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[2003] QSC 64
General information, not legal advice.
Supreme Court of Queensland
2003-03-20
Mullins, J
Original judgment source is linked above.
The application for security for costs filed on 6 December 2002 is dismissed.
[43] Costs would normally follow the event. I will defer making the costs order, until the parties have had an opportunity to make any submissions on costs.
Project Leaders Pty Ltd
Mt Isa Irish Association Friendly Society Limited [2003] QSC 64
[9] One of the matters that was the subject of the application filed on 6 December 2002 was a strike out application in respect of parts of the counterclaim. That application was disposed of by Holmes J on 24 February 2003 (Project Leaders Australia Pty Ltd v Mt Isa Irish Association Friendly Society Limited [2003] QSC 32) who ordered that sub-para 8(a), para 9 insofar as it is expressed to rely on sub-para 8(a), sub-para 15(b), sub-para 17(a) and para 18 insofar as it is expressed to rely on sub-para 17(a) of the counterclaim be struck out. The respondent was given leave to re-plead. That had not occurred at the time this application for security for costs was heard. The application for security for costs proceeded on the basis of the counterclaim, as it stood after the striking out order.
[11] A counterclaiming party can be ordered to provide security for costs to the other party: see r 677 of the UCPR. Security will ordinarily only be ordered against a counterclaiming party who is in substance a plaintiff and will not be ordered against a party who brings a counterclaim as a defensive proceeding or who has been forced to litigate: Buckley v Bennell Design and Constructions Pty Limited (1974)1 ACLR 301, 306-307 (per Street CJ), Interwest Ltd (Receivers and Managers Appointed) v Tricontinental Corporation Ltd (1991) 9 ACLC 1218, 1228-1229 and KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] FCA 76; (1995) 56 FCR 189, 198.
[13] The respondent relied on the decision in Anutech Pty Ltd v Latent Energy Systems Pty Ltd [1997] ACTSC 4 as exemplifying when the claim and counterclaim will be treated as arising out of the one matter or transaction. On the facts of that case, even though the defendant's counterclaim was for damages in the sum of $5.6m arising out of the same contract in respect of which the plaintiff was seeking to recover a debt in the sum of about $309,000, it was held the counterclaim was substantially defensive in character and the bulk of the time and resources required to litigate those issues would also be devoted to establishing that there was a defence to the plaintiff's claim. The principle applied in this decision was no different from that which I have set out above as which finds support in those authorities that security will not be ordered against a party who brings a counterclaim as a defensive proceeding or is forced to litigate.
(1995) 56 FCR 189