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

The plaintiffs, The Owners - Strata Plan No 16624, sought security for costs from the defendant, IPM Developments Pty Ltd (in liquidation). The plaintiffs, a body corporate for a strata scheme, were engaged in litigation concerning the construction of a building, including alleged defects and breaches of contractual obligations. The court was required to determine whether security for costs should be ordered against the plaintiffs and, if so, the appropriate quantum and form of such security. The primary issue was whether the plaintiffs had demonstrated that there was a reason to believe they would be unable to meet a costs order against them, and if so, whether the delay in bringing the application for security had caused any prejudice.

The court examined the plaintiffs' ability to meet a costs order and noted that the plaintiffs had accepted that there was reason to believe they would be unable to meet such an order. However, the plaintiffs had failed to explain any prejudice suffered by reason of the delay in bringing the application for security. The court held that while the plaintiffs had demonstrated a reason to believe they would be unable to meet a costs order, the failure to explain any prejudice caused by the delay was a significant factor in determining whether security should be ordered. The court found that the plaintiffs had not established that the delay had caused them any prejudice, and therefore, the application for security should not be granted.

The court concluded that no security for costs should be ordered against the plaintiffs, The Owners - Strata Plan No 16624, as they had not demonstrated that the delay in bringing the application had caused any prejudice. The plaintiffs were ordered to pay the defendant's costs of the application for security for costs.