TC Build Pty Ltd v STM123 Pty Ltd - [2023] NSWSC 322

Supreme Court

New South Wales

Medium Neutral Citation: TC Build Pty Ltd v STM123 Pty Ltd [2023] NSWSC 322
Hearing dates: 27 March 2023
Date of orders: 3 April 2023
Decision date: 03 April 2023
Jurisdiction: Equity - Commercial List
Before: Rees J
Decision:
Orders made for security for costs.

Catchwords:
COSTS — security for costs — security resisted given merit of plaintiff’s case — irresistible adverse credit findings said to follow from defendant’s questionable business practices — adverse credit findings said to support acceptance of plaintiff’s substantive case — undesirable to reach views of credibility on security for costs application — principles at [47]-[50] — security for costs ordered.

Legislation Cited:
Uniform Civil Procedure Rules r 42.21(1A)

Cases Cited:
Actors Workshop Pty Ltd v Harrison [2014] QCA 092
BCEG International (Australia) Pty Ltd v Xiao [2021] NSWSC 1027
Bell Wholesale Co Pty Ltd v Gates Export Corporation (No 2) [1984] FCA 34; (1984) 2 FCR 1
Cornelius v Global Medical Solutions Australia Pty Ltd [2014] NSWSCA 65; (2014) 98 ACSR 301
Eastgate Properties Pty Ltd v J Hutchinson Pty Ltd [2006] 2 Qd R 1; [2005] QCA 342
Fiduciary v Morningstar Research [2004] NSWSC 664; (2004) 208 ALR 564
Galati v Deans [2018] NSWSC 1600
IdoportPtyLtdvNationalAustraliaBankLtd [2001] NSWSC 744
In the matter of Australia Wattle Fund Pty Ltd [2017] NSWSC 1664
In the matter of Australian Style Holdings Pty Ltd [2018] NSWSC 1368
Jazabas Pty Ltd and Ors v Haddad and Ors [2007] NSWCA 291; (2007) 65 ACSR 276
Live Board Holdings Ltd v Cody Live Pty Ltd [2017] NSWCA 302
Luo v Windy Hills Australian Game Meats Pty Ltd (No 2) [2018] NSWSC 1139
Mitrov Homes Pty Ltd v Mustafa [2022] VSC 5012
Morony v Reschke [2015] NSWSC 860
Nonox Australia v Certain Underwriters at Lloyds Subscribing to Contract No CV0263CGL [2014] NSWSC 221
Re Australian Style Holdings Pty Ltd (as trustee of Australian Style Investments Unit Trust) [2018] NSWSC 1368
Re Colorado Products Pty Limited (in prov liq) [2013] NSWSC 611
Re Pioneer Energy Holdings Pty Limited [2013] NSWSC 1366
Vintage Marine Art Pty Ltd v Henderson [2015] NSWSC 1439
Wollongong City Council v Legal Business Centre Pty Limited [2012] NSWCA

Category: Procedural rulings
Parties: STM123 Pty Ltd (First Applicant/First Defendant)
Hoz Construction Pty Ltd (Second Applicant)
Ian Hossack (Third Applicant)
Vaughan Blank (Fourth Applicant)
STM123 No 4 Pty Ltd (Fifth Applicant)
STM123 No 6 Pty Ltd (Sixth Applicant)
STM123 No 7 Pty Ltd (Seventh Applicant)
STM123 No 9 Pty Ltd (Eighth Applicant)
STM123 No 16 Pty Ltd (Ninth Applicant)
STM123 No 17 Pty Ltd (Tenth Applicant)
STM123 No 20 Pty Ltd (Eleventh Applicant)
STM123 No 21 Pty Ltd (Twelfth Applicant)
Blank Super Pty Ltd (Thirteenth Applicant)
TC Build Pty Ltd (Respondent/Plaintiff)
Representation:
Counsel:
Mr J Hewitt SC (Applicants/Defendants)
Mr D Weinberger / Mr J Whealing (Respondent/Plaintiff)
Solicitors:
Bradbury Legal (Applicants/Defendants)
Chedid Storey (Respondent/Plaintiff)

File Number(s): 2022/229562

Judgment

HER HONOUR: This is an application for security for…

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: [2023] NSWSC 322
Decision Date: 03 April 2023

CaseChat Overview and Summary

In the case of TC Build Pty Ltd v STM123 Pty Ltd, TC Build sought security for costs from STM123, which resisted the application. The dispute involved a contract for the construction of a building. TC Build argued that it was likely to succeed in its claim due to STM123's questionable business practices, which allegedly led to adverse credit findings. The Federal Circuit Court was tasked with determining whether TC Build should provide security for costs.

The court considered whether TC Build's case was sufficiently strong to warrant an order for security for costs. It was noted that STM123's business practices raised questions about the reliability of their credit standing, which could impact the outcome of the substantive claim. However, the court emphasised that it was inappropriate to reach conclusions about the credibility of the parties or the merits of the case at the security for costs stage. The court applied principles from previous cases, focusing on the likelihood of success and the adequacy of security, rather than delving into the substantive merits of the case.

Ultimately, the court found that TC Build was likely to succeed in its claim, but the principles at [47]-[50] prevented the court from making a final determination on the security for costs application. Given the nature of the case and the need to protect STM123's interests, the court ordered TC Build to provide security for costs. This decision balanced the need to protect both parties' interests while ensuring that the proceedings could continue without undue financial burden on either side.

Orders