Eko Investments Pty Limited v Austruc Constructions Limited [2007] NSWSC 539

New South Wales Supreme Court

CITATION : Eko Investments Pty Limited v Austruc Constructions Limited [2007] NSWSC 539

HEARING DATE(S) : 25/05/07

JUDGMENT DATE : 29 May 2007

JURISDICTION : Equity Division Technology and Construction List

JUDGMENT OF : Einstein J

DECISION : Additional security ordered

CATCHWORDS : Security for costs

CASES CITED : Rosenfield Nominees Pty Limited & Anor v Bain & Co & Ors (1988) 14 ACLR 467

Eko Investments Pty Limited (Plaintiff) PARTIES : Austruc Constructions Limited (Defendant)

FILE NUMBER(S) : SC 55047/03

COUNSEL : Mr Galvin (Plaintiff) Ms White (Defendant)

SOLICITORS : Stacks Forster (Plaintiff) Doyles Construction Lawyer (Defendant)

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

Einstein J

Tuesday 29 May 2007

55047/03 Eko Investments Pty Limited v Austruc Constructions Limited JUDGMENT The application for further security for costs 1 In January 2005 the plaintiff by bank guarantee in favour of the first defendant provided the sum of $296,670 as security for the first defendant's costs. 2 There is before the court an application by the first defendant for an additional security for costs amount in the sum of $200,000 to be provided by the plaintiff. The dispute 3 The dispute between the plaintiff and the first defendant involves the rectification of defects consequent upon the execution of a Building Contract between the first defendant and the plaintiff in August 1999. The first defendant was apparently the head contractor. That contract involved the construction of 32 residential units at 46 Denning Street, The Entrance. At the time the plaintiff, by its former name entered into the building contract, the contract sum agreed upon having apparently been $5,668,000. Upon completion of the units by the first defendant, the plaintiff claims to have discovered certain substantial defects. To date the first defendant has apparently refused to rectify such defects. Accordingly the plaintiff claims the cost of rectification of the defects together with relocation costs of tenants residing in the building. 4 Apparently the units have been purchased by lot owners in an Owners Corporation who have brought concurrent proceedings in relation to alleged defects in the building. 5 The dispute between the plaintiff and the second defendant arises from the obligations of the second defendant pursuant to its retainer as a professional architect and pursuant to its alleged breaches of its duty of care said to be owed to the plaintiff. The second defendant was the architect contracted to design plans and specifications for the building having also been appointed under the building contract as the architect. 6 The dispute between the plaintiff and the third defendant arises from obligations of the third defendant pursuant to its retainer as a professional engineer and pursuant to its alleged breaches of duty of care also owed to the plaintiff. The third defendant was the consultant engineer appointed to carry out the structural design of the building. 7 Other cross-defendants include window installers or suppliers and ceiling installers. 8 There is no doubt but that the hearing of the proceedings will be complex and that considerable sums will be expended by the respective parties in pursuing their own claims and in defending themselves from cross claims. 9 The first defendant has identified its estimate of costs as at 27 April 2007 in the following terms: