The Blue Shop Pty Ltd v Hereweare Pty Ltd [2016] NSWSC 1930

Supreme Court New South Wales

Medium Neutral Citation: The Blue Shop Pty Ltd v Hereweare Pty Ltd [2016] NSWSC 1930 Hearing dates: 21 November 2016 Date of orders: 21 November 2016 Decision date: 21 November 2016 Jurisdiction: Equity Before: Slattery J Decision: Stay the proceedings as against all defendants unless the plaintiff provides security for costs in the form of joint and several guarantee from the shareholders of the plaintiff for costs that may be incurred up to 21 February 2017, namely in the amount of $35,000 with respect to the first to third defendant's costs and the amount of $22,000 with respect to the fourth defendant's costs. The parties are referred to mediation. Other directions made to prepare the proceedings for mediation. The costs of the first to third defendants' motion will be the successful party's costs in the cause. The costs of the fourth defendant's motion will be the fourth defendant's costs in the cause. Catchwords: SECURITY FOR COSTS – the plaintiff company negotiates for the sale of a retail business to the first to third defendants – the fourth defendant acts as a solicitor for the plaintiff in the negotiations with the purchasers – the landlord of the premises grants a new 3 year lease to the purchasers – the contract for sale from the plaintiff/vendor to the purchasers falls through – purchasers are alleged to represent to the vendor that they will purchase the business and complete a sale on 1 April 2016 – whether the purchasers are estopped from departing from their alleged representation that they would purchase the business – whether the fourth defendant, solicitor, was negligent in advising the vendor on the sale of the business thereby leaving the vendor without any lease to sell with the business – plaintiff cannot repay order for costs if unsuccessful – whether plaintiff's impecuniosity caused by the defendant's conduct – whether an order for security would stultify the proceedings – whether the plaintiff has reasonable prospects of success – whether security for costs should be ordered - if so, what quantum of security should be ordered. Legislation Cited: Corporations Act 2001 (Cth) Retail Leases Act 1994 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Appleglen Pty Ltd v Mainzeal Corporation Pty Ltd (1988) 79 ALR 634 Ballard v Brookfield Australia Investments Ltd [2013] NSWCA 82 Bell Wholesale Co Pty Ltd v Gates Export Corporation (No 2) (1984) 52 ALR 176 Brad's on Tap Plumbing Pty Ltd v The Owners – Strata Plan No 56443 [2016] NSWSC 512 Crypta Fuels Pty Ltd v Svelte Corporation Pty Ltd (1995) 19 ACSR 68 Dae Boong International Co Pty Ltd v Gray [2009] NSWCA 11 Fiduciary Ltd v Morningstar Research Pty Ltd (2004) 208 ALR 564 Hassoun v Wesfarmers General Insurance Limited t/a Lumley General [2015] NSWCA 33 In the matter of Felan's Fisheries Pty Limited [2016] NSWSC 1351 KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 Laundry Coin‑Wash Nominees Pty Ltd v Dunlop Olympic Ltd (1985) ATPR 40‑584 Nonox Australia v Certain Underwriters at Lloyd's Subscribing to Contract No CV0263CGL [2014] NSWSC 221 Power Infrastructure Pty Ltd v Downer EDI Engineering Power Pty Ltd [2010] FCA 1222 Re Beechworth Land Estates Pty Ltd (admin apptd) and Griffith Estates Pty Ltd (admin apptd) (No 3) (2015) 106 ACSR 495 Samadi Developments Pty Limited v SX Projects Pty Limited [2015] NSWSC 1576 Seventy Fourth Wreath Pty Ltd v Wilbrow Corporation Pty Ltd (Federal Court of Australia, 15 September 1998, unrep) Statewide Developments Realty Pty Ltd v The Owners Corporation, SP 77457 [2013] NSWSC 1750 Second Lenbourne Pty Ltd v Beagle Management Pty Ltd [1999] FCA 486 Szanto v Bainton [2011] NSWSC 985 Category: Procedural and other rulings Parties: The Blue Shop Pty Ltd (Plaintiff/Respondent) Hereweare Holdings Pty Ltd (First Defendant/Applicant) Wendy Priddle (Second Defendant/Applicant) Matthew Priddle (Third Defendant/Applicant) Fiona Rhodes Lomax (Fourth Defendant/Applicant) Representation: Counsel: A Hill/M Daniels (Plaintiff/Respondent) RL Gall (First to Third Defendants/Applicants) Z Hillman (Fourth Defendant/Applicant) Solicitors: Dakin Law (Plaintiff/Respondent) Baker Mannering & Hart (First to Third Defendants/Applicants) Sparke Helmore (Fourth Defendant/Applicant) File Number(s): 2016/195687 Publication restriction: Nil