Douglas Edward Thomas Trading as Douglas E Thomas Plumbing v Williams

[2009] NSWDC 354

CITATION:	Douglas Edward Thomas Trading As Douglas E Thomas Plumbing v Williams [2009] NSWDC 354
HEARING DATE(S):	20 August 2009
EX TEMPORE JUDGMENT DATE:	20 August 2009
JURISDICTION:	District Court - Civil
JUDGMENT OF:	Sidis DCJ
DECISION:	1. On the Motion filed on behalf of the defendant on 24 July 2009 the Application is dismissed. 2. The defendant is to pay the plaintiff’s costs of the motion. 3. The affidavit evidence is returned. 4. I make orders in accordance with the Short Minutes signed and dated 20 August 2009 noting that the matter is listed for directions on 5 November 2009.
CATCHWORDS:	BUILDING AND CONSTRUCTION - Stay of proceedings pending payment of judgement secured under Security of Payment legislation - Security for costs of recovery action
LEGISLATION CITED:	Building & Construction Industry (Security of Payment) Act 1999 District Court Act 1973 Uniform Civil Procedure Rules 2005
CASES CITED:	Phillips Electronics Australia Pty Limited v Matthews 2002 NSW CA 157
PARTIES:	Douglas Edward Thomas Trading As Douglas E Thomas Plumbing (Plaintiff) Anthony John Williams (First Defendant) Linda Suzanne Williams (Second Defendant)
FILE NUMBER(S):	160/08
COUNSEL:	F Hicks (For the Plaintiff) F Kalyk (For the First and Second Defendants)
SOLICITORS:	J M Glass & Son (For the Plaintiff) Moray & Agnew Solicitors (For the First and Second Defendants)

JUDGMENT

1 The defendants are earth moving contractors who entered into a contract to perform road works for the plaintiff at Port Macquarie. A payment claim was served upon the plaintiff pursuant to the Building and Construction Industry (Security of Payment) Act 1999. The claim was inappropriately responded to by the plaintiff and the defendants obtained judgment in the Port Macquarie proceedings in April 2007. The amount claimed was $160,700, plus costs and interest.

2 The plaintiff made application to pay by instalments and his application was acceded to by his Honour Judge Johnstone in February 2008. The instalment process, if complied with, would have resulted in the judgment being met by March 2010.

3 The plaintiff in his affidavit evidence stated that to 17 August 2009 he had paid $179,675.59. He has not fully complied with the instalment regime and at the date of hearing of this application he remained in default of Judge Johnstone’s orders.

4 The defendants seek a number of orders. They ask that the plaintiff pay the balance of the judgment entered against him in the Port Macquarie proceedings, the sum claimed being $46,606.10 plus interest and they ask that he provide security for costs of the proceedings before this court in the sum of $50,000. Their application is that these orders be complied with on or before 5pm on 31 August 2009.

5 The defendants seek a stay of the current proceedings pursuant to s 156 of the District Court Act pending compliance with those orders. They seek liberty to apply for a permanent stay in the event that the orders are not complied with.

6 The application for a stay and security was based upon the obvious difficulty that the plaintiff is having in meeting his financial obligations under the instalment regime and the obvious inference that arises that he will not be in a position to meet orders for costs if the proceedings before this court are unsuccessful. Those proceedings deal with the plaintiff’s claim to recover monies paid to the defendants under the judgment they secured under the Act.

7 My attention was drawn to a number of authorities that deal with the principles to be adopted in determining the application and the source of my power to grant the relief sought.

8 As to the power, it was conceded that an order for security for costs could not be secured through rule 42.21 of the Uniform Civil Procedure Rules because the plaintiff is an actual person, unless there are exceptional circumstances.

9 The defendants relied upon s 156 of the District Court Act that provides the court with a general power to stay proceedings on terms.

10 In Phillips Electronics Australia Pty Limited v Matthews 2002 NSW CA 157, the Court of Appeal decided that s 156 can be called into effect to order a stay pending the provision of security for costs, notwithstanding that the order is made against an actual person. It is apparent, therefore, that the court has the power to grant the relief sought. The question becomes one of whether that power should be exercised.

11 The defendants argued that I should do so to protect the processes of the court because, firstly, the plaintiff was in breach of Judge Johnstone’s orders concerning payment by instalments and, secondly, the plaintiff was using the current proceedings to avoid the obligations imposed on him by the Act to transfer the parcel of money in dispute under the contract to the defendants.

12 I understand these arguments but I consider that there were a number of reasons why I should not grant the relief sought. Those are as follows:

(1) The plaintiff is in his current financial position as a consequence of a dispute over his liability to pay the sums claimed by the defendants and the obligations imposed by the Act that the money be paid, although the dispute is not resolved.

(2) I appreciate that this approach could encourage others to withhold payment pending the outcome of litigation but I take the view that each case must be dealt with on its own merits.

(3) In this case the merits were:
(a) the plaintiff has paid a considerable sum towards the judgment ordered against him;
(b) the payments made have put him in a position where he is financially constrained and limited in his capacity to earn and his failure to comply with the instalment orders is not the result of a deliberate flouting or attempt to avoid those orders;
(c) it was not suggested that his claim in this court was without merit;
(d) the proceedings in this court commenced a year ago, in those proceedings the plaintiff has filed and served extensive material in support of his claim;
(e) an order for a stay pending payment of the balance of the judgment sum would merely delay the proceedings in this court and would not resolve them;
(f) an order for provision of security for costs would potentially deprive the plaintiff of the right remaining to him under s 32 of the Act to pursue such claims as he has against the defendants under the contract.

13 I do not say that there will never be a circumstance when the exercise of the power under s156 should not be implemented. However, in this case the plaintiff presented as a person making genuine efforts to meet the judgment and to progress the proceedings in this court.

14 In those circumstances, the application must fail.

15 The orders that I make in this matter are as follows:

1. On the motion filed on behalf of the defendants on 24 July 2009, the application is dismissed. The defendants are to pay the plaintiff’s costs of the motion. The affidavit evidence is returned.

2. On the proceedings generally, I make orders in accordance with the short minutes signed and dated 20 August.

3. The affidavit evidence is returned.

4. I make orders in accordance with the Short Minutes signed and dated 20 August 2009 noting that the matter is listed for directions on 5 November 2009.

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