The Owners - Strata Plan 64415 v Serman [2017] NSWSC 806

The Owners - Strata Plan 64415 v Serman [2017] NSWSC 806

Given the plaintiff’s substantial negative net asset position, lack of real property, insufficient liquid assets, and historical patterns of delayed and partial levy payments, combined with practical limitations on levy recovery and significant outstanding liabilities, there is reason to believe the plaintiff will be unable to pay the defendants' costs if ordered. Discretionary factors under r 42.21(1A) do not displace the appropriateness of a security for costs order. The plaintiff must provide security for costs in the amount of $180,000 for the defendants’ costs, and proceedings are stayed until security is provided.

Parties
Plaintiff: The Owners – Strata Plan No 64415; First Defendant: Malcolm Serman; Second Defendant: Marcus Jacobs QC
Jurisdiction
Australia
Judgment Date
20 June 2017
Procedural Posture
Interlocutory Application / Security for Costs Ruling
Outcome
Security for costs ordered against plaintiff; proceeding stayed until security provided.
Legal Topics
Security for Costs, Strata Law, Professional Negligence, Costs
Civil Procedure Security for Costs Strata Law Professional Negligence Costs

Case Brief

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Parties

The Owners – Strata Plan No 64415

Plaintiff

Malcolm Serman

First Defendant

Marcus Jacobs QC

Second Defendant

Procedural Posture

Interlocutory Application / Security for Costs Ruling

Legal Issues

  1. 1 Whether an order for security for costs should be made against the plaintiff owners corporation under r 42.21(1)(d) of the Uniform Civil Procedure Rules 2005 (NSW)
  2. 2 Whether the plaintiff is unable to pay the defendants' costs if ordered to do so
  3. 3 Whether the plaintiff's financial position requires the making of a security for costs order

Ratio Decidendi

Given the plaintiff’s substantial negative net asset position, lack of real property, insufficient liquid assets, and historical patterns of delayed and partial levy payments, combined with practical limitations on levy recovery and significant outstanding liabilities, there is reason to believe the plaintiff will be unable to pay the defendants' costs if ordered. Discretionary factors under r 42.21(1A) do not displace the appropriateness of a security for costs order. The plaintiff must provide security for costs in the amount of $180,000 for the defendants’ costs, and proceedings are stayed until security is provided.

Court Disposition

Security for costs ordered against plaintiff; proceeding stayed until security provided.

Orders

  • Order for plaintiff to provide security for first and second defendants' costs in the sum of $180,000.
  • Order to stay proceedings until security is provided by the plaintiff.