Asia Strategic Investment Alliances Pty Ltd v HIH Casualty & General Insurance Ltd & Ors [1999] NSWSC 601

New South Wales Supreme Court CITATION : Asia Strategic Investment Alliances Pty Ltd v HIH Casualty & General Insurance Ltd & Ors [1999] NSWSC 601 CURRENT JURISDICTION : Commercial FILE NUMBER(S) : 50024/98 HEARING DATE(S) : 28/05/99 JUDGMENT DATE : 31 May 1999

Asia Strategic Investment Alliances Ltd (ACN 063 507 139) (Plaintiff/ Cross-defendant)

PARTIES : HIH Casualty & General Insurance Ltd (ACN 008 482 291) (1st Defendant/ Cross-claimant) Raymond Reginald Williams (2nd Defendant) Terence Kevin Cassidy (3rd Defendant) JUDGMENT OF : Bergin J

COUNSEL : Mr M. Dempsey (Plaintiff) Mr C. Curtis (Defendant) SOLICITORS : Peter Kemp (Plaintiff) Clayton Utz (Defendant) CATCHWORDS : Application by defendant for security for costs: Part 53 Rule 2(e) Supreme Court Rules; s1335 Corporations Law: Court considered reasonableness of quantum for security. ACTS CITED : Corporations Law - s1335 Supreme Court Rules - Part 53 Rule 2(e); Practice Note 105 CASES CITED : Investment Ltd v Tricontinental Corporation Ltd (1991) 5 ACSR 621 KP Cable Investments v Meltglo Pty Ltd (1995) 56 FCR 189 DECISION : Security for costs ordered.

THE SUPREME COURT OF NEW SOUTH WALES COMMERCIAL DIVISION

BERGIN J

MONDAY 31 MAY 1999

50024/98 - ASIA STRATEGIC INVESTMENT ALLIANCES PTY LIMITED v HIH CASUALTY & GENERAL INSURANCE LIMITED & ORS

JUDGMENT EX TEMPORE 1 This is a Notice of Motion brought by the defendants for security for costs pursuant to pt 53 r 2 (e) of the Supreme Court Rules and s 1335 of the Corporations Law that the plaintiff give security in the sum of $516,424 additional to a previous amount to which I will refer in due course. 2 The Notice of Motion has had a history commencing, it appears, on 7 May before Einstein J when the plaintiff, the respondent to the motion, apparently sought an adjournment for two weeks which was granted by his Honour. On 20 May 1999 the matter was fixed for hearing on 28 May 1999, although a judge was not designated to hear it at that time. 3 It is necessary to detail a little history in this matter because it came before me on 28 May 1999 for hearing of the motion but also in respect of what could be described as the finalisation of an argument in respect of the Notice to Produce that had been served by the defendants, the applicants to the motion, for various documents relating to a legal opinion. It sought to challenge the then claimed loan arrangement and an insurance policy backing for costs of these proceedings that the plaintiff had suggested was in place. 4 The proceedings themselves, that is the main proceedings, were commenced in March 1998. The summons sets out in detail the plaintiff's claim against the defendants. Although it has been variously described throughout the hearing of this application as a straight-forward or simple matter, a reading of the summons lends the reader to the conclusion that it is perhaps not as simple as has been suggested. 5 The plaintiff makes a number of claims including that the defendants are liable to pay the plaintiff certain amounts of money totalling, as it then was, approximately $US8.4 million. The claims include a breach of contract and breach of implied terms of contract. There are claims of misleading and deceptive conduct with allegations that the alleged representations made by the defendants were false and that the defendant did not have reasonable grounds for making the representations. 6 There is an additional claim that the second and third defendants aided, abetted, counselled and procured the contravention of the section of the Trade Practices Act, essentially a claim under s 75B of the Trade Practices Act. 7 There is also a claim of breach of fiduciary duty with a number of paragraphs setting out the purported basis of the way in which that fiduciary duty arises. Additionally, there are claims for the construing of a trust, unjust enrichment, a breach of implied term and misleading and deceptive conduct in respect of future and further negotiations. Albeit claims of that nature can be straight-forward, the parties are at issue as to whether it is a simple claim. That has some bearing on this application for a rather large amount of security for costs. 8 The Defence which was filed on 15 April 1998 puts the contentions of the plaintiff in issue. It is a detailed and apparently careful Defence which runs to some twenty-one pages and there is a reply to it. The reply deals with the $2 million payment which was to be paid on the signing of the joint venture. 9 The defendants put on a cross-claim of which paragraph 7 pleads: "By the summons filed in the proceedings ASIA asserts, inter alia, that it was a term of the agreement that HIH agreed to pay ASIA the sum of $US5 million for the right to acquire the 27% interest or alternatively, for the 27% interest." Paragraph 10 pleads: " For the purpose of this cross-claim only , HIH says that if in the proceedings it is found that the agreement included the term (a reference to paragraph 7) HIH is entitled to recover the part payment by way of restitution consequent upon ASIA's failure to transfer the 27% interest,"