Denblaze Pty Ltd v Relbank Pty Limited
[1996] QDC 48
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- Denblaze Pty Ltd v Relbank Pty Limited[1996] QDC 48
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Denblaze Pty Ltd v Relbank Pty Limited[1996] QDC 48
Denblaze Pty Ltd v Relbank Pty Limited[1996] QDC 48
DISTRICT COURT | No 2857 OF 1995 |
CIVIL JURISDICTION
JUDGE BOULTON
DENBLAZE PTY LTD | Plaintiff |
and
RELBANK PTY LIMITED | First Defendant |
and
NORFOLK ESTATES PTY LTD | Second Defendant |
BRISBANE
DATE 01/04/96
JUDGMENT
HIS HONOUR: Gentlemen, this is a matter of Denblaze Pty Ltd. It came before me in Chambers the week before last. Because of the pressure of other matters in the list, I did not have an opportunity to read the material carefully and I promised to give some brief oral reasons as soon as I could do that. That is what I propose to do just now.
This is an application on the part of the defendants for an order that the plaintiff provide security for costs. The summons was filed on 6 March 1996. By letter dated 20 February 1996, the defendants solicitors wrote to the plaintiff inquiring as to the capacity of the plaintiff, if unsuccessful, to meet an order for costs.
It requested certain financial information by Wednesday, 28 February 1996 and foreshadowed, in the event the information was not provided, an application to the Court. A copy of the first annual return of the plaintiff company dated 3 December 1993 disclosed, amongst other things, that the company acts as a trustee, has current assets of $2 and liabilities incurred as a trustee of $780,000 for which the company has a right to be indemnified out of trust assets.
In Supreme Court action 1443 of 1995, the plaintiff, Denblaze Pty Ltd, sought a speedy trial. In an affidavit filed 1 March 1996, Sharon Ann Wynn, a solicitor, employed by the plaintiff's solicitors deposed as follows:
“I am aware from my own knowledge and I am informed by Phillip Moore, a director of the plaintiff, and verily believe that as a result of the transactions referred to in the statement of claim of the plaintiff and summarised in paragraph 6 of this my affidavit, the plaintiff has:
- (1)Lost the use of a substantial sum of money which it would otherwise have had;
- (2)Consequently defaulted under financial facilities with other parties which transactions were dependent upon the moneys flowing from the transactions detailed in the statement of claim;
- (3)Suffered financial hardship.”
“(15) The plaintiff carries on business in Queensland as a developer of real property. As a result of the financial hardship of the plaintiff, the plaintiff has not been able to undertake further development projects and I verily believe that it would be in the best interests of all parties that this matter is resolved quickly to minimise the disruption to the business interests of the parties”
The principles governing the making of an order for security for costs were set out in the judgment of Shepherdson J. in Interchase Corporation Limited (in liq.) v. Colliers Jardine (Qld) Pty Ltd and Others 17 ACSR 447 at page 448 where His Honour refers to the statement of Waddell J in Southern Cross Exploration NL v. Fire and All Risks Company Limited (1985) 1 NSWLR 114 at 116:
“The first may be described as a threshold question. It is, whether having regard to the whole of the evidence before the Court, there is credible testimony by which it appears that there is reason to believe that the plaintiffs will be unable to pay the costs of the defendants if successful in their defence. If this question is answered ‘yes’, the second question arises which is whether, in the exercise of the discretion given to the Court by the subsection, the relief sought ought to be granted wholly or in part or should be refused.”
I am satisfied with the first limb of the abovementioned test. The question then to be considered involves the exercise of a discretion. The financial information now provided by the plaintiff does not descend into particularity.
The plaintiff claims that the defendants have delayed in bringing the application. However, the action was only commenced on 25 October 1993 and inquiries were needed before the defendants wrote the letter of 20 February 1996 expressing disquiet at the plaintiff's financial position.
The plaintiff does suggest that a default has occurred as a result of the defendants breach of contract in payments to third parties. It is not submitted though that the action will be defeated by the payment of security. In the exercise of my discretion, it seems to be appropriate that security be paid.
I note that this is a specific performance action which might be expected to last for some days. The applicant swears to a sum of $13,508.05 but the plaintiff is doubtful as to whether certain steps will be necessary and swears to an amount of $9,262.10. An amount of $11,000 seems appropriate to me.
I will hear submissions as to whether, in addition to a payment into Court, some other method of providing securities such as a bank guarantee might be appropriate in the present instance. In normal circumstances I would order that security be provided in satisfactory form within a limited time and that the action be stayed pending the provision of such security. I will hear submissions, too, on the question of costs but my first inclination would be to make the costs of both parties their costs in the cause. Firstly, gentlemen as to the form of the security. Is a bank guarantee perhaps a more suitable alternative.
MR HASSLER: I think it would be, yes, Your Honour.
HIS HONOUR: Well I'll just mention that in the formal order.
MR LILLEY: I have no objection to what form it takes, Your Honour.
HIS HONOUR: I order that the plaintiff, within 21 days of today's date, provide security for costs in the sum of $11,000 by paying such sum into Court or by providing a bank guarantee in that sum or by providing any other security satisfactory to the Registrar. I order that pending the provision of such security, the action be stayed. What about costs? Do you both agree that they should be both parties costs in the cause?
MR HASSLER: Yes, Your Honour, I think so.
MR LILLEY: Your Honour, I would except for the fact that a letter was written asking for the details and we were forced to come to Court. The plaintiff attempted to bring into Court a new financial statement which they could have given the details of that and perhaps given some further detail particularly in view of the fact that they didn't say that this would frustrate the action so obviously they have the ability, they just don't want to disclose the details.
HIS HONOUR: Yes, I hear what you say but I propose to order that the costs of both parties to the application be the parties costs in the cause.