LRSM Enterprise Pty Ltd v Zurich Australian Insurance Limited [2014] NSWCA 88

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: LRSM Enterprise Pty Ltd v Zurich Australian Insurance Limited [2014] NSWCA 88 Hearing dates: 10 February 2014 Decision date: 31 March 2014 Before: McColl JA at [1]; Macfarlan JA at [2]; Barrett JA at [3] Decision: 1. Appeal allowed. 2. Set aside orders made in the Common Law Division on 10 April 2013 and in lieu order that the notice of motion filed on 30 November 2012 seeking security for costs be dismissed with costs. 3. That the respondent pay the appellant's costs of the proceedings in this Court. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: PROCEDURE - security for costs - appeal against order requiring substantial security - action brought by insured against insurer where complicity of insured in fire causing the relevant loss is in issue - finding that there are real issues to be tried - suspicion that plaintiff not bona fide - impermissible use of suspicion in place of finding of lack of bona fides - any such lack in any event going to the central issue to be determined in the case - assessment of ability of plaintiff to fund costs - shown that various creditors unwilling to fund - not shown that they are unable to do so - such creditors are not "insiders" - relevance of unwillingness of arms length trade creditors to give financial support. Cases Cited: Ariss v Express Interiors Pty Ltd (1995) 13 ACLC 1585 Bell Wholesale Co Pty Ltd v Gates Export Corporation (No 2) (1984) 2 FCR 1 Dae Boong International Co Pty Ltd v Gray [2009] NSWCA 11 Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664; 208 ALR 564 Green (as liquidator of Arimco Mining Pty Ltd) v CGU Insurance Ltd [2008] NSWCA 148; 67 ACSR 105 Jazabas Pty Ltd v Haddad [2007] NSWCA 291; 65 ACSR 276 Madgwick v Kelly [2013] FCAFC 61; 212 FCR 1 Pasdale Pty Ltd v Concrete Constructions (1995) 131 ALR 268 Pioneer Park Pty Ltd v Australia and New Zealand Banking Group Ltd [2007] NSWCA 344; 65 ACSR 383 Rajski v Computer Manufacture & Design Pty Ltd [1982] 2 NSWLR 443 Reches Pty Ltd v Tadiran Ltd (1998) 85 FCR 514 Sent v Jet Corporation of Australia Pty Ltd (1984) 2 FCR 201 Tyneside Property Management Pty Ltd v Hammersmith Management Pty Ltd [2013] NSWCA 404 Yandil Holdings Pty Ltd v Insurance Co of North America (1985) 3 ACLC 542 Category: Principal judgment Parties: LRSM Enterprise Pty Ltd (Appellant) Zurich Australian Insurance Limited (Respondent) Representation: Counsel: D A Lloyd/D J Williams (Appellant) D E Grieve QC/R A O'Keefe (Respondent) Solicitors: Kheir Lawyers (Appellant) Vardanega Roberts Solicitors (Respondent) File Number(s): 2013/140672 Decision under appeal Citation: [2013] NSWSC 324 Before: Adamson J File Number(s): 2008/317328