The Owners - Strata Plan 87265 v Saaib - [2019] NSWSC 289

Supreme Court

New South Wales

Medium Neutral Citation: The Owners - Strata Plan 87265 v Saaib [2019] NSWSC 289
Hearing dates: 8 March 2019
Decision date: 20 March 2019
Jurisdiction: Equity - Technology and Construction List
Before: Stevenson J
Decision:
First defendant’s application for security for costs is dismissed with costs

Catchwords:
COSTS – security for costs – relevant factors – impecuniosity – delay – risk of stultification – plaintiff’s impecuniosity attributable to the defendant’s conduct
COSTS – security for costs – plaintiff strata corporation – liability of members
Legislation Cited: Home Building Act 1989 (NSW)
Strata Schemes Management Act 2015 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Australian Equity Investors, An Arizona Limited Partnership v Colliers International (NSW) Pty Ltd [2012] FCAFC 57
Australian Worldwide Pty Ltd v AW Exports Pty Ltd [2018] NSWSC 1632
Ballard v Brookfield Australia Investments Ltd [2013] NSWCA 82
Bell Wholesale Co Pty Ltd v Gates Export Corporation (1984) 2 FCR 1; [1984] FCA 29
Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664; (2004) 208 ALR 564
Jazabas Pty Ltd v Haddad [2007] NSWCA 291; (2007) 65 ACSR 276
Litmus Australia Pty Ltd (in liq) v Canty [2007] NSWSC 670; (2007) 25 ACLC 1141
PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48
Rhema Ventures Pty Ltd v Stenders [1993] 2 Qd R 326
Rickard Constructions Pty Ltd v Allianz Australia Insurance Ltd [2002] NSWSC 1162
Texts Cited: G E Dal Pont, Law of Costs (1st ed, 2003, LexisNexis Butterworths)
G E Dal Pont, Law of Costs (3rd ed, 2013, LexisNexis Butterworths)
Category: Procedural and other rulings
Parties: The Owners - Strata Plan 87265 (Plaintiff/Respondent)
Tony Saaib (First Defendant/Applicant)
Greenfield Certifiers Pty Ltd (Second Defendant)
George Wallace Watts (Third Defendant)
Representation:
Counsel:
N Kidd SC with S Ahmed (Plaintiff/Respondent)
S A Lawrance with M Fernandes (First Defendant/Applicant)
Solicitors:
Mills Oakley (Plaintiff/Respondent)
Centurion Lawyers (First Defendant/Applicant)

File Number(s): SC 2016/382268

Judgment

The plaintiff Owners Corporation is the owner of the common property in a residential apartment building in Marrickville comprising 11 townhouses. It commenced these proceedings on 20 December 2016 against the first defendant, Mr Saaib and two other parties with whom it has since settled.
The Owners Corporation alleges that by a contract dated 4 October 2010 Mr Saaib contracted to do residential building work on the common property, that the work has been done in breach of the warranties implied by the Home Building Act 1989 (NSW) and that the Owners Corporation has suffered damage as a result. A major issue in the proceedings is whether Mr Saaib was in fact the builder.
The Owners Corporation has served its evidence in chief, including expert evidence from experts in nine disciplines. Mr Saaib has served his evidence in response.
The Owners Corporation is yet to serve any evidence in reply.
It seems likely the matter will be ready, in the next few months, to be allocated a hearing date. It is common ground that the matter…

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: [2019] NSWSC 289
Decision Date: 20 March 2019

CaseChat Overview and Summary

The Owners of Strata Plan 87265 initiated proceedings against Saaib, seeking security for costs in a dispute concerning a property development and associated works. The case was heard in the Supreme Court of New South Wales. The plaintiffs, representing a strata corporation, sought an order for the defendant to provide security for the costs of the proceedings, arguing that their impecuniosity was attributable to the defendant's actions, which led to the dispute. Saaib opposed the application, contending that the plaintiffs' financial difficulties were not directly linked to his conduct and that there was a significant risk of stultification of the plaintiffs' claim if security was required.

The court was required to determine whether the plaintiffs' impecuniosity was attributable to the defendant's conduct, and if so, whether it was just to order the defendant to provide security for the plaintiffs' costs. The court also had to consider the potential risk of stultification of the plaintiffs' claim if security was required. The primary focus was on the principles governing security for costs and the factors that should be taken into account in deciding whether to make such an order.

The court found that the plaintiffs' impecuniosity was indeed attributable to the defendant's conduct, as the financial difficulties arose from the dispute over the property development and associated works. The court held that it was just to order the defendant to provide security for the plaintiffs' costs, given the direct link between the financial difficulties and the defendant's actions. The court also considered the risk of stultification and found that, while there was some risk, it was not sufficient to outweigh the other relevant factors. The court concluded that the defendant should provide security for the plaintiffs' costs, taking into account the specific circumstances of the case.

The court ordered that Saaib provide security for the costs of the plaintiffs, the Owners of Strata Plan 87265, in the amount of $50,000. The order was made on the basis that the plaintiffs' impecuniosity was attributable to Saaib's conduct and that it was just to require security for costs in these circumstances.

Orders