Owners Corporation Strata Plan 64970 v Austruc Constructions Limited [2007] NSWSC 778

New South Wales Supreme Court

CITATION : Owners Corporation Strata Plan 64970 v Austruc Constructions Limited [2007] NSWSC 778

HEARING DATE(S) : 13/07/07 JURISDICTION : Equity Division Technology and Construction List

JUDGMENT OF : Einstein J

EX TEMPORE JUDGMENT DATE : 13 July 2007

DECISION : Dismiss application for security for costs.

CATCHWORDS : Practice and procedure - Security for costs - Delay - Overlapping of two sets of proceedings

LEGISLATION CITED : Home Building Act 1989 (NSW)

Bank Invest AG v. Seabrook (1988) 14 NSWLR 711 CASES CITED : Bryan v Maloney (1995) 182 CLR 609 KP Cable Investments Pty Ltd v Meltglow Pty Ltd (unreported, Federal Court of Australia, Beazley J, 28 February 1995). Owners - Strata Plan 50530 v Walter Construction Group Ltd [2001] NSWSC 820

PARTIES : Owners Corporation Strata Plan 64970 (Plaintiff) Austruc Constructions Limited (Defendant)

FILE NUMBER(S) : SC 55048/05

COUNSEL : Mr G Sirtes (Plaintiff) Mr M White (Defendant)

SOLICITORS : David Le Page (Plaintiff) Doyles Construction Lawyers (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TECHNOLOGY AND CONSTRUCTION LIST

Einstein J

Friday 13 July 2007 ex tempore Revised 17 July 2007

55048/05 Owners Corporation Strata Plan 64970 v Austruc Constructions Limited JUDGMENT The notice of motion 1 There is before the Court an amended notice of motion filed on 16 December 2005 under cover of which Austruc Constructions Limited, in proceedings 55048/05, seeks security for costs in the amount of $310,000. Owners - Strata Plan 64970 is the plaintiff in the proceedings 2 Concurrent proceedings [55047/03] ordered to be heard at the same time and commenced in 2003 have been brought by Eko Investments Pty Ltd against the same defendant. A recent decision for additional security for costs in the 2003 proceedings was determined on 29 May 2007: [2007] NSWSC 539. That decision serves the purpose of identifying the claims made by Eko Investments against the three defendants to those proceedings, Austruc Constructions Limited being the first defendant. It will be apparent from that judgment that the original order for security for costs of some $296,670 plus the additional security ordered, furnished Austruc with in the order of $436,000 by way of security funds. 3 The plaintiff in the 2003 proceedings had, as developer owner, entered into a contract with the first defendant as head contractor, in respect of the construction of 32 residential units at 46-50 Denning Street, The Entrance. 4 It is common ground that the vast bulk of the claims made by each plaintiff against Austruc in the two sets of proceedings raise common issues. In the main they are issues concerning the common property. There are, however, some matters raised concerning unit owners' property. 5 Mr White, who has appeared for Austruc, has drawn attention to areas where there may be some differences in terms of claims. That this is the case cannot be gainsaid. Having examined exhibits A1 and A2 tendered by the defendant, being respectively the minutes of experts conclaves held in Sydney in February 2007 [with the attached notations of agreements and disagreements] and a report by Mr Norman Fisher [a quantity surveyor retained by the plaintiffs in the 2005 proceedings], my assessment is that some differences may be anticipated in terms of the approaches to be taken by the plaintiffs in the 2005 proceedings as opposed to the approach to be taken by the plaintiffs in the earlier proceedings. Indeed some of the defects currently pursued in the 2005 proceedings are [at least not] yet the subject of claims made in the 2003 proceedings. However, my abiding impression from the evidence is that on the probabilities, these differences are unlikely to be of huge significance in the litigation. 6 One issue to be litigated in the 2005 proceedings involves an alternative defence pursued on Bryan v Maloney [(1995) 182 CLR 609] grounds along the lines that the plaintiff in the 2005 proceedings is acting as agent for the present unit holders and that the defendant had no duty of care to those unit holders in respect of all or some of the types of defect for which the defendant to the 2005 proceedings is being pursued. 7 This matter is certain pleaded. However it is plainly enough only an alternative count. The primary manner in which the plaintiff as immediate successor in title to the developer puts its case relies upon its claimed entitlement to the benefit of the statutory warranties as if the developer were required to hold a contractor licence and has done the work under a contract with the successor in title to do the work: cf section 18C of the Home Building Act 1989 (NSW). 8 Considerable assistance has been given in unravelling the principles which inform applications of the present type by the judgment given by Bergin J in Owners - Strata Plan 50530 v Walter Construction Group Ltd [2001] NSWSC 820 (24 September 2001). 9 In particular the plaintiff in resisting the present claim for security for costs has relied upon the following distillation of those principles which seems to me to be unexceptionable: