Office Shop Renovations Australia Pty Ltd v Zhou
[2013] QCAT 619
| CITATION: | Office Shop Renovations Australia Pty Ltd v Zhou & Anor [2013] QCAT 619 |
| PARTIES: | Office Shop Renovations Australia Pty Ltd (Applicant) |
| v | |
| Mr Ming Hu Zhou Ms Hua Zhong (Respondents) |
| APPLICATION NUMBER: | BDL335 -12 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 30 September 2012 |
| HEARD AT: | Brisbane |
| DECISION OF: | Senior Member Stilgoe OAM |
| DELIVERED ON: | 21 October 2013 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. The application for security for costs is refused. |
| CATCHWORDS: | COSTS – SECURITY FOR COSTS – where company applicant – where company licensee – where licensee required to meet financial benchmarks to retain licence - whether appropriate to order security for costs |
APPEARANCES and REPRESENTATION (if any):
The tribunal heard and determined this matter on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009.
REASONS FOR DECISION
Office Shop Renovations Australia Pty Ltd has filed a claim for $66,001.43 for money owing under a building contract. Mr Zhou and Ms Zhong dispute the claim and have a counterclaim for damages. Mr Zhou and Ms Zhong filed an application for security for costs for approximately $45,000[1].
[1] Affidavit Madison Lodder sworn 9 August 2013.
The tribunal may give security for costs[2]. In deciding whether to order security, the tribunal may consider: the financial circumstances of the partiers; the prospects of success or the merits of the proceeding; the genuineness of the proceeding; and anything else the tribunal considers relevant[3].
[2] Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 109.
[3] QCAT Act s 109(4).
Mr Zhou and Ms Zhong’s submitted it was clear from the material that Office Shop did not have the financial means to satisfy an adverse order for costs.
Office Shop Renovations Australia Pty Ltd is a company licensed by the Queensland Building Services Authority. To maintain that licence, it must have a certain net tangible asset base yet the company had not filed any evidence about that. I adjourned the hearing to allow Office Shop Renovations Australia Pty Ltd to file that evidence.
Office Shop Renovations Australia Pty Ltd filed material in compliance with my directions of 30 September 2013. The material shows it has an annual allowable turnover of $12M. It also shows the company has net tangible assets to support that allowable annual turnover. Its current asset to current liability ratio meets the Queensland Building Services Authority’s requirements. As one would expect from a licensee with this level of allowable turnover, the company has a significant surplus of assets over liabilities.
Mr Zhou and Ms Zhong say that this material is not enough to show that Office Shop Renovations Australia Pty Ltd can meet an adverse costs order. They say that: the company has not provided a current list of trade creditors and debtors; the building assets listed to do form any type of realisable asset; the only realisable asset is the cash at bank which is a trading account and may fluctuate; and the past year’s financial statement has no bearing on the current year’s financial position.
It is unrealistic to expect a company to have a spare $45,000 sitting in an account ready to meet an adverse costs order if the tribunal is minded to order costs. The best case for Mr Zhou and Ms Zhong, on the material before me, is that Office Shop Renovations Australia Pty Ltd may have to realise some assets, or that it may take some time, to comply with a costs order. I do not understand that to be the test which I should apply.
The evidence does not suggest that Office Shop Renovations Australia Pty Ltd will not be able to pay an adverse costs order.
The tribunal may have regard to the financial position of both parties when deciding whether to grant security for costs[4]. Mr Zhou and Ms Zhong have not provided any material about their financial position. I do not know what impact that an unsatisfied costs order may have on their position. In the absence of any evidence, I can only assume that the consequences will not be severe.
[4] QCAT Act s 109(4)(a).
The application for security for costs is refused.
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