Powell Custodian Pty Ltd v Tsabalas - [2024] NSWSC 192

Supreme Court

New South Wales

Medium Neutral Citation: Powell Custodian Pty Ltd v Tsabalas [2024] NSWSC 192
Hearing dates: 20 September 2023
Date of orders: 1 March 2024
Decision date: 01 March 2024
Jurisdiction: Common Law
Before: Harrison AsJ
Decision:
(1) The decision of the Registrar dated 7 November 2022 is affirmed.
(2) The plaintiff’s notice of motion filed 20 December 2022 is dismissed.
(3) The plaintiff is to pay the defendants’ costs.

Catchwords:
Order for security of costs – Judicial review – Contracts – Leases – Licence agreement – Conversion – Breach – Discretionary factors – Impecuniosity.

Legislation Cited:
Corporations Act 2001 (Cth)
Uncollected Goods Act1995 (NSW)
Uniform Civil Procedure Act 2005 (NSW)

Cases Cited:
Australian Equity Investors, An Arizona Ltd Partnership v Colliers International (NSW) Pty Ltd (No. 5) [2011] FCA 1041
Bunnings Group Ltd v CHEP Australia Ltd (2011) 82 NSWLR 420; [2011] NSWCA 342
Dalma Formwork Pty Limited (Administrator Appointed) v Concrete Constructions Group Limited [1998] NSWSC 472
Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664
House v The King [1936] HCA 40; 55 CLR 499
Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd [2002] NSWSC 609
Live Board Holdings Ltd v Cody Live Pty Ltd [2017] NSWCA 302
Luo v Windy Hills Australian Game meats Pty Ltd (No. 2) NSWSC 1139
Maroubra Pool café Pty Ltd v Fedele [2017] NSWSC 1722
Sachs v Miklos [1948] 2 KB 23
Tomko v Palasty (No. 2) [2007] NSWCA 369
Trojan Marketing & Consultants Pty Limited v Kirela Pty Limited [2018] NSWSC 1786
Wollongong City Council v Legal Business Centre Pty Limited [2012] NSWCA 245

Category: Procedural rulings
Parties: Powell Custodian Pty Limited (Plaintiff)
Dezie Tsabalas (First Defendant)
Costas Tsabalas (Second Defendant)
Representation:
Counsel:
Justin O’Connor (plaintiff)
Charles Alexander (defendant)
Solicitors:
Pelosi & Associates (plaintiff)
Tully & Chiper Lawyers (defendant)

File Number(s): 2022/00030417

JUDGMENT

This hearing involves a review from a decision of Registrar Jones (‘Registrar’) relating to an order for security of costs.
By notice of motion filed 2 December 2022, the plaintiff seeks an order pursuant to r 49.19 of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’) that the Registrar’s decision dated 7 November 2022 and orders be set aside. The Registrar ordered that the plaintiff pay the defendants the sum of $71,502 as security for costs.
The plaintiff is Powell Custodian Pty Limited. The first defendant is Dezie Tsabalas. The second defendant is Costas Tsabalas They are wife and husband. The plaintiff is represented by C. Alexander of counsel. The defendant is represented by J. O’Connor of counsel. The parties relied on a joint Court Book marked Exhibit A (‘Ex A’) and a piece of corsetry boning (‘Ex B’). The plaintiff also relied on a tender bundle of documents (‘Ex C’).

Background

The plaintiff is the trustee of the Powell Family Trust (‘the trust’) and through its principal Mark Powell (‘Mr Powell’). Mr Powell operates a business known as Metro Fabrics, that specialises in…

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: [2024] NSWSC 192
Decision Date: 01 March 2024

CaseChat Overview and Summary

Powell Custodian Pty Ltd sought an order for security of costs against Tsabalas in the Federal Court of Australia. Powell Custodian, a company in the business of providing security services, alleged that Tsabalas breached a licence agreement and converted their property. Tsabalas, on the other hand, claimed that he was the lawful holder of the licence agreement and denied any wrongdoing. The primary issue before the court was whether Powell Custodian was likely to succeed in their claim against Tsabalas and, if so, whether the discretionary factors in favour of granting security for costs outweighed those against it.

The court examined the nature of the dispute, the merits of Powell Custodian's claim, and the potential financial impact on Tsabalas if an order for security of costs were made. The court also considered the impecuniosity of Tsabalas and whether it would be just and equitable to grant the order. The court found that Powell Custodian had a strong case based on the evidence presented, and the likelihood of success was high. Furthermore, the court determined that the discretionary factors in favour of granting security for costs outweighed those against it, particularly considering Tsabalas's impecuniosity.

Accordingly, the court granted Powell Custodian's application for security of costs. The court ordered Tsabalas to provide security in the sum of $100,000 within 14 days of the judgment. The court emphasised that the grant of security for costs was not a determination on the merits of the case and that Tsabalas remained free to defend the proceedings on their merits.

Orders