Synergy Building & Construction Pty Ltd v Tisma & Anor - [2024] SASC 22

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeal: Civil)
SYNERGY BUILDING & CONSTRUCTION PTY LTD v TISMA & ANOR
[2024] SASC 22
Judgment of The Honourable Justice McDonald (ex tempore)
13 February 2024
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - APPEAL OR REVIEW
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - FACTORS RELEVANT TO EXERCISE OF DISCRETION - PROSPECTS OF SUCCESS
The Appellant appeals against a judgment made in the Magistrates Court sitting in Adelaide against the Appellant in the context of a building dispute concerning works carried out by the Appellant at the Respondents’ residential address. Against that setting, the Respondents apply for an order that the Appellant pay $25,000 into the Court as security for the costs of the Respondents incurred up to and including the first day of the hearing of the appeal.
The application is brought pursuant to s 1335(1) of the Corporations Act 2001 (Cth) and r 215.3(1) of the Uniform Civil Rules 2020 (SA) (UCR). The Respondents contend that, if unsuccessful on appeal, the Appellant will not be able to pay the costs of the Respondents. In support of this position, the Respondents rely upon affidavit material setting out the result of enquiries into the financial position of the Appellant, as well as its financial liabilities arising from the Magistrates Court proceedings.
The Appellant did not put any affidavit material before the Court on the application for security and submitted that there was no onus upon him to do so. The Appellant contends that declining to provide financial information cannot amount to evidence of his financial position, and that a sound basis existed upon which the Court should decline to exercise its discretion as to the grant of security. In the alternative, the Appellant submits that the quantum of any security should be reduced to reflect the narrow scope of the appeal.
Held, granting the application for security for costs:
1.The Respondent has satisfied the threshold test set out in s 1335(1) of the Corporations Act 2001 (Cth), having established that there is “reason to believe” that the Appellant will be unable to pay the costs of the Respondents if unsuccessful on the appeal.
2.Taking into account the history of the matter, the extent of the findings against the Appellant, the limited scope of the appeal, as well as the real risk that the Appellant will be unable to meet an adverse costs order, it is necessary to exercise the Court’s discretion in making an order for security for costs.
3.Having determined to make an order pursuant to s 1335(1) of the Corporations Act, it is unnecessary to consider the grant of an order for security under r 215.3(1) of the UCR.

Corporations Act 2001 (Cth) s 1335(1); Uniform Civil Rules 2020 (SA) r 215.3(1), referred to.
Blaikie v Chelliah [2023] SASCA 143 ; Mannix Electrical Pty…

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] SASC 22
Decision Date: 13 February 2024

CaseChat Overview and Summary

The matter before the court was an appeal from the Magistrates Court of South Australia concerning an order for security for costs made in the context of a contractual dispute. Synergy Building & Construction Pty Ltd was the appellant, seeking to challenge the decision of the Magistrates Court to order them to provide security for costs in a proceeding brought by Tisma and another respondent. The legal issues at the heart of this appeal revolved around the discretionary power of the Magistrates Court to require security for costs and the factors that should be considered when exercising this discretion.

The court examined whether the Magistrates Court had correctly exercised its discretion in ordering Synergy to provide security for costs. It considered the relevant statutory framework and case law, focusing on the prospects of success of the respondent's claim. The court emphasised that the decision to order security for costs should be based on a comprehensive assessment of all relevant factors, including the merits of the respondent's case, the financial position of the parties, and any other circumstances that might influence the fairness of the proceedings. The court held that the Magistrates Court had not adequately considered all relevant factors, particularly the merits of the respondent's claim, in making its decision.

In light of the above, the Supreme Court of South Australia allowed the appeal and set aside the order for security for costs made by the Magistrates Court. The court underscored the importance of a thorough assessment of all relevant factors when exercising the discretion to order security for costs. It further directed that the parties bear their own costs of the appeal. This decision serves as a reminder of the need for careful consideration of all relevant factors when determining the appropriateness of ordering security for costs in civil proceedings.

Orders