Di Pompo Constructions Pty Ltd v Astor Hotel Motel P/L [2001] QDC 90

DISTRICT COURT OF QUEENSLAND CITATION: Di Pompo Constructions P/L v Astor Hotel Motel P/L [2001] QDC 090 PARTIES: DI POMPO CONSTRUCTIONS PTY LTD (ACN 099 944 745) Plaintiff v THE ASTOR HOTEL MOTEL PTY LTD (ACN 010 406 541) First Defendant and WICKHAM PROPERTY PTY LTD (ACN 010 872 876) Second Defendant FILE NO/S: D 694 OF 2001 DIVISION: Civil jurisdiction PROCEEDING: Chamber application ORIGINATING COURT: District Court DELIVERED ON: 15 May 2001 DELIVERED AT: Brisbane HEARING DATE: 15 May 2001 JUDGE: Judge Forde ORDER: 1. Order the application of the first defendant for security for costs be dismissed. 2. Order the first defendant pay the plaintiff’s costs of this application to be assessed. CATCHWORDS: SECURITY FOR COSTS – rr 671, 672 Uniform Civil Procedure Rules – Respondent is defendant in counter claim – Sloyan v Brothers of Christian Instruction (1974) 3 All E.R. applied 715 COUNSEL: Mr S. Keim for the plaintiff Mr Churven for the defendants SOLICITORS: Stephen Comino & Cominos, Solicitors for the plaintiff Corums, Solicitors for the defendant -- 1 of 4 -- 2 [1] This is an application for security for costs by the applicant/defendant Astor Hotel Motel Pty Ltd. The claim in the action is for moneys due and owing by the defendant to the plaintiff who carried out construction work for the defendant at 191 Wickham Terrace, Spring Hill. The amount claimed is $86,016.70. I am told by counsel for the respondent/plaintiff that that aspect of the case would take approximately half a day. It may be that there is some cross-examination obviously the length of which may be unable to be determined at this stage. [2] It is also pleaded that the plaintiff provided to the defendant the sum of $45,700 by way of a bank guarantee which relates to the potential for rectification work to be done. That amount is still retained by the defendant.. [3] This matter came before me on 2 May 2001, and, notwithstanding material had not been filed, I dealt with other applications on that day and adjourned the matter to today to allow the defendant to put material before me. [4] Neither the application or affidavit material was put before me, but I grant leave to the defendant to file the requisite application today post this application being heard to regularise the matter. The application for security costs then proceeded on the merits this morning, as material, including correspondence between the parties was before me. [5] The application is under Rule 671 of the Uniform Civil Procedure Rules. Paragraph (A) says that: “A Court may order the plaintiff to give security for costs if the Court is satisfied that the plaintiff is a corporation and there is reason -- 2 of 4 -- 3 to believe the plaintiff will not be able to pay the defendant’s costs if ordered to pay them.” [6] In fact, a substantial part of this action will relate to the counterclaim which the plaintiff Di Pompo Constructions Pty Ltd will in fact be the defendant. [7] In a situation of that nature, a Court is less likely to order security for costs: See Sloyan v Brothers of Christian Instruction (1974) 3 All ER 715. That seems to be the substantial issue in the case, and judging by the pleadings and the particulars provided on an earlier occasion, that seems to be a substantial aspect to be litigated. [8] In some ways, that is probably enough to dispose of this matter, but I deal also with the other aspect, and that is that the books of account given by the plaintiff to the defendant are not in accord with the usual form of comparative figures, and that if the shareholders loans are repaid, that the company would not be solvent. As pointed out by Mr Keim for the plaintiff, that particular matter, if the directors attempted to divest the company and it subsequently became insolvent, then those moneys would be able to be pursued. [9] On the accounts, I find that the company has a net asset position in the sum of $300,395. The discretionary factors in making an order under the relevant section are set out in Rule 672 of the Uniform Civil Procedure Rules. [10] One factor which has some import is that there is a bank guarantee with the defendant for the sums of $45,000. One does not give security for costs for damages, but it is fair to say that the sum could be earmarked in relation to costs although under the contract it is referable to rectification work. -- 3 of 4 -- 4 [11] The other factor to which I have already referred is under Rule 672(f) where the plaintiff is effectively in the position of a defendant, and taking those matters into account, a Court would be reluctant to order security for costs in this case. [12] The onus is upon the applicant in an application of this nature to prove that the plaintiff is or will not be able to pay costs if ordered. In my view, the defendant has failed to discharge that onus. In fact, the material provided by the plaintiff points in the opposite direction. [13] In relation to costs of today, the plaintiff seeks an order that the costs be on an indemnity basis. However, in view of the fact the matter was adjourned to today, and that it has been heard on the merits as Mr Churven has elected to proceed to argue the substantive point, I see no reason to depart from the usual order. [14] The orders will be that the defendant, Astor Hotel Motel Pty Ltd’s application for security for costs be dismissed. Further order that the defendant Astor Hotel Motel Pty Ltd do pay the plaintiff’s costs of this application to be assessed. -- 4 of 4 --