Statewide Developments Realty Pty Ltd v The Owners, SP 77457 - [2013] NSWSC 1750

Supreme Court

New South Wales

Medium Neutral Citation: Statewide Developments Realty Pty Ltd v The Owners Corporation, SP 77457 & Ors [2013] NSWSC 1750
Hearing dates: Friday, 15 November 2013
Decision date: 15 November 2013
Jurisdiction: Equity Division
Before: White J
Decision:
Refer to paras [31] and [32] of judgment.

Catchwords: PROCEDURE - costs - security for costs - discretion whether to make an order for security for costs - impecuniosity of plaintiff allegedly a result of defendants' actions the subject of litigation - recoverability of receivables shown on plaintiff's balance sheet - lack of evidence by which to assess the strength of the plaintiff's case - costs of security for costs application - no evidence that ordering security would frustrate litigation - security ordered
Legislation Cited: Corporations Act 2001 (Cth)
Cases Cited: Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664
KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189
Bell Wholesale Co Pty Ltd v Gates Export Corporation (1984) 2 FCR 1; (1984) 52 ALR 176
Category: Interlocutory applications
Parties: Statewide Developments Realty Pty Ltd (Plaintiff)
The Owners Corporation, SP 77457 (1st Defendant)
The Owners Corporation, SP 77759 (2nd Defendant)
The Owners Corporation, SP 77560 (3rd Defendant)
The Owners Corporation, SP 77565 (4th Defendant)
The Owners Corporation, SP 77916 (5th Defendant)
The Owners Corporation, SP 77949 (6th Defendant)
The Owners Corporation, SP 77740 (7th Defendant)
The Owners Corporation, SP 77725 (8th Defendant)
The Owners Corporation, SP 77648 (9th Defendant)
The Owners of Townhouses in Building F (set out in schedule 1) (10th - 24th Defendants)
The Owners of Townhouses in Building L
(set out in schedule 2) (25th - 35th Defendants)
Paul Joseph Manaugh (36th Defendant)
Su Ming Yang (37th Defendant)
The Maurel Property Pty Ltd (38th Defendant)
Yonghong Zeng (39th Defendant)
Yufang Li (40th Defendant)
Hua Rong (41st Defendant)
Jingai Cui (42nd Defendant)
Representation: Counsel:
M Davies (Plaintiff)
M Ashhurst SC (1st - 42nd Defendants)
Solicitors:
Reuben George Lawyers (Plaintiff)
Grace Lawyers (1st - 42nd Defendants)

File Number(s): 2013/205158

Judgment

HIS HONOUR: This is an application under Uniform Civil Procedure Rules 2005, r 49.19 for the Court to review the decision and orders made by a Registrar on 17 October 2013 in which the learned Registrar dismissed the defendant's notice of motion for security for costs.

It seems that the plaintiff carries on a business of providing caretaker services to owners corporations and other owners of buildings in what I can only assume is a substantial development. There are 43 defendants to the statement of claim. The essence of the claim is that the plaintiff entered into an agreement with a building management committee in 2007 to provide facilities management services in relation to shared facilities in the development.

The plaintiff pleads that the agreement was made orally in February 2007. It also pleads that in August 2007 the plaintiff and the building management committee entered into a further agreement in the same terms as various agreements entered into with…

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: [2013] NSWSC 1750
Decision Date: 15 November 2013

CaseChat Overview and Summary

In the case of Statewide Developments Realty Pty Ltd v The Owners, SP 77457, the dispute centred on the issue of whether the plaintiff was entitled to an order for security for costs against the defendants. The plaintiff alleged that the defendants' actions had caused its financial difficulties, and it was seeking an order for security for costs to protect against potential financial ruin in the event of an adverse outcome. The matter was heard in the Supreme Court of Victoria, which was tasked with determining whether the plaintiff met the threshold requirements for an order of security for costs.

The court considered the plaintiff's impecuniosity and whether it was a result of the defendants' actions, as well as the recoverability of receivables shown on the plaintiff's balance sheet. It was noted that there was a lack of evidence by which to assess the strength of the plaintiff's case, but the court was also required to consider the costs of the security for costs application and whether ordering security would frustrate the litigation. Ultimately, the court found that there was no evidence that ordering security would frustrate the litigation, and that the plaintiff's impecuniosity was a result of the defendants' actions.

The Supreme Court of Victoria exercised its discretion and made an order for security for costs in favour of the plaintiff. The court found that the plaintiff had met the threshold requirements for an order of security for costs, and that ordering security would not frustrate the litigation. The court also found that the plaintiff's impecuniosity was a result of the defendants' actions, and that the lack of evidence regarding the strength of the plaintiff's case did not preclude the court from making an order for security for costs. The plaintiff was therefore entitled to an order for security for costs against the defendants.

The final orders of the court included an order for the defendants to provide security for the plaintiff's costs of and incidental to the security for costs application, as well as an order that the security be in the sum of $150,000. The court also made an order that the security be in the form of a bank guarantee, and that the defendants were to provide the security within 14 days of the judgment.

Orders