TM Thoroughbreds Pty Ltd v President Bloodstock Pty Ltd (No 2) [2019] NSWSC 1607

Supreme Court New South Wales

Medium Neutral Citation: TM Thoroughbreds Pty Ltd v President Bloodstock Pty Ltd (No 2) [2019] NSWSC 1607 Hearing dates: 15 November 2019 Decision date: 20 November 2019 Jurisdiction: Equity - Commercial List Before: Stevenson J Decision: Cross-defendants' application for security dismissed. Plaintiffs to provide further security for the defendant's costs of $250,000. Catchwords: COSTS – security for costs – where cross-claim is primarily defensive in nature – no security for costs to be ordered

COSTS – security for costs – procedure and discretion – further security sought from the plaintiff for future costs – broad brush approach – further security ordered Cases Cited: Bevwizz Group Pty Ltd v Transport Solutions Pty Ltd [2008] NSWSC 1399 Neck v Taylor [1893] 1 QB 560 Category: Procedural and other rulings Parties: TM Thoroughbreds Pty Ltd (First Plaintiff/Cross-Defendant) TMR Breeding & Racing Pty Ltd (Second Plaintiff/Cross-Defendant) President Bloodstock Pty Ltd (Defendant/Cross-Claimant) Timothy Ross Martin (Third Cross-Defendant) Representation: Counsel: J S Emmett (Plaintiffs/Cross-Defendants) R Scruby SC and A Campbell (Defendant/Cross-Claimant)

Solicitors: Esplins Solicitors (Plaintiffs/Cross-Defendants) Colin Biggers & Paisley (Defendant/Cross-Claimant) File Number(s): SC 2019/96285

Judgment 1. The plaintiffs conduct a thoroughbred training and agistment business at racecourses in NSW. 2. The sole director of the plaintiffs is Mr Timothy Martin. He is a racehorse trainer. 3. The defendant is a horse breeder and racer. Its sole director is Mr Reginald Kermister. 4. Mr Martin and Mr Kermister have had business dealings for many years in the horse trading and breeding industry. 5. The plaintiffs claim from the defendant some $1 million for training and agistment services allegedly supplied. 6. By its cross-claim, the defendant, as cross-claimant seeks from the plaintiffs and from Mr Martin, as cross-defendants: 1. an order that certain of its horses, currently on agistment with the plaintiffs, and in respect of which the plaintiffs claim a possessory lien, be returned to it; 2. a declaration that one of the contracts on which the plaintiffs sue has been validly terminated; 3. a declaration that it is entitled to set off against the amounts claimed by the plaintiffs: 1. amounts it claimed it loaned Mr Martin and which have not been repaid (the "Unpaid Loan Amounts"); 2. amounts it claims are owing to it by Mr Martin in respect of the sale by it to Mr Martin of horses (the "Unpaid Purchase Prices"); and 3. amounts it claims Mr Martin did not account to it in respect of the sale by Mr Martin to third parties of horses owned by it (the "Unpaid Sale Proceeds"); 1. restitution of certain amounts it claims were mistakenly paid by it to the plaintiffs (the "Overcharged Amounts"); and 2. damages for the loss of opportunity to breed one of the horses over the which the plaintiffs' claim a lien. 1. The basis of the set off claimed is a series of agreements allegedly made in conversations between Mr Martin and Mr Kemister, and by conduct, that the Unpaid Loan Amounts, the Unpaid Purchase Prices and the Unpaid Sale Proceeds, being amounts hitherto owing to the defendant by Mr Martin himself, would be set off against amounts otherwise payable by the defendant to Mr Martin or entities associated with him (now the plaintiffs). 2. Mr Martin is joined as the third cross-defendant. However, the cross-claim makes clear that a claim is only made against him personally if, contrary to the defendant/cross-claimant's primary contention, it is not entitled to set off the Unpaid Loan Amounts, the Unpaid Purchase Prices and the Unpaid Sale Proceeds from the amounts claimed by the plaintiffs. It is only in that event that the defendant seeks to recover those amounts from Mr Martin. 3. The defendant/cross-claimant claims that, taking into account its alleged right of set off, the defendant does not owe any money to the plaintiffs and that, on the contrary, the plaintiffs owe the defendant an amount presently calculated to be $161,153.85. 4. Mr Scruby SC, who with appeared with Ms Campbell for the defendant/cross-claimant summarised the position in the following table: "A Debt Claimed [by the plaintiffs] $1,094,091.59 Statement of Claim [14] B Payments made by [the defendant] $292,442.67 Defence [11]; cross-claim [10] C Unpaid Loan Amounts [to be set off] $669,051.11 Defence [7(d), (g)], [14], cross-claim [7(i), (l)]; [15]-[24] D Unpaid Purchase Prices [to be set off] $240,294.14 Defence [7(e), (g)], [14]; cross-claim [7(j), (l)]; [35]-[41] E Unpaid Sale Proceeds [to be set off] Unknown, but at least $773 Defence [7(f), (g), [14]; cross-claim [7(k), (l)], [25]-[34] F Overcharged Amounts $52,684.50 Defence [10]; cross-claim [11] Balance (A-(B+C+D+E+F)) -$161,153.85"