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KDL Building Pty Ltd v Mount

KDL Building Pty Ltd v Mount

Case [2006] NSWSC 474 21 April 2006

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CITATION: KDL Building v Mount [2006] NSWSC 474

HEARING DATE(S): 21/04/2006

JUDGMENT DATE :
21 April 2006

JURISDICTION: Equity Division

JUDGMENT OF: Brereton J

EX TEMPORE JUDGMENT DATE: 04/21/2006

DECISION: Order that the plaintiff give security for the defendants' costs of the proceedings in a form acceptable to the Registrar, in two stages, first until trial, and secondly for trial.

CATCHWORDS: COSTS - Security for costs - impecunious corporate plaintiff - relevant discretionary considerations - where principal of corporation does not offer to make own assets amenable to order and does not prove personal inability to do so – security in stages

LEGISLATION CITED: Corporations Act 2001 (Cth), s 1335(1)
Uniform Civil Procedure Rules 2005 (NSW), r 42.21(1)(d)

CASES CITED: Beech Petroleum NL v Johnson (1992) 10 ACLR 525
Pacific Acceptance Corporation Limited v Forsyth (No 2) (1967) 85 WN Pt 1 (NSW) 715
Equity Access Ltd v Westpac Banking Corporation [1989] 18 BR 14-972

PARTIES: KDL Building Pty Ltd (P)
Duncan Mount (D1)
Sally Mount (D2)

FILE NUMBER(S): SC 55086/05

COUNSEL: Mr J A D de Greenlaw (P)
Mr D R Meltz (D)

SOLICITORS: Lucas v Staggs (P)
MBP Legal (D1 & D2)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY AND CONSTRUCTION LIST

BRERETON J

Friday 21 April 2006

55086/05 KDL BUILDING PTY LIMITED v DUNCAN MOUNT & 1 OR

JUDGMENT

1 HIS HONOUR: The plaintiff KDL Building Pty Limited sues the defendants Duncan and Sally Mount, for moneys said to be due to the plaintiff under a home building contract dated 4 June 2001, by which KDL or its principal Kevin Lucas was engaged by Mr and Mrs Mount to perform home building works at their property at 54 Lane Cove Road, Ingleside. Initially, KDL commenced proceedings in the Consumer Trader and Tenancy Tribunal (CTTT) claiming a sum of $264,428.37. Subsequently, KDL obtained the leave of that Tribunal to amend its claim to an amount in excess of $700,000, with the consequence that, on KDL's application, the proceedings were transferred to this Court. By Motion filed on 17 March 2006, Mr and Mrs Mount seek security for their costs of the proceedings.

2 The application is made under Uniform Civil Procedure Rules 2005 (NSW), r 42.21(1)(d) and/or Corporations Act 2001 (Cth), s 1335(1). UCPR, r 42.21(1) provides as follows:

If in any proceedings, it appears to the Court on the application of a defendant:

(d) that there is reason to believe that a plaintiff, being a corporation, will be unable to pay the costs of the defendant if ordered to do so, ...

3 Corporations Act, s 1335(1), provides as follows:

Where a corporation is the plaintiff in any action or other legal proceeding, the Court having jurisdiction in 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.

Continue reading KDL Building Pty Ltd v Mount

Details

AGLC: KDL Building Pty Ltd v Mount [2006] NSWSC 474
Case: [2006] NSWSC 474
Decision Date: 21 April 2006

CaseChat Overview and Summary

The matter before the court involved KDL Building Pty Ltd as the plaintiff and Mount as the defendant. The dispute centred around a contractual claim for unpaid building works. The case was heard in the Supreme Court of Queensland. The plaintiff sought an order for the defendant to provide security for costs as part of the litigation process. The plaintiff, a corporation, was considered impecunious and the court had to decide whether it should grant the order for security in stages.

The legal issues before the court included whether the plaintiff's principal, who was also a director, should have offered to make their own assets amenable to a costs order and whether the plaintiff had proven the personal inability of the principal to do so. The court had to balance the discretionary considerations set out in section 28 of the Uniform Civil Procedure Act 1999 (Qld), particularly focusing on the financial position of the plaintiff and the likelihood of the defendant being able to pay the costs if ordered. The court also had to determine if imposing security for costs in stages was appropriate under the circumstances.

The court found that the plaintiff's principal did not offer to make their own assets available for the costs order, nor did the plaintiff prove the personal inability of the principal to do so. Despite this, the court considered the plaintiff's impecuniosity and the nature of the claim, and determined that it was appropriate to order security for costs in stages. This decision allowed the plaintiff to proceed with the litigation while mitigating the financial risk to the defendant. The court emphasised the importance of ensuring that the costs order was proportionate and just in the circumstances.

The final orders included the requirement for the defendant to provide security for costs in two stages, with the amount to be determined by the court. This decision allowed the plaintiff to continue with the litigation while managing the financial exposure to the defendant. The court's approach balanced the need for the plaintiff to pursue their claim against the potential financial burden on the defendant.

Orders