The Owners - Strata Plan 6877 v 2-4 Lachlan Avenue Pty Ltd; The Owners - Strata Plan 6666 v Kahu Holdings Pty Ltd Respondent (No 2) [2018] NSWLEC 174

The Owners - Strata Plan 6877 v 2-4 Lachlan Avenue Pty Ltd; The Owners - Strata Plan 6666 v Kahu Holdings Pty Ltd Respondent (No 2) [2018] NSWLEC 174

Although the evidence showed that the owners corporations lacked the financial ability to satisfy possible s 188 costs orders without levies or third party support, the proposed Deed of Support from a sufficiently well-endowed entity standing behind the acquiring purchaser meant that, subject to execution of that deed, there was no proper basis to make an immediate security for costs order. Because the deed had not yet been entered into and timing and quantum needed to be addressed, contingent security orders were made requiring payment to the Registrar unless the deed was entered into and filed and served by the specified dates, with liberty to relist to challenge the deed's adequacy.

Jurisdiction
Australia
Judgment Date
23 August 2018
Procedural Posture
Class 3 Strata Renewal Proceedings; Costs Application for Security for Costs / Ex Tempore Judgment on Applications for Orders for Security for Costs
Outcome
Contingent orders for security for costs made in each matter, unless a Deed of Support was entered into by the specified date; liberty to relist granted to challenge adequacy of the deed.
Legal Topics
['security for Costs' 'strata Redevelopment Scheme' 'dissenting Owner Costs' 'impecuniosity of Owners Corporation' 'deed of Support' 'conciliation Conference']
['costs' 'civil Procedure' 'strata Schemes' 'land and Environment Court'] ['security for Costs' 'strata Redevelopment Scheme' 'dissenting Owner Costs' 'impecuniosity of Owners Corporation' 'deed of Support' 'conciliation Conference']

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Procedural Posture

Class 3 Strata Renewal Proceedings; Costs Application for Security for Costs / Ex Tempore Judgment on Applications for Orders for Security for Costs

Legal Issues

  1. 1 ['Whether orders for security for costs should be made against the relevant owners corporations under Pt 42 r 21 of the Uniform Civil Procedure Rules 2005 in circumstances where the dissenting owners may be entitled to reasonable costs under s 188(1)(a) of the Strata Schemes Development Act 2015.' 'Whether the proposed Deed of Support from the entity standing behind the supporting purchaser removed any likelihood that the proceedings would be stultified if security were not ordered.' 'What timing and amount of any contingent security for costs order should be fixed.']

Ratio Decidendi

Although the evidence showed that the owners corporations lacked the financial ability to satisfy possible s 188 costs orders without levies or third party support, the proposed Deed of Support from a sufficiently well-endowed entity standing behind the acquiring purchaser meant that, subject to execution of that deed, there was no proper basis to make an immediate security for costs order. Because the deed had not yet been entered into and timing and quantum needed to be addressed, contingent security orders were made requiring payment to the Registrar unless the deed was entered into and filed and served by the specified dates, with liberty to relist to challenge the deed's adequacy.

Court Disposition

Contingent orders for security for costs made in each matter, unless a Deed of Support was entered into by the specified date; liberty to relist granted to challenge adequacy of the deed.

Orders

  • ['In the Kahu proceedings, security for costs in the amount of $205,000 is to be paid to the Registrar within 14 days after 28 September 2018, by 4.30 pm on Friday 12 October 2018, unless a Deed of Support is entered into by the GSA Unit Trust, ABN 90 119 124 742, by 9 October 2018.' 'In the Lachlan Avenue...