Strata Plan 94417 trading as The Owners-Strata Plan 94417 v TC Build [2021] NSWSC 1284

Strata Plan 94417 trading as The Owners-Strata Plan 94417 v TC Build [2021] NSWSC 1284

Security for costs was refused because, although the Owners Corporation did not have cash on hand to meet a possible adverse costs order, it had the ability and obligation to raise funds from lot owners through a special levy. At most, the evidence showed possible delay in payment, not a sufficient basis for security, and any delay could likely be compensated by interest; requiring security would make lot owners out of pocket with no obvious mechanism for return if the Owners Corporation succeeded.

Jurisdiction
Australia
Judgment Date
11 October 2021
Procedural Posture
Security for Costs Motions in Building Defects Proceedings / On the Papers
Outcome
The first and second defendants' notices of motion for security for costs were dismissed with costs.
Legal Topics
['security for Costs' 'owners Corporation' 'special Levies' 'home Building Statutory Warranties' 'statutory Duty of Care' 'residential Strata Development Defects']
['costs' 'civil Procedure' 'building and Construction' 'strata Schemes'] ['security for Costs' 'owners Corporation' 'special Levies' 'home Building Statutory Warranties' 'statutory Duty of Care' 'residential Strata Development Defects']

Case Brief

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Procedural Posture

Security for Costs Motions in Building Defects Proceedings / On the Papers

Legal Issues

  1. 1 ['Whether security for costs should be ordered against an Owners Corporation that owns common property in a residential strata development and claims damages for building defects.' "Whether there was reason to believe the Owners Corporation would be unable to pay the defendants' costs if ordered to do so." "Whether the Owners Corporation's ability and obligation to raise funds from lot owners by special levy meant security should be refused."]

Ratio Decidendi

Security for costs was refused because, although the Owners Corporation did not have cash on hand to meet a possible adverse costs order, it had the ability and obligation to raise funds from lot owners through a special levy. At most, the evidence showed possible delay in payment, not a sufficient basis for security, and any delay could likely be compensated by interest; requiring security would make lot owners out of pocket with no obvious mechanism for return if the Owners Corporation succeeded.

Court Disposition

The first and second defendants' notices of motion for security for costs were dismissed with costs.

Orders

  • ["The first defendant's notice of motion filed on 26 August 2021 be dismissed with costs." "The second defendant's notice of motion dated 6 September 2021 be dismissed with costs."]