194] 1987 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION BETWEEN: AND: AND BETWEEN: AND: NOT FOR GENERAL DISTRIBUTION ) ) ) NSW G.465 of 1987 ) ) TRENDAX PTY LIMITED Applicant IAN WILLIAM WHEELER First Respondent NEWCASTLE IMPORTERS AUSTRALIA PTY LIMITED Second Respondent IAN & SONS WHOLESALE PTY LIMITED Third Respondent GARTH GRIFFITHS Fourth Respondent GRIFFITHS SHEARMAN REAL ESTATE PTY LIMITED trading as "WILSONS BUSINESS BROKERS" Fifth Respondent IAN & SONS WHOLESALE PTY LIMITED — First Cross-Claimant TRENDAX PTY LIMITED First First Cross—Respondent AND BETWEEN: AND BETWEEN: AND: JOHN GEORGE KERR Second First Cross-Respondent KIM REGINALD SHARPE Third First Cross—Respondent IAN WILLIAM WHEELER First Second Cross-Claimant NEWCASTLE IMPORTERS AUSTRALIA PTY LIMITED Second Second Cross-Claimant IAN & SONS WHOLESALE PTY LIMITED Third Second Cross-Claimant GARTH GRIFFITHS First Second Cross-Respondent GRIFFITHS SHEARMAN REAL ESTATE PTY LIMITED trading as "WILSONS BUSINESS BROKERS" Second Second Cross~Respondent GARTH GRIFFITHS First Third Cross-Claimant GRIFFITHS SHEARMAN REAL ESTATE PTY LIMITED trading as "WILSON'S BUSINESS BROKERS" _ Second Third Cross-Claimant IAN WILLIAM WHEELER First Third Cross-—Respondent CORAM : PLACE: DATE: NEWCASTLE IMPORTERS AUSTRALIA PTY LIMITED Second Third Cross-Respondent IAN & SONS WHOLESALE PTY LIMITED = SOS Third Third Cross-Respondent WILCOX J SYDNEY 8 DECEMBER 1987 MINUTES OF ORDER THE COURT ORDERS THAT: The applicant, Trendax Pty Limited, pay or provide security for costs in the sum of ten thousand dollars ($10,000), the said amount to be lodged not later than 12 noon on Thursday 10 December 1987 in an interest bearing account with a bank or building society in the joint names of the solicitor for the said applicant and the solicitor for the first respondent, Ian William Wheeler, the second respondent, Newcastle Importers Australia Pty Limited, and the third respondent, Ian & Sons Wholesale Pty Limited. The said moneys are to be retained in the account until a further order of a Judge of the Court. AND THE Note: The application to vacate the hearing date be refused. COURT DIRECTS THAT: The direction in relation to the interrogatories addressed to the first and third respondents be varied so as to extend the time for service of answers to interrogatories to 12 noon on Thursday 10 December 1987. The said documents may be served in Newcastle. 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 GENERAL DIVISION NOT FOR GENERAL DISTRIBUTION BETWEEN: AND: AND BETWEEN: AND: NSW G.465 of 1987 —ewewwrw TRENDAX PTY LIMITED Applicant IAN WILLIAM WHEELER First Respondent NEWCASTLE IMPORTERS AUSTRALIA PTY LIMITED Second Respondent IAN & SONS WHOLESALE PTY LIMITED Third Respondent GARTH GRIFFITHS Fourth Respondent GRIFFITHS SHEARMAN REAL ESTATE PTY LIMITED trading as "WILSONS BUSINESS BROKERS" Fifth Respondent IAN & SONS WHOLESALE PTY LIMITED First Cross-Claimant TRENDAX PTY LIMITED First First Cross-Respondent AND BETWEEN: AND BETWEEN: AND: JOHN GEORGE KERR Second First Cross-Respondent KIM REGINALD SHARPE Third First Cross-Respondent IAN WILLIAM WHEELER First Second Cross-Claimant NEWCASTLE IMPORTERS AUSTRALIA PTY LIMITED Second Second Cross-Claimant IAN & SONS WHOLESALE PTY LIMITED Third Second Cross-Claimant GARTH GRIFFITHS First Second Cross-Respondent GRIFFITHS SHEARMAN REAL ESTATE PTY LIMITED trading as "WILSONS BUSINESS BROKERS" Second Second Cross-Respondent GARTH GRIFFITHS First Third Cross-Claimant GRIFFITHS SHEARMAN REAL ESTATE PTY LIMITED trading as "WILSON'S BUSINESS BROKERS" Second Third Cross-Claimant IAN WILLIAM WHEELER First Third Cross-—Respondent 3. NEWCASTLE IMPORTERS AUSTRALIA PTY LIMITED Second Third Cross-Respondent IAN & SONS WHOLESALE PTY LIMITED Third Third Cross~-Respondent CORAM: WILCOX J PLACE: SYDNEY DATE: 8 DECEMBER 1987 EXTEMPORE REASONS FOR JUDGMENT There are before the Court applications by the various respondents for security for costs. They can be dealt with as if there were only two respondents. The first group of respondents is the first to third respondents, who are represented by a single solicitor and counsel and have a common interest in the matter. The second group is the fourth and fifth respondents, who are also represented by a single solicitor and counsel and, again, have a common interest. It seems to me that this is a case where an order for security for costs should be granted. The evidence discloses that the applicant company has a paid up capital of only $2 and has a deficiency of assets. The company has been recently incorporated and it has directors, being Mr J Kerr and Mr KR Sharpe, who are people engaged in business activities. It appears that Mr Kerr would be in a position to provide funds by way of security, although I am not so confident of Mr Sharpe's ability to do this. In taking the view that this is a proper case, I accept completely the statement made by counsel for the applicant that the claim is bona fide and seriously pressed. In saying that, I express no view whatever as to the prospect of success because I have formed no view. However, I do not think that it would be right to treat the claim as other than a genuine one. Counsel has suggested that there ought to be no order for security because of the delay by the respondents in making the application. The matter is currently listed to be heard next week and, in some cases, an application at this stage would be foredoomed to failure on account of delay. However, the case has been somewhat unusual in the speed with which it has moved. The Application was served on the various respondents in late September or early October. There has been a fairly tight timetable with a lot of work being done. There was discussion on security for costs between the solicitor for the first to third respondents and the solicitor for the applicant in mid-November and, when the matter was before me on 26 November, it was intimated that there would be applications for security for costs. It is true that the applications might have been brought a little earlier, but I do not think that the respondents have acted unreasonably, under all the circumstances, in applying at this stage. I am not satisfied that the applicant has been disadvantaged by the delay which has occurred. I do not think that it is likely that the requirement of security for costs will cause it to 5. discontinue the action, and therefore be prejudiced in the sense that it has incurred costs of its own which it would not have incurred had it known that there would be an order for security for costs. It is agreed that the most appropriate form of order would be for funds to be deposited in an interest bearing account with a bank or building society in the joint names of the respective solicitors. I think that it is correct to say there ought to be one account in the name of the solicitor for the applicant and the name of the solicitor for the first to third respondents and a second account in the name of the solicitor for the applicant and the solicitor for the fourth and fifth respondents. As to the amount, my estimate -- which I think is not seriously contested by counsel -- is that, on the basis of a hearing of about three days, party and party costs would be taxed at about $10,000. I see no reason why the figure which I have estimated should not be fully covered and, consequently, it is appropriate that there be deposited in each of the interest bearing accounts the sum of $10,000. I understand that this can be done quickly. I therefore order that the necessary security for costs be given no later than 12 noon on Thursday next. The orders that I make in respect of each of the Notices of Motion are as follows: I order that the applicant pay or provide security for costs in the sum of $10,000, the said amount to be lodged not later than 12 noon on Thursday, 10 December in an interest bearing account with a bank or building society in the joint names of the solicitor for the applicant and the solicitor for the respondents. The said moneys are to be retained in the account until a further order of a Judge of the Court. There remains the question as to whether the hearing should proceed next Monday as previously fixed. The submission has been put by counsel for the respondents that the hearing date should be vacated because their clients have not had sufficient time to digest all of the material which has been produced to them, and particularly the affidavits recently served dealing with the applicant's claim for damages. I have not found this an easy question to resolve. I have some sympathy for the position in which the respondents and their legal advisers find themselves. On the other hand, if the matter is adjourned it would, having regard to the imminent vacation and the Full Court sittings in February, have to be adjourned for a period of about three months. I am loath to force this delay on the parties, particularly as each of the parties professes some desire to have the matter heard as quickly as possible. If I felt that justice could not be done next week, I would unhesitatingly vacate the dates but, despite what has been put by counsel for the respondents, I am not so persuaded, at least at this . stage. Certainly I think that the matters which have to be investigated in relation to liability can be fully and adequately investigated. I appreciate that questions of credit are involved and that counsel may wish to use material on damages in order to cross-examine the applicant's witnesses on credit in respects which go to findings on liability. For this reason I would always be reluctant to separate a trial on damages from a trial on liability. However, I think that, subject to one qualification, there is no reason why the trial cannot proceed next week. The material which has been produced in relation to damages on behalf of the applicant will by that time have been in the possession of the respondents and their advisers for a period of a week. This period will give a reasonable opportunity for that material to be understood and any necessary inquiries made, so that there can be a proper foundation for cross-examination. The only concern which I have is that it may turn out that the time has been too short for the filing of evidence in reply to matters on damages. I do not say that this is necessarily so, because it is not obvious to me that the respondents could usefully file affidavits or tender documents which would cut down the applicant's case on damages, but it may be so. Consequently, I would not take the course at this moment of ruling out an application for an adjournment at the conclusion of the hearing next week if counsel for the respondents thought this to be justified in the light of the position as it then was. I would be reluctant to see that course eventuate, but if it is necessary in the interests of justice, then it will occur. However, I think that it is extremely likely that the time which has been set aside can be usefully occupied in ventilating the matters which are at issue and as to which I see no problem. I think that the appropriate course is to retain the date and, subject to the order for security for costs having been complied with on Thursday, to rule that the matter should begin on Monday. If, at any stage in the proceedings, a real problem arises, I will be prepared to consider the situation as it may then be. I decline the application to vacate the hearing date. I vary the direction in relation to the interrogatories addressed to the first and third respondents so as to extend time for service of the answers to interrogatories until to 12 noon on Thursday 10 December. The documents may be served in Newcastle. I certify this and the seven (7) preceding pages to be a true copy of the Reasons for Judgment of his Honour Justice Wilcox. Associate : omens fee. Date: 1 February 1988 Counsel for the Applicant: Solicitors for the Applicant: Counsel for the First, Second and Third Respondents: Solicitors for the First, Second and Third Respondents: Counsel for the Fourth and Fifth Respondents: Solicitors for the Fourth and Fifth Respondents: Date(s) of hearing: 9, Mr R S Hulme QC with Mr J A Treback Thomas Laycock Mr K E Lindgren Mitchell Thomas Partners Mr J A Timbs Vercoe O'Sullivan & Saddington 8 December 1987