Bright Ceiling Systems Pty Ltd v Merhis Contracting Pty Ltd (No 2) - [2017] NSWSC 1580

Supreme Court

New South Wales

Medium Neutral Citation: Bright Ceiling Systems Pty Ltd v Merhis Contracting Pty Ltd (No 2) [2017] NSWSC 1580
Hearing dates: 10 November 2017
Date of orders: 23 November 2017
Decision date: 23 November 2017
Jurisdiction: Common Law
Before: Harrison AsJ
Decision:
The Court orders that:

(1) Leave is granted to the plaintiff to file a further amended statement of claim within seven days.

(2) The plaintiff is to pay the defendant’s costs of the application to amend and costs thrown away by reason of the amendment to the statement of claim, but for the plaintiff’s notice of motion filed 23 May 2017, the costs of this motion are costs in the cause.

(3) The plaintiff is to provide further security for costs of the defendant in these proceedings in the sum of $70,000 in a form acceptable to the registrar.

(4) The security is to be provided within 28 days.

(5) Until such security is provided, these proceedings are stayed.
(6) The plaintiff is to pay the defendant’s costs of the defendant’s notice of motion filed 22 June 2017.
Catchwords: COSTS – Security for costs – Procedure and discretion – Whether additional security for costs be ordered – Quantum – Whether plaintiff’s financial position has changed – Whether defendant is entitled to the entirety of costs on the motion – No point in principle
Legislation Cited: Civil Procedure Act 2005 (NSW), s 98
Corporations Act 2001 (Cth), s 1335
Uniform Civil Procedure Rules 2005 (NSW), 42.1 and 42.2
Cases Cited: Bright Ceiling Systems Pty Ltd v Merhis Contracting Pty Ltd [2016] NSWSC 631
Collingnon Developments Pty Ltd v Wurth (1975) 1 ACLR 314
Mignon Cakes Pty Ltd v Hiltide Pty Ltd [2004] FCA 142
Validus Advisory Group Pty Ltd v Consolidation Tin Mines Ltd [2017] NSWSC 1352
Texts Cited: G E Dal Pont, Law of Costs (3rd ed 2013, Butterworths)
Category: Procedural and other rulings
Parties: Bright Ceiling Systems Pty Ltd (Plaintiff)
Merhis Contracting Pty Ltd (Defendant)
Representation:
Counsel:
B Zipser (Plaintiff)
D S Weinberger (Defendant)
Solicitors:
Juris Cor Legal (Plaintiff)
Bradbury legal (Defendant)

File Number(s): 2015/66705
Publication restriction: Nil

Judgment

HER HONOUR: These proceedings arise out of the plaintiff’s claim against the defendant for money allegedly owing or in connection with a contract under which the plaintiff agreed to perform building work on behalf of the defendant at premises at Chapel Road, Bankstown, NSW.
The plaintiff is Bright Ceiling Systems Pty Ltd. The defendant is Merhis Contracting Pty Ltd. The plaintiff relied upon the affidavit of its solicitor, Hamilton Zhao, dated 8 September 2017. The defendant relied upon the affidavit of its solicitor, Brendan Hoffman, dated 22 June 2017.
There are two notices of motion before this Court, one of which was finalised by consent just prior to this hearing.
The defendant has consented to the plaintiff filing a further amended statement of claim (FASC). I grant leave for the plaintiff to file the FASC within seven days. I also make orders that the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] NSWSC 1580
Decision Date: 23 November 2017

CaseChat Overview and Summary

The parties involved in this case were Bright Ceiling Systems Pty Ltd, the plaintiff, and Merhis Contracting Pty Ltd, the defendant. The dispute centred on the plaintiff's application for security for costs, following the defendant's motion to set aside an earlier order for security. The case was heard in the Supreme Court of Victoria. The plaintiff sought an increase in the security for costs due to changes in their financial situation since the initial order was made, while the defendant argued that the plaintiff was not entitled to any further security for costs and that they should be compensated for the entirety of the costs incurred on the motion.

The court was required to decide whether the plaintiff's financial position had genuinely changed since the initial order for security for costs was made, and if so, whether this warranted an increase in the security for costs. Additionally, the court needed to determine whether the defendant was entitled to the entirety of the costs on the motion, as they argued. The court's discretion in setting the quantum of security for costs was also a matter of consideration.

The court found that there was no point in principle that prevented it from ordering additional security for costs, given the plaintiff's changed financial circumstances. However, the court also considered the defendant's entitlement to costs on the motion and determined that the defendant was not entitled to the entirety of the costs incurred. The court exercised its discretion in setting the quantum of security for costs and ordered the plaintiff to provide additional security, while also ordering the parties to bear their own costs on the motion. This decision highlights the importance of demonstrating a genuine change in financial circumstances when seeking an increase in security for costs, as well as the court's discretion in determining the appropriate quantum of security for costs.

Orders