The Owners - Strata Plan No 16624 v IPM Developments Pty Ltd (in liquidation)

[2024] NSWSC 1548

Supreme Court

New South Wales

Medium Neutral Citation:	The Owners - Strata Plan No 16624 v IPM Developments Pty Ltd (in liquidation) [2024] NSWSC 1548
Hearing dates:	On the papers; written submissions 22, 25, 27 November 2024
Date of orders:	3 December 2024
Decision date:	03 December 2024
Jurisdiction:	Equity - Commercial List
Before:	Stevenson J
Decision:	Plaintiffs to provide security for second, fourth, and fifth defendants’ costs in the sum of $300,000, payable in three tranches of $100,000; plaintiffs to pay the second, fourth, and fifth defendants’ costs of their motions
Catchwords:	COSTS – security for costs – quantum and form – whether security should be ordered against plaintiff owners corporation – where plaintiffs accept that there is reason to believe they will be unable to meet a costs orders – where plaintiffs have failed to explain prejudice suffered by reason of delay in bringing application for security
Cases Cited:	In the matter of IPM Developments Pty Ltd [2023] NSWSC 1443
Category:	Procedural rulings
Parties:	The Owners - Strata Plan No 16624 (First Plaintiff) The Owners - Strata Plan No 90950 (Second Plaintiff) IPM Developments Pty Ltd (in liquidation) (First Defendant) Aleksander Novakovic (Second Defendant) IDA Potts Point Pty Ltd (in liquidation) (Third Defendant) Steven Sroba (Fourth Defendant) John Cardamis (Fifth Defendant)
Representation:	Counsel: P Folino Gallo (Plaintiffs) A Jucha (Second Defendant) G Ng / R Harvey (Fourth Defendant) B Hord (Fifth Defendant) Solicitors: Piper Alderman (Plaintiffs) Shaw Reynolds (Second Defendant) Yeldham Price O’Brien Lusk (Fourth Defendant) Diamond Conway (Fifth Defendant)
File Number(s):	2022/69738

JUDGMENT

1. By Notices of Motion filed on 18 September 2024, 4 September 2024, and 22 August 2024, respectively, the second, fourth and fifth defendants seek security for costs.

2. The plaintiffs have accepted, in solicitor’s correspondence, that there is reason to believe that they will be unable to meet a costs order, were they to be unsuccessful.

3. Thus, the only issue is the quantum of the security to be provided.

4. Each of the second, fourth and fifth defendants seeks security in the sum of $300,000, payable in three tranches as follows:

1. $100,000 within 21 days;

2. $100,000 within 21 days of a mediation or the fixing of a hearing date; and

3. $100,000 28 days before hearing.

5. Each application is supported, in the usual way, by a solicitor’s affidavit estimating the actual and likely recoverable costs of each of the defendants.

6. The plaintiffs propose that security in the sum of $100,000 be provided for the costs of each of the second, fourth and fifth defendants for costs “up to and including any mediation”.

7. In his written submissions responding to those of the second, fourth and fifth defendants, Mr Folino Gallo, for the plaintiff, referred to the fact that the second defendant could have sought security for his costs earlier and at the time that the two corporate defendants, the first and third defendants, now both in liquidation, successfully obtained orders for security. ^[1]

   1. See In the matter of IPM Developments Pty Ltd [2023] NSWSC 1443.

8. However, Mr Folino Gallo did not explain what prejudice the plaintiffs have suffered by reason of the second defendant’s delay in bringing an application for security and did not engage at all with the evidence adduced on behalf of the second defendant as to his past and likely costs.

9. Mr Folino Gallo’s submissions also did not engage with evidence adduced on behalf of the fifth defendant as to his likely costs.

10. Mr Folino Gallo made no submissions at all concerning the position of the fourth defendant.

11. In those circumstances I see no reason to doubt the reasonableness of the estimates made on behalf of each of the second, fourth, and fifth defendants.

12. I see no reason why security should only be ordered, at this stage, up to any mediation.

13. I am persuaded that orders should be made to the effect sought by each of the second, fourth and fifth defendants.

14. If there is a mediation and the matter settles, then the security that would otherwise be required beyond that point will not be needed.

15. I propose to order security as proposed by the second, fourth, and fifth defendants. Each should have their costs of the application for security.

16. The parties should confer and agree on the orders necessary to give effect to these reasons.

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Endnote