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[2022] FCA 1309
Federal Court of Australia
2022-10-25
Besanko J, O'Sullivan J
Original judgment source is linked above.
Division: General Division
Registry: South Australia
National Practice Area: Commercial and Corporations
Sub-area: Corporations and Corporate Insolvency
Number of paragraphs: 75
Date of hearing: 23 September 2022
Counsel for the Applicants: Mr I Thomas
Solicitor for the Applicants: Charlton Rowley
Counsel for the First and Second Respondents: Mr D Ratnam
Solicitor for the First and Second Respondents: Morgan & English Commercial Lawyers
Counsel for the Applicants: Mr I Thomas
Solicitor for the Applicants: Charlton Rowley
Counsel for the First and Second Respondents: Mr D Ratnam
Solicitor for the First and Second Respondents: Morgan & English Commercial Lawyers
Counsel for the Third Respondent: Ms G Walker
Solicitor for the Third Respondent: Sparke Helmore Lawyers
BETWEEN: CHOPSONION PTY LTD (CONTROLLERS APPOINTED) ACN 142 890 971 First Applicant
MEG INVESTMENTS PTY LTD ACN 008 198 221 (and others named in the schedule) Second Applicant
AND: WATTS MEAT MACHINERY PTY LTD ACN 111 528 771 First Respondent
order made by: O'SULLIVAN J DATE OF ORDER: 2 November 2022
BETWEEN: MEG INVESTMENTS PTY LTD ACN 008 198 221 First Applicant
RED DOG #1 PTY LTD ACN 122 895 309 (and others named in the schedule) Second Applicant
AND: ROLTON LIMITED NZBN 942 903 4464 First Respondent ROLAND JOHN SMITH (and another named in the schedule) Second Respondent
order made by: O'SULLIVAN J DATE OF ORDER: 2 November 2022
THE COURT ORDERS THAT:
overview 1 There are two security for costs applications before the Court, one in each of actions - SAD 109/2020 - Chopsonion Pty Ltd (Controllers Appointed) & Ors v Watts Meat Machinery Pty Ltd & Anor (Controller Proceedings) and SAD 76/2022 - MEG Investments Pty Ltd & Ors v Rolton Ltd NZBN 942 903 4464 & Ors (Lender Proceedings). 2 In January 2015, Chopsonion Pty Ltd (Chopsonion) purchased from Watts Meat Machinery Pty Ltd two small animal abattoir chains located in New Zealand. The funding for the purchase was advanced by the applicants in the Lender Proceedings. In so doing, the applicants in the Lender Proceedings allege they relied on a valuation of the abattoir by the first and second respondents to those proceedings (Rolton parties). 3 Chopsonion defaulted on the loan and on 20 October 2016 the applicants in the Lender Proceedings appointed themselves controllers of Chopsonion pursuant to a General Security Agreement. 4 The Lender Proceedings were commenced in the Supreme Court of South Australia before being transferred to this Court on or about 14 April 2022. The two actions are to be heard together at a trial commencing on 12 December 2022. 5 On 12 May 2021, Besanko J in the Controller Proceedings ordered Chopsonion to provide security for costs in the sum of $125,000: Chopsonion Pty Ltd (Controllers Appointed) v Watts Meat Machinery Pty Ltd [2021] FCA 491. His Honour gave liberty to apply. The respondents in the Controller Proceedings (Watts parties) now apply to increase the amount of that security pursuant to that liberty. The application was heard on 23 September 2022. 6 On 13 August 2021, the Rolton parties had applied for security for costs against the applicants in the Lender Proceedings. For the reasons set out in the affidavit of Annette Patricia English sworn and filed 15 September 2022 (first English affidavit) at [5] there has been a delay in hearing the application. The application for security for costs in the Lender Proceedings was also heard on 23 September 2022. 7 On 23 September 2022, orders were made joining Chopsonion to the Lender Proceedings as an applicant and joining the applicants in the Lender Proceedings as applicants in the Controller Proceedings. 8 The issues on these applications are: (a) In the Lender Proceedings, whether the applicants should provide security for costs for the Rolton parties' costs; and (b) In the Controller Proceedings, whether the existing order for security for costs should be varied by increasing the amount of security. 9 It is for the reasons which follow that both applications are dismissed. Lender Proceedings - documents read 10 The Rolton parties read: (a) The first English affidavit; and (b) The affidavit of Annette Patricia English sworn and filed 21 September 2022 (second English affidavit). 11 The applicants read: (a) The affidavit of Luke John Charlton Rowley sworn and filed 7 September 2022(fifth Rowley affidavit); (b) The affidavit of Luke John Charlton Rowley sworn and filed 13 September 2022 (sixth Rowley affidavit); and (c) The affidavit of Luke John Charlton Rowley sworn and filed 21 September 2022(eighth Rowley affidavit).
Controller Proceedings - documents read 12 The respondents read: (a) The first English affidavit; (b) The second English affidavit; (c) The affidavit of Annette Patricia English sworn 12 November 2020; and (d) The affidavit of Annette Patricia English sworn 13 August 2021 filed in Supreme Court of South Australia in the Lender Proceedings. 13 The applicants read: (a) The fifth Rowley affidavit; and (b) The eighth Rowley affidavit.
Legal Principles 14 In the Lender Proceedings, the Rolton parties seek security for costs relying on r 19.01 of the Federal Court Rules 2011 (Cth) (FCR) and/or s 1335 of the Corporations Act 2001 (Cth) and/or the inherent jurisdiction of the Court. 15 The Court's power to order security for costs is provided by s 56 of the Federal Court of Australia Act 1976 (Cth) (Act). 16 Section 56 provides a broad and unfettered discretion however, unlike FCR 19.01 and/or s 1335, it does not expressly impose a threshold to be met before the Court considers the various discretionary matters. Nonetheless, the applicants' inability to pay an adverse costs order is an important consideration in the exercise of the discretion: All Class Insurance Brokers Pty Ltd (in liq) v Chubb Insurance Australia Ltd [2020] FCA 840, [41] (Allsop CJ). 17 FCR 19.01 and s 1335 of the Corporations Act are in slightly different terms. 18 FCR 19.01(2) requires an application for an order for security for costs to be accompanied by an affidavit stating the facts upon which the order is sought. FCR 19.01(3) sets out what should be in the affidavit, which will vary according to the circumstances. FCR 19.01(3)(a) includes whether there is reason to believe that the applicant will be unable to pay the respondent's costs if so ordered 19 Section 1335 provides: 1335 Costs (1) Where a corporation is plaintiff in any action or other legal proceeding, the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his, her or its defence, require sufficient security to be given for those costs and stay all proceedings until the security is given. (1A) Subsection (1) does not apply to a corporation that is an Aboriginal and Torres Strait Islander corporation. (2) The costs of any proceeding before a court under this Act are to be borne by such party to the proceeding as the court, in its discretion, directs. 20 Section 1335 applies only to corporations and establishes a threshold of "credible testimony" that there is "… reason to believe that the Corporation will be unable to pay the cost of the defendant if successful in his, her or its defence …". The onus is on the party seeking security for costs to satisfy the threshold however, once satisfied, whether security for costs will be ordered is determined on discretionary grounds. There is an evidentiary burden on the party resisting an order for security for costs to establish a reason why the discretion should not be exercised: Concrete Mining Structures Pty Ltd v Cellcrete Australia Pty Ltd (No 2) [2016] FCA 360, [12] (Edelman J). 21 The Rolton parties also rely on the inherent jurisdiction of the Court to order security for costs. In Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 (French J) (as his Honour then was) at p 504 doubted the Court had an inherent jurisdiction to order security for costs however, it is unnecessary to consider that question further. 22 Irrespective of the provision relied upon, the discretion to order security for costs is broad and unfettered but it must be exercised judicially, according to the merits of each case without any particular predisposition and by reference to the particular circumstances arising in each case: Madgwick v Kelly [2013] FCAFC 61; (2013) 212 FCR 1 at [6] (Allsop CJ, Jessup and Middleton JJ). 23 Ultimately, it is fairness which underlies the exercise of the discretion when determining whether security should be ordered and if so, in what amount: Madgwick at [92]. The Court seeks to achieve a balance between ensuring the respondent is protected whilst avoiding injustice to an impecunious applicant by making an order which would either unnecessarily shut out or prejudice an applicant in the conduct of the proceedings: All Class at [42] referring to Rosenfield Nominees Pty Ltd v Bain & Co (1988) 14 ACLR 467, 470 (Giles J). 24 In KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] FCA 76; (1995) 56 FCR 189 at 197-198, Beazley J identified a number of well-established guidelines that a court will typically take into account when determining an application for security for costs: (a) The application should be brought promptly; (b) The strength and bona fides of the applicant's case are relevant considerations. As a general rule, where a claim is prima facie regular on its face and discloses a cause of action, in the absence of evidence to the contrary, the court should proceed on the basis that the claim is bona fide with a reasonable prospect of success; (c) Whether the applicant's impecuniosity was caused by the respondent's conduct subject of the claim; (d) Whether the respondent's application for security is oppressive, in the sense that it is being used merely to deny an impecunious applicant a right to litigate. If an order for security will act to stultify the applicant's claim, whilst not definitive, that is a powerful factor in the exercise of the discretion to refuse an order; (e) Whether there are any persons standing behind the company who are likely to benefit from the litigation and who are willing to provide the necessary security; (f) Whether persons standing behind the company have offered any personal undertaking to be liable for the costs and if so, the form of any such undertaking; and (g) Security will only ordinarily be ordered against a party who is in substance a plaintiff, and an order ought not to be made against parties who are defending themselves and thus forced to litigate.
Should the applicants provide security for costs to the Rolton parties' costs in the Lender Proceedings? 25 In the first English affidavit, Ms English refers to the affidavit of Julietta Kinnear sworn 25 August 2022 and filed on 26 August 2022 in the Lender Proceedings for the third respondent. Ms Kinnear deposes to the results of searches she had caused to be undertaken in relation to the asset position of the applicants. Those searches are limited in their scope to ASIC searches and Real Property searches. 26 Of the now seven applicants, four are corporations to which s 1335 applies. Chopsonion is clearly impecunious. Two of the remaining three - Red Dog Pty Ltd (Red Dog) and Meg Investments Pty Ltd (MEG) are trustee companies. The fourth - RJC Willson Nominees Pty Ltd (Willson Nominees) is the private investment vehicle of Richard Willson Senior, the father of the third applicant, Richard Willson. 27 The results of the searches to which Ms Kinnear deposes are, to some extent, contradicted by documents annexed to the fifth Rowley affidavit. 28 In the fifth Rowley affidavit, Mr Rowley deposes to his instructions: at [10], to offer joint and several undertakings on the part of the third applicant (Richard Willson); the fourth applicant (Leigh Willson); the sixth applicant (John Rowley), and Jeff Cannan (the Director of MEG) that (relevantly) they will each, or in combination: (a) Pay the costs of the Rolton parties if they are successful in their defence of the Lender Proceedings and awarded costs notwithstanding the financial capacity of Red Dog, RJC Willson Nominees or MEG to do so; and (b) Provide any documentation to the solicitors for the Rolton parties to give them comfort that they can each or in combination pay the costs of the Rolton parties if they were successful in their defence of the Lender Proceedings and awarded costs on the basis that the request is reasonable in advancing resolution of the issue of security for costs and the documentation remains confidential. 29 The Rolton parties did not accept this undertaking and contended that the undertaking proffered by the applicants is unsatisfactory, that no credible evidence has been provided by the corporate applicants as to their ability to meet an adverse costs order and there is reason to believe the individual applicants will be unable to pay the Rolton parties' costs if so ordered. 30 Just prior to the hearing, the Rolton parties filed and served notices to produce directed to the applicants in the Lender Proceedings (except for Chopsonion) seeking production of financial documentation. The notices were not answered. The failure to answer the notices to produce does not sit well with the offer by the Lenders to provide documentation to support the proffered undertaking but ultimately, nothing turns on that. 31 In the fifth Rowley affidavit, Mr Rowley deposes to the matters on the basis of his own knowledge and belief, save where otherwise appears. At [8]-[9], he deposes to what he has been told by the applicants. 32 I deal with the matters to which Mr Rowley deposes below however, whilst accepting there is some documentation to support that to which Mr Rowley deposes to in [8] of his fifth affidavit, nonetheless the evidence is incomplete. Insofar as Mr Rowley deposes on his information and belief that either a corporation or an individual has assets, in some cases those assets are not identified. Further, notwithstanding two of the applicants are corporate trustees, no trust deeds have been produced. Still further, no reason is advanced as to why any of the individual applicants or a director of the corporate applicants could not depose as to the respective individual and corporate entity asset and income positions rather than a solicitor who deposes to various matters on the basis of what he has been told. The consequences of this unsatisfactory state of affairs is that particularity in the case of MEG, the Court is left to try and decipher the financial information provided without any explanation of the matters or circumstances underlying that financial information. 33 Mr Rowley deposes at [8.2], that he has been informed by Richard Willson and his wife, Leigh Willson, that (with my observations in brackets): (a) Richard Willson and his parents, Di Willson and Richard Willson Senior are directors of the second applicant, Red Dog; (b) Red Dog is a trustee of the family trust for the benefit of the Willson family; (c) Red Dog owns a commercial property purchased on 20 July 2022 for an amount of $1,105,000, which is unencumbered; (d) It owns a portfolio of ASX listed shares (which are not identified), a number of investment vehicles (which are not identified) and private mortgages over real property assets (which are not identified); (e) Red Dog has no liabilities of any significance (however no particulars are given of the liabilities it does have); (f) As at the end of the 2021 financial year, Red Dog had a net asset position of $1.047 million (but no basis is identified for that statement other than what Mr Rowley has been told); and (g) They (presumably Richard Willson and Leigh Willson) "believe" that the financial statements for Red Dog for the 2022 financial year will show a net asset position in the order of $3.6 million, (again, no basis is identified for that statement other than what Mr Rowley has been told). 34 Notwithstanding the paucity of information, annexure LJCR-5 at pp 11-16 to the fifth Rowley affidavit comprises a copy of the certificate of title for the commercial property owned by Red Dog, the land valuation record from Land Services SA which records a capital value for the commercial property as of 1 January 2022 of $910,000 and the transfer documents. 35 No trust deed has been produced however, in annexure LJCR-5 at pp 11-16, both the certificate of title and the transfer documents for the property reveal that Red Dog is the registered proprietor of the property in question in its own name and not as trustee. The certificate of title also reveals the property is not subject to any registered encumbrance. 36 As a trustee, Red Dog is entitled to be indemnified from the assets of the trust: s 35(2) Trustee Act 1936 (SA): Chief Commissioner of Stamp Duties for New South Wales v Buckle [1998] HCA 4; (1998) 192 CLR 226, [47]-[48]. There is no suggestion Red Dog is acting outside authority. 37 It may be that if the Rolton parties obtain an adverse costs order against Red Dog, it will be necessary for them to enforce that order by obtaining an order for sale of the property. It may also be that between now and any potential adverse costs order the property may become encumbered however, that is a matter for the Rolton parties to monitor. 38 I do not consider the Rolton parties have met the threshold requirement in s 1335 or FCR 19.01 in relation to Red Dog. 39 At [8.3] in his fifth affidavit, Mr Rowley deposes that he is informed by Richard Willson that (with my observations in brackets): (a) The fifth applicant, Willson Nominees is the personal investment vehicle for Richard Willson Senior; (b) Richard Willson is the Secretary of Willson Nominees; (c) Willson Nominees has significant assets and few liabilities by comparison (none of which are identified); and (d) Richard Willson is collating relevant financial information and will provide it to Mr Rowley shortly for distribution to the parties. 40 It has not been explained why, notwithstanding the security for costs application was filed on 13 August 2021, it is only now that "relevant financial information" is being collated. In the circumstances I give no weight to what Mr Rowley deposes to in relation to Willson nominees and for that reason, I am satisfied that there is credible testimony that there is reason to believe Willson Nominees will be unable to pay the costs of the Rolton parties if successful in their defence. 41 At [8.4], Mr Rowley deposes that he is informed by Jeff Cannan that: (a) He is the Director of MEG; (b) MEG is the trustee of The Cannan Family Trust; and (c) The Cannan Family Trust recorded: (i) a net operating profit in the 2021 financial year in the amount of $1,043,638; and (ii) total assets of $2,663,525 in the 2021 financial year albeit with a net asset deficiency of $356,754 having regard to beneficiary accounts; (d) Zadelle Pty Ltd is his trading entity; (e) Zadelle Pty Ltd recorded: (i) a net operating profit in the 2021 financial year of $1,037,293; and (ii) net Assets of $5,620,105; and (f) The financial statements for MEG Investments and Zadelle Pty Ltd for the 2022 financial year have not yet been prepared. 42 Annexure LJCR-5 at pp 17-29 to the fifth Rowley affidavit comprises The Cannan Family Trust Financial Report for the financial year ended 30 June 2021 and other financial documentation. It shows no retained profits at the end of the 2021 financial year and discloses a net operating profit of $1,042,638 before distribution to beneficiaries. The balance sheet records a deficiency in trust funds of $356,754 and although three reserves in the trust fund are identified, no evidence has been adduced to explain what they represent. 43 Further, the notes to the financial statements identify two additional trusts, six sub-trusts and one Division 7A loan. No explanation is provided as to the relationship these trusts bear to The Cannan Family Trust nor the purpose of the Division 7A loan. 44 At pp 30-45 of annexure LJCR-5 is the tax return for The Cannan Family Trust for the financial year ended 30 June 2021. It records total assets of $2,663,525 and total liabilities of $3,020,279. It also records the beneficiaries as Zadelle Pty Ltd, Mr Jeffrey Cannan and Mrs Elisabeth Cannan. 45 At pp 46-56 of annexure LJCR-5 is the financial report for the financial year ended 30 June 2021 for Zadelle Pty Ltd. It records retained profits of $5,620,103 which comprises virtually all of its equity. 46 At pp 57-72 of annexure LJCR-5 is the 2020 company tax return for Zadelle Pty Ltd for the financial year ended 30 June 2021 which it shows a total income of $1,186,214 of which $1,023,979 is a trust distribution from The Cannan Family Trust. 47 The trust deed for The Cannan Family Trust has not been produced. As trustee, MEG will be entitled to an indemnity from the assets of the trust however, the majority of the assets appear to be held by a beneficiary of the trust - Zadelle Pty Ltd which is not a party. Absence any explanation, the trust structure is opaque and the Court is left to try to understand various matters from the documents annexed to Mr Rowley's fifth affidavit. The lack of any explanation is unsatisfactory. 48 Notwithstanding the material deposed to by Mr Rowley and the annexed documents to his fifth affidavit, I am satisfied on the material produced by the Rolton parties that there is credible testimony that there is reason to believe that MEG will be unable to pay the costs of the Rolton parties if successful in their defence. 49 At [8.5], Mr Rowley deposes that he is informed by Leigh Willson that: (a) She is the registered proprietor of a residential property in Fullarton; and (b) The property has a capital value of $2,250,000 as at 1 January 2022 and is mortgaged for an amount less than $1 million. 50 Annexure LJCR-5 at pp 73-76 is the certificate of title and capital value valuation as at 1 January 2022 according to Land Services SA for the residential property over which Leigh Willson is the registered proprietor. It identifies a mortgage over the property to Big Sky Credit Union Ltd and records the capital value as $2,250,000 however, there is no evidence of the current balance of the mortgage. 51 Notwithstanding the mere assertion that the current balance of the mortgages is for an amount less than $1 million, in view of the capital value of the Site I am not satisfied that there is reason to believe Leigh Willson will be unable to pay the Rolton parties' costs if so ordered such that the Rolton parties have not met the threshold in FCR 19.01. 52 At [8.6], Mr Rowley deposes that he is informed by Richard Willson that: (a) He is the registered proprietor of a residential property at Fullarton (not being the same property for which Leigh Willson is the registered proprietor); and (b) The property has a capital value of $1 million as at 1 January 2022 and is unencumbered. 53 Annexure LJCR-5 at pp 77-80 is the certificate of title and capital value valuation as at 1 January 2022 according to Land Services SA for the residential property over which Richard Willson is the registered proprietor. It records the capital value as $1 million. 54 I am not satisfied that there is reason to believe Richard Willson will be unable to pay the Rolton parties' costs if so ordered such that the Rolton parties have not met the threshold in FCR 19.01. 55 At [8.7], Mr Rowley deposes that he is informed by John Rowley that: (a) He is a registered proprietor of a residential property on East Terrace, Adelaide; and (b) The property has a capital value of $1,525,000 as at 1 January 2022 and is mortgaged to a private mortgagee for approximately $800,000. 56 Annexure LJCR-5 at pp 82-86 is the certificate of title and capital value valuation as at 1 January 2022 according to Land Services SA for the residential property over which John Rowley is the registered proprietor. It records the capital value as $1,525,000 and a mortgage to a private mortgagee although there is no evidence of the current balance of the mortgage. 57 Nonetheless, I am not satisfied that there is reason to believe John Rowley will be unable to pay the Rolton parties costs if so ordered such that the Rolton parties have not met the threshold in FCR 19.01. 58 There is no issue that Chopsonion, which has been added to the Lender Proceedings as an applicant, is impecunious such that the Rolton parties have met the s 1335 threshold. 59 The Rolton parties submit that the unsatisfactory nature of Mr Rowley's evidence is such that there remains a risk that the Rolton parties will be unable to recover any adverse costs order from the applicants if the Rolton parties are successful in their defence. 60 Although there is some force in the Rolton parties' submissions, nonetheless the first to sixth applicants' causes of action are such that if one of the applicants is unsuccessful, so too will the balance of those applicants. The consequences is that if an adverse costs order is made against those applicants, there are a number of applicants from whom the Rolton parties may seek to recover any costs to which they may be entitled.
Consideration 61 Chopsonion has been joined as an applicant to the Lender Proceedings albeit only recently. The Lender Proceedings and Controller Proceedings are closely related with the applicants in both sets of proceedings the same. Further, the applicants, other than Chopsonion, all stand to benefit from any judgment in favour of Chopsonion in either of the proceedings. 62 Although the Rolton parties have met the required threshold for some of the applicants in the Lender Proceedings, given the common interest of all the applicants to the proceedings, I am not satisfied that the Rolton parties have met the required thresholds in s 1335 and FCR 19.01, as the case may be, such as to enliven the discretion as to whether or not an order for security for costs should be made. 63 Accordingly, I decline to order the applicants provide security for costs.
An increase in the amount of security in the Controller Proceedings? 64 In the decision handed down in Chopsonion on 12 May 2021 at [72] Besanko J noted there was no issue that Chopsonion was impecunious. The applicants accept, quite properly, that insofar as Chopsonion is concerned, the threshold question is satisfied. 65 The Watts parties apply, pursuant to liberty to apply granted by his Honour, to increase the amount of security from the current $125,000 to $466,730.58 on the basis that before Besanko J, the total expected cost of the proceedings was $336,926.43 and that in the period from the date of the security for costs orders on 12 May 2021 to 15 September 2022 they have incurred costs in excess of the estimated sum to be incurred to this stage of the proceedings of $129,804.15. 66 There is no issue between the parties that an order for security for costs will generally not be varied and that in order for a variation to be made, a material change in circumstances since the original application was heard or new evidence emerges which could not reasonably have been addressed at the time of the original hearing, is required: Pampered Paws Connection Pty Ltd (on its own and in a representative capacity) v Pets Paradise Franchising (Qld) Pty Ltd (No 7) [2010] FCA 626 at [18] (Mansfield J); Truth About Motorways Pty Limited v Macquarie Infrastructure Investment Management Limited [2001] FCA 1603 at [11] (Hely J); Ninan v St George Bank Ltd (No 2) [2013] FCA 273 at [10]-[11] (Griffiths J).
Consideration 67 The applicants accept that there have been costs incurred in addition to those anticipated by the respondents earlier in the proceedings, but submit that it does not follow the level of security provided should be increased let alone in the amount sought by the Watts parties. 68 The delay in exercising the liberty to apply has been significant and the Watts parties have not explained the reasons for the delay. 69 Further, security for costs is normally ordered in relation to anticipated costs and not past costs. 70 The individual and corporate applicants in the Lender Proceedings have now been joined as applicants in the Controller Proceedings. The same evidence in relation to the applicants' financial position is relevant to the Watts parties' application for an increase in the amount of security. 71 I have found in relation to the Lender Proceedings, that whilst the evidence filed by the original applicants in the Lender Proceedings is not entirely satisfactory, nonetheless taking the applicants as a whole, I was not satisfied that the Rolton parties had met the required threshold such as to enliven the discretion. The position is the same with respect to the application by the Watts parties. 72 The costs to be incurred between the exercise of the liberty and trial insofar as Chopsonion alone is concerned overlaps with the costs to be incurred in preparation for trial which now includes the applicants from the Lender Proceedings. Accordingly, there is now a greater number of applicants against whom the Watts parties may pursue a costs order should that prove to be the case and in relation to whom I am not satisfied will be unable to satisfy such an order. 73 It is for these reasons that I am not satisfied that in the exercise of the Court's discretion there should be an increase in the amount of security for costs in the Controller Proceedings.
Conclusion 74 The application by the first and second respondents in the Lender Proceedings for an order for security for costs is dismissed. 75 The application by the respondents in the Controller Proceedings for a variation of the existing order for security for costs is dismissed. I certify that the preceding seventy-five (75) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Sullivan.
SCHEDULE OF PARTIES SAD 109 of 2020 Applicants Third Applicant: RED DOG #1 PTY LTD ACN 008 198 221 Fourth Applicant: RJC WILLSON NOMINEES PTY LTD ACN 007 790 329 Fifth Applicant: RICHARD WILLSON Sixth Applicant: LEIGH WILLSON Seventh Applicant: JOHN CHARLTON ROWLEY
SAD 76 of 2022 Applicants Third Applicant: RICHARD WILLSON Fourth Applicant: LEIGH WILLSON Fifth Applicant: RJC WILLSON NOMINEES PTY LTD ACN 007 790 329 Sixth Applicant: JOHN CHARLTON ROWLEY Seventh Applicant: CHOPSONION PTY LTD ACN 142 890 971 (Controllers Appointed) Respondents Third Respondent: MULGA CORPORATION PTY LTD ACN 144 810 435 AS TRUSTEE FOR THE MULHERIN FAMILY TRUST
Chopsonion Pty Ltd (Controllers Appointed)
Watts Meat Machinery Pty Ltd
[1998] HCA 4
(1987) 16 FCR 497
(1998) 192 CLR 226
(1995) 56 FCR 189
(2013) 212 FCR 1