Dipole Consulting Group Pty Ltd v Netlinkz Limited [2024] NSWSC 1178

Supreme Court New South Wales

Medium Neutral Citation: Dipole Consulting Group Pty Ltd v Netlinkz Limited [2024] NSWSC 1178 Hearing dates: 13 September 2024 Date of orders: 13 September 2024 Decision date: 13 September 2024 Jurisdiction: Equity - Technology and Construction List Before: Stevenson J Decision: Plaintiff's motion dismissed with costs Catchwords: COSTS – security for costs – whether there is reason to believe that the plaintiff will be unable to meet a costs order were it unsuccessful Category: Procedural rulings Parties: Dipole Consulting Group Pty Ltd (Plaintiff/Respondent) Netlinkz Limited (Defendant/Applicant) Representation: Counsel: S A Cominos (Plaintiff/Respondent) G I Adams (Defendant/Applicant)

Solicitors: JTA Law (Plaintiff/Respondent) Gillis Delaney Lawyers (Defendant/Applicant) File Number(s): 2024/232694

EX TEMPORE JUDGMENT (REVISED) 1. The plaintiff commenced these proceedings on 24 June 2024. By its Summons and Commercial List Statement, it seeks an order that the defendant pay it a sum of a little less than $2 million plus costs. The plaintiff's claim relates to work that it alleges has been performed by various of its representatives in specific IT roles in relation to identified IT projects for the defendant. 2. The plaintiff's claim is pleaded principally as a claim in contract, but alternatively as a quantum meruit. 3. Although a direction has been made for the defendant to file a List Response, that has not yet occurred. 4. By notice of motion filed on 9 August 2024, the defendant seeks security for costs in the sum of $990,000. I will return to that figure in a moment. 5. I have heard submissions as to the likely strength of the plaintiff's claim. That is a matter that is capable of relevance to a question of ordering security for costs. But, in this case, it is far too early for the Court to form any view about the strength of the party's claim. I proceed upon the basis that the claim is at least arguable. 6. The defendant's estimate of its costs is that it will incur a total of $990,000 in the proceedings. The evidence in support of that estimate is expressed by the defendant's solicitor at a very high level and appears to assume that there will be a lengthy debate about particulars and that there will be a lengthy debate about discovery before evidence. It also proceeds upon the assumption that the defendant will recover the total of its actual costs in the proceedings were it to be successful. 7. The plaintiff's solicitor has produced a competing estimate of the defendant's likely costs. The plaintiff's solicitor estimates the costs will, rather than being $990,000, be something in the order of between $112,000 and $140,000 costs. 8. Neither party has produced evidence by a costs assessor. Therefore, neither party has placed before the Court evidence from which the Court could reliably and confidently predict what the likely costs of these proceedings are. It may well be that the defendant's costs will be somewhere in the range between the plaintiff's solicitor's estimate of $112,000 to $140,000 and the defendant's solicitor's estimate of $990,000. I would have thought it is likely to be at the lower end of that range. 9. As to the question of whether there is reason to believe that the plaintiff will be unable to meet a costs order were it unsuccessful, counsel for the defendant drew attention to the fact that the plaintiff has a share capital of $4, that there are a number of security interests recorded under the PPSA against its name, and that it has no real property. 10. However, the plaintiff's financial records as at 30 June 2024 are in evidence. Those records show that for the financial year ended 30 June 2024, the plaintiff had net current assets of some $350,000. However, its balance sheet for 30 June 2024 shows that it has a surplus of assets over liabilities exceeding $800,000, and that this included assets of some $430,000 cash at bank. The plaintiff's managing director has deposed that, as at 6 September 2024, the amount of cash at bank was more than $500,000. 11. In those circumstances, assuming that the costs the defendant will incur will be somewhere in the range of $100,000 to $900,000, I am not satisfied that there is reason to believe that the plaintiff would be unable to meet such costs. 12. The defendant's motion of 9 August 2024 is dismissed with costs.