“Money down; then you can sue me!”
___
P sued the Ds for $4m claiming it was an unpaid builders margin: [1]
The Ds sought security for their costs: [2]
In 2018 P worked on 2 projects for some Ds, with the Ds’ Dir expressing interest in buying shares in P despite a dropping margin: [7]
Later in 2018 some of the Ds entered into the shareholders deed. One of the Ds became a 50% shareholder in P and P was entitled to charge an 8% margin on costs for construction work done for the Ds: [8] - [10]
In 2019 P began construction work and issued D invoices for costs plus 8%: [12]
The Dirs of P and the Ds incorporated NewCo to do building work. There was some complexity as to whether NewCo charged a margin or was entitled to: [13] - [18]
The Dirs of P and the Ds incorporated NewerCo which, in a complicated arrangement, also purported to do building work for the Ds: [22] - [25]
In 2022, the Dirs of P and the Ds agreed to part ways: [26] - [30]
P then rendered an invoice to the Ds for 8% of the cost of works performed by P, NewCo, NewerCo and related entities: [31]
After settlement negotiations failed, and the making of SOPA payment claims, P commenced proceedings in August 2022: [32] - [39]
The Ds sought financial information from P: [44]
P provided a P and L and said on the assumption its invoices were paid, it was profitable: [44]
P represented that it had tendered successfully for a $20m job, but it appeared that may have been a party related to the P: [45]
The Ds sought security for their costs: [46]
P resisted the application. It said its prospects were strong based on credit findings it said would be made about the Ds’ business practices at final hearing: [50]
P said the Ds’ Dir sent emails requesting invoices be re-issued to refer to other developments, and that contracts were backdated: [51], [52]
The Court said these issues were peripheral to P’s central claim that came from the “complex and changeable” contractual environment: [53]
The Court found that even if the credit finding contended for were made, it was not clear how that would affect the parties’ contractual relationship: [54]
Regarding finances, P said it was $1.4m in deficit. If the $4m claimed was paid its position would stabilise: [56]
The Ds said the claims were claims of other entities related to P, and not P themselves. That meant that P’s prospects were not as strong as claimed and, even if the claims succeeded, the money would not necessarily revert to the P: [57] - [61]
The Court considered whether an order for security for costs would stifle the proceedings.
To prove this, P had to prove neither it, nor those who stood to benefit from the litigation, could provide security. Including due to insufficient evidence about the beneficiaries of a relevant trust, P failed to meet this test: [63] - [71]
The Court ordered that P should provide D with $250K security for their costs, and for it to have its costs of this application: [79]

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