Ninety-Sixth Dekro Pty Ltd & Ors v D. and D. Tolhurst Ltd [1988] FCA 162

UDGMENT No. 2 728_.

THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ©) -V. 'No. G 227 of 1987 ) GENERAL DIVISION ) BETWEEN: - {2} S Applicants and D and D TOLHURST LTD. Respondent "er COURT: | NORTHROP J. NO r ray CN DATE : 11 MARCH 1988 ? aad Me WS » SeNY \ PLACE: § MELBOURNE yas en | x iS aren ' ! +, Oo, "in ' BN on c , Oy Ox . _ ° ONS FOR Set

This is the return of a motion in which the respondent is seeking an order that the applicants provide security for costs of the action which has been brought by them in this Court against the respondent. The history of this matter, as appearing from the material before the Court,

can be stated briefly.

Early in the year 1987, the applicants entered into an arrangement with the respondent, a sharebroker, whereby a schene was arranged for the respondent to advise the

applicants on the purchase of shares to be bought and sold

2.

under a scheme whereby the obligation to pay did not arise, apparently, until sometime after purchase, by which time the value of those shares would have increased and could be sold at a higher price thereby allowing the applicants to pay the cost from the proceeds of the sale thus leaving a profit with the applicants. Those profits, in theory, would be

sufficient to pay the commission charged by the respondent on

the arrangements.

Each of the applicants is a company with a 6§2 paid-up capital only and each has nd assets from which it could pay any costs which each might be obliged to pay to the respondent. For some reason or other the scheme did not

operate and eventually losses were made and the applicants

owed a large sum of money to the respondent pursuant to the arrangements made between them. Pursuant to the provisions

of the Companies Code, the respondent gave the required

notice and then moved in the Supreme Court for orders that