Against non-party (2)

Petromec Inc v Petroleo Brasileiro SA Petrobras CA SJ 28 July

Actual funding by a third party is not a jurisdictional prerequisite to the exercise of the court’s discretion under s51 of the Supreme Court Act 1981. If the evidence is that a person, whether a director or shareholder or controller of a relevant company, had effectively controlled the proceedings and sought to derive potential benefit from them, that would be enough to establish the jurisdiction. Whether the jurisdiction should be exercised is another matter, and the extent to which a person has, in fact, funded any proceedings might be very relevant to the exercise of discretion. In any event, the appellant had funded the proceedings throughout. The ability to obtain an order for security for costs and the existence of any security put up as a result of such an order were matters that a judge had to take into consideration and the judge had had those factors clearly in mind in this case. The fact that in the course of the proceedings, a judge had ordered security that, in the event, had turned out to be inadequate was not any reason for declining to exercise jurisdiction in an otherwise appropriate case. This was not a case of a liquidator or director bringing proceedings for the benefit of the company. Accordingly, the judge had been right to join the appellant to the proceedings and make him jointly and severally liable for the costs of the successful defendants because he had controlled the proceedings, funded them, and would have benefited from them if they had been successful.