Steel Building Systems Pty Ltd (in liq) v Decmil Australia Pty Ltd [2019] NSWSC 1645

Supreme Court New South Wales

Medium Neutral Citation: Steel Building Systems Pty Ltd (in liq) v Decmil Australia Pty Ltd [2019] NSWSC 1645 Hearing dates: 22 November 2019 Decision date: 25 November 2019 Jurisdiction: Equity - Technology and Construction List Before: Stevenson J Decision: Plaintiff to provide further security for costs in the amount sought Catchwords: COSTS – security for costs – procedure and discretion – further security sought from the defendant – whether cross-claim defensive in nature – further security ordered Category: Procedural and other rulings Parties: Steel Building Systems Pty Ltd (in liquidation) (Plaintiff/Respondent) Decmil Australia Pty Ltd (First Defendant/Applicant) Kneebone & Beretta Consulting Pty Ltd (Second Defendant) Representation: Counsel: D Hand (Plaintiff/Respondent) A Harding (First Defendant/Applicant)

Solicitors: ERA Legal (Plaintiff/Respondent) McCullough Robertson Lawyers (First Defendant/Applicant) File Number(s): SC 2017/348226

Judgment 1. These proceedings arise out of the engagement by the first defendant, Decmil Australia Pty Ltd, of the plaintiff, Steel Building Systems Pty Ltd (in liq) ("SBS"), to design and construct "modules" installed in a mining village in Queensland to provide accommodation and other services for mine workers. 2. On 10 August 2018, the Court ordered that SBS provide security for the costs Decmil for amongst other things, "Tranche 1" of the proceedings; that is to the close of evidence. The amount of security ordered for Tranche 1 was some $160,500. 3. Liberty was reserved to Decmil to apply for further security. 4. By notice of motion filed on 8 October 2019, Decmil now seeks an order that SBS provide further security for Decmil's costs of Tranche 1. 5. SBS and Decmil have served their lay evidence in chief. SBS's lay evidence in reply is due presently. 6. The parties have exchanged expert accounting evidence. Directions have been made appointing for joint expert reports in four disciplines and for the parties provisionally to share the costs of those expert reports. 7. Decmil's solicitor, Mr Nielsen, has deposed that in relation to Tranche 1 Decmil has already incurred professional fees of some $570,000 and disbursements of some $140,500. Mr Nielsen estimates that Decmil will incur further costs in the order of $210,000 in relation to costs associated with the four joint experts. A little under $100,000 of that figure is Decmil's provisional share of the fees payable to those experts. 8. After allowing appropriate discounts to reflect party/party costs, and deducting the amount of security already provided by SBS for Tranche 1, Mr Neilsen proposes a figure in the order of some $460,000 as the appropriate figure for further security. 9. As SBS is in liquidation, and as these proceedings are funded by a litigation funder, it is common ground that the Court's jurisdiction to order further security has been enlivened. 10. SBS resists paying further security on the bases that: 1. the costs in respect of which security is sought are in substance those arising on Decmil's cross-claim; 2. in a number of respects that cross-claim is not defensive, such that Decmil should be seen as, in substance, a plaintiff; 3. there has been delay in bringing this application; 4. an adequate explanation has not been given for Decmil's 2018 underestimate of the costs likely to be incurred in relation to Tranche 1; and 5. Mr Neilsen's estimate of the further costs that will be incurred in relation to the joint expert evidence is excessive.