Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd

[2013] NSWSC 584

Supreme Court

New South Wales

Medium Neutral Citation:	Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2013] NSWSC 584
Hearing dates:	14 May 2013
Decision date:	14 May 2013
Jurisdiction:	Equity Division - Commercial List
Before:	Stevenson J
Decision:	Security for costs to be paid into Court by 5pm on 24 May 2013
Catchwords:	PRACTICE AND PROCEDURE - security for costs - timing of the provision of security - consequence of non-payment of security
Cases Cited:	Armstrong Strategic Management Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2013] NSWSC 457
Category:	Interlocutory applications
Parties:	Armstrong Strategic Management and Marketing Pty Ltd (first plaintiff) Armstrong Consulting Pty Ltd (second plaintiff) Ken Armstrong (third plaintiff) Expense Reduction Analysts Group Pty Ltd (first defendant) ERA Insurance Services Pty Ltd (second defendant) Expense Reduction Analysts Australasia Pty Ltd (third defendant) Stuart Roy Michael (fourth defendant) Ronald Clucas (fifth defendant) Charles Frederick Marfleet (sixth defendant) Eragics Limited (seventh defendant) Expense Reduction Analysts International Limited (eighth defendant) Keith John Chapman (ninth defendant) Anthony Frederick Dormer (tenth defendant)
Representation:	Counsel: H Pintos-Lopez (plaintiffs) E A J Hyde (fourth, fifth, sixth, ninth and tenth defendants) Solicitors: Marque Lawyers (plaintiffs) Norton Rose Australia (fourth, fifth, sixth, ninth and tenth defendants)
File Number(s):	SC 2011/76919
Publication restriction:	Nil

EX TEMPORE Judgment (Revised)

1. Before me today are matters arising from my reasons of 1 May 2013 (Armstrong Strategic Management Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2013] NSWSC 457). I shall use the same abbreviations in these reasons as I used in that judgment.

1. In that judgment, I resolved a dispute between the parties as to whether the plaintiffs should provide to the Individual Defendants security for costs. That argument took three days.

1. The Individual Defendants sought security on two bases. First, on the basis that there was a legally binding agreement between the Individual Defendants and the plaintiffs that the plaintiffs provide security on a particular basis. Alternatively, the Individual Defendants sought security on the conventional basis.

1. The Individual Defendants succeeded. I found there was a legally binding agreement of the kind for which they contended. However, I declined to grant specific performance of that agreement on the basis of impossibility.

1. I found that the plaintiffs should give further security of $100,000 on a conventional basis, although the notion of stultification of these proceedings played a role in my determination of that figure.

1. The three arguments that remain are as to the timing of the provision of security, the consequence of non-payment of security, and the costs of the application for security.

1. So far as the timing of security is concerned, I recorded at [49] of my judgment the evidence Mr Armstrong gave on the motion as to his financial position. That evidence played a crucial role in my determination of what amount of security I should order. No further evidence has been adduced today as to Mr Armstrong's financial position, although Mr Pintos-Lopez, who appears for the plaintiffs, tells me from the bar table that none of the cash referred to in [49(a)] of the judgment is now available to be provided as part of the security. It is highly unsatisfactory that information of this nature should be conveyed to the Court from the bar table and without evidence. Mr Pintos-Lopez told me the reason no evidence of that matter had been adduced was because the plaintiffs were anxious to minimise costs and expense. I do not accept that as an adequate reason for there being no evidence. The costs involved in putting on an affidavit by Mr Armstrong, in the scheme of things, would not have been significant.

1. The individual defendants seek orders that the plaintiffs provide $50,000 security forthwith and the balance of $50,000 by 7 June 2013.

1. The plaintiffs seek an order that the security not be provided until 18 July 2013, although there is no evidence before me explaining why that date has been chosen.

1. As to the consequence of the non-payment of the security, Mr Hyde, who appears for the Individual Defendants, accepts the usual order would be that the proceedings be stayed in the event the security is not provided. Mr Hyde submits, in the special circumstances of this case, the appropriate order is that if security is not provided the proceedings be dismissed. Mr Hyde pointed out that I have found that the plaintiffs did agree to provide security on a particular basis and have, as it were, walked away from that agreement without offering any explanation (see [121] of my judgment). I think there is weight in Mr Hyde's submission. However, on reflection, I am not persuaded I should depart from the usual order.

1. So far as costs are concerned, Mr Pintos-Lopez seeks an order that the Individual Defendants pay the plaintiffs' costs. I do not see on what possible basis I could make that order. The Individual Defendants, in substance, have been successful. They did not succeed on every issue (for example, they did not persuade me I should order the agreement I have referred to be specifically performed). But at the end of the day they came to the Court seeking security for costs and that is what they have achieved.

1. In those circumstances, I make these orders: -

(1)   The plaintiffs provide further security for costs of the fourth, fifth, sixth, ninth and tenth defendants in the sum of $100,000.

(2)   That sum is to be paid into Court by 5pm on 24 May 2013.

(3)   If the plaintiffs, either themselves or their servants or agents, fail to comply with the preceding order the proceedings against the fourth, fifth, sixth, ninth and tenth defendants will be stayed until such time as the funds are paid into Court.

(4)   That the plaintiffs pay the costs of the fourth, fifth, sixth, ninth and tenth defendants of those defendants' Second Amended Notice of Motion dated 19 December 2012 as amended on 21 March 2013.

(5)   That those costs be assessed forthwith.

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