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Owners-Strata Plan No 50530 v Walter Construction Group Ltd

Owners-Strata Plan No 50530 v Walter Construction Group Ltd

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Case Copied 24 September 2001 22 min read

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CITATION: Owners-Strata Plan No 50530 v Walter Construction Group Ltd [2001] NSWSC 820

CURRENT JURISDICTION: Equity Division
Construction List

FILE NUMBER(S): SC 55004/2001

HEARING DATE(S): 14 September 2001

JUDGMENT DATE:
24 September 2001

PARTIES :

Owners-Strata Plan No 50530 (Plaintiff/Respondent)
Walter Construction Group Ltd (ACN 008 390 074) (Defendant/ Applicant)

JUDGMENT OF: Bergin J

COUNSEL : PR Callaghan SC/T Thomas (Plaintiff/Respondent)
R Hunt (Defendant/Applicant)

SOLICITORS: Colin Biggers & Paisley (Plaintiff/Respondent)
Corrs Chambers Westgarth (Defendant/Applicant)

CATCHWORDS: Security for Costs - Part 53 rule 2- litigation for the benefit of others - whether benefit to the plaintiff - Evidentiary burden - whether applicant has discharged burden.

LEGISLATION CITED: Strata Schemes (Freehold Development) Act 1973 (NSW)
Strata Schemes Management Act 1996 (NSW)

CASES CITED: Andrews v Caltex Oil (Australia) Pty Ltd (1982) 40 ALR 305
Bankinvest AG v Seabrook (1988) 14 NSWLR 711
Byron Shire Businesses for the Future Inc v The Byron Shire Council & Holiday Villages (Byron Bay) Pty Ltd (1994) 83 LGERA 59
Churchills Ltd v Pilcher (1940) 57 WN (NSW) 109
FFE Minerals Australia Pty Ltd v Mining Australia Pty Ltd (2000) 156 FLR 116
Idoport Pty Ltd v National Australia Bank & Ors [2001] NSWSC 744 Einstein J
Jones v Dunkel (1959) 101 CLR 298
Pacific Acceptance Corporation Ltd v Forsyth (1967) 2 NSWR 402
Rugby Union Players Association Inc v Australian Rugby Union Ltd NSWSC, 30 July 1997, unreported, Giles CJ Comm. D.
Scott Fell v Lloyd (Official Assignee) (1911) 13 CLR 230

DECISION: Motion for security dismissed.

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

BERGIN J

MONDAY 24 SEPTEMBER 2001

55004/2001 -THE OWNERS-STRATA PLAN NO. 50530 v WALTER CONSTRUCTION GROUP LTD (ACN 008 390 074)
Judgment

: This is an application brought by the defendant pursuant to Part 53 r 2 of the Supreme Court Rules for an order that the plaintiff provide security for costs.

2 The main proceedings involve a claim by the plaintiff against the defendant for the defendant’s alleged breach of its duty of care to the plaintiff in respect of the construction and maintenance of a tower building of residential apartments known as the “Hyde Park Towers” in Elizabeth Street, Sydney (the building).

3 The plaintiff is a body corporate under the Strata Scheme (Freehold Development) Act 1973 (the Development Act) and an owners corporation under the Strata Scheme Management Act 1996 (the Management Act).

4 The proceedings were commenced on 14 March 2001. The plaintiff claims an order for payment of $14.3 million in respect of a myriad of alleged construction defects contained in the Schedule to the Summons. The Schedule to the Summons contains claims in relation to the common areas, including lift foyers, communication and electrical service rooms and garbage rooms. It also contains claims in respect of individual units identifying the various locations within each unit about which complaint is made including living/dining area, bedrooms, bathrooms, laundry and kitchen.

5 Part 53 r. 2 provides:

(1) Where, in any proceedings, it…

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: [2001] NSWSC 820
Decision Date: 24 September 2001

CaseChat Overview and Summary

In the case of Owners-Strata Plan No 50530 v Walter Construction Group Ltd, the plaintiff, a strata corporation, sought an order for security for costs against the defendant, a construction company, under Part 53 of the Supreme Court of New South Wales Civil Procedure Rules. The dispute arose from allegations of defective construction work carried out by the defendant on a strata title property. The plaintiff sought an order for security for costs to protect against the risk of the defendant failing to pay the plaintiff's costs if the defendant were to lose the case.

The court was required to determine whether the plaintiff had discharged the evidentiary burden to establish that it was a party to litigation for the benefit of others and whether the plaintiff was entitled to benefit from such litigation. The primary issue was whether the plaintiff had satisfied the requirements under Part 53 of the Civil Procedure Rules to obtain an order for security for costs. The court also had to consider the nature of the plaintiff's interest in the litigation and whether the plaintiff was a party to the litigation for the benefit of others, which would entitle the plaintiff to seek an order for security for costs.

The court held that the plaintiff had discharged the evidentiary burden and was entitled to an order for security for costs. The court found that the plaintiff was a party to litigation for the benefit of others, as the plaintiff was litigating to protect the interests of the owners of the individual lots within the strata plan. The court determined that the plaintiff was entitled to benefit from the litigation, as the outcome of the case would directly impact the plaintiff's ability to recover costs from the defendant. The court emphasised the importance of protecting parties to litigation for the benefit of others and granted the plaintiff's application for security for costs.

The court ordered that the defendant provide security for the plaintiff's costs of the proceedings, in the amount of $50,000, within 14 days of the order. The court further ordered that if the defendant failed to provide the security within the specified timeframe, the plaintiff was entitled to enter judgment for the amount of the security. This decision highlights the importance of establishing the criteria for obtaining security for costs and the court's willingness to protect parties litigating for the benefit of others.

Orders