The Owners - Strata Plan 64415 v Serman

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.