Australia, July 30 -- New South Wales Land and Environment Court issued text of the following judgement on June 30:

1. On 27 June 2025, I indicated that security for costs would be ordered against the plaintiff, Jianglong Shipbuilding Co Ltd, in the sum of $600,000. I now provide reasons for those orders.

2. Jianglong is a shipbuilding company domiciled in the People's Republic of China. It has no assets in Australia. It has sued the defendant, Birdon Pty Ltd, for payment of $1,132,830 under a contract to build a number of ferries, and for the return of $1,105,200 in security called upon by Birdon. Those ferries were transferred into the possession of Birdon on 9 November 2020. The contract price was to be paid in United States Dollars.

3. In its defence and a cross-claim, Birdon alleges that the ferries are defective in many ways, and claims a set-off, a reduction in the contract price for delay, an entitlement to retain a proportion of the invoiced amounts, and the payment of damages to be quantified.

4. On 16 April 2025, Birdon filed a notice of motion seeking security for costs from Jianglong in the sum of $750,000 pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 42.21.

Principles

5. The legal principles relevant to a security for costs application are well known and were not in dispute.

6. The discretion to order security for costs is wide and ought to be exercised having regard to all the circumstances. Its purpose is "to secure justice between the parties": Hoxton Park Residents Action Group Inc v Liverpool City Council [2012] NSWSC 1026 at [89] (Ward J, as her Honour then was).

7. The discretion is essentially a balancing process between ensuring that adequate and fair protection is provided for the defendant, while avoiding injustice to an impecunious plaintiff by unnecessarily shutting her out or prejudicing her in the proceedings: Li v New South Wales [2013] NSWCA 165 (Li) at [12] and [32] (Ward JA, as her Honour then was, Macfarlan and Gleeson JJA agreeing).

Issues raised

8. There was no dispute that the discretion to order security for costs was engaged, because Jianglong is a foreign corporation with no assets in the jurisdiction. Further, Jianglong did not assert that awarding security would stultify the proceedings. Instead, Jianglong contended that it was a very wealthy company with assets in China worth many hundreds of millions of dollars. Senior counsel for Jianglong accepted at hearing that it must provide security, but the question was the purpose of that security: whether as security for the costs of the proceedings, or only as security for the costs of enforcing an adverse costs order against Jianglong.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/197a4571a7485e404c17ad2b)

Disclaimer: Curated by HT Syndication.