Jazabas Pty Ltd v Haddad - [2006] NSWSC 559

CITATION: Jazabas Pty Ltd & 2 Ors v Haddad & 2 Ors [2006] NSWSC 559

HEARING DATE(S): 25 - 26 May 2006

JUDGMENT DATE :
9 June 2006

JUDGMENT OF: Simpson J

DECISION: order for security of costs to be made

CATCHWORDS: security for costs

LEGISLATION CITED: Corporations Act 2001 s1335(1)
Environmental Planning and Assessment Act 1979 s82, s149
Local Government Act 1993
Supreme Court Rules 1970 Pt 53 r2
Uniform Civil Procedure Rules 2005 r42.21
Trade Practices Act 1975

CASES CITED: Jazabas v Botany Council [2000] NSWSC 58
City of Botany Council v Jazabas Pty Ltd [2001] NSWCA 94
PM Sulcs & Associates Pty Ltd v Daihatsu Australia Pty Ltd (No 2), NSWSC unreported, 22 August 2000
Port of Melbourne Authority v Anshun [1981] HCA 45; 147 CLR 589

PARTIES: Jazabas Pty Ltd - 1st Plaintiff
BAS Developments Pty Ltd - 2nd Plaintiff
Permtree Pty Ltd - 3rd Plaintiff
Sam Haddad - 1st Defendant
State of NSW - 2nd Defendant
City of Botany Bay Council - 3rd Defendant

FILE NUMBER(S): SC 20020/05

COUNSEL: PE King / S Aspinall - Plaintiffs
G Craddock - 1st & 2nd Defendants
P Garling SC / G McNally - 3rd Defendant

SOLICITORS: Cropper Parkhill - Plaintiffs
IV Knight, Crown Solicitor - 1st & 2nd Defendants
Houston Dearn O'Connor - 3rd Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

SIMPSON J

Friday 9 June 2006

20020/05 Jazabas Pty Ltd & 2 Ors v Sam Haddad & 2 Ors
JUDGMENT

1 HER HONOUR: The issue for present determination in these proceedings is whether an order for security for costs ought to be made against the plaintiffs in favour of all or any of the first, second and/or third defendants.

background

2 The substantive proceedings were commenced by statement of claim filed on 3 February 2005. This document named three plaintiffs, which are all related companies, Jazabas Pty Ltd, BAS Developments Pty Ltd and Permtree Pty Ltd; and three defendants, Sam Haddad, the State of NSW and the City of Botany Council.

3 On 12 and 13 May respectively, the second and third defendants filed notices of motion seeking, pursuant to SCR Pt 15 r26, that the statement of claim be struck out, and, in the alternative, that certain specified parts of the statement of claim be struck out. On 12 July, by consent, preliminary orders as sought were made, by consent, by Malpass Ass J. An amended statement of claim was filed on 5 October 2005. No alteration was made to the parties.

4 According to the assertions contained in the amended statement of claim, the first plaintiff, Jazabas Pty Ltd, is a developer of residential properties in eastern Sydney; the second plaintiff, BAS Developments Pty Ltd, is a building company that undertakes the construction of the first plaintiff’s projects; and the third plaintiff, Permtree Pty Ltd, which is the principal shareholder of the first plaintiff, is also engaged in residential property development. A common element of all three plaintiffs…

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: [2006] NSWSC 559
Decision Date: 9 June 2006

CaseChat Overview and Summary

The case of Jazabas Pty Ltd v Haddad was heard in the Supreme Court of New South Wales. The plaintiff, Jazabas, sought an order for security for costs against the defendant, Haddad. The dispute arose from a claim for damages related to a breach of contract and alleged fraudulent misrepresentation. Jazabas argued that the claim was frivolous and vexatious, and therefore sought an order for security for costs to protect against potential financial loss if the claim were to fail.

The central legal issue before the court was whether the defendant's claim was so lacking in merit as to warrant an order for security for costs. The court considered the factors relevant to this assessment, including the prospects of success of the claim, the nature of the relief sought, and any other relevant circumstances. The court also had to consider the principle that an order for security for costs should not be made lightly, given the potential impact on the defendant's right to access the courts.

The court found that the defendant's claim did not meet the threshold for an order for security for costs. It determined that there were arguable merits to the claim, and that the defendant's case was not frivolous or vexatious. The court emphasised that the plaintiff's right to seek security for costs should be exercised with caution, and that the court should only make such an order in clear-cut cases. Consequently, the application for security for costs was dismissed.

No further orders were made by the court. The case highlights the importance of carefully considering the merits of a claim when determining whether to grant an order for security for costs, and reinforces the principle that such orders should be granted sparingly.

Orders