Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors; Idoport Pty Limited & Market Holdings Pty Limited v Donald Robert Argus; Idoport Pty Limited "JMG" v National Australia Bank Limited [35] [2001] NSWSC 744

New South Wales Supreme Court

CITATION : Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors; Idoport Pty Limited & Market Holdings Pty Limited v Donald Robert Argus; Idoport Pty Limited "JMG" v National Australia Bank Limited [35] [2001] NSWSC 744 revised - 20/09/2001 FILE NUMBER(S) : SC 50113/98; 50026/99; 3991/00 HEARING DATE(S) : 29/08/01, 30/08/01, 31/08/01, 3/09/01, 4/09/01 JUDGMENT DATE : 13 September 2001

Idoport Pty Limited (Plaintiff) PARTIES : Market Holdings Pty Limited (Plaintiff) National Australia Bank Limited (Defendant) Donald Robert Argus (Defendant) JUDGMENT OF : Einstein J

COUNSEL : Mr Garnsey QC, Mr M Dicker, Mr R Titterton (Plaintiffs) Mr J Gleeson SC, Dr AS Bell (Defendants) SOLICITORS : Withnell Hetherington (Plaintiffs) Freehills (Defendants) CATCHWORDS : Practice and procedure - Costs - Security for costs - General principles - Impecunious plaintiff - Bodies corporate - Litigation for benefit of third parties - Delay in pursuing claim for security for costs - Significance of prejudice - Final hearing to take extended period of years - Application for security as to - (1) defendants' future costs in respect of amendments to statement of claim allowed well after commencement of final hearing - (2) defendants' future costs in respect of claims made by Market Holdings (in liquidation) - (3) defendants' costs, past and future, in respect of MLC proceedings initiated following the commencement of the final hearing of the existing proceedings and ordered to be heard together with the existing proceedings - Primary purpose of an award of costs is to indemnify the successful party - A secondary purpose concerns the public interest objective in the sense of instilling in parties commencing litigation a realisation of the potential financial expenses involved - Large-scale disregard of the principle of the usual order as to costs would inevitably lead to an increase in litigation with an increased and often unnecessary burden on the scarce resources of the publicly funded system of justice - Purpose of a security for costs order is a protective jurisdiction to ensure that the primary purposes for having costs orders themselves can be achieved - A defendant is protected against the risk that a cost order obtained at the end of the proceedings may turn out to be of no value by reason of the impecuniosity of the plaintiff - The jurisdiction assists both the compensation purpose as well as the public interest objective Corporations Act 2001 (Cth) LEGISLATION CITED : Legal Profession Act 1987 (NSW) Supreme Court Rules 1970 (NSW) Maintenance, Champerty and Barratry Abolition Act 1993 (NSW) Andrews v Caltex (1982) 40 ALR 305 Anstee v. Jennings (1935) VLR 144 Bankinvest AG v Seabrook (1988) 14 NSWLR 711 Beach Petroleum NL & Anor v Johnson & Ors Bell Wholesale Co Pty Limited v Gates Export Corporation (1994) 2 FCR 1 Bryan E. Fencott and Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 Buckley v Bennell Design & Constructions Pty Ltd (1974) 1 ACLR 301 Cameron's Unit Services Pty Ltd v Kevin R Whelpton and Associates (Aust) Pty Ltd (1986) 13 FCR 46 Carr v Baker (1936) 36 SR (NSW) 301 Caruso Australia Pty Ltd v Portec (Aust) Pty Ltd (1984) 8 ACLR 818 Caswell v Powell Duffryn Associated Collieries Limited [1940] AC 152 Chartspike Pty Ltd (in liq) v Chahoud [2001] NSWSC 585 Chellaram and Mr Courtney v Chine Ocean Shipping Co (1991) 65 ALJR 642 Cilli v. Abbott (1981) 53 FLR 108 Clyde Industries Ltd v Ryad Engineering Pty Ltd (1993) 11 ACLC 325 Commonwealth of Australia and Another v Cable Water Skiing (Australia) Ltd (1994) 14 ACSR 760 Cunningham v Olliver Federal Court of Australia, unreported 21 November 1994, NG 14/93 Cowell v Taylor (1885) 31 Ch D 34 Crypta Fuels Pty Ltd v Svelte Corporation Pty Ltd (1995) 19 ACSR 68 Equity Access Limited v Westpac Banking Corporation (1989) ATPR 40-972 Fitzpatrick v Waterstreet (1995) 18 ACSR 694 Foss Export Agency Pty Ltd v Trotman (1949) 67 WN (NSW) 1 Gentry Bros Pty Ltd v Wilson Brown and Associates Pty Ltd (1992) 8 ACSR 405 Grant v The Banque Franco-Egyptienne Egyptienne (1876) 1 CPD 143 Harpur v Ariadne Australia Ltd [1984] 2 Qd.R 523 Heller Factors Pty Ltd v John Arnold's Surf Shop Pty Ltd (in liq) (1979) ACLC 32,446 Hession v Century Twenty-one South Pacific Limited (In Liq) (1992) 28 NSWLR 120 Idoport Pty Ltd & Anor v National Australia Bank Limited & 8 Ors.[1999] NSWSC 828 Idoport Pty Ltd & Anor v National Australia Bank Limited & 8 Ors [2001] NSWSC 142 Idoport Pty Ltd & Anor v National Australia Bank Limited & 8 Ors [2001] NSWSC 509 Idoport Pty Ltd & Market Holdings Pty Ltd (in liq) v National Australia Bank Limited CA40825 of 2000 Interwest Ltd v Tricontinental Corp Ltd (1991) 5 ACSR 621 Jingellic Minerals NL & Anor v King & Ors (1992) 10 ACLC 525 J & M O'Brien Enterprises Pty Limited v The Shell Co of Australia Limited (1983) 7 ACLR 790 CASES CITED : Johnson v Lake Macquarie City Council (1995) 87 LGERA 22 Jones v Great Western Railway Co (1930) 144 LT 194 Kelly v. Noumenon Pty Ltd (1988) 47 SASR 182 KP Cable Investments Latoudis v Casey (1990) 170 CLR 534 Lindsay Petroleum v Hurd (1874) LR 5 PC 221 Mantaray Pty Ltd v Brookfield Breeding Co Pty Ltd (1990) 8 ACLC 304 MA Productions Pty Limited v Austaram Television Pty Limited (1982) 7 ACLR 97 Memutu Pty Limited v Lissenden (1983) 8 ACLR 364 Mummery v Irvings (1956) 96 CLR 99 National Bank of New Zealand Limited v Donald Export Trading Limited [1980] 1 NZLR 9 Orr v Ford (1989) 167 CLR 316 Oshlack v Richmond River Council (1998) 193 CLR 72 Pacific Acceptance Corporation Ltd v Forsyth (No 2) [1967] 2 NSWR 402 Pearson v Naydler [1977] 1 WLR 899 Rajski and Another v Computer Manufacture & Design Pty Ltd and Others [1982] 2 NSWLR 443 Ramsey v Hartley [1977] 2 All ER 673 Re Insurance Associates Pty Ltd (in liq) (1975) 1 ACLR 74 Riot Nominees Pty Limited v Suzuki Australia Pty Limited (1981) 34 ALR 653 Rosenfield Nominees Pty Limited v Bain & Co (1988) 14 ACLR 467 Rugby Union Players Association [30/7/1997, SCNSW, 50225/96, unreported] Scott Fell v Lloyd (Official Assignee) (1911) 13 CLR 230 Seltsam Pty Limited v McGuiness (2000) 49 NSWLR 262 Semler v Murphy [1968] Ch 183 Sent v Jet Corporation (1984) 2 FCR 201 Smail v Burton (1975) VR 776 Southern Cross Exploration v Fire and All Risks Insurance Co Ltd (1985) 1 NSWLR 114 Spiel v Commodity Brokers Australia Pty Ltd at 415 Sydmar Pty Ltd v Statewise Developments Pty Ltd (1987) 5 ACLC 480 Tricorp Pty Ltd (in liq) v Deputy Commissioner of Taxation (WA) 10 ACLC 474 Tulloch v Walker (Yeldham J. 8 December 1987, unreported) Warren Mitchell Pty Ltd v Australian Maritime Officers Union (1993) 12 ACSR 1 Weily's Quarries v Devine Shipping (1994) 14 ACSR 186 Woodhouse v McPhee (1997) 80 FCR 529 Yandil Holdings Pty Ltd v Insurance Co of North America (1985) 3 ACLC 542 DECISION : Orders to be made for the provision by Idoport Pty Ltd and by Market Holdings Pty Ltd (in liquidation) of security for costs in respect of each of the defendants' claims in notices of motion 19 and 22. Parties to bring in short minutes of order to reflect the reasons for judgment. The liquidator of Market Holdings to be given an opportunity to address submissions in relation to Market Holding's position.