Equa Building Services Pty Ltd as trustee for The Equa Trust v KLG Trading Pty Ltd [2022] NSWSC 997

Equa Building Services Pty Ltd as trustee for The Equa Trust v KLG Trading Pty Ltd [2022] NSWSC 997

No binding agreement to provide security was established because the alleged agreement did not identify the property over which a charge would be granted and that matter was essential to both parties. The threshold for ordering security was effectively common ground, and the discretion should be exercised in KLG's favour because Equa's claim was not defensive in substance and Equa did not establish that its impecuniosity was caused by KLG's alleged defective work. Security of $300,000 was reasonable in light of the parties' evidence and KLG's acceptance of that amount.

Jurisdiction
Australia
Judgment Date
28 July 2022
Procedural Posture
Application for Security for Costs and Alternative Declaration Under S 73 of the Civil Procedure Act 2005 (nsw) / Interlocutory Notice of Motion in the Equity Technology and Construction List
Outcome
KLG's application for security for costs was granted in the sum of $300,000; KLG was not entitled to the alternative declaration of an agreement; Equa was ordered to pay KLG's costs of the motion.
Legal Topics
['security for Costs' 'corporate Plaintiff Impecuniosity' 'discretion to Order Security' 'compromise or Settlement Declaration' 'building and Construction Industry Security of Payment Act Adjudication']
['civil Procedure' 'costs' 'corporations' 'building and Construction'] ['security for Costs' 'corporate Plaintiff Impecuniosity' 'discretion to Order Security' 'compromise or Settlement Declaration' 'building and Construction Industry Security of Payment Act Adjudication']

Case Brief

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Procedural Posture

Application for Security for Costs and Alternative Declaration Under S 73 of the Civil Procedure Act 2005 (nsw) / Interlocutory Notice of Motion in the Equity Technology and Construction List

Legal Issues

  1. 1 ['Whether KLG was entitled to a declaration that the parties reached an agreement that Equa would provide security in the sum of $300,000.' 'Whether the threshold requirement for security for costs against a corporate plaintiff was satisfied.' "Whether Equa's claim should be treated as defensive in substance because it concerned rights under a contract previously the subject of an adjudication determination." "Whether Equa's impecuniosity was brought about by KLG's alleged conduct." 'What amount and form of security should be ordered.']

Ratio Decidendi

No binding agreement to provide security was established because the alleged agreement did not identify the property over which a charge would be granted and that matter was essential to both parties. The threshold for ordering security was effectively common ground, and the discretion should be exercised in KLG's favour because Equa's claim was not defensive in substance and Equa did not establish that its impecuniosity was caused by KLG's alleged defective work. Security of $300,000 was reasonable in light of the parties' evidence and KLG's acceptance of that amount.

Court Disposition

KLG's application for security for costs was granted in the sum of $300,000; KLG was not entitled to the alternative declaration of an agreement; Equa was ordered to pay KLG's costs of the motion.

Orders

  • ["The plaintiff provide security for the defendant's costs in the sum of $300,000 by way of payment into Court or the provision of a bank guarantee in a form which is acceptable to the defendant or approved by the Court." 'The security be provided in three tranches: $100,000 within 21 days of the date of judgment;...