IN THE COUNTY COURT OF VICTORIA
AT Melbourne
COMMERCIAL LAW DIVISION	Revised
Not Restricted
Suitable for Publication	
General List

Case No. CI-21-05062

COMMERCIAL AUTOMATICS PTY LTD (ACN 108 344 127)	First Plaintiff	
		
and		
		
GRAEME JOHN BALL 	Second Plaintiff	
v		
		
CAROLOS TSAKIRIS	First Defendant	
		
and		
		
HELEN TSAKIRIS	Second Defendant	
		
and		
		
GOLLANT AUCTIONEERS & VALUERS PTY LTD (ACN 609 952 007) 	Third Defendant	

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JUDGE:	HIS HONOUR JUDGE FRAATZ	
WHERE HELD:	Melbourne	
DATE OF HEARING:	17 September and 3 October 2024	
DATE OF RULING:	20 December 2024	
CASE MAY BE CITED AS:	Commercial Automatics Pty Ltd & Anor v Tsakiris & Ors (Ruling)	
MEDIUM NEUTRAL CITATION:	[2024] VCC 2083		

RULING
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Subject:	PRACTICE AND PROCEDURE
Catchwords: 	Security for costs – plaintiffs not able to meet any adverse costs order – plaintiffs’ impecuniosity caused by defendants – stultification of proceedings if security ordered – delay 
Legislation Cited:	County Court Civil Procedure Rules 2008; Corporations Act 2001 (Cth)

Cases Cited:	Livingspring Pty Ltd v Kliger Partners (2008] 20 VR 377; Etchell t/as Ikonic Homes v F & J Investment Assets Pty Ltd atf The Mustafa Property Trust [2024] VSCA 245; Trility Pty Ltd v Ancon Drilling Pty Ltd [2013] VSC 577; Christou v Stanton Partners Australasia Pty Ltd [2011] WASCA 176; Sell Your Gold Pty Ltd v Australian Diamond Trading Corporation Pty Ltd (2018) 57 VR 595; Bunnings Group Limited v CHEP Australia Limited (2011) 82 NSWLR 420; Stuart v Said (2021) 65 VR 50; Sykes v Sykes (1869) LR 4 CP 645; Perry v Jackson [1998] 4 VR 463; Drumdurno Pty Ltd v Braham (1982) 42 ALR 563; Andrews v Zuccubarr Pty Ltd [2020] VSC 675; Vintage Marine Art Pty Ltd v Henderson & Cremer (No 2)  [2019] NSWCA 252
Ruling:	Security not ordered.

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APPEARANCES:
	Counsel	Solicitors	
For the Plaintiffs	Mr N Andreou	KCL Law 	
			
For the First and Second Defendants	Mr F Brimfield	SGM Legal	

For the Third Defendant	Ms K Dovey	Carter Newell Lawyers	

HIS HONOUR:

1	By summons issued 24 April 2024, Carolos and Helen Tsakiris (“Tsakiris”) seek orders for security for costs against the plaintiffs in the sum of $78,715.  Gollant Auctioneers & Valuers Pty Ltd (“Gollant”) followed suit on 6 May 2024, seeking orders for security for costs in the sum of $103,400, and that the proceeding be stayed until security is provided.
2	By way of overview of the events giving rise to this proceeding, Commercial Automatics Pty Ltd operated a business servicing transmissions for heavy vehicles at 20 Ovata Drive, Tullamarine (“premises”).  It has leased the premises from Tsakiris, the registered proprietors, since December 2016 (“lease”).
3	Graeme John Ball was the sole director and shareholder of Commercial Automatics and the guarantor of the lease until he passed away on 20 May 2023.  His personal representative, Raymond John Solomon, is conducting the proceeding on behalf of the plaintiffs.
4	Gollant operates a business conducting online auctions of personal property.
5	In or about January 2020, Commercial Automatics began falling into arrears of rent.  In April 2021, Tsakiris issued a notice of breach which required Commercial Automatics to remediate alleged illegal works and pay arrears of rent and outgoings in the sum of $20,967.  At that stage, there was also a dispute concerning electrical works and building works carried out by Commercial Automatics at the premises.
6	In an act described by the plaintiffs’ counsel, Mr Andreou, as “exercising the remedy of self-help”, Tsakiris changed the locks on 21 April 2021 and took possession of the premises.  
7	At no time have Tsakiris sought or obtained an order for possession of the premises.
8	Although Commercial Automatics later resumed possession, Tsakiris again re-entered the premises in early May 2021 in relation to remaining rental arrears of only $1,093. 
9	A proceeding issued by Commercial Automatics in the Supreme Court of Victoria seeking an order for possession of the premises was resolved by agreement on 27 May 2021.
10	Two weeks later, on 11 June 2021, Tsakiris re-entered the premises a third time, upon Commercial Automatic’s default under the consent orders.  
11	Later in June 2021, Tsakiris refused to permit Commercial Automatics to enter the premises for the purposes of removing its fixtures and chattels unless arrears of rent and an unparticularised, and disputed, amount of damages were paid.
12	Commercial Automatics briefly resumed possession of the premises between 28 September and 21 October 2021, before Tsakiris re-entered and took up residence at the premises to prevent Commercial Automatics from conducting its business.  Upon re-entry, Tsakiris took possession of all fixtures and chattels located upon the premises.
13	On 5 November 2021, Tsakiris engaged Gollant to sell all plant, stock and other items remaining at the premises.
14	On 19 November 2021, Commercial Automatics’ solicitors wrote to Tsakiris, notifying them that it intended to commence proceedings to protect its interests; and on 23 November 2021, Commercial Automatics duly commenced this proceeding, seeking an order for possession of the premises and an injunction preventing the sale of its goods by Gollant.  In addition to seeking possession, the Statement of Claim seeks damages for the conversion of goods, which included plant, stock and other items owned by Commercial Automatics; and valuable vintage cars, car parts and memorabilia owned by Mr Ball.
15	Commercial Automatics and Mr Ball allege that Tsakiris’s October 2021 re-entry and taking possession of the premises in May was unauthorised and constituted a direct interference with Commercial Automatics’ lawful possession of the premises.  
16	Before the application for injunctive relief was heard on 1 December 2021, Tsakiris permitted the auction to conclude.  The auction returned $81,818 to Tsakiris.  Commercial Automatics says the value of the goods sold at auction exceeded $1 million.  Tsakiris concede that classic vehicles were sold at the auction, although submit there is no evidence that Ball owned any of these goods.
17	All items that were not sold at auction were disposed of into skips by Tsakiris, including Commercial Automatics’ business records, computers and personal items of the deceased, Mr Ball.  
18	It is self-evident that, by Tsakiris’s exclusion of Commercial Automatics from the premises and the sale or destruction of its plant, stock and business records, it has been unable to conduct its business.
19	Despite proceedings being issued and served, and being on notice of an application for injunctive relief to prevent the auction going ahead, Tsakiris permitted the sale of the goods at auction in November 202.
20	The taking of possession of the premises by Tsakiris and sale of the goods by Gollant has had the direct effect of preventing Commercial Automatics from conducting its business at the premises, or elsewhere.  
21	While Gollant concede it was on notice of the disputed ownership of the goods insofar as Commercial Automatic’s property is concerned, it says it was not aware Mr Ball owned some of the goods sold at auction.  
22	The proceeding is set down for trial on 10 February 2025.
23	On 16 May 2023, Gollant’s solicitors requested security for its costs, or evidence of Commercial Automatics’ capacity to meet an adverse costs order.
24	On 13 February 2024, Tsakiris’s solicitors wrote to Commercial Automatics, indicating their intention to make an application for security for costs.
Evidence and submissions
25	Tsakiris rely upon the affidavits of Giulio Marra sworn 2 April 2024 and 17 September 2024, with exhibits; and the affidavit of Ms Tsakiris sworn 12 April 2024.
26	Gollant relies upon the affidavit of Alison Mary Elmes, affirmed 6 May 2024, and an affidavit of David Weinberger, sworn 16 August 2024, together with the affidavit of Mr Marra, affirmed 2 April 2024 and filed on behalf of Tsakiris.
27	Commercial Automatics and Mr Soloman rely on the affidavits of Lauren Buckley sworn 26 July 2024; Mr Solomon sworn 15 August 2024 and Abigail Shieh affirmed 9 August 2024.
28	Each party filed written submissions, and made oral submissions at the hearing.  Gollant relied upon the submissions of Tsakiris subject to certain matters which differentiate their position, mainly in respect of the question of delay in issue of its summons.  
Principles
29	The general principles in relation to an application for security for costs are not in dispute.  I respectfully adopt these principles as set out in Livingspring Pty Ltd v Kliger Partners, which considers the position of a company unable to pay costs.  
30	In Trility Pty Ltd v Ancon Drilling Pty Ltd, Croft J confirmed that the discretion to award security for costs is unfettered and to be exercised having regard to all the circumstances of the case.  Factors to be taken into account include: 
(a)	whether the orders sought would frustrate the claim; 
(b)	the merits of the claim; 
(c)	whether the defendant was the cause of the plaintiff’s impecuniosity; 
(d)	whether there was delay on the part of the applicant; 
(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 any such 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)	whether the party against whom the order is sought is, in substance, a plaintiff, rather than a party who is defending itself and thus forced to litigate. 
31	In relation to delay, Newnes JA made the following remarks in Christou v Stanton Partners Australasia Pty Ltd: 
“It is, however, incumbent upon a defendant who wishes to obtain security for its costs to apply promptly for that relief once it is, or ought reasonably be, aware that the plaintiff would be unable to meet an order for costs. Security for costs is not a card that a defendant can keep up its sleeve and play at its convenience. Delay is an important consideration in the determination of an application for security for costs because it is capable of causing prejudice or unfairness to the plaintiff. A plaintiff is entitled to know at the earliest opportunity, before it has committed substantial resources to pursuing the litigation, whether it will be required to provide security. The later an application is made the greater the likelihood that it will cause substantial disruption or distraction in the conduct of the plaintiff’s case, and if the plaintiff is unable to provide security, the greater the costs that will have been wasted. … .”
32	It is not in dispute in this proceeding that the discretion to order security for costs is enlivened under r62.02(1)(b) of the County Court Civil Procedure Rules 2018 (‘Rules’), as Commercial Automatics deposes to having insufficient assets to pay the costs of the defendants if ordered to do so.  Commercial Automatics’ principal place of business was repossessed by Tsakiris in 2021, and since then it has been unable to conduct its business and has not done so.  Its sole director and shareholder, Mr Ball, passed away in 2023.  Its primary asset is the claim in this proceeding.  
33	A similar discretion is enlivened under s1335(1) of the Corporations Act 2001 (Cth) or pursuant to the Court’s inherent jurisdiction.
34	The power being enlivened, the Court must consider whether it should be exercised.  Principal among the discretionary considerations is whether an order for security would work an injustice.
35	The burden rests on Tsakiris, from first to last, to persuade the Court the order for security for costs should be made.
36	Commercial Automatics bears the evidentiary onus of proof in establishing the making of an order will stultify the proceedings; and, further, the conduct of Tsakiris and Gollant has caused their impecuniosity.
37	The claim for conversion assumes particular importance.  At paragraph 87 of Sell Your Gold Pty Ltd v Australian Diamond Trading Corporation Pty Ltd, the Court adopted Allsop P’s description of the “essential elements, or basic features” of conversion in Bunnings Group Limited v CHEP Australia Limited:
“… an intentional act or dealing with goods inconsistent with or repugnant to the rights of the owner, including possession and any right to possession. Such act or dealing will amount to such an infringement of the possessory or proprietary rights of the owner if it is an intended act of dominion or assertion of rights over the goods.”
38	In Bunnings, the Court further stated:
“The tort is one of strict liability and thus a mental element in knowing that a wrong is being committed is not required. Nevertheless, intention is not irrelevant. The act or dealing in question must be intentional; further, the intention must be the exercise of such dominion as is repugnant to the rights of the owner. … ”
39	Conversion does not depend on a demand being made. 
The underlying dispute between Commercial Automatics and Tsakiris
40	In 2020, rent payable under the lease was $52,836.  As at May 2021, Commercial Automatics owed $1,093 in rent.  
41	While Commercial Automatics was locked out of the premises, Tsakiris made an unsubstantiated claim for $41,553.43; in particular a claim for $30,000 for damages to men’s toilets in respect of which Commercial Automatics denied all liability.  It then sought the revised amount of $50,000, including rent and “further amounts as contingencies”, which again was disputed.  Commercial Automatics’ lawyers request in July 2021 for access to the premises to collect its computer and business records was denied, unless it paid Tsakiris the disputed amount of now $59,850.
42	On 19 November 2021, Commercial Automatics’ lawyers wrote to Gollant putting it on notice of the claim in relation to the chattels, and requesting that Gollant terminate the auction immediately.  Gollant did not respond directly; instead, providing the correspondence to Tsakiris’s solicitors, who simply reiterated the unsubstantiated demand for nearly $60,000.
43	In summary, Tsakiris re-entered and took possession of the premises with $1,000 rent owing in June 2021, and less than $8,000 owing in October 2021, in the context of a commercial tenancy of five years’ duration at $53,000 per annum, claiming a further unsubstantiated amount of relating to subsisting disputes between Tsakiris and Commercial Automatics concerning building works.
Consideration 
44	Mr Solomon is a natural person, a party only in his capacity as executor of the estate of Mr Graham Ball, deceased.  Mr Solomon states he would not personally receive the benefit of any award for damages, as he holds the sole share in the company in his capacity as executor of the estate.  Further, that:
“Neither [Commercial Automatics] nor the Estate have the ability to pay security for the defendants costs of the proceeding.  I am not currently willing to personally pay such security.  If this Court were to make an order that the plaintiffs pay security for the defendants costs of the proceeding, I believe this is likely to have the effect that the proceeding would be unable to continue.”
(sic)
45	Mr Solomon has not deposed to his personal financial circumstances; but the assets and liabilities by way of the Inventory of the estate of Mr Ball is in evidence.  It is not in dispute the estate has insufficient assets to discharge any order for security for costs that might be made. 
46	The application, so far as Mr Solomon is concerned, may be disposed of shortly.  I am not minded to grant any security against the estate because the executor, Mr Solomon, is a natural person.  As such, absent some additional factor, no award of security is available pursuant to r62.02 of the Rules.  
47	In the circumstances of this case, it is also not appropriate to exercise the discretion in the inherent jurisdiction of the Court in the absence of exceptional circumstances.  Had Mr Ball been alive, no security would have been ordered against him.  He would have been entitled to bring his claim in relation to goods owned by him.  In my view, there is no reason in principle why this position should change upon his passing.  
48	Executors are not nominal plaintiffs and ought not be required to provide security. 
49	The Court should not order security for costs against the executor by reason of his representative status alone.  Ashley J in Perry v Jackson, confirmed the position that:
“Executors, administrators, trustees having no interest in the subject matter of the trust ... were not required to give security even if impecunious: ...  Such persons, though suing for the benefit of others, were not mere nominal plaintiffs.  They sued in what might be called a representative capacity. … ”
50	The key issue is the prevention of abuse, for example by a person divesting himself of assets; or a nominal plaintiff being a mere shadow.  That is not this case.
51	I reject the submission that, because unknown persons might potentially benefit from the litigation, an order for security is required to protect the defendants from the risk of being unable to recover their costs.  
52	Although the financial position of those who might stand to benefit from the litigation, in at least a corporate context, have been required to disclose their financial situation, no authority was provided in support of the submission that any beneficiaries of the Will ought disclose their financial position.  I reject that submission.
53	The Will is not in evidence.  That beneficiaries, which might include children, grandchildren, friends, nieces, nephews and other family members, ought disclose their financial position and agree to indemnify Tsakiris and Gollant in relation to any costs order, is a step I am unwilling to take in the absence of clear authority.  
54	The relevant person is the legal personal representative of the Estate, who has disclosed the deceased’s assets.  
55	There is no authority in support of Gollant’s submission that Mr Solomon, being a shareholder of Commercial Automatics, in his capacity as executor of the estate, ought bear the risk of adverse costs personally.  
56	The factors set out below in relation to the application for Commercial Automatics to provide security for costs also apply to Mr Solomon.
57	The applications, so far as the second plaintiff is concerned, are dismissed.
58	The claim against Commercial Automatics is also dismissed for the following reasons.
The merits of the claim 
59	The applicants submit that the “real hurdles” faced by the plaintiffs’ claims are a factor in favour of the grant of the applications.  
Conversion
60	Acknowledging the difficulties with any claim for future business losses, having regard to the death of Mr Ball, the claim in conversion appears to be, at least arguable, if not strong.
61	I accept Commercial Automatics’ submission that Gollant was on notice of the disputed ownership before the sale.  Although Gollant proceeded on assurances from Tsakiris, this may not help, because it was on notice of dealing in converted goods.  It chose not to obtain independent legal advice, which might be described as unwise, at the very least.
62	If the claim in conversion is established as against Tsakiris, then those dealing with those goods may also be liable.
Defence to the claims
63	Tsakiris relies heavily on the terms of the lease to justify its sale of the goods, which they say were left “abandoned” on the premises after the end of the lease.  Special Condition 11 of the lease provides:
“All of the Lessee's installations and other Lessee's property which remain on the premises after the end of the lease (‘the Goods’), will, unless the Lessor and Lessee agree otherwise in writing, be deemed abandoned, and the Lessor may elect at its absolute discretion to either:
 (a) 	take the Goods as the property of the Lessor, without need to notify or account to the Lessee; or
 (b) 	remove the Goods and recover the costs of removal and making good as a liquidated debt payable on demand. 
Notwithstanding clause 11 above, any debt owed by the Lessee to the Lessor shall be discharged by the Lessor to the extent of the value of the Goods, or, where the Lessor sells the Goods, to the extent 
of the net proceeds obtained from the sale of the Goods after deducting selling costs. 
The parties intend that clause 11 shall operate in relation to the Goods in place of any legislation that might otherwise apply to goods remaining on the premises.”
64	Commercial Automatics pleads this condition is an unenforceable penalty.  The Court will no doubt consider carefully the circumstances of the sale of the goods; and the issue of an unparticularised and disputed liquidated debt asserted in relation to reinstatement of the premises as a basis for re-entry without a court order.
65	Whether or not special condition 11 of the lease is unenforceable is a matter for the trial.  It is beyond the scope of an interlocutory application to further analyse the issue.  Suffice it to say it is arguable, and the strength of the claim is not a basis to grant the applications for security for costs having regard to the other factors.
66	Any defence under special condition 11 may not apply to the claim made by Mr Ball in his personal capacity for goods owned by him.
67	While the death of Mr Ball may result in difficulties for Commercial Automatics and the estate proving aspects of the dealings between Commercial Automatics and Tsakiris, much of the history is agreed and capable of proof by other means.  Without assessing the actual evidence, I am unable to give any weight to submissions that the prospects of Commercial Automatics are low because of this factor.
68	Gollant, for its part, is not concerned with the primary dispute between Commercial Automatics and Tsakiris in relation to whether it was in breach of the lease and/or damaged property; and/or whether Tsakiris were entitled to re-enter and take possession of the property, and then sell the goods.
69	Gollant conceded it knew the right to title in the goods was disputed in November 2021, although I accept it was not aware of the application for the injunction.
70	Gollant submits that, despite selling the goods, it is not liable because it never took possession of the goods; further that it believed at all relevant times that Tsakiris were entitled to sell the goods.
71	While it may be arguable, I reject the submission at an interlocutory stage that Gollant was never in possession of the goods sold at auction.  Even without physical possession, it was seized of title by virtue of the contractual arrangements between it and Tsakiris, and exercised rights in respect of the relevant property.  
72	The strength of the respective claims will depend on interpretation of all of the lease terms, the broader duties and obligations of landlords and tenants under a retail lease, and various factual matters.  I accept the plaintiffs’ submission that the claim is regular on its face and discloses a cause of action, and the Court should proceed on the basis that their claim is bona fide with reasonable prospects of success.
73	The respective merits of the parties’ claims and defences are not considered at length in the context of an application for security for costs.
Stultification
74	An order for security for costs would frustrate the claim as the company has no ability to pay.  Commercial Automatics’ only shareholder, Mr Solomon, has not adduced evidence as to whether he has the resources, or is willing to bear the risk of adverse-risk consequences.  While this factor tends to support the claim for security, it must be balanced against the other factors, including the strength of the claim.  
75	In my view, Commercial Automatics has a strong claim against Gollant and Tsakiris in conversion in the circumstances of their conduct in auctioning fixtures and chattels, and disposing of other items, as referred to above.  
76	Mr Solomon makes the somewhat equivocal statement he is currently not willing to meet any order for costs.  This nevertheless is the evidence as at the date of the hearing.  To the extent there is a possibility he may, in the future, meet an order for security, does not override the general considerations in terms of the justice of the case.  I do not consider his position as executor to alter this position.
77	In the circumstances of the defendants having sold the assets of the business and excluding it from its premises, I find Commercial Automatics has no ability to pay and an order for security for costs would result in stultification of the proceeding.
What is the cause of the plaintiffs’ impecuniosity
78	I accept the plaintiffs’ submissions that the plaintiffs’ impecuniosity has arisen due to the conduct of Tsakiris and Gollant in:
(a)	locking Commercial Automatics out of the premises, thereby preventing it from trading;
(b)	converting its goods after re-entering the premises;
(c)	putting those assets up for auction online; and 
(d)	continuing that auction after proceedings were commenced.
79	Tsakiris submit that the impecuniosity of Commercial Automatics is not caused by them; rather, by Commercial Automatics’ breach of the lease, and then Tsakiris lawfully exercising special condition 11.  I reject this submission.  
80	On one reasonable view, the evidence before me supports a finding that, owed less than $10,000 for rent, taking possession and selling tools of trade and classic vehicles present on the premises worth up to $1,000,000 without an order of the Court or the Victorian Civil and Administrative Tribunal on the basis of disputed reinstatement costs, is a clear example of conduct of a defendant causing the impecuniosity of a plaintiff, and then seeking to take advantage of that impecuniosity in seeking security for costs.  
81	There is evidence of complaints over a number of years about leaking roofs, resulting in damages to transmission parts at the premises.  This caused part of the financial distress of Commercial Automatics.  There is also evidence Tsakiris locked out Commercial Automatics after arrears in rent were paid.
82	I reject the submission that Gollant did not cause Commercial Automatics’ impecuniosity: it sold the goods on notice of the claim of disputed ownership of the goods against Tsakiris.  In a material sense, Gollant perfected the impecuniosity of the plaintiffs by selling the chattels at auction.
83	Acknowledging the principles in establishing the cause of a plaintiff’s impecuniosity in Andrews v Zuccubarr Pty Ltd, and that it is a difficult matter to prove, I find the plaintiffs have established this factor for the reasons set out above.  
84	Even if I were to accept Gollant’s submissions that the impecuniosity was not caused by it, the other factors and the overall justice of the case resolve in a finding that no security for costs should be ordered in its favour.
Delay
85	This proceeding was issued in November 2021.  Mr Ball passed away in May 2023.
86	Tsakiris’s summons was issued two-and-a-half years after the proceeding was commenced and eleven months after Mr Ball passed away.
87	There is no doubt there has been very significant delay on behalf of Tsakiris.  
88	I accept the period of delay in Gollant raising or requesting security from the plaintiffs on 16 May 2023 was six months after its joinder to the proceeding in 2022.  The amended statement of claim was filed on 11 November 2022.  Its summons was issued eighteen months after joinder.  In context, these are both significant delays.
89	Whether that delay may be explained in part, to my mind, is irrelevant, because the length of the delay has resulted in significant prejudice to the plaintiffs in investing substantial costs in the prosecution of this proceeding.  
90	The company has no assets and its shareholder, the estate, has minimal assets.  It ought to have been apparent to Tsakiris that Commercial Automatics had virtually no ability to meet any order for costs from the outset.  There is one ordinary share in Commercial Automatics, valued at $1, and its only asset is an amount to be quantified, being damages in this proceeding.  
91	Mr Ball, upon being locked out of his business and his assets auctioned for less than market value, likewise probably had no or little ability to pay.  Upon his passing and the grant of probate, there is no dispute the available funds of the estate would be applied to its administration, including legal fees in prosecution of this claim.
92	I reject Tsakiris’s submission they were not in a position to bring any application until they received the inventory of assets and liabilities of Mr Ball’s estate in December 2023.  This is not an adequate explanation for the delay, and in any event, only responds to the position of the estate, rather than Commercial Automatics.  Mr Ball’s passing is irrelevant to the circumstance of impecuniosity of Commercial Automatics.
93	I reject the submission that, in real terms, there was no delay.
Prejudice
94	The plaintiffs have incurred substantial costs in this proceeding, which would potentially be wasted if the proceedings are stultified by an order for security for costs.
95	The plaintiffs’ ability to defend the present applications seeking security for costs have also been diminished by Mr Ball’s passing eighteen months after it was commenced.  Had the applications for security for costs been brought in a timely fashion, and prior to the death of Mr Ball, affidavit evidence could have been obtained from him in his personal capacity and in his capacity as the sole director and shareholder of Commercial Automatics.  Such evidence is likely to have assisted the plaintiffs, in defending these applications.
96	There is no adequate explanation for the delay, which has caused irremediable prejudice, including incurring considerable costs in the litigation since its inception in 2021.  
97	I accept the question of prejudice applies less in relation to Gollant, as a request for security was made shortly before Mr Ball’s death.
Defensive nature of claim
98	I accept the plaintiffs’ submission they had no practical alternative but to commence proceedings to preserve their rights arising from the sale of goods at auction by the defendants, and disposal of other valuable items by Tsakiris.  In the ordinary course, Tsakiris would have commenced proceedings to prove their entitlement to possession on the basis of arrears in rent, and outgoings and other matters, and in those circumstances, Commercial Automatics would have been the defendant to the proceeding.
99	I accept Tsakiris’s submission that, although initially the proceeding was defensive in nature, once the goods were sold by Gollant, at least in part the claim relates to damages.  
100	It is appropriate to consider the underlying substance of the dispute, and whether Tsakiris ought be permitted to take advantage of their own conduct in considering this factor: on one view, it is the actions of the defendants in converting and then selling the goods after the issue of proceedings which have turned a defensive proceeding into one for damages.  
101	In my view, this factor is neutral in the applications.
Other factors
102	In terms of Mr Ball’s estate, Tsakiris accept that out of the net assets of the estate, the executor will be required to administer the estate and pay its solicitors for the conduct of these proceedings.
103	A corporate plaintiff’s impecuniosity may be both a threshold condition and also a significant factor in the exercise of the discretion.  As Commercial Automatics’ impecuniosity is a result of the defendants’ conduct, however, this is not a substantial factor to be weighed in favour of the Court’s discretion.  
104	Courts will not usually order security where a case for security is made out only against one, or some, of multiple plaintiffs.  If the Court would not order security for costs against one plaintiff, it is an important consideration for not ordering security for costs against any plaintiff.
105	In my view, it would be inappropriate for this Court to order security against Commercial Automatics, but not the second plaintiff.  While the principle that, unless there is ground for making an order for security against all plaintiffs it cannot be made against any, is no longer an absolute rule, it remains a significant consideration. 
106	Even though Gollant was not informed prior to the auction that Mr Ball owned various goods at the premises, the submission falls on barren ground, as no security for costs will be ordered against Mr Ball, or his executor, for the reasons set out above.
107	There is no evidence of any persons standing behind the company who are likely to benefit from litigation and who are willing to provide necessary security, and no undertaking has been offered by Mr Solomon.  Although this factor tends towards making an order, the other factors in the balancing exercise and the justice of the case resolve in a conclusion that the applications for security of costs are refused.
108	Tsakiris also have a counterclaim against the plaintiffs, so it is inappropriate to order security for costs in those circumstances.  An undertaking that they will not prosecute that counterclaim was only proffered at the hearing of the application for security for costs.
109	The amount owing to Tsakiris for rent (less than $6,000) and outgoings (less than $3,000) at October 2021 is relatively low, having regard to the consequences of the action, on notice of this proceeding, to exercise a remedy without a court order, lock the tenant out of the premises and dispose of all its property, which has prevented it from operating its business.  Commercial Automatics had no access to their stock in trade, business records and computers to generate income at an alternative premises; or personal cars and other items owned by Mr Ball, which might have been otherwise available to realise for the purposes of the business.  This is a factor in the exercise of my discretion to refuse the application for security for costs.
110	When balancing the factors set out above, the overall justice of the case is against exercise of the discretion.  While neither plaintiff has the capacity to meet an order for costs, such an order would likely stultify the proceeding in circumstances where the defendants’ conduct has caused the plaintiffs’ impecuniosity. The delay in bringing the applications is also a significant factor against the exercise of the discretion.
Conclusion
111	The applications for security for costs by summons filed 24 April 2024 and 6 May 2024 are dismissed.
112	I will hear the parties as to the form of final orders, and in relation to costs.
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