Stateland Developments Pty Ltd v Cavassini Developments Pty Ltd [2010] NSWSC 1299 (1 October 2010)

Last Updated: 15 November 2010

NEW SOUTH WALES SUPREME COURT

CITATION:
Stateland Developments Pty Ltd v Cavassini Developments Pty Ltd [2010] NSWSC 1299


JURISDICTION:
Equity Division
Technology & Construction List

FILE NUMBER(S):
2009/298797

HEARING DATE(S):
1 October 2010


EX TEMPORE DATE:
1 October 2010

PARTIES:
Stateland Developments Pty Ltd (plaintiff)
Cavassini Developments Pty Ltd (Receiver & Manager appointed) (defendant)
ACN 061 447 621 Pty Ltd (cross defendant)

JUDGMENT OF:
Brereton J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
A Vincent (plaintiff)
D Weinberger (defendant)
S Bird (sol) (cross defendant)

SOLICITORS:
Thomson Lawyers (plaintiff)
Walker, Kissane & Plummer (defendant)
Kennedys (Australasia) Pty Ltd (cross defendant)


CATCHWORDS:
PROCEDURE – Costs – Security for costs – Other matters – whether proceedings should be stayed when security for costs has not been provided – whether consent order for security should be varied

LEGISLATION CITED:
(CTH) Corporations Act 2001, s 1335
(NSW) Uniform Civil Procedure Rules 2005. r 42.21(1)(d)

CATEGORY:
Procedural and other rulings

CASES CITED:


TEXTS CITED:


DECISION:
Unless security is given in accordance with the order of 28 April 2010 by 5 October 2010 the proceedings be permanently stayed



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY AND CONSTRUCTION LIST


BRERETON J

Friday, 1 October 2010

2009/298797 Stateland Developments Pty Ltd ACN 100 016 171 v Cavassini Developments Pty Ltd ACN 001 838 437 (Receiver and Manager appointed)

JUDGMENT (ex tempore)

1 HIS HONOUR: On 28 April 2010, the court by consent made an order that the plaintiff provide security for the defendant’s costs of the proceedings in the sum of $130,000, that payment to be made into court or by such manner as agreed between the plaintiff and the defendant by 31 July 2010 or by such other date agreed between the plaintiff and defendant. Although some extension to 31 July 2010 may have been agreed, the security has not yet been given, and whatever agreed extension there was has now lapsed. By motion filed on 7 September 2010, the defendant seeks an order that the plaintiff’s claim be dismissed for failure to provide the security. By motion filed on 9 September 2010 and amended today, the plaintiff seeks an order setting aside the order of 21 April 2010 and, alternatively, an extension of time in which to provide security to next Tuesday, 5 October 2010.

2 The order for security was, a consent order, made after negotiations between the parties. While interlocutory orders can be varied when there has been a change of circumstances, and while that extends even to consent orders, the court should not lightly disturb a consent arrangement in respect of security for costs. It would be necessary, at least in the circumstances of this application, for the plaintiff to show that the ground upon which security was ordered – which implicitly was that of corporate impecuniosity, referred to in (NSW) Uniform Civil Procedure Rules 2005, r 42.21(1)(d), and/or (CTH) Corporations Act 2001, s 1335, namely, that there is reason to believe that the plaintiff, being a corporation, will be unable to pay the costs of the defendant if ordered to do so – no longer exists.

3 In my view, the plaintiff’s evidence does not convincingly show that that ground no longer exists. The evidence certainly does establish that there has been an improvement in the plaintiff's financial position. I would accept, despite some conflict in the evidence, that the controllers previously appointed to the plaintiff have been removed. But that is not to say that it will be able to pay a costs order. It remains the fact that the plaintiff has taken considerable time – months – to raise the $130,000 security for costs. It remains that there is a long outstanding debt due to the Office of State Revenue.

4 So far as reliance is placed on the value of the plaintiff’s real property at Newtown Road, which has been sold, the point that that evidence does not disclose the amount of encumbrances on that property is a powerful one. Similarly, the attempt to demonstrate substantial equity in the plaintiff’s Cowpasture Road property is not convincing; in the absence of evidence as to the amount secured by the second mortgage.

5 There is no up-to-date profit and loss statement – nor has there been since about 2007 – nor balance sheet. There is no summary of the plaintiff's assets and liabilities which would enable the court to form a conclusion that a potential costs order could be satisfied.

6 In those circumstances, I am unconvinced that there has been a sufficient change of circumstances to warrant setting aside the order of 28 April, all the more so where that order was made by consent.

7 On the other hand, the plaintiff has now deposited with its solicitor the amount of the security ordered, and is in a position to pay it into court, or provide it by some other agreed method, by 5 October. While the delay is regrettable, there is no suggestion that the breach occasioned by it is such as to seriously jeopardise the position of the defendant, and it would be unreasonable in those circumstances peremptorily to dismiss the proceedings.

8 I order that unless security is given in accordance with the order of 28 April 2010 by 5 October 2010, the proceedings be permanently stayed.

9 I think the defendant was entitled to bring this application when it brought it. It provoked the plaintiff’s application in response. In those circumstances, the proper order is that the plaintiff pay the defendant’s costs of both notices of motion, and I so order.

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LAST UPDATED:
11 November 2010