BROTHERS IN BUILDING [2025] SASC 53

Applicant: BROTHERS IN BUILDING Counsel: MR P ADAMS - Solicitor: MILLS OAKLEY First, Second and Third Respondents: CHAO DONG, YUE HONG ZHAO, THE DONG FAMILY COMPANY PTY LTD Counsel: MR M HOILE - Solicitor: LEGAL PROJECTS Fourth Respondent: TORRENS CONSTRUCTIONS PTY LTD Director of Company: MR C DONG Hearing Date/s: 04/04/2025 File No/s: CIV-22-002817 B SUPREME COURT OF SOUTH AUSTRALIA (Civil: Application) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. IN THE MATTER OF TORRENS CONSTRUCTIONS PTY LTD (No 3) [2025] SASC 53 Reasons for Decision of the Honourable Justice Kimber 24 April 2025 PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - PROCEDURE PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - PROCEDURE - MORE THAN ONE ORDER PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS This is an application by the first, second, and third respondents (the respondents) for a further order for security for costs in the trial of this matter. The application is made in the context of the trial having not concluded in the 12 days the subject of the existing security for costs order. It is not disputed that a further three days is required to complete the trial. The respondents are seeking that the applicant pay further security for costs equivalent to six days at the daily rate of $7,300. The respondents submit that this is the appropriate order given the preparation of written submissions prior to closing addresses. The applicant opposes this application, submitting that no order should be made. The applicant submits that time was ‘lost’ during the trial due to the conduct of the respondents. In particular, that time was ‘lost’ due to its application to amend the pleadings during the trial as a result of the late disclosure of documents by the respondents and the manner of cross-examination of the only civilian witness of substance called by the applicant. Held, granting the application for a further order for security of costs: 1. The applicant is to pay security for costs for an additional three days in the amount of $21,900; and 2. The above amount is to be paid by 20 June 2025. -- 1 of 7 -- Uniform Civil Rules 2020 (SA) r 115.1(1), referred to. Camping Warehouse Australia Pty Ltd v Downer EDI Ltd [2016] VSC 29; Anchung Pty Ltd v Northern Territory of Australia (No 2) [2016] NTSC 34, applied. Re Torrens Constructions Pty Ltd [2024] SASC 136; Re Torrens Constructions Pty Ltd [2023] SASC 25, discussed. -- 2 of 7 -- IN THE MATTER OF TORRENS CONSTRUCTIONS PTY LTD (No 3) [2025] SASC 53 Civil: Application KIMBER J: 1 This is an application by the first, second, and third respondents (the respondents) for a further order for security for costs in the trial of this matter. 2 Two previous orders have been made in favour of the respondents. The first order was made by Judge Bochner, as her Honour then was, in the amount of $56,000 for costs up to, and including, the first day of the trial.1 The second order was made by me, as the trial Judge, in the amount of $85,580 for a period of 11 days from the second day of the trial.2 3 The current application is made in the context of the trial having not concluded in 12 days. The trial commenced on 3 February 2025 and has occupied, in effect, 12 days to date. There is no dispute that a further three days will be required to complete the trial (i.e. – two days for the completion of the evidence on 23 and 24 June 2025 and one day for closing addresses on 22 July 2025). Between 24 June 2025 and 22 July 2025, the parties will prepare, and file, written submissions. It follows that the trial is expected to occupy 15 sitting days, not 12. 4 The issue in this application is whether a further order for security for costs should be made and, if so, the amount that should be paid. Having initially sought further security for 12 additional days at $7,300 per day, on the hearing before me, the effect of the submission of the respondents was that an order for a further six days is appropriate at the same daily rate. The applicant submits that no order should be made. 5 For the reasons that follow, I order that the applicant pay, by the close of business on 20 June 2025, security for costs for three days in the amount of $21,900. Background 6 The background in the proceedings, at least before the trial commenced, is set out in Re Torrens Constructions Pty Ltd [2024] SASC 136. I will not repeat that summary. An overview of the submissions of the parties 7 The respondents submit that, due to the trial having occupied longer than anticipated, the order sought is appropriate. The respondents submit that there is 1 Re Torrens Constructions Pty Ltd (Supreme Court of South Australia, Judge Bochner, 24 February 2023). 2 Re Torrens Constructions Pty Ltd [2024] SASC 136. -- 3 of 7 -- [2025] SASC 53 Kimber J 2 no challenge to the following submissions made before Judge Bochner as her Honour then was, namely that:3 • The applicant is a trustee company and so is bringing this action for the benefit of another; • As a trustee company, the applicant owns no property in its own right, and in fact, divested itself of its only substantial asset in September 2022; • No one standing behind the applicant has come forward to offer security; • There has been no suggestion that an order for security would stultify this action; • There is unchallenged evidence that the applicant is unlikely to be able to meet any costs order made against it. 8 The respondents submit that, given the above, if the order sought is not made, there is a substantial risk that the applicant may have no ability to meet an adverse costs order. Although only three more sitting days should be needed to complete the trial, the respondents submit that an order for six days is appropriate given the preparation of written submissions between 24 June 2025 and 22 July 2025. 9 The applicant opposes any order being made. The applicant submits that I should find the following: • that time was ‘lost’ during the first 12 days of the trial; • that the fault for that ‘lost’ time lies with the respondents; and • had that time not been ‘lost’, the trial would have been completed within the 12 days the subject of existing orders for security for costs. 10 Broadly, the applicant submits that, during the trial to date, approximately a day or so was ‘lost’ due to arguments about amendments to the statement of claim which were ultimately granted. The applicant further submits that the cross-examination of the only substantial civilian witness called by the applicant was unduly lengthy. Taking what might be described as a ‘broad brush’ approach, the applicant submits that if those things had not occurred, the trial would have been completed within 12 days. In the alternative, the applicant submits that even if the above submissions are rejected, the amount of any further order should be significantly less than that sought. The applicant submits that is, on its own, a reason to decline to make any order. The rules and some principles 11 Rule 115.1(1) of the Uniform Civil Rules 2020 (SA) provides: 4 3 Re Torrens Constructions Pty Ltd [2023] SASC 25, [18]. 4 Uniform Civil Rules 2020 (SA) r 115.1(1). -- 4 of 7 -- [2025] SASC 53 Kimber J 3 115.1—Security for costs (1) The Court may order that an applicant in an action provide security for costs if— (a) the applicant is bringing the claim or application for someone else’s benefit; (b) the applicant is ordinarily resident outside Australia; (c) there are reasonable grounds to suspect that the action has been brought for an ulterior purpose; (d) the order is authorised by statute; or (e) the order is necessary in the interests of justice. 12 There is no dispute that there is a discretion to award further security for costs if the previous order was insufficient.5 For the purposes of this application, if any order is appropriate, there is no dispute that it is appropriate to approach the amount in a ‘broad brush’ manner.6 The submission of the applicant about time ‘lost’ 13 As a starting point, it is necessary to consider the submissions of the applicant about time that it says was ‘lost’ during the trial due to the conduct of the respondents. 14 After its opening, the applicant sought leave to amend its statement of claim. Argument about whether the amendments should be permitted did not take place immediately. Some aspects of that application were conceded by the respondents, other aspects were opposed. As some aspects of the application to amend were opposed, time that would have been devoted to evidence was spent hearing submissions with respect to the amendments. In that sense, it is the case that some time was ‘lost’. 15 Identification of which party caused the ‘lost’ time is not straightforward in every respect. It is only necessary to consider those amendments which were opposed by submissions of any material length. The amendments in that category have been described as the insolvency (or liquidation) amendments.7 At the time the application was first made, nothing new materially had occurred. The amendments were simply in response to observations made by the respondents about the applicant’s opening. However, by the time that submissions on the application to amend were heard, the respondents had, on the fourth day of the trial, discovered documents (the documents) which should have been discovered following a ruling in March 2023.8 Despite the application being made so late, it was granted. A key reason for granting the application to make the insolvency amendments was the discovery of the documents. The applicant submits that, had 5 Anchung Pty Ltd v Northern Territory of Australia (No 2) [2016] NTSC 34, [11]. 6 Camping Warehouse Australia Pty Ltd v Downer EDI Ltd [2016] VSC 29. 7 Re Torrens Constructions (Supreme Court of South Australia, Kimber J, 11 February 2025). 8 Re Torrens Constructions (No 2) (Supreme Court of South Australia, Judge Bochner, 6 March 2023). -- 5 of 7 -- [2025] SASC 53 Kimber J 4 the documents been discovered before trial, time would not have been spent during the trial on the application to amend as the amendment application would have been made before the trial commenced. 16 In a submission which mirrors the approach taken to the relevant aspect of the amendment application, the respondents do not dispute that the documents should have been discovered before the trial but submit that the foundation for the amendments was open to be discerned from documents already discovered. 17 Given that the relevant aspect of the amendment application was opposed by the respondents and the time spent on that opposition, there is some merit in the submission of the applicant in this application that the respondents caused time to be lost. That said, taking a ‘broad brush’ approach, I do not quantify the time spent on the relevant aspect of the submissions as being nearly as extensive as that submitted by the applicant. The submissions were not solely directed to the insolvency amendments. Taking a ‘broad brush’ approach, I would estimate the time ‘lost’ to the relevant aspects of the application to amend the statement of claim to be significantly less than one day. It is undesirable that time was lost, particularly as, on the reasons ultimately given for the application being granted, the merits of that application were influenced in a material way by the discovery of the documents on the fourth day of the trial. That said, I do not find that it is appropriate to weigh that against the respondents in a material way in this application. As I find that less than a day was lost, the trial still would not have concluded in the time set aside and I am unable to discount that the three days set aside to conclude the trial may not still have been necessary. 18 I now consider the submission of the applicant about the length of the cross-examination by the respondents of Mr Toubia, the only civilian witness of substance called by the applicant. I am satisfied that it was lengthy and involved some repetition. Nevertheless, for the following reasons, I do not give that weight in this application. The cross-examination by the applicant of Mr Dong, the only civilian witness of substance called to date by the respondents, has also been lengthy and has occupied a considerable portion of the trial. I accept that the length of that cross-examination has, at times, been influenced by the approach taken in answering some questions, but it would not be appropriate to draw any conclusion about the reasons for that on this application. Further, comparison of the length of cross-examination conducted by both parties and drawing any conclusion, before the trial has concluded, adverse to one party or another is, at least, an exercise about which meaningful precision is not possible. 19 I turn to the application of the respondents for further security of costs to be ordered for the three days to prepare closing submissions. I am not satisfied that any time is appropriate for that preparation. Had the trial been able to continue uninterrupted, that is work which would have been necessary within the earlier order made with respect to security for costs from the second day of the trial. -- 6 of 7 -- [2025] SASC 53 Kimber J 5 Conclusion 20 As earlier outlined, in this application, the submissions set out at [7] above remain unchallenged. Those matters weigh in favour of the application being granted. In my view, they are matters of substantial weight to whether an order should be made. 21 Having concluded that the period of three days for preparation of closing submissions should not be the subject of any order, what remains is the three days set aside to complete the trial. That is a relatively short period but, in the context of a trial that has taken 12 days to date, it is a period which is material. There is no dispute that the appropriate amount per day is $7,300. In the circumstances, I find that the applicant should pay further security for costs for three days in the amount of $21,900. Orders 1. The applicant pay security for costs for an additional three days in the amount of $21,900. 2. The above amount is to be paid by 20 June 2025. 3. I will hear the parties as to any further orders which may be necessary. -- 7 of 7 --