CHAN v KAI DESIGN & CONSTRUCTION PTY LTD
[2014] ACTSC 86 (5 May 2014)
PROCEDURE – costs – security for costs – where the plaintiffs applied for security for costs as the respondents in an arbitration under the Commercial Arbitration Act 1986 – the Court has power under s 47 of the Commercial Arbitration Act 1986 to grant security for costs in arbitrations – whether the defendant who was the applicant in the arbitrations was an impecunious corporation – application for security for costs granted.
Arbitration Act 1902 (NSW)
Commercial Arbitration Act 1984 (NSW) s 47
Commercial Arbitration Act 1986 (ACT) s 47
Corporations Act 2001 (Cth) s 1335
Court Procedure Rules 2006 (ACT) s 1900, 1902
Chan v Wood [2013] ACTSC 228
Cleary Bros (Parramatta) Pty Limited v Commonwealth Bank of Australia (No 3) (2011) ACTSC 139
FPM Construction Pty Limited v ABB Service v Pyrmont Light Rail [2006] NSWSC 187
Holman v Dynabuild Pty Ltd (1975) 2 NSWLR 334
Imperial Leatherware Co Pty Ltd v Macri & Marcellino Pty Ltd (1991) 22 NSWLR 653
Johnson v Macri & Marcellino Pty Limited (unreported, Supreme Court of New South Wales, 8 June 1990, Cole J)
Mowbray College v Exhib Design & Construction Pty Ltd (in liq) (1986) 5 ACLC 478
Nasic v Dimovski [1988] VR 94
Wollongong City Council (2004) NSWCA 418
EX TEMPORE
SC 101 of 2014
Judge: Master Mossop
Supreme Court of the ACT
Date: 5 May 2014
IN THE SUPREME COURT OF THE )
) No. SC 101 of 2014
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN:LING CHAN
First Plaintiff
WAI MAN MI
Second Plaintiff
AND:KAI DESIGN AND CONSTRUCTION PTY LTD
Defendant
ORDER
Judge: Master Mossop
Date: 5 May 2014
Place: Canberra
THE COURT ORDERS THAT:
Within 21 days, the defendant is to provide security for costs in the sum of $80,000.
The security shall be provided by payment into a joint account in the name of the plaintiffs’ and defendant’s solicitors or by unconditional bank guarantee payable on demand made by the plaintiffs’ solicitors or in a form agreed to by the plaintiffs within seven days of the date of this order.
The application in proceedings dated 31 March 2014 is dismissed.
The defendant pay the plaintiffs’ costs of the originating application dated 13 March 2014 except that there be no order as to costs of the application in proceedings dated 31 March 2014.
If the security required by order 1 is not provided, the arbitration proceedings IAMA 5073 and 5074 are stayed until that security is provided.
Introduction
This is an unfortunate case in that it involves two arbitrations relating to construction contracts for two single residential dwellings. A different aspect of the case has previously been subject of a decision of this Court: see Chan v Wood [2013] ACTSC 228. While the amount at stake in the arbitration proceedings is significant for the parties and significant in terms of the quantum of the original building contracts, the amount at stake are not such…
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- AGLC
- Chan v Kai Design & Construction Pty Ltd [2014] ACTSC 86
- Case
- [2014] ACTSC 86
- Decision Date
CaseChat Overview and Summary
The court considered the statutory provisions of the Commercial Arbitration Act 1986, which provides for the grant of security for costs in arbitrations. The court found that the defendants were not an impecunious corporation, and therefore, the plaintiffs were entitled to security for costs. The court considered the financial position of the defendants and found that they had sufficient assets to meet the security for costs. The court also considered the public interest in the enforcement of security for costs provisions in arbitration proceedings.
The court granted the plaintiffs' application for security for costs in the sum of $80,000. The security was to be provided by payment into a joint account in the name of the plaintiffs' and defendants' solicitors or by unconditional bank guarantee payable on demand made by the plaintiffs' solicitors or in a form agreed to by the plaintiffs within seven days of the date of the order. The application in proceedings dated 31 March 2014 was dismissed. The defendants were ordered to pay the plaintiffs' costs of the originating application dated 13 March 2014 except that there be no order as to costs of the application in proceedings dated 31 March 2014. If the security required by order 1 was not provided, the arbitration proceedings IAMA 5073 and 5074 were to be stayed until that security was provided.
Orders
Orders of the court
1. Within 21 days, the defendant is to provide security for costs in the sum of $80,000.
2. The security shall be provided by payment into a joint account in the name of the plaintiffs’ and defendant’s solicitors or by unconditional bank guarantee payable on demand made by the plaintiffs’ solicitors or in a form agreed to by the plaintiffs within seven days of the date of this order.
3. The application in proceedings dated 31 March 2014 is dismissed.
4. The defendant pay the plaintiffs’ costs of the originating application dated 13 March 2014 except that there be no order as to costs of the application in proceedings dated 31 March 2014.
5. If the security required by order 1 is not provided, the arbitration proceedings IAMA 5073 and 5074 are stayed until that security is provided.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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