. Charlwood Partnership as at 31 December 1994 shows total assets of approximately $1.9m. and total liabilities of approximately $1.3m. Among the liabilities is an unsecured loan to Charlwood Industries of some $500,000, and of the assets some $800,000 are unsecured loans from members of the Charlwood family. The partnership owns land at Seven Hills, Dural and Minchinbury, total fixed assets being approximately $1.1m. Another Group company, Olaroad Pty Limited, appears to be trustee of a superannuation fund with net assets of some $300,000.
The unaudited balance sheet as at 31 December 1994 for the Charlwood Unit Trust shows $1,167,585.86 total assets of which $725,148.92 are unsecured loans by Mr and Mrs Charlwood. Charlwood Industries is unsecured creditor for $725,765.86. The non-current assets (property, plant and equipment) of about $442,000 is a little more than the total equity in the fund of about $440,000.
In cross-examination, Mr Treleaven agreed, "absolutely", with the proposition that there was an entitlement between the companies, individuals and entities in the Group to charge one another management and service fees, and that in 1993 management fees of the order of $1m. had been charged. Annexure C to Mr Treleaven's affidavit of 2 February 1995 is a draft balance sheet for Charlwood Industries as at 31 December 1994. It shows total current assets of $2,093,315 and total current liabilities of $559,668. It makes no allowance for any liability for management fees to be charged to the trustee of the Accord Trust.
In Mr Treleaven's re-examination, the following exchange occurred:
"How is this management fee actually calculated? - Its based on the amount of the expenses in the Accord Trust and there is a loading that is made to the different categories of expenses and that's in accordance with the income tax rulings.
So, there is a [criterion] by which the fee is to be calculated? - That's correct, to a maximum fee. It could be less than that, of course, when we come to do it.
The figure of $1 million, is that your best estimate as to what the fee may come to? - Comparing it with the prior year, that would be.
When does this management fee technically become due and payable? - I would imagine, its when the entries are put through into the loan account. These loans are at call, so really its payable when its called, its due when I put the - well, its due and payable when its called and its not called at that time."
Mr M.R. McGarrigle is financial controller employed by Charlwood Industries. He has been employed there since June 1994. At some date in January 1995, he was supplied by Mr Treleaven with the figure of $900,000 as the management fee for the year which had ended 30 June 1994. Mr McGarrigle then made an entry on a journal voucher which was posted into the computerised general ledger.
The Australian Taxation Office has been, at least since January 1995, carrying out an audit which includes investigation of the management fees charged within the Group over the past few years. The Office also has been enquiring into the details of various loans to directors and family members. Notices to various persons have been issued under s. 264 of the Income Tax Assessment Act 1936.
The draft balance sheet, annexure C to Mr Treleaven's affidavit, shows $144,620 as moneys paid to the Australian Taxation Office, but there is no other provision in the balance sheet for any liability for tax. The current assets include an unsecured loan to the Charlwood Unit Trust of $725,000 and to the partnership of $505,000. These loans appear to be supported by book entries but without any other documentation.
In the course of Mr Treleaven's cross-examination, there was the following exchange:
"Were you involved in the setting up of the group structure? - Yes.
What were the reasons for setting up the structure in that fashion? - It needed flexibility for distribution of income to family members.
Was one of the reasons to minimise taxation liability? - Yes.
Was one of the reasons to limit liability? - Not entirely; the reason to have the [structure] the way it is is a tax driven basis. That is the manner in which to [distribute] income to the family members.
...
One of the reasons for having Charlwood Industries operate in that fashion, i.e. without any fixed assets, is to limit liability is it not? - Well, its to - well, its to - in order to charge a fee across to the Accord Trust. Accord Trust has the assets, or some of them and that basis is the way we get the income into the Trust."
In his cross-examination, the attention of Mr Treleaven was drawn to annexure C as indicating that the Accord Trust owed Charlwood Industries $3,597 as an unsecured loan. Mr Treleaven was shown other evidence which suggested that, several months earlier, in May 1994, the Accord Trust owed Charlwood Industries $707,318.79. The following exchange then occurred:
"Can you tell the Court how that asset came to be reduced to the sum of 3,597 some six or seven months later? - No, I can't, except for what I've said before, on transfer of funds.
So these companies just transfer money backwards and forwards between themselves, do they? - As its needed to pay creditors and so forth."
The evidence also indicated a net deficiency in assets of Charlwood Industries for the year ended 1993 of $333,768 and at the end of 1992 a net deficiency of $348,279. Mr Treleaven agreed that these net deficiencies arose after the making of book entries which recorded the management fees that moved between entities in the Group. In 1993, these were in the order of $1m. On the other hand, in both of these years, whilst there was a net deficiency of assets, there was an operating profit before income tax. In 1992, this was $137,208.58 and in 1993, $512,403.45.
In his affidavit of 2 February 1995, Mr Treleaven described the inter-group transactions involving Charlwood Industries and the Accord Trust as follows:
"Charlwood Industries used the Accord Trust as a vehicle through which the creditors of Charlwood Industries were paid. Charlwood Industries lent to the Accord Trust moneys to enable the Trust to pay the creditors of Charlwood Industries. The Accord Trust also used Charlwood Industries as a vehicle through which the creditors of the Accord Trust were paid. The Accord Trust lent to Charlwood Industries moneys to enable Charlwood Industries to pay the creditors of the Accord Trust. Adjustments were made to the respective loan accounts."
Mr Treleaven was asked in cross-examination whether it was his expectation that Charlwood Industries would receive amended assessments from the Australian Taxation Office in respect of its taxation returns over the last few years. He responded:
"Well, its my hope that it doesn't but its very subjective. It depends on interpretation and we'll wait and see."
In Bell Wholesale Co. Ltd v Gates Export Corporation (1984) 2 FCR 1 at 3, the Full Court said that "[t]he discretion to make orders under s. 56 must be exercised judicially, but that is the only relevant limitation". That judicial exercise of the discretion, in accordance with ordinary principles, will involve consideration of the subject matter, the scope and purpose of the legislation: The Queen v Australian Broadcasting Tribunal; ex parte 2HD Pty Ltd (1979) 144 CLR 45 at 49, Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 348, Aiden Shipping Co. Ltd v Interbulk Ltd [1986] AC 965 at 975, Knight v F.P. Special Assets Limited (1992) 174 CLR 178 at 185, 205.
One provision of the statute which is of general significance for the exercise of the original jurisdiction of the Court is s. 22. This states:
"22.The Court shall, in every matter before the Court, grant, either absolutely or in such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided."
On the present applications, both sides referred to the approach taken by Hill J in Equity Access Limited v Westpac Banking Corporation (1989) ATPR 40-972. His Honour referred to six factors as among the matters appropriate for consideration of the exercise of the discretion given by s. 56.
(1) Chances of success
Hill J pointed out that in the ordinary case if the hearing of the motion for security for costs takes place some considerable time before the hearing of the action and before the evidence has been tested, there is a difficulty in embarking in any detail upon a consideration of the prospects of success; more pertinent questions would be whether the applicant appeared to have an arguable or triable case or whether the case appeared to be merely frivolous. In the present matter, the case does not appear to be merely frivolous. It was not suggested that the solicitors' estimate of a 5 day trial was off the mark.
(2) Would an order for security shut out the applicant from proceeding with its claim?
There was no real suggestion that the present was such a case.
(3) Does the impecuniosity of the applicants arise out of the breaches alleged by it against the respondents?
This case, like Equity Access, is not a case where the acts in respect of which the applicant complains have rendered it impecunious.
(4) The public interest
In Equity Access, Hill J said some weight was to be given in trade practices litigation to the provision of an effective mechanism whereby there may be agitated before the Court issues of contravention of the legislation. Here, federal jurisdiction is attracted by the presence of allegations of infringement of copyright. It was not suggested that any particular weight thereby should be given any particular aspect of the public interest.
(5) Discretionary matters peculiar to the particular case
It will be appropriate to refer to these matters later in these reasons.
(6) The quantum of risk that the applicant cannot satisfy an order for costs
Hill J was satisfied, on the balance of probabilities, that there was a substantial risk that the respondents before him would not, if judgment be given in their favour, be reimbursed in full for their taxed costs. No financial materials had been placed before the Court to indicate the present liabilities of the applicant, and all that was known was that it had a very small issued share capital and some cash flow from the factoring of debts. Thus, the "substantial risk" which Hill J found that the respondents might not be reimbursed in full for their taxed costs flowed from the apparent impecuniosity of the applicant.
Before me, the respondents referred to the discussion by Jenkinson J in Chester & Fein Property Developments Pty Ltd v Candam Investments Pty Ltd (1985) 9 FCR 419 at 422-4, of the significance to be attached in such a case to the availability to the party against whom the costs order is made of an indemnity out of assets of which that party is trustee. This case also indicates that the "real risk" of non-satisfaction of a costs order might arise without any apprehended improper dissipation of assets of the applicant; cf Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 325-7.
In his submissions, counsel for Charlwood Industries referred to the substance of the Group taken as a whole, to the large turnover of Charlwood Industries and to the operating profit returned by Charlwood Industries in the two most recent years for which there are final accounts, 1992 and 1993. Counsel particularly stressed the large sales receipts, $8.8m. in 1993 and $5.9m. for the first half of the present financial year. It was then submitted that the evidence did not disclose that Charlwood Industries was insolvent in the sense of being unable, utilising such cash resources as it has or can command through the use of its assets, to meet its debts as they fall due: Sandell v Porter (1966) 115 CLR 666 at 670, per Barwick CJ.
In that case
the High Court was immediately concerned whether a payment was a preference
within the meaning of s. 95 of the Bankruptcy Act 1924. This required it to be established by
evidence to the satisfaction of the Court that the payer of the alleged
preference was at the time of the payment insolvent. Insolvency was expressed in s. 95 as an
inability to pay debts as they fell due out of the debtor's own money.
A rather different question arises on the hearing of a creditor's petition under s. 52 of the Bankruptcy Act 1966. Sub-section 52 (2) provides that the Court may dismiss the petition if it is satisfied by the debtor that the debtor is "able to pay his debts". For this purpose, a debtor may be able to pay a debt even though unwilling to do so: Re Sarina; Ex parte Council of the Shire of Wollondilly (1980) 43 FLR 163, (affd. 48 FLR 372). In that case, at first instance, Deane J said (43 FLR at 165-6):
"It does not appear to me that it is possible to divine any policy underlying the provisions of the [Bankruptcy] Act to the effect that a creditor should be entitled to make a recalcitrant debtor bankrupt even though the debtor satisfies the court that he is plainly solvent and able to pay his debts. It seems to me that it may well be that the legislative intent was to leave a creditor, in those circumstances, to the ordinary remedies by way of execution and garnishee."
On the other hand, in Trojan v Corporation of Hindmarsh (1987) 16 FCR 37, the Full Court held that the fact that a trust had assets sufficient to pay the debt of the appellant did not assist him in demonstrating that he was able to do so, even though he was a named beneficiary of the trust and the trustee had power to advance moneys to pay the debt. The Full Court said (at 47):
"So far as the assets of the Trust are concerned, they are available to him only if a discretion is exercised in his favour. The possibility of a favourable exercise of the trustee's discretion as to the utilisation of trust assets is quite different from the ability to 'command' cash resources 'through the use of his assets' to which Barwick CJ referred in Sandell v Porter (1966) 115 CLR 666 at 670."
I mention these matters to emphasise that "solvency" in the sense identified by Barwick CJ takes its colour from a particular context and that it is not necessarily a sufficient answer to an application for security for costs in a case such as the present.
Various factors are relevant, as indicated in the treatment of the subject by Hill J in Equity Assets. However, in the end, the circumstances must be looked at as a whole, in the light of the general concern for the efficient administration of justice in this Court, manifested in the statute of which s. 56 is a part.
It may be that Charlwood Industries throughout the period covered by the evidence has been solvent in the technical sense. The answer to the question is bound up with the extent of the company's capacity to command cash resources through the use of its assets to meet its debts as they fall due. That in turn involves the consideration of the complex, but apparently fluid, structure of the Group by means of which the financial affairs of the business are conducted.
The legal rights, the vindication of which is sought in the present litigation, are vested in Charlwood Industries which therefore is the appropriate applicant. However, the commercial substance which it is sought to protect is that of the Group. It is in that setting that, on the present applications, one considers the nature of the risk that the applicant would not be able to satisfy a costs order against it in the total sum suggested in the evidence of about $120,000. Terms such as "able" and "cannot" when used in relation to satisfaction of a costs order should not be given so rigid a meaning as to circumscribe the discretion given by s. 56.
Counsel for the applicant submits that if the respondents did not obtain payment from his client of the amount of costs awarded against it, then it would be open to them to "get at" the assets of the applicant. However, a liquidator of the applicant would have the task of unravelling the structure of the Group so as to produce the necessary available funds. There is force in the submission for the respondents that they should not have to carry the risk of the delay and expense which would be involved in the taking of such steps.
On the other
hand, I do take into account the submission for the applicant that that risk to
some extent is diminished by the interest of Mr Charlwood in keeping his
business structure intact, rather than risk its dislocation or
destruction by resistance on the part of Charlwood Industries to payment of any
adverse costs order.
But it remains the fact that the structure of the Group was devised to give "flexibility" for distribution of income to family members and to minimise taxation liability. Charlwood Industries, as part of this arrangement, operates without fixed assets and a significant component of its current assets are unsecured loans from other entities in the Group. The financial relations between the components of the Group are fluid. One example is the reduction in the course of six months of the indebtedness of the Accord Trust to Charlwood Industries from over $700,000 to about $3,500.
Another example is the computation and charging of the management fee. This remains somewhat obscure. For example, Mr McGarrigle's evidence initially was that his profit and loss analysis for Charlwood Industries for the year to date ending December 1994 should include $918,641 as "finance expenses". When this was questioned, Mr McGarrigle said that the entry included a management fee of $900,000 entered in the books in January 1995 as the management fee applicable for the financial year ending 30 June 1994. He said in his affidavit of 10 February 1995 that the reference to "financial expenses" occurred "by reason of that description being contained in the computer generated spreadsheet".
It also is to be borne in mind that the past income tax characterisation of the management fees is presently under consideration by the Australian Taxation Office.
The evidence of Mr McGarrigle provides some inferential support for another point made by the respondents. It is that the financial relationships between the integers of the Group to a significant degree depend upon unsecured loans which are undocumented other than by book entries. There may be, and it is put no higher, difficulty in ascertaining the accuracy of those book entries and in determining whether they reflect true and enforceable obligations.
Wholesalers has a significant role as trustee of the Accord Trust and the Charlwood Unit Trust. The terms of those trusts do not appear from the evidence. However, even if the trustee had a broad discretion as to the use of trust assets that, as was pointed out by the Full Court in Trojan would be quite a different matter from any ability of Charlwood Industries to "command" cash resources through the use of its assets.
Given the complexity of the structure of the Group and the manner of the conduct of the financial relations between the elements of the Group, what is the result on these motions? Putting to one side any apprehension of evasive action, there is still a real risk that the successful respondents may meet an unacceptably high degree of difficulty and delay in obtaining satisfaction of a costs order in their favour for amounts in the magnitude suggested by the solicitors' estimates. In reaching that conclusion, I have taken into account and weighed the various matters discussed in the course of these reasons.
These are not applications which involve the consideration of what one might call "discretionary matters" peculiar to the particular case in the sense of delay, sharp practice or other conduct which helps to indicate a particular outcome. Rather, the Court seeks to achieve a result whereby all those matters peculiar to the particular case which are in controversy between the parties may be completely and finally determined, and multiplicity of proceedings concerning any of the matters in controversy be avoided. To that end, security for the payment of costs may be ordered under s. 56. Any order that is made may be reduced or increased as the litigation proceeds.
In the present case, given the conclusion reached above, it is appropriate for the Court to exercise its discretion at this stage of the proceeding by ordering the provision of security in respect of the claim against the first respondent and of the claim against the remaining respondents.
The respondents urged the making of an order to take matters up to the conclusion of the trial. In my view, it is more appropriate, and consistent with sub-s. 56 (3), to make an order in a sum designed to take the matter up to setting down for hearing. An application to increase the amount of security may then be made by the respondents if they are so advised.
In all the circumstances, I would order that in respect of each of the first respondent on the one hand, and the remaining respondents on the other, the applicant provide security for the payment of costs that may be awarded against the applicant in the sum of $30,000. That security is to be provided within 21 days, and to be in a form agreed between the respective solicitors, and in default of agreement in a form fixed by the District Registrar. The proceeding is to be stayed until the applicant has complied with the orders for security.
The costs of the respondents on their motions for security should be their costs in the cause.
I certify that this and the preceding twenty (20) pages are a true copy of the reasons for judgment of the Honourable Mr Justice Gummow.
Associate:
Date:
Counsel and solicitors for the applicant
(respondent to the motions):
Mr A.J. Martin, instructed by Clayton Utz.
Counsel and solicitors for the first respondent
(applicant on the motion of 15 December 1994):
Mr D.L. Williams instructed by Dibbs, Crowther & Osborne.
Solicitors for the second to fifth respondents
(applicants on the motion of 30 January 1995):
Makinson & d'Apice.
Dates of hearing: 9, 10 February 1995.
Date of judgment: 15 March 1995.
