Supreme Court Rejects Security for Costs Against Corporate Plaintiff

In a case involving a corporate and a natural plaintiff, the Supreme Court of New South Wales dismissed the application for security for costs, finding that the presence of a natural plaintiff within the jurisdiction precluded the need for security against the corporate plaintiff.

Supreme Court New South Wales

Medium Neutral Citation: In the matter of [COMPANY] [2015] NSWSC 1497 Hearing dates: 30 June 2015 Date of orders: 30 June 2015 Decision date: 30 June 2015 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: Claim for relief in paragraph 2 of the interlocutory process dismissed. Catchwords: PROCEDURE – costs – security for costs – where misstatement of plaintiff's address in originating process – whether intention to mislead – whether security should be ordered against corporate plaintiff where there is a natural plaintiff within the jurisdiction. Legislation Cited: (NSW) Uniform Civil Procedure Rules 2005, r 4.2(g) Category: Costs Parties: [NAME] (first plaintiff) 1888 Trading Pty Limited ACN 133 964 584 (second plaintiff) [NAME] (first defendant) [COMPANY] 137 384 457 (second defendant) Nandinu Pty Limited ACN [PHONE] (third defendant) Representation: Counsel: [redacted] A Abadee (defendant/applicant)

Solicitors: [redacted] [NAME] (defendants) File Number(s): 2015/94829

Judgment (ex tempore)

1. HIS HONOUR: Although, in my view, on no view could it be said that an address, the only connection with which the plaintiff has is being a mere employee of the occupier, is a sufficient address for the purposes of compliance with (NSW) Uniform Civil Procedure Rules 2005, r 4.2(g), I am not satisfied that the misstatement of an address in the originating process in these proceedings was with intention to mislead. As it seems to me, that inference is practically excluded by the circumstance that, concurrently with the originating process, the plaintiff [NAME] filed an affidavit sworn on the date of the originating process, which identified his address as Unit 12/[ADDRESS], Fivedock, which is the address at which he says he resides and has resided since 2012. It was not really suggested that it was not the place at which he presently resides and has resided since 2012. It was not put to him that he resides elsewhere, or resided elsewhere, during that period. I could not find on the present state of the evidence that he resided, or had resided during that period, anywhere else.

2. In those circumstances, it seems to me that I must find that he disclosed, concurrently with filing the originating process, his true residential address and, in those circumstances, it is just not open to conclude that the misstatement of the address in the originating process was with intention to mislead. On that basis, no ground for ordering security against the first plaintiff is made good.

3. The second plaintiff is potentially exposed to an order for security only in respect of the application for leave to amend the statement of claim. I have come to the conclusion that an application for security against the second plaintiff should be dismissed, for the accumulation of a number of reasons.

4. First, the amount of party/party costs that would be incurred by the defendants in the successful opposition of that application for leave to amend would not likely exceed $5000 or $6000, if that.

5. Secondly, the first and second plaintiffs are joint applicants for leave to amend, and if the application were unsuccessful a costs order would be made against both of them jointly and severally. It is a general principle of the law in this area that when there is a natural person plaintiff within the jurisdiction amenable to a costs order concurrently with a corporate plaintiff, the Court will not order security against the corporate plaintiff because there is a natural plaintiff worth powder and shot available in any event.

6. Thirdly, although there is some evidence that the company's financial position is, at best, marginal, it is insufficient to persuade me that it may not be able to meet a costs order for $5000.

7. Fourthly, the proceedings in which the application for leave to amend is sought to be made have been on foot for a year, and the delay in making an application for security in those proceedings tells against making an order in respect of a mere application for leave to amend at this stage of the proceedings.

8. While it may be that none of those four matters of themselves would have dictated dismissal of the application against the company, taken together, they do. 9. [ADDRESS] orders that the claim for relief in paragraph 2 of the interlocutory process be dismissed, with costs assessed in the sum of $5,500 inclusive of GST.

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