Resilium Pty Ltd v Nest Insurance Consult Pty Ltd (No 2)

[2021] NSWSC 1019

Supreme Court

New South Wales

Medium Neutral Citation:

Resilium Pty Ltd v Nest Insurance Consult Pty Ltd (No 2) [2021] NSWSC 1019

Hearing dates:

On the papers

Decision date:

13 August 2021

Jurisdiction:

Equity - Commercial List

Before:

Stevenson J

Decision:

Security to be provided in tranches as set out at [15]; cross-claimant to pay the cross-defendants’ costs of their application for security costs; directions made for future conduct of proceedings

Catchwords:

COSTS – security for costs – tranches which security to be provided – costs of application for security for costs

Legislation Cited:

Corporations Act 2001 (Cth)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Resilium Pty Ltd v Nest Insurance Consult Pty Ltd [2021] NSWSC 974

Category:

Procedural rulings

Parties:

Resilium Pty Ltd (Plaintiff/Second Cross-Defendant/Applicant)
Resilium Insurance Broking Pty Ltd (First Cross-Defendant/Applicant)
Nest Insurance Consult Pty Ltd (Defendant/Cross-Claimant/Respondent)

Representation:

Counsel:
M R Elliot SC with D K Ratnam (Plaintiff/Cross-Defendants/Applicants)
S Gray (Defendant/Cross-Claimant/Respondent)

Solicitors:
Roberts & Partners Lawyers Pty Ltd (Plaintiff/Cross-Defendants/Applicants)
Cite Legal Pty Ltd (Defendant/Cross-Claimant/Respondent)

File Number(s):

2020/356006

Judgment

1. On 5 August 2021 I published my reasons for ordering that the cross-claimant provide security for the costs of the cross-claim. [1] I shall use the same abbreviations here.

   1. Resilium Pty Ltd v Nest Insurance Consult Pty Ltd [2021] NSWSC 974.

2. I ordered that Nest provide for the Resilium Parties’ costs of Nest’s cross-claim in the sum of $400,000.

3. I noted that the parties had suggested that, if security were to be ordered, it would be open to the Court to order that it be ordered in stages.

4. I have now received competing submissions as to what those stages should be.

5. The stages proposed by the Resilium Parties are said to be justified by a further Affidavit made by Mr Roberts and, in any event, appear to me to be reasonable.

6. As to the costs of the Resilium Parties’ Motion, it was submitted on behalf of Nest that although the Resilium Parties should have their costs to 13 July 2021, Nest should have its costs, and on an indemnity basis, from that date.

7. Nest points to an offer it made on 13 July 2021 to provide security by way of a bank guarantee in the sum of $169,000 as security for the Resilium Parties’ costs up to and including service of evidence and attending a mediation.

8. I do not propose to make the costs order proposed by Nest for a number of reasons.

9. The first is that the offer of $169,000 is less than the figure of $180,000 that I propose to allow as costs of the proceedings up to service of evidence and attending a mediation.

10. Second, the quantum of security that I have ordered is less than the Resilium Parties offered prior to the hearing ($390,000 for the entire proceedings and $235,000 for certain stages).

11. Third, and in any event, Nest has been unsuccessful on the motion. It opposed the making of any order for security for costs. In that context, I cannot see how the offer it made could possibly affect the Resilium Parties’ entitlement to costs, let alone provide a basis for ordering indemnity costs against the Resilium Parties.

12. The Resilium Parties also sought liberty to apply to strike out the cross-claim if security was not provided in accordance with the orders I propose to make, and for liberty to apply for further security should the current orders prove inadequate. I see no reason to make those orders. The Resilium Parties can, by notice of motion in the usual way, make such application as they consider necessary.

13. Nest proposes further orders providing for the ongoing conduct of the matter. The Resilium Parties submitted that it is not appropriate for those orders to be made where “security is yet to be provided”.

14. But the orders proposed by Nest take effect only once security is provided.

15. In those circumstances I make orders and directions as follows:

Security for costs

1. Order pursuant to r 42.21 of the Uniform Civil Procedure Rules 2005 (NSW) and s 1335 of the Corporations Act 2001 (Cth), the cross-claimant is to provide security for costs in the amount of $400,000 (“the Security”) in favour of the cross-defendants.

2. Direct that the Security be provided by way of cash paid into Court or bank guarantee in a form to the reasonable satisfaction of the cross-defendants by way of the following tranches:

1. the first tranche in the sum of $80,000 to be provided by 3 September 2021 to comprise the costs:

1. incurred in the proceedings to date by the cross-defendants;

2. of the security for costs motion;

3. of the preparation and finalisation of pleadings,

2. the second tranche in the sum of $100,000 to be provided within 14 days of the close of pleadings to comprise the costs of:

1. preparation and consideration of lay evidence;

2. preparation and attendance at a mediation,

3. the third tranche in the sum of $100,000 to be provided within 28 days of the parties’ attendance at a mediation to comprise the costs of:

1. discovery;

2. a joint expert report,

4. the fourth tranche in the sum of $120,000 to be provided within 14 days of the setting down of the cross-claim for a final hearing, to comprise the costs of preparation and attendance at the final hearing of the cross-claim.

3. In the event that the cross-claimant does not comply with order 2 above, the proceedings are stayed, until the order is complied with.

4. The cross-claimant pay the cross-defendants’ costs of the cross-defendants’ Notice of Motion filed 28 June 2021.

5. The Motion is otherwise dismissed.

Directions in the proceedings

1. Within 7 days of the provision of the first tranche of security, the cross-defendants inform the cross-claimant if they consent to the proposed amended cross-claim statement sent to them on 18 June 2021 (“Proposed Amended Cross-Claim”).

2. If the cross-defendants’ consent to the filing of the Proposed Amended Cross-Claim:

1. the cross-claimant has leave to file the Proposed Amended Cross-Claim;

2. the cross-claimant is to file and serve the Proposed Amended Cross-Claim within 2 business days.

3. If the cross-defendants oppose the filing of the Proposed Amended Cross-Claim:

1. the cross-claimant is to file and serve a notice of motion seeking leave to file the Proposed Amended Cross-Claim together with any affidavit in support within seven days of the cross-defendants’ notice of their opposition to the amendment;

2. the cross-defendants are to file and serve any affidavit in opposition within seven days of service of the cross-claimant’s notice of motion and affidavit in support.

4. Within 28 days of leave being granted (or denied) to file the Proposed Amended Cross-Claim, the Resilium Parties are to file and serve a reply to the defendant’s defence and defence to the cross-claim.

5. Within 14 days of the filing of the cross-defendants’ defence to the cross-claim, the cross-claimant is to file any reply.

6. The matter is listed for directions on 15 October 2021.

7. Liberty to apply on 3 days’ notice.

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Endnote

Decision last updated: 13 August 2021