Truckbug Pty Limited and anor v Rethmann Australia Environmental Services Pty Limited and ors

Industrial Relations Commission (NSW)|2008-03-19|Before: Marks J, Mr J

CITATION: Truckbug Pty Limited and anor v Rethmann Australia Environmental Services Pty Limited and ors [2008] NSWIRComm 57

FIRST APPLICANT Truckbug Pty Limited SECOND APPLICANT Gary Blair PARTIES: FIRST RESPONDENT Rethmann Australia Environmentmental Services Pty Limited SECOND RESPONDENT Andrew Hopkins THIRD RESPONDENT ADH Transport Pty Limited

CATCHWORDS: S106 unfair contract proceedings - co-applicants - appointment of administrators to corporate applicant - applications for security for costs - corporate applicant impecunious but individual co-applicant not impecunious - delay in making the application prejudicial to proceedings - presence of co-applicant mitigates against application - applications dismissed.

Corporations Act 2001 s1335 LEGISLATION CITED: Industrial Relations Act 1996 s106 Industrial Relations Commission Rules 1996

Maples v Hughes [2002] NSWSC 617 CASES CITED: Pioneer Park Pty Ltd (in liq) and ors v Australia and New Zealand Banking Group Limited [2007] NSWCA 344 Winnote Pty Limited v Page and ors [2005] NSWCA 362

FIRST AND SECOND APPLICANTS Mr D Smallbone of counsel Solicitors Anderson Lawyers Mr B Rando

FIRST RESPONDENT Mr R Goot SC LEGAL REPRESENTATIVES: Mr S Prince of counsel Solicitors TressCox Lawyers Ms R Sheftalovich SECOND AND THIRD RESPONDENTS Mr J Pearce of counsel Solicitors Adams & Partners, Lawyers Mr J Isaksen

Truckbug Pty Limited and anor v Rethmann Australia Environmental Services Pty Limited and ors

Application under s 106 of the Industrial Relations Act 1996

1 These are proceedings brought under s 106 of the Industrial Relations Act 1996 ("the Act") by the applicants, Truckbug Pty Limited and Gary Blair, against the first respondent Rethmann Australia Environmental Services Pty Limited ("Rethmann"), the second respondent Andrew Hopkins and the third respondent ADH Transport Pty Limited ("ADH"). The proceedings are constituted by a further amended summons. The applicants seek to impugn a contract described in the further amended summons as being an arrangement that comprised a sale contract by which Truckbug purchased a truck from ADH which was said to be "contracted to Rethmann Waste" and a contract of carriage between Rethmann as head contractor and Truckbug as subcontractor and Mr Blair. It is alleged in the further amended summons for relief that this arrangement was and became unfair in circumstances and in a manner which it is not presently necessary to describe. I note that the summons claims relief by reference to the repayment of goodwill paid to ADH, an alleged underpayment of earnings by Rethmann and a lost opportunity of further earnings, also claimed from Rethmann. 2 The proceedings were originally commenced in 2003. In July 2005, the applicants filed an affidavit of Paul Mansfield, accountant, which among other things sets out certain material concerning the financial circumstances of Truckbug. This included a detailed profit and loss statement of that company for the year ended 30 June 2003 and a detailed balance sheet as at the same date. This documentation disclosed a trading loss of $603.70 and a deficiency in shareholders' funds of $151,736.81. Included within the total assets of $130,771.86 was the sum of $110,000 shown as an intangible asset being the amount expended for goodwill to acquire the Rethmann contract. The remaining $20,000, approximately, in assets was predominantly the value shown for the truck of $20,909 less depreciation. 3 The current liabilities totalled $282,500 approximately. The largest component of this amount was almost $244,000 shown as a director's loan. There was a further amount said to be owing, presumably to the Australian Taxation Office, by reference to a GST payable control account of $37,774 and trade creditors of $7,622. 4 There was also included in this material a detailed balance sheet as at 30 June 2002 which showed, for comparison purposes, the position as at 30 June 2001. As at 30 June 2001, there was a deficiency in shareholders' funds of almost $150,000. As at 30 June 2002, the deficiency was approximately $148,000. In general terms, the assets and liabilities for each of these two years reflected those of the 2003 financial year. 5 Accordingly, there was always revealed in this documentation, which was available to the respondents in July 2005, that the financial affairs of Truckbug were such that its ability to meet any liability for costs in the proceedings would depend entirely on an injection of funds either by way of capital or loan. Certainly, the fate of the value of the goodwill would depend upon the outcome of the proceedings. The other tangible assets were, as I have said, of minimal value. 6 The hearing of the substantive proceedings commenced on 5 November 2007 and continued until 7 November 2007 when it was adjourned part heard for further hearing for 7 days commencing 25 March 2008. As it transpired, I vacated the hearing on 25 March at the request of the applicant. 7 By letter dated 14 March 2008, the applicants' solicitors advised the first respondent's solicitors for the first time that external administrators had been appointed to Truckbug. In fact, this had occurred on 4 December 2007. It seems that the appointment of the administrators was precipitated by the service of a statutory demand on Truckbug by the Australian Taxation Office claiming a debt of $103,708.08 relating to its running balance account for amounts due under its BAS obligations. 8 On 18 March 2008, Rethmann filed a notice of motion seeking, among other things, an order for security for costs against Truckbug, but not against Mr Blair. The motion was set down for hearing on 19 March 2008. At the commencement of that hearing the second and third respondents were granted leave to file in Court a notice of motion also seeking an order for security for costs against Truckbug, but not against Mr Blair. 9 At the conclusion of the hearing of these applications on 19 March 2008, I dismissed the applications and made orders that the respondents pay the applicants' costs, indicating that I would publish my reasons for doing so shortly. That which follows constitutes my reasons.

10 The respondents submitted that on the evidence Truckbug was clearly impecunious and incapable of meeting any costs order that might be made against it. There can be no doubt about this basic proposition by reference to such material as was put before the Court including a balance sheet of Truckbug as at 30 June 2004. I note that in that financial year, Truckbug made an operating profit of $45,948 and that the deficiency in shareholders' funds was reduced to $108, 373. 11 It was not made clear during the hearing whether the application for security was brought under s 1335 of the Corporations Act 2001, or in reliance upon the Rules of this Court or the inherent powers of this Court to order security for costs. In my opinion, the principles that apply in each of these cases are, for current purposes, the same. 12 The principles which are to be applied by a court when exercising the discretion to order security for costs under s 1335 have most recently been described by Basten JA in the New South Wales Court of Appeal in Pioneer Park Pty Ltd (in liq) and ors v Australia and New Zealand Banking Group Limited [2007] NSWCA 344. Tobias and McColl JJA agreed in his Honour's judgment (save for one particular only, which is not relevant for the purpose of these proceedings). 13 Although Pioneer Park was concerned with appeal proceedings, I respectfully adopt and apply the general discussion of the principles by Basten JA. At [47] to [58] his Honour said, "47 A number of factors may be derived from the principles set out by Beazley J in KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 at 196-198 and the authorities to which her Honour referred. The first factor is whether the applicant for the order has established, in order to engage the power, that the company is unlikely to be able to pay the costs of the applicant if it is unsuccessful in its claim (impecuniosity).

48 Two further factors arise once impecuniosity is established by the applicant; the company may seek to avoid an order by establishing that: (a) the applicant's conduct was the cause of its impecuniosity, or (b) an order for security for costs would stifle the proceedings.

49 In the case of a small company or one starting up a business, impecuniosity may be unrelated to the matter in dispute: see, eg, Equity Access Ltd v Westpac Banking Corporation (1989) ATPR ¶40-972 at 50,637 (Hill J). In many cases, however, companies assert that current financial problems have arisen as a result of the applicant's conduct which is the subject of the litigation. An assessment of that contention would require some consideration of the merits of the appeal.

50 The third factor derives from the principle that to require security of a plaintiff reduced to poverty by the act of the defendant would involve a denial of justice. This principle is sometimes sourced to Farrer v Lacy, Hartland & Co (1885) 28 Ch D 482. However, the principle was not applied in that case, the Court distinguishing Rourke v White Moss Colliery Company (1876) 1 CPD 566, in which it was applied. Rourke involved a personal injury claim by an individual plaintiff. There was no dispute that the negligence of the defendant had reduced the plaintiff to poverty, the issue being a question of law as to the scope of the doctrine of common employment, the injury having resulted from the negligence of a fellow employee of the defendant. Understandably, the plaintiff was not deprived of his opportunity to argue the point of law. In relation to a corporate plaintiff, the principle has a somewhat different operation. Thus, it has been said that the existence of a genuine dispute cannot "of itself provide cause for disentitling the respondent to security if the circumstances otherwise are appropriate ones for the making of such an order": see Pasdale Pty Ltd v Concrete Constructions [1995] FCA 1471; (1995) 131 ALR 268 at 273 (35) (Finn J).

51 The likelihood that an order for security would stifle or stultify the proceedings, if established, is a factor which will tend against an order for security. However, that factor is not made out merely by reference to the company's impecuniosity, but requires proof, as explained in the passage from Bell Wholesale at [43] above. As noted by Austin J in Fiduciary Ltd v Morningstar Research Pty Ltd (2004) 208 ALR 564 at [74], referring to the judgment of Clarke J in Yandil Holdings Pty Ltd v Insurance Co of North America (1985) 3 ACLC 542 at 545, "the mere fact that the corporate plaintiff is financially unable to provide security does not lead inevitably to the conclusion that the making of an order for security will stultify the plaintiff's claim. It may be that there is someone else who will satisfy the order on the plaintiff's behalf".

52 A fourth factor, providing a reason for not ordering security, may arise where all those who seek to benefit from the litigation are willing to step out from behind the corporate shield and offer undertakings in relation to an adverse costs order in the event of failure. There may be different views as to how such circumstances should affect the exercise of the power to order security, but the need for their resolution does not arise in the present case: see Jazabas Pty Ltd v Haddad [2007] NSWCA 291 at [2]- [3] (Mason P).

53 A fifth factor concerns the presence in the proceedings of an individual litigant. In Winnote Pty Ltd (In liq) v Page [2005] NSWCA 362; (2005) 64 NSWLR 244 Mason P, in declining to order security for costs against the corporate appellant, noted that "[t]he continuing presence of Mr Roach (apparently a man of substantial means) shows that it is not called for, so long as it remains highly likely that costs would be awarded against both appellants if the appeal fails": at [43].

54 Two further factors are commonly identified as "oppression" and the public interest.

55 The concept of oppression is most likely to operate as a constraint on the making of an order where an order is likely to stifle the appeal. It may also invite some closer attention to the merits of the proceedings than would otherwise be necessary and appropriate. On the other hand, it is not entirely clear what is referred to by oppression. As noted by Beazley J in KP Cable Investments at 197, Needham J referred in MA Productions Pty Ltd v Austarama Television Pty Ltd (1982) 7 ACLR 97 at 100 to the need to consider whether "the defendants' application for security is oppressive in the sense that it is being used merely to deny to an impecunious plaintiff a right to litigate". There may be rare cases in which it can be established that an application for security is brought for improper purposes: such conduct could no doubt be described as "oppressive". On the other hand, from the respondent's point of view the question is not whether an impecunious corporate appellant has a "right to litigate" but rather who should be required to bear the costs of the litigation if the appellant is unsuccessful.

56 It may be that a court will be more sympathetic to an application from a respondent with limited funds than a respondent which is a major corporation: see Remm Construction (SA) Pty Ltd v Allco Newsteel Pty Ltd (1992) 57 SASR 180 at 186 (King CJ) and Irwin Alsop Services v Mercantile Mutual Insurance Co Ltd [1986] VR 61 at 65 (Ormiston J), referred to by McClellan CJ at CL in Jazabas Pty Ltd v Haddad [2007] NSWCA 291 at [76]. Nevertheless, as implied by Brooking J in Prime Forme Cutting Pty Ltd v Baltica General Insurance Co (1989) 8 ACLC 29 at 32-33, large corporate defendants should not be seen as standing "outside the policy of the security for costs provisions". However, to accept that they do not, does not in turn require the Court to ignore the fact that they "stand in no special need of care and protection", as Brooking J expressed the point. Thus, it might be seen as oppressive to allow a large corporate defendant to obtain an order for security for costs which would be likely to stifle the litigation in circumstances where it could be seen that the claim had potential merit and that the quantum of costs would in any event be a relatively insignificant amount for the corporate defendant, though beyond the capacity of the corporate plaintiff to pay. To order security in such circumstances may constitute a form of "oppression".

57 Finally, there is the question of any "public interest" in the proceedings. The question of public interest may have greater weight with a claim which can be seen to have some merit on its face, rather than being merely arguable. Again the question is likely to arise only in circumstances where a prima facie case of stultification has been made out. G.E. Dal Pont, Law of Costs (2003) adopted the cautious view of Young CJ in Kardynal v Dodek [1978] VR 414 at 415-416, as to reliance on public interests, stating that to be "a sensible view because otherwise plaintiffs will seek to characterise their claim as novel or in the public interest confident in the knowledge that this will of itself immunise them from a security order": at [29.113]. Such an approach places little faith in the perspicacity of the court, but there is a more principled basis for caution. Thus in Lucas v Yorke (1984) 58 ALJR 20, a case in which there had been a grant of special leave to appeal, Brennan J, in refusing an order for security stated (at p 21): "I do not stress the importance of the question for determination lest the public interest in the resolution of that question override the interests of the parties (c.f. Kardynal v Dodek [1978] VR 414). However, justice would not be best served in the circumstances of the present case by shutting out the appeal and I decline to make an order for security." 58 The nature of the public interest, the circumstances in which it arises in particular litigation and the basis on which an application for security is made would all be relevant in determining the role of a claim that litigation promotes the public interest: see, eg, Arnold v Queensland (1987) 73 ALR 607 at 613 (Wilcox J). It does not arise squarely in the present case and therefore need not be discussed further." 14 As is made clear from the judgment of Basten JA, once impecuniosity is established it is for the plaintiff/applicant corporation to establish any matters which are to be taken into account in persuading a court that an order for security for costs should not be made. That is, the evidentiary burden falls upon Truckbug in the circumstances of these proceedings. 15 It was submitted by Truckbug that it was the conduct of the respondents that caused its impecuniosity. That is, the fact that having paid $110,000 for goodwill, having received less by way of earnings than had been represented and the contract of carriage with Rethmann having come to an end, had brought about or caused its impecuniosity. The difficulty that I have with this argument is that at all relevant times, Truckbug was impecunious before entering into the arrangement which is the subject of these proceedings. Accordingly, it was never in a position to pay the respondents' costs and its impecuniosity preceded the making of the arrangement. It could not be said in these circumstances that the conduct of the respondents was the cause of its impecuniosity even though that conduct might be alleged to have exacerbated any underlying impecuniosity. However, a company is either impecunious or it is not. The extent of the impecuniosity was always sufficient to ground an application for security for costs from the time of the commencement of the proceedings. This, as will be seen, is a relevant factor to be taken into account in connection with these interlocutory proceedings, but does not assist Truckbug in connection with this part of its argument. 16 There is no evidence before the Court concerning the circumstances of Mr Blair. There is evidence that he is relevantly the sole shareholder and was, at the time of the appointment of the external administrators, the sole director. He did not proffer any evidence for the purpose of the interlocutory proceedings concerning his financial worth and I conclude that the Court cannot be satisfied that all those who seek to benefit from the litigation are willing to step out from behind the corporate shield and offer undertakings in relation to an adverse costs order in the event of failure. In these circumstances, I cannot be satisfied that Truckbug has discharged its burden of demonstrating that an order for security for costs would stifle the proceedings. 17 However, there are two matters that, in my opinion, militate against making an order for security for costs. The first concerns the delay in seeking such an order. The respondents submitted that they moved the Court with all due speed once they became aware of the appointment of the external administrators to the company and as to its impecuniosity. However, it is the fact, as I have pointed out, that as at July 2005 the respondents were aware that Truckbug was impecunious. It is true that its impecuniosity has increased by some $60,000 because of the amount now owing to the Australian Taxation Office when compared with the amount shown to be owing as at 30 June 2002. However, whether or not there is greater impecuniosity does not avoid a conclusion that at all relevant times Truckbug was impecunious. Again, there can be no question that, at all relevant times, the extent of the impecuniosity of Truckbug was always such that it could not meet any order for costs, whether or not exacerbated by an increase in the amount owing to the Australian Taxation Office. 18 The applicants' counsel submitted that since July 2005 a great deal of monies have been expended in and about the preparation of the proceedings for hearing and a great deal of legal work has been undertaken in this regard. It was said that it would be unfair in these circumstances to impose an order for the payment of security for costs at a late stage in the proceedings, after the substantial hearing had commenced, which would, in all probability, frustrate the ability of Truckbug to continue. I agree. 19 In my opinion, because the respondents were, or should at all relevant times have been, aware of the impecunious state of affairs of Truckbug, any application for security for costs should have been made in 2005. The delay in making the application is such that the applicants would be severely prejudiced by the making of an order for the payment of security for costs and the proceedings would be utterly frustrated. For this reason I reject the application. 20 The applicants also relied on another basis to resist the respondents' motions. Truckbug is one of two applicants. It was submitted on behalf of Truckbug that the other applicant, Gary Blair, would be liable for the payment of the respondents' costs and on this basis it is inappropriate to make an order for security for costs against Truckbug. 21 The principles that should be applied when considering applications for security for costs against an impecunious corporate plaintiff in circumstances where there are one or more additional plaintiffs against whom no allegation of impecuniosity is made, were considered by Studdert J in the New South Wales Supreme Court in Maples v Hughes [2002] NSWSC 617. At [14] to [19], his Honour said, "14 Had the second plaintiff been the only plaintiff in this cause I would not have hesitated to order security for costs. However, the defendant has another plaintiff, Bruce John Maples, against whom an order for costs could be enforced should the plaintiffs' claims fail. Whilst security for costs may be ordered where there is a natural plaintiff and a company joined as plaintiffs, if the overlap of their claims is small (see, for example, John Bishop (Caterers) Limited & Anor v National Union Bank Limited & Ors (1973) 1 All ER 707), such an order will not generally be made if the overlap of claims is such as would attract a liability in costs in the natural person should the claims fail.

15 The question of security for costs was considered in Harpur & Ors v Ariadne Australia Ltd & Ors (1984) 8 ACLR 835, a case in which a natural person was joined with three companies as plaintiffs. In the Queensland Court of Appeal it was determined that security for costs should not be ordered against the three plaintiff companies and the other members of the court agreed with what Connolly J had to say in the following passage at 841: "...what is the rule where there is more than one plaintiff? In such a case, all plaintiffs suing in the same interest and by the same solicitors and counsel, there is but one set of costs. If the defendants have an opponent who is worth powder and shot they have as much as any litigant is fairly entitled to. The court cannot by its orders guarantee a successful outcome in a practical sense to any party. It is thus no answer when security for costs is sought to say that a person of apparent substance may be able to make away with his assets within the jurisdiction before a judgment for costs can be executed: Re Apolinaris Company's Trade Marks [1891] 1 Ch 1 per Lord Halsbury LC at 3 sitting in the Court of Appeal. The 'two plaintiff' cases start with the situation in which one is out of the jurisdiction. Prima facie he ought to be ordered to provide security but his co-plaintiff is within the jurisdiction. In such a case it was considered that there was no ground for ordering security. See Sykes v Sykes (1869) 4 LR CP 645 at 648 per Byles J and Montague Smith J. This principle was held to apply even where the plaintiff within the jurisdiction was insolvent. I take the underlying reason to be that the defendant was really in no worse position than if he had been sued by a single plaintiff resident within the jurisdiction and insolvent. As Brett J remarked at 650, the cases show that, unless there is ground for making an order for security against all the plaintiffs, it cannot be made against any. One of the earlier cases was McConnell v Johnston [1801] 1 East 431; [1801] 102 ER 167 where it was held that if one of the plaintiffs reside within reach of the process of the court, security will not be required for the costs although the other plaintiff be a foreigner residing abroad and though the first mentioned plaintiff be a bankrupt in execution for debt. In D'Hormusgee & Co and Isaacs & Co v Grey (1882) 10 QBD 13 the same result was reached by Denman and Manisty JJ affirming Cave J in an action brought against a defendant as a common carrier by two plaintiffs, one resident abroad. The statement of claim alleged a contract by the defendant with the plaintiffs jointly and in the alternative with each of the plaintiffs separately. Although their Lordships cited no authority both referred to the practice in relation to security for costs before the Judicature Act . The critical point was that each plaintiff was liable for the whole of the defendant's costs. Now in John Bishop (Caterers) Ltd v National Union Bank Ltd [1973] 1 All ER 707 Plowman J made an order for security against a company although there was a co-plaintiff within the jurisdiction who was a natural person. His Lordship distinguished the earlier cases on the footing that there was in those cases a complete overlap as he put it of the causes of action. Accordingly, as he was not satisfied that the natural person would necessarily be ordered to pay all of the defendant's costs he ordered security. That is concededly not this case."

16 In the present case Mr Whittle submitted that if the plaintiffs are unsuccessful in these proceedings, the first plaintiff would be fully liable for costs incurred by the defendant. If that submission is correct then it seems to me, bearing in mind the above cited dicta of Connolly J, that security for costs should not be ordered against the second plaintiff. Whether the submission is correct calls for consideration of the nature of the claims being brought by the plaintiffs.

17 The nature of the claims of the plaintiffs is outlined in the statement of claim. From that document it emerges that the plaintiffs allege that the first plaintiff consulted the defendant as a solicitor to give certain advice concerning the purchase of some land at Woronora. The first plaintiff contemplated acquiring that land with another natural person or with the second plaintiff. What was contemplated was a sub-division of the land, but as the land adjoined Crown land, which was undeveloped bushland, any sub-division would call for fire-fighting development works that incorporated distance setbacks. It is alleged that the defendant gave incorrect advice as to what would be required and, the land having been purchased by the second plaintiff in reliance upon the defendant's allegedly negligent advice, the plaintiffs suffered loss. The first plaintiff claims as damages the diminution in the value of his shares in the second plaintiff. The second plaintiff claims damages, being the loss allegedly suffered in the acquisition of the land.

18 It seems to me that when one analyses the nature of the claim, Mr Whittle's submission is correct. The claims of the first plaintiff and of the second plaintiff are completely interlocked both as to liability and as to damages, and if the defendant is successful costs would ordinarily follow the event. On the material presently before the Court, it seems to me that the first plaintiff would be exposed to the liability of a costs order for all of the defendant's costs if the defendant succeeds.

19 I have therefore concluded that as this cause is presently constituted the Court should not order security for costs against the second plaintiff because the defendant will have resort to the first plaintiff to recover his costs if the action fails. If, for any reason, the first plaintiff was to cease to be a party to this litigation, the situation would warrant review." 22 It will be seen from his Honour's judgment that in essence the claim of the natural plaintiff was based on his diminution in the value of the shares of the corporate plaintiff. In these circumstances, Studdert J concluded that the claims of both plaintiffs were "completely interlocked both as to liability and as to damages" and that the natural plaintiff would therefore be exposed to a costs order if the defendant were successful. 23 The enunciation of the relevant principles and the authorities to which Studdert J referred were adopted and applied by Mason P in the New South Wales Court of Appeal in Winnote Pty Limited v Page and ors [2005] NSWCA 362. Those proceedings dealt with an application for security for costs made in connection with appeal proceedings. Nevertheless, Mason P, as I have said, applied the approach of Studdert J in Maples. In Winnote, the appellant who was a natural person was a shareholder of the fellow corporate appellant. The shareholder was seeking to claim damages in his own right by reason of his shareholding in the corporate appellant. 24 In discussing the position of the natural appellant in connection with the appeal proceedings, Mason P said, "41 The grounds of appeal and submissions filed in their support indicate that the overwhelming thrust of the appellants' argument will be directed at matters that are either common to each appellant or supportive only of the case of the corporate appellant. This said, Mr Roach's continuing role as a co-appellant who has an indirect interest in Winnote succeeding strongly suggests that, if the appeal fails, costs will be ordered against the appellants jointly, as occurred below.

42 It is undoubtedly the case that both Mr Roach and the funder have significant financial interests in the outcome of the appeal. It is also true that each in a sense shelters behind the impecunious Winnote without expressly volunteering to underwrite the costs of the appeal. These matters clearly engage the power to order security and firmly predispose in favour of granting it.

43 Nevertheless, an order for security should not be made unless it is called for. The continuing presence of Mr Roach (apparently a man of substantial means) shows that it is not called for, so long as it remains highly likely that costs would be awarded against both appellants if the appeal fails." 25 Senior counsel for Rethmann sought to distinguish the factual circumstances that apply in these proceedings to those that applied in both Maples and Winnote. I respectfully disagree. The involvement of Mr Blair as second applicant is said in the further amended summons to arise because he was a party to the arrangement. The nature and extent of his involvement will no doubt be revealed during the course of the proceedings. I conclude that whatever doubts are expressed by the respondents as to the merits of Mr Blair's involvement in the proceedings, there can be no doubt that he is a co-applicant and he has an exposure to the making of an adverse costs order in the event that the proceedings fail. 26 Consistent with the authorities to which I have referred and the principles therein espoused, for this reason the applications for security for costs should be dismissed.

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Judgment (29 paragraphs)

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Cases Cited (12)