Roadpacker Australia Pty Ltd v Handel, David Warwick & Anor [1995] FCA 881

IN THE FEDERAL COURT OF AUSTRALIA) QUEENSLAND DISTRICT REGISTRY ) No. QG 76 of 1994 GENERAL DIVISION ) BETWEEN : ROADPACKER AUSTRALIA PTY LTD Applicant AND : DAVID WARWICK HANDEL First Respondent AND : REYNOLDS TECHNOLOGIES PTY LTD (ACN 063 394 829) Second Respondent CORAM: Spender J PLACE: Brisbane DATE: 25 October 1995 MINUTES OF ORDER THE COURT ORDERS THAT: 1. The motion be dismissed. 2. The respondents on the motion are to have their costs of the motion. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA) QUEENSLAND DISTRICT REGISTRY ) No. QG 76 of 1994 GENERAL DIVISION ) BETWEEN : ROADPACKER AUSTRALIA PTY LTD Applicant AND : DAVID WARWICK HANDEL First Respondent AND : REYNOLDS TECHNOLOGIES PTY LTD (ACN 063 394 829) Second Respondent CORAM: Spender J PLACE: Brisbane DATE: 25 October 1995 REASONS FOR JUDGMENT This is an application for security for costs. It seems to me that it is based on s. 1335 of the Corporations Law although that does not distinctly appear from the application. The nature of the application and the relevant approach seems to me to be clearly set out in the judgment of von Doussa J in Beach Petroleum N.L. v Johnson (1992) 2 ACSR 404 and which in Set Technologies Pty Ltd v Lewis (1993) 10 ACSR 61, I respectfully approved. I think that on the material before me there is a reason to believe that there is a real chance that the applicant corporation will be unable to pay all of the costs of a successful defendant, and so the discretion to order security for costs arises. I am conscious of what is said by Mr Calabro as to the encouraging health of the company in its present circumstances and that it may be in a position ultimately to be able to pay costs, but I think there is a real chance that it may not be able to, and therefore I have to consider whether, in the circumstances here, I should order the provision of any security. The primary reason I do not is because of the delay in bringing this application, accompanied by the expenditure of considerable costs during the period of that delay on the part of the respondents to the motion for security. It is said by Mr Newton on behalf of the applicant for security, that it is only recently, on receipt of information that came into its possession as a result of the provision of a summary of sales by the applicant which is set out in exhibit RDS8 to an affidavit of Rodney Deo Sahay, which was filed on 29 September 1995, that it became aware of the need for an application for security. I have some difficulty in accepting that this is the case. The material shows that the applicant is a $2 company. As at May of last year the applicants for security were aware that "strike out" process was in progress at the Australian Securities Commission in respect of the applicant company. While I am cautious not to accord too much weight to the contents of a facsimile, there is also evidence that Mr Handel, one of the applicants for security, wrote to a distributor of the applicant before the commencement of these proceedings referring to "financial problems" of the applicant.