Suncare Constructions Australia Pty Ltd v Gainspace (Mackay) Pty Ltd - [2016] QSC 67

SUPREME COURT OF QUEENSLAND

CITATION:

Suncare Constructions Australia Pty Ltd & Anor v Gainspace (Mackay) Pty Ltd [2016] QSC 67

PARTIES:

SUNCARE CONSTRUCTIONS AUSTRALIA PTY LTD ACN 132 210 238 (IN LIQUDATION)

(first plaintiff)

and

SUNCARE CIVIL PTY LTD ACN 143 268 937 (IN LIQUIDATION)

(second plaintiff)

v

GAINSPACE (MACKAY) PTY LTD ACN 119 510 710 AS TRUSTEE FOR THE STEVENSON STREET DEVELOPMENT TRUST

(defendant)

FILE NO:

BS9314/13

DIVISION:

Trial Division

PROCEEDING:

Application

DELIVERED ON:

31 March 2016

DELIVERED AT:

Brisbane

HEARING DATE:

9 February 2016

JUDGE:

Jackson J

ORDER:

The order of the court is that:

1.   Within twenty one (21) days the plaintiffs give security for the defendant’s costs of the proceeding up to and including the first day of trial in the sum of $150,000 in a form satisfactory to the registrar of the court and in default, the proceeding is stayed until further order.

2.   The plaintiffs pay the defendant’s costs of this application on the standard basis.

3.   The proceeding is listed for hearing on the Commercial List, for review, on 28 April 2016 at 9:30am.

CATCHWORDS:

PROCEDURE – SECURITY FOR COSTS – FACTORS RELEVANT TO EXERCISE OF DISCRETION – PLAINTIFF'S OR APPLICANT'S IMPECUNIOSITY – where the plaintiffs’ insolvency is due to the defendant’s conduct in failing to pay the claimed debt or damages – whether the defendant’s conduct must be related to particular debts to other creditors that the plaintiff is unable to pay – whether the defendant’s conduct must involve some form of misconduct or unacceptable business dealings qua the plaintiff

ACN 006 577 162 Pty Ltd (formerly Harrop Engineering Australia Pty Ltd) as trustee for Harrop Family Trust v Beauville Pty Ltd [2014] VSC 298, cited

Base 1 Projects Pty Ltd v Islamic College of Brisbane Ltd [2012] QCA 114, cited

Contamination Control Laboratories Pty Ltd v Reyer [2010] QSC 1, cited
Dalma Formwork Pty Ltd (administrators appointed) v Concrete Constructions Group [1998] NSWSC 472, not followed

Gentry Bros Pty Ltd v Wilson Brown & Associates Pty Ltd (1992) 8 ACSR 405, cited
Gore v Justice Corp Pty Ltd (2002) 119 FCR 429; [2002] FCAFC 83, cited
Green v CGU Insurance Ltd (2008) 67 ACSR 105; [2008] NSWCA 148, cited

Harpur v Ariadne Australia Ltd [1984] 2 Qd R 523, considered

Jazabas Pty Ltd v Haddad (2007) 65 ACSR 276; [2007] NSWCA 291, considered
KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189, cited

Lanai Unit Holdings Pty Ltd v Mallesons Stephen Jacques [2016] QSC 2, cited

Lynnebry Pty Ltd v Farquhar Enterprises Pty Ltd (1977) 3 ACLR 133, cited

Mantaray Pty Ltd v Brookfield Breeding Co Pty Ltd (1990) 8 ACLC 304, cited

Melunu Pty Ltd v Claron Constructions Pty Ltd [2004] NSWSC 1064, cited

Porzelack KG v Porzelack (UK) Ltd [1987] 1 WLR 420, cited

Sir Lindsay Parkinson & Co Ltd v Triplan Ltd [1973] QB 609, applied
Southern…

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: [2016] QSC 67
Decision Date: 31 March 2016

CaseChat Overview and Summary

The case between Suncare Constructions Australia Pty Ltd and Gainspace (Mackay) Pty Ltd was before the court, where the central issue was the application for security for costs. Suncare Constructions Australia, the plaintiff, sought to have Gainspace (Mackay) Pty Ltd, the defendant, provide security for the plaintiff's costs of proceeding. The dispute arose from a construction-related claim, with the plaintiff alleging that the defendant had failed to pay for completed works and materials supplied.

The legal issues that the court had to address included the discretionary factors relevant to ordering security for costs. Specifically, the court needed to determine if the plaintiff's impecuniosity, resulting from the defendant's failure to pay the claimed debt or damages, was a sufficient ground for requiring security. Additionally, the court examined whether the defendant's conduct must be linked to specific debts to other creditors that the plaintiff could not pay, or whether it must involve some form of misconduct or unacceptable business dealings.

In its reasoning, the court found that the plaintiff's financial difficulties were indeed linked to the defendant's failure to pay the claimed debt. The court held that the defendant's conduct did not necessarily need to involve misconduct or be related to particular debts to other creditors, as the plaintiff's inability to meet its financial obligations was sufficient. The court therefore ordered that the plaintiff must provide security for the defendant's costs up to and including the first day of trial in the specified sum of $150,000. Furthermore, the plaintiff was required to pay the defendant's costs of the application on the standard basis. The proceeding was then listed for hearing on the Commercial List for review on a specified date.

Orders

Orders of the court

The order of the court is that:

1. Within twenty one (21) days the plaintiffs give security for the defendant’s costs of the proceeding up to and including the first day of trial in the sum of $150,000 in a form satisfactory to the registrar of the court and in default, the proceeding is stayed until further order.

2. The plaintiffs pay the defendant’s costs of this application on the standard basis.

3. The proceeding is listed for hearing on the Commercial List, for review, on 28 April 2016 at 9:30am.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Suncare Constructions Australia Pty Ltd & Anor v Gainspace (Mackay) Pty Ltd [2016] QSC 67
PARTIES:	SUNCARE CONSTRUCTIONS AUSTRALIA PTY LTD ACN 132 210 238 (IN LIQUDATION) (first plaintiff) and SUNCARE CIVIL PTY LTD ACN 143 268 937 (IN LIQUIDATION) (second plaintiff) v GAINSPACE (MACKAY) PTY LTD ACN 119 510 710 AS TRUSTEE FOR THE STEVENSON STREET DEVELOPMENT TRUST (defendant)
FILE NO:	BS9314/13
DIVISION:	Trial Division
PROCEEDING:	Application
DELIVERED ON:	31 March 2016
DELIVERED AT:	Brisbane
HEARING DATE:	9 February 2016
JUDGE:	Jackson J
ORDER:	The order of the court is that: 1. Within twenty one (21) days the plaintiffs give security for the defendant’s costs of the proceeding up to and including the first day of trial in the sum of $150,000 in a form satisfactory to the registrar of the court and in default, the proceeding is stayed until further order. 2. The plaintiffs pay the defendant’s costs of this application on the standard basis. 3. The proceeding is listed for hearing on the Commercial List, for review, on 28 April 2016 at 9:30am.
CATCHWORDS:	PROCEDURE – SECURITY FOR COSTS – FACTORS RELEVANT TO EXERCISE OF DISCRETION – PLAINTIFF'S OR APPLICANT'S IMPECUNIOSITY – where the plaintiffs’ insolvency is due to the defendant’s conduct in failing to pay the claimed debt or damages – whether the defendant’s conduct must be related to particular debts to other creditors that the plaintiff is unable to pay – whether the defendant’s conduct must involve some form of misconduct or unacceptable business dealings qua the plaintiff ACN 006 577 162 Pty Ltd (formerly Harrop Engineering Australia Pty Ltd) as trustee for Harrop Family Trust v Beauville Pty Ltd [2014] VSC 298, cited Base 1 Projects Pty Ltd v Islamic College of Brisbane Ltd [2012] QCA 114, cited Contamination Control Laboratories Pty Ltd v Reyer [2010] QSC 1, cited Dalma Formwork Pty Ltd (administrators appointed) v Concrete Constructions Group [1998] NSWSC 472, not followed Gentry Bros Pty Ltd v Wilson Brown & Associates Pty Ltd (1992) 8 ACSR 405, cited Gore v Justice Corp Pty Ltd (2002) 119 FCR 429; [2002] FCAFC 83, cited Green v CGU Insurance Ltd (2008) 67 ACSR 105; [2008] NSWCA 148, cited Harpur v Ariadne Australia Ltd [1984] 2 Qd R 523, considered Jazabas Pty Ltd v Haddad (2007) 65 ACSR 276; [2007] NSWCA 291, considered KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189, cited Lanai Unit Holdings Pty Ltd v Mallesons Stephen Jacques [2016] QSC 2, cited Lynnebry Pty Ltd v Farquhar Enterprises Pty Ltd (1977) 3 ACLR 133, cited Mantaray Pty Ltd v Brookfield Breeding Co Pty Ltd (1990) 8 ACLC 304, cited Melunu Pty Ltd v Claron Constructions Pty Ltd [2004] NSWSC 1064, cited Porzelack KG v Porzelack (UK) Ltd [1987] 1 WLR 420, cited Sir Lindsay Parkinson & Co Ltd v Triplan Ltd [1973] QB 609, applied Southern…