Bidisco Pty Ltd v Australian Prawn Farms Pty Ltd & Anor [2006] QSC 203

State Reporting Bureau [3066]©sc *203 Queensland Government Department of Justice and Attorney-General Transcript of Proceedings Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION DUTNEY J REVISED COPIES ISSUED State Reporting Bureau Date: 19 June, 2006 No S561 of 2005 BIDISCO PTY LTD ACN 002 990 392 Plaintiff and AUSTRALIAN PRAWN FARMS PTY LTD First Defendant ACN 083 581 542 and ROSBAL CORPORATION PTY LTD Second Defendant ACN 010 9904 426 CAIRNS . .DATE 12/05/2006 JUDGMENT WARNING: The publication of information or details likely to lead to the identification of persons in some proceedings is a criminal offence. This is so particularly in relation to the identification of children who are involved in criminal proceedings or proceedings for their protection under the Child Protection Act 1999, and complainants in criminal sexual offences, but is not limited to those categories. You may wish to seek legal advice before giving others access to the details of any person named in these proceedings. 1 4th Floor, The Law Courts, George Street, Brisbane, Q. 4000 Telephone: (07) 3247 4360 Fax: (07) 3247 5532 -- 1 of 4 -- HIS HONOUR: This is an application for security for costs of an action commenced by the plaintiff against the defendants seeking what is alleged to be the balance owing under an earthmoving contract. The defendants' case is that they have paid everything to which the plaintiff is entitled and therefore, are not indebted. 12052006 Tll/MNH M/T CNS2/2006 (Dutney J) 10 The action was commenced on the 13th of December 2005, and this application was brought on the 6th of April 2006. I am thus satisfied that it has been brought promptly and before 2C excessive costs are likely to have been incurred in relation to the action. The material discloses that the plaintiff is a proprietary company with paid up share capital of $14,000. It has granted six fixed charges over its assets and undertakings, and a fixed and floating charge over its assets in favour of its banker. A titles office search discloses that the plaintiff does not own any real property in Queensland. No material has been filed on behalf of the respondent/plaintiff, and I am thus satisfied, having regard to the nature of the plaintiff entity and the extent to which its assets have been pledged to third parties, that there is reason to believe that if an order for costs is made against the company in the action it will be unable to pay those costs. It seems to me, therefore, to be an appropriate case in which to order security. 30 40 50 The directors of the company, as appears from the company search, are a Sandra Maree Lewis and a Leslie William Lewis. 2 JUDGMENT 60 -- 2 of 4 -- Mr Lewis also appears to be the holder of all the issued shares in the company. So far as the quantum of security sought is concerned, two estimates have been provided up to the first day of hearing. One of those is in the amount of a little over $80,000, and the other in the amount of $71,000. It is apparent, certainly from the matters to which Mr Royds took me, that there is some legitimate scope for argument as to whether or not some of those amounts are properly included in an estimate at this stage of the proceedings, but in any event, it has never been the practice of the Court that security for costs should constitute a complete indemnity against any risk which a defendant might run if it successfully defends the action. Ordinarily some proportion of those costs are allowed by way of security. Having regard to the matters raised by Mr Royds, and considering the nature of the action, it seems to me that an appropriate amount for security for costs in this case will be the sum of $35,000. I therefore propose to order that, unless within 14 days of today's date the directors of the plaintiff Bidiso Pty Ltd ACN 002 990 392 file in the registry of the Court in Cairns an undertaking that in the event that Bidiso becomes liable to pay costs to either or both of the first and second defendants in the action, they will unconditionally indemnify the defendants against those costs, that is, unless they file the undertaking within 14 days of today's date, then I order that the plaintiff give security for the first and second defendants ' costs of and incidental to the proceedings by payment of the sum of $35,000 into Court, either in cash or 12052006 Tll/MNH M/T CNS2/2006 (Dutney J) 3 JUDGMENT -- 3 of 4 -- by way bank guarantee acceptable to the Registrar, such payment to be made by 4 p.m. on the 29th of May, 2006. I order that the proceedings be stayed until the plaintiff provides the security for costs or the directors provide the indemnity, and I order that the first and second defendants ' costs of this application be those parties' costs in the proceedings 12052006 Tll/MNH M/T CNS2/2006 (Dutney J) 4 JUDGMENT -- 4 of 4 --