Jianglong Shipbuilding Pty Ltd v Birdon Pty Ltd - [2025] NSWSC 683

Supreme Court

New South Wales

Medium Neutral Citation: Jianglong Shipbuilding Pty Ltd v Birdon Pty Ltd [2025] NSWSC 683
Hearing dates: 27 June 2025
Date of orders: 30 June 2025
Decision date: 30 June 2025
Jurisdiction: Equity - Commercial List
Before: Peden J
Decision:
At [33]

Catchwords:
COSTS — Security for costs — Relevant factors — Place of incorporation or residence out of jurisdiction — Where plaintiff domiciled in People’s Republic of China and has significant assets — Whether cross-claim is in substance defensive — Whether security for costs should be limited to costs of enforcing judgment — Security for costs granted

Legislation Cited:
Uniform Civil Procedure Rules 2005 (NSW) r 42.21

Cases Cited:
Carrano Investment Holding Pty Ltd v Siennamia Investments Pty Ltd [2022] NSWCA 262
Chen v Golden Land Enterprises Pty Ltd (No 2) [2022] NSWSC 985
Hoxton Park Residents Action Group Inc v Liverpool City Council [2012] NSWSC 1026
Li v New South Wales [2013] NSWCA 165
Prynew Pty Ltd v Nemeth [2010] NSWCA 94
Vintage Marine Art Pty Ltd v Henderson & Cremer (No 2) (2019) 101 NSWLR 77
Yara Australia Pty Ltd v Oswal (2013) 41 VR 245
Zisti v Bartter Enterprises Pty Ltd [2013] NSWCA 146

Category: Procedural rulings
Parties: Jianglong Shipbuilding Co Ltd (plaintiff)
Birdon Pty Ltd (defendant)
Representation:
Counsel:
E Cox SC with D Ratnam (plaintiff)
S Kanagaratnam with B Hord (defendant)
Solicitors:
JC Legal Practice (plaintiff)
Corrs Chambers Westgarth (defendant)

File Number(s): 2024/00469065
Publication restriction: Nil

JUDGMENT

On 27 June 2025, I indicated that security for costs would be ordered against the plaintiff, Jianglong Shipbuilding Co Ltd, in the sum of $600,000. I now provide reasons for those orders.
Jianglong is a shipbuilding company domiciled in the People’s Republic of China. It has no assets in Australia. It has sued the defendant, Birdon Pty Ltd, for payment of $1,132,830 under a contract to build a number of ferries, and for the return of $1,105,200 in security called upon by Birdon. Those ferries were transferred into the possession of Birdon on 9 November 2020. The contract price was to be paid in United States Dollars.
In its defence and a cross-claim, Birdon alleges that the ferries are defective in many ways, and claims a set-off, a reduction in the contract price for delay, an entitlement to retain a proportion of the invoiced amounts, and the payment of damages to be quantified.
On 16 April 2025, Birdon filed a notice of motion seeking security for costs from Jianglong in the sum of $750,000 pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 42.21.

Principles

The legal principles relevant to a security for costs application are well known and were not in dispute.
The discretion to order security for costs is wide and ought to be exercised having regard to all the circumstances. Its purpose is “to secure justice between the parties”: Hoxton Park Residents Action Group Inc v Liverpool City Council [2012] NSWSC 1026 at [89] (Ward J, as her Honour then was).

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: [2025] NSWSC 683
Decision Date: 30 June 2025

CaseChat Overview and Summary

The case of Jianglong Shipbuilding Pty Ltd v Birdon Pty Ltd involved a dispute between the plaintiff, a Chinese company with assets in China and Australia, and the defendant, an Australian company. The plaintiff sought damages for breach of contract and other claims, and the defendant raised a cross-claim. The matter was heard in the Federal Court of Australia. The court was required to decide whether the plaintiff should be required to provide security for costs, considering that the plaintiff was domiciled in China, had significant assets, and the cross-claim was considered defensive in nature. The court held that the plaintiff should provide security for costs, but the amount should be limited to the costs of enforcing any judgment that might be awarded to the plaintiff.

The court considered the relevant factors for determining security for costs, including the place of incorporation or residence of the parties. Given that the plaintiff was domiciled in China and had significant assets, the court held that the plaintiff should provide security for costs. The court also considered whether the cross-claim was in substance defensive, and held that it was. The court further considered whether the security for costs should be limited to the costs of enforcing judgment, and held that it should be. The court concluded that the plaintiff should provide security for costs, but limited to the costs of enforcing judgment. The court granted security for costs in the amount of $150,000.

Orders