The Owners - Strata Plan No 69746 v IPM Pty Ltd; The Owners - Strata Plan No 71241 v IPM Pty Ltd

The case before the court involved two separate strata plans, Owners - Strata Plan No 69746 and Owners - Strata Plan No 71241, suing IPM Pty Ltd. The dispute centred around the issue of security for costs, specifically whether IPM Pty Ltd was required to provide security for the costs of the plaintiffs. The matter was heard in the Supreme Court of New South Wales. The plaintiffs sought an order that IPM Pty Ltd provide security for the costs of the proceeding, arguing that there was a reasonable belief that IPM Pty Ltd would be unable to pay the costs if the plaintiffs were successful in their claims.

The legal issues before the court included whether the exercise of discretion in ordering security for costs required consideration of the prospects of success or failure of a party’s action, and whether a cross claim against a third party should be considered defensive in nature. Additionally, the court had to determine the appropriate quantum of security to be ordered. The plaintiffs argued that the cross claim was defensive, while the defendant contended that the court should consider the prospects of success of the plaintiffs' claims when determining whether to order security for costs.

The court found that the exercise of discretion to order security for costs did not necessarily require consideration of the prospects of success or failure of a party's action, but rather a reasonable belief that the defendant would be unable to pay the costs. The court also determined that the cross claim was not defensive in nature. Regarding the quantum of security, the court ordered a sum that was considered sufficient to cover the potential costs, taking into account the defendant's financial situation and the nature of the claims. The court found that the plaintiffs had demonstrated a reasonable belief that IPM Pty Ltd would be unable to pay the costs if they were successful in their claims.