The Owners - Strata Plan 64415 v Serman [2017] NSWSC 806
Hearing dates:
22 February 2017
Date of orders:
16 June 2017
Decision date:
20 June 2017
Jurisdiction:
Common Law
Before:
Walton J
Decision:
The conclusions reached together with the order, proposed orders and directions (save for minor adjustments made with respect to the directions in (3) and (4) below) made by the Court on 16 June 2017 were as follows:
(1) Having regard to my findings as to the threshold question and the assessment of discretionary factors, I make an order that the plaintiff provide security for the first and second defendants’ costs in the sum of $180,000. I also propose to make orders for the stay of the proceedings until the security is provided by the plaintiff and, further, orders under s 90 of the Act of the kind proposed by the first defendant in the amended notice of motion (noting that the first defendant proposed alternative orders in that respect).
(2) Upon this ruling the defendants should, in the ordinary course, have a favourable costs order for the motions. However, I will reserve to the parties an opportunity to make submissions in relation to that question in the directions below.
(3) The defendants shall bring in short minutes of order by 23 June 2017 in conformity with this judgment. The orders should be accompanied by a note identifying whether there exists any dispute as to the proposed orders.
(4) In the event of there being no dispute as to the proposed orders, and subject to the satisfaction of the Court as to the terms of the same, the Court will make the orders administratively in Chambers. In the event of a dispute as to the form of the orders, the Court shall make directions for the disposition of that dispute.
(5) As to costs, the defendants shall file and serve by 30 June 2017 any application for costs of the motions together with a short written submission in support of the same. The plaintiff shall file and serve any submission in reply within 14 days after the service of the defendants’ submissions as to costs. The Court will take further steps or make further directions subject to the terms of those submissions.
Catchwords:
COSTS – application for security for costs – principles– statutory provision -- security for costs sought from an Owners Corporation – strata scheme - threshold question – whether there is reason to believe the plaintiff will be unable to pay the costs of the defendant if ordered to do so – net negative asset position – no real property – limited cash resources – levy history and performance – reasonable time to pay – discretionary factors – prospects for success – impecuniosity – risks – contribution of defendants – quantum – directions
[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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The Owners - Strata Plan 64415 v Serman [2017] NSWSC 806
Case
[2017] NSWSC 806
Decision Date
CaseChat Overview and Summary
The Owners – Strata Plan 64415, represented by its body corporate, sought an order for security for costs from Serman, a defendant in a strata dispute. The application was heard by the Supreme Court of New South Wales, where the plaintiffs sought security for the costs they anticipated incurring in defending the action. The primary issue before the court was whether there were grounds to believe that the plaintiffs would be unable to pay the defendants' costs if they were to be ordered to do so. The court considered the plaintiffs' financial position, including their net negative asset position, lack of real property, and limited cash resources. Additionally, the court assessed the levy history, performance, and the reasonable time the plaintiffs would need to pay any awarded costs.
The court examined whether the plaintiffs had prospects of success, their financial status, and the risks involved in the litigation. It also considered the contribution of the defendants to the costs. The court found that the plaintiffs were impecunious and unlikely to be able to pay the costs of the defendants if ordered to do so. The plaintiffs' financial position, including their net negative asset position and lack of real property, contributed to the court's decision. The court also considered the reasonable time the plaintiffs would need to pay any awarded costs. Ultimately, the court determined that the application for security for costs should be granted and directed the parties to provide further information regarding the quantum of the security required.
The court ordered the plaintiffs to provide further information regarding the quantum of the security required and directed the parties to confer in an attempt to agree on the appropriate amount. The court emphasised the importance of the parties considering the principles of justice and fairness in determining the quantum of the security. The court's decision highlights the importance of considering the financial position of plaintiffs in strata disputes and the need for careful consideration of the principles and factors involved in determining security for costs applications.