Coca-Cola Amatil Victoria Ltd v P A A Enterprises Pty Ltd

[2003] VSCA 135

Victorian Court of Appeal

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Interrogate

Catchwords

1. Practice and Procedure
2. › Security for costs
3. › Corporations
4. › Discretionary factors
5. › Defendant requiring contracting party to incorporate
6. › Whether defendant's role in creating corporate structure a relevant factor
7. › Whether factor elevated to determinative principle
8. › Corporations Act 2001 (Cth), s 1335(1)
1. Practice and Procedure
2. › Security for costs
3. › Corporations
4. › Impecunious plaintiff corporation
5. › Balancing injustice to defendant against stultification of plaintiff's claim
6. › Whether purpose of security is to place defendant in same position as if plaintiff were individual
7. › Corporations Act 2001 (Cth), s 1335(1)
1. Appeal
2. › Standard of appellate review
3. › Appeal from exercise of discretion
4. › Security for costs
5. › Whether exercise of discretion attended by error of principle

Quick Take

Where a defendant required or induced the plaintiff to incorporate as a company rather than contracting with the individual, this is a factor of considerable weight against ordering security for costs under s 1335(1) of the Corporations Act 2001, though it is not determinative and must be weighed against all other circumstances. The purpose of security for costs is not to place the defendant in the same position as if the plaintiff were an individual. The mere fact of voluntarily contracting with a corporation may carry less weight than being instrumental in creating the corporate structure.