[2008] QDC 81
DISTRICT COURT
CIVIL JURISDICTION
JUDGE ROBIN QC
No 190 of 2007
SVEN PAYNE HOSPITALITY MANAGEMENT PTY LTD (ACN 070 866 689) | Applicant |
and | |
NORTH BRISBANE SPORTING ASSOCIATION INCORPORATED trading as AO'ACES CLUB | Defendant |
BRISBANE
DATE 01/04/2008
ORDER
CATCHWORDS: | Uniform Civil Procedure Rules r 671, r 672 - appropriate order for security for costs to be given by plaintiff company - $25,000 required to cover first day of trial, and in addition an uncapped undertaking of a director to meet unpaid costs |
HIS HONOUR: This is a defendant's application for security for costs. It is accepted, at least for purposes of the application, that the plaintiff company is without any ability to pay costs should its claim fail. If its claim succeeds of course it is unlikely to come under any significant liability for costs to the defendant.
The facts, according to the plaintiff, are that it was engaged to provide management services for the defendant club at a rate of something like $1,000 per week and that this arrangement was implemented for as long as 81 weeks. The defendant denies that there was any such arrangement and also the authority of its treasurer to make any such arrangement on its behalf, as the plaintiff asserts the treasurer did.
The club's case is that the services, which I would infer were essentially rendered by Mr Payne personally, were provided voluntarily and that he received, even from his own point of view, sufficient recompense for the services by enjoying his time in the club using its bar and gambling facilities. To an extent, in those comments, I am probably acting on evidence from the Bar table by Mr Sheppard.
Another issue that finds its way into the pleadings is that when the company finally invoiced the club for services a modest amount of $11,000 was involved, only an eighth or something like that of the claim now pursued. The plaintiff has an explanation for that in terms of invoicing being delayed until the club's financial position had improved and, at that point, to be in amounts on account of $10,000, or thereabouts, the extra 1,000 being attributed to GST.
The plaintiff's situation is more sympathetic by reason of services having been supplied. It is not a claim based on loss of opportunity to provide services in circumstances where the energy and effort required could have been profitably employed elsewhere.
The parties and their solicitors have gone to a considerable amount of trouble trying to resolve this security issue. On the plaintiff's side it seems to have been accepted that security in some form was appropriate. There has been much argument about the appropriate form.
Recently, both sides have engaged the services of experienced cost assessors to provide estimates of appropriate amounts. Mr Ryan, for the defendant, estimates that something like $25,000 has been spent already, another $50,000 will be incurred by the end of the first day of a trial. Mr Graham, engaged for the plaintiff, has paid attention to future costs and estimates at the upper end of his range $20,000 against the $50,000. Minds may well differ in a case like this. It appears that the plaintiff will have a fair number of witnesses attesting to services that were provided. No doubt the defendant will have a similar number, probably including all of its management committee.
Mr Rees has taken Mr Ryan to task for including components that in the end have not eventuated such as the employment of counsel for today.
I think the important feature is the plaintiff's offering a personal undertaking of Mr Payne to be responsible for costs the plaintiff might be ordered to pay to the defendant but fail to pay. There has been discussion about his declining to provide personal financial information to establish the worth of an undertaking by him, which does cause me some concern. If anything that is heightened by the evidence to the effect that a fund in the order of half a million dollars is expected to become available to some combination of Mr Payne and the plaintiff, and perhaps another company of his, next June. I understand Mr Sheppard's misgivings about the uncertainties that might affect that and in the end I am not impressed by Mr Rees's offers on behalf of the plaintiff to quarantine some part of that future fund.
Traditionally, courts have not enquired into the ability to pay costs of flesh and blood individuals who normally escape being ordered to provide security. Of course there will be exceptions to that such as vexatious litigants or people who may be regarded as closely similar.
On the other hand, if a guarantee by an individual is proffered in support of potential costs liability of a company, it may be inappropriate to critically accept the undertaking of any individual at all. It should be a person of some substance, but that is the assumption made about most individuals in the community. The cap which has previously been attached to offers of personal responsibility by Mr Payne seems to have disappeared. In any event, I would not be entertaining accepting his undertaking if it were capped. I think he ought to be regarded as a rational person, unlikely to risk personal bankruptcy to procure the continued pursuit of a relatively modest claim by his company.
Mr Sheppard says, and I accept that he is right, that security for costs can be ordered for costs already incurred. I am not inclined to do that. The action has been on foot for some time now, and even though the plaintiff has known of the defendant's interest in obtaining security, it has not actually been faced with an application for it.
I think the appropriate order, doing the best I can, and taking into account the matters listed in rules 671 and 672, is a combination of taking up Mr Payne's proffered undertaking and the provision of some additional security which may indirectly assist the defendant in respect of the amount for which, if is Mr Ryan's right, it may already be out-of-pocket; the coincidence of the amounts is no more than coincidence. It is based on a view that the appropriate figure for costs after today probably falls somewhere in between those of Mr Ryan and Mr Graham.
I propose the following orders:
...
HIS HONOUR: I will just make a slight change so that the costs you will get today, Mr Sheppard, I am going describe as the defendant's professional costs of today's application to be assessed on the standard basis. Now, we are adjourning for later consideration the defendant's application for payment by the plaintiff of its disbursements and for the difference between such costs and costs assessed on the indemnity basis. I will adjourn the application to a date to be fixed ( - because it is not going to be urgent is it?) on three business days' notice - three clear days' notice. I keep the liberty to apply there.
