Locke case still stuck on costs

Mr Maconochie took on the National Australia Bank but was virtually knocked out because of a crippling security for costs order which soaked up all his fighting funds.

In Mr Locke's case, the costs order is being sought by Macquarie Corporate Finance Ltd.

Mr Locke, through his company Agricultural Equity Investments (AEI), brought an investment project idea to MCF late in 1996.

He claims MCF failed to finance or progress the project but a system very much like his subsequently went ahead on another site involving MCF and another client, Ravensworth Feed Lot.

Since launching a suit seeking $19 million for alleged breach of confidence and lost opportunity as a result of the non-implementation of the AEI/MCF deal, Mr Locke has been to the Supreme Court 35 times for directions and other interlocutory hearings. He claims these hearings have already cost him well over $100,000.

Several actions have related to MCF seeking security for its defence costs.

Mr Locke has already paid MCF $80,000 in costs security. Now MCF wants a further $270,000, and having failed to get it on two separate occasions before a registrar and deputy registrar, yesterday took the matter before Master John McLoughlin for hearing.

MCF counsel Simon Gregory told the NSW Supreme Court that MCF estimates its defence will cost $350,000 and wants cover in case AEI loses the action and cannot pay.

At the heart of the suit is whether MCF used information given to it by Mr Locke for another project and whether Mr Locke suffered loss because the deal he brought to MCF did not go ahead. MCF denies it misused Mr Locke's ideas and argues he has no case and no possibility of succeeding.

Yesterday, an affidavit read in court detailed a series of emails between four senior employees of MCF in relation to Project Harvest which Mr Locke claims is the code name given to a project that was effectively his.

The emails were exchanged in July and August 1996, around the time of Mr Locke's discussions with MCF. One email identifies potential investors in Project Harvest.

The minimum investment was $500,000, and the projected internal rate of return was 29 per cent after tax, assuming 60 per cent of the investment was geared.

The emails were exchanged between MCF's Peter Annand, Robert Dunlop, Nick Moore and John Caldon. In one email, Mr Dunlop says to Mr Annand: ``... I did an audit of the Harvest model over the weekend as I tried to turn it into a Ravensworth model."

Yesterday Mr Locke's accountant, Mark Edwards, gave evidence of AEI's financial state. His evidence continues today.