Uniform Civil Procedure Rules 1999 (UCPR Qld) - Digest
back to table of provisionsChapter 17 – Security for Costs
- [670] Security for Costs
- [671] Prerequisite for security for costs
- [671A] Plaintiff is a corporation and unable to pay defendant’s costs if ordered to do so
- [671C] Address of plaintiff is not stated or misstated in originating process
- [671E] Plaintiff ordinarily resident outside Australia
- [671F] Plaintiff ordinarily resident outside Australia
- [671H] Justice of the case requires the making of the order
- [672] Discretionary factors for security for costs
- [672A] Means of those standing behind the litigation
- [672B] Prospects of success
- [672D] Impecuniosity of a corporation
- [672E] Impecuniosity attributable to defendant
- [672F] Whether plaintiff is effectively in the position of a defendant
- [672G] Whether order would be oppressive
- [672H] Order would stifle the litigation
- [673] Way security given
- [674] Stay or dismissal
- [675] Setting aside or varying order
- [676] Finalising security
- [677] Counterclaims and third party proceedings
[670] Security for Costs go to top
Considerations to be applied in exercising discretion
The discretion to order security for costs is unfettered and should be exercised having regard to all of the circumstances of the particular case without any predisposition in favour of an award of security. The exercise of that discretion requires the assessment and weighing of relevant factors, some of which may be inter-related: Base 1 Projects Pty Ltd v Islamic College of Brisbane Ltd [2012] QCA 114, [18], [23] (Wilson AJA, McMurdo P and Applegarth J agreeing).
A convenient summary of the relevant considerations is contained in Beazley J’s judgment in KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189, 197-198, cited in Base 1 Projects Pty Ltd v Islamic College of Brisbane Ltd [2012] QCA 114, [18] (Wilson AJA, McMurdo P and Applegarth J agreeing) (citations omitted):
- Such applications should be brought promptly. This is a longstanding principle.
- The strength and bona fides of the applicant’s case are relevant considerations. As a general rule, where a claim is prima facie regular on its face and discloses a cause of action, in the absence of evidence to the contrary, the court should proceed on the basis that the claim is bona fide with a reasonable prospect of success.
- Whether the applicant’s impecuniosity was caused by the respondent’s conduct the subject of the claim.
- Whether the respondent’s application for security is oppressive, in the sense that it is being used merely to deny an impecunious applicant a right to litigate.
- Whether there are any persons standing behind the company who are likely to benefit from the litigation and who are willing to provide the necessary security.
- Whether persons standing behind the company have offered any personal undertaking to be liable for the costs and if so, the form of any such undertaking.
- Security will only ordinarily be ordered against a party who is in substance a plaintiff, and an order ought not to be made against parties who are defending themselves and thus forced to litigate.
Parties should not be encouraged to devote extensive resources (including court resources) to questions of security for costs. It should not be forgotten that an order for security is not a final assessment of anything about the amount of the costs that may be payable, but a provision against a contingent amount that depends on a number of things that are not amenable to precise prediction: Lanai Unit Holdings Pty Ltd v Mallesons Stephen Jacques [2016] QSC 2, [52] (Jackson J).
Security for costs of application for leave to appeal
The correct basis for bringing an order for security for costs relating to an application for leave to appeal to the Court of Appeal is r 670 and not r 772. Rule 670 vests in the Court of Appeal the power to order the plaintiff to give security for the defendant's costs of the proceeding to obtain leave to appeal from the Court of Appeal: Bell v Bay-Jespersen [2004] 2 Qd R 235; [2004] QCA 68, [14] (McPherson JA, McMurdo P and White J concurring).
Section 244(7) of the Supreme Court Act 1995 (now s 8(4) of the Civil Proceedings Act 2011), when read in conjunction with r 670, enables the Court of Appeal to order a stay of an applicant’s application for leave to appeal pending the applicant’s provision of security in favour of the respondent for the costs of the application for leave to appeal: Bell v Bay-Jespersen [2004] 2 Qd R 235, [14] (McPherson JA, McMurdo P and White J concurring).
Inherent jurisdiction
In addition to rr 670 and 671, the Court retains its inherent jurisdiction to make orders for security for costs: Mbuzi v Hall [2010] QCA 356, [17] (Fraser JA, Holmes JA and Muir JA agreeing).
If the applicant is not a “plaintiff” for the purposes of r 670, then the matters stated in r 671 and the discretionary considerations stated in r 672 provide guidance about matters which may be relevant to the exercise of the court’s inherent jurisdiction: Mbuzi v Hall [2010] QSC 359, [57] (Applegarth J).
Quantum of Security
An order for security for costs is intended to provide protection against the risk that an order for standard costs in the defendant’s favour might not be satisfied: Dodd v Shine Corporate Ltd [2018] QSC 40 (Martin J) at [17]. It does not set out to give a complete and certain indemnity: Sanrus Pty Ltd v Monto Coal 2 Pty Ltd [2018] QSC 53 (Crow J) at [83].
The assessment of an appropriate amount of security for costs is not like an assessment of costs after the event. It is a provision against a contingent amount that depends on a number of things that are not amenable to precise predictions. It usually requires a broad brush approach, having regard to the court’s own experience of the work involved in similar matters: Dodd v Shine Corporate Ltd [2018] QSC 40 (Martin J) at [15]-[16]; Sanrus Pty Ltd v Monto Coal 2 Pty Ltd [2018] QSC 53 (Crow J) at [83]; Logan APZ Pty Ltd v Council of the City of Logan [2017] QCA 288 at [45]-[47].
Security for costs may be given in instalments up to a particular stage in the litigation (eg to the completion of disclosure: Dodd v Shine Corporate Ltd [2018] QSC 40 (Martin J) at [35]). Security may be given for costs already incurred, as well as future costs: Sanrus Pty Ltd v Monto Coal 2 Pty Ltd [2018] QSC 53 (Crow J) at [83].
Where security is sought up to the first day of trial, it is usually necessary to make some allowance by way of discount for the chance that the matter may settle or otherwise not proceed. This factor may not be as significant if security is only sought for a period when settlement is unlikely (eg from commencement to disclosure): Dodd v Shine Corporate Ltd [2018] QSC 40 (Martin J) at [18]; Sanrus Pty Ltd v Monto Coal 2 Pty Ltd [2018] QSC 53 (Crow J) at [83].
In assessing quantum, it may relevant to take into account that the plaintiff’s costs are the subject of litigation funding: Dodd v Shine Corporate Ltd [2018] QSC 40 (Martin J) at [19]-[20].
[671] Prerequisite for security for costs go to top
Onus of establishing prerequisites
The overall onus remains on an applicant seeking an order for security for costs to establish the prerequisites for the order: Robson v Robson [2008] QCA 36, [52] (McMeekin J).
Under r 671 the defendant(s) carry the evidentiary burden of establishing a prima facie entitlement to an order for security but, once established, the evidentiary onus shifts to the plaintiff(s), to satisfy the court that, taking all the relevant factors into account, the court’s discretion ought be exercised by either refusing to order security, or by ordering security in some lesser amount than is sought by the defendants: Bellaluz Pty Ltd v Westpac Banking Corp [2014] QSC 273, [13] (Alan Wilson J), citing Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744, [60]–[62].
[671A] Plaintiff is a corporation and unable to pay defendant’s costs if ordered to do so go to top
When a company would likely be unable to meet an adverse costs order, then absent any other discretionary consideration, an alternative proposal advanced by the company must be reasonably secure, if an order for security for costs is to be avoided: Togito Pty Ltd v Pioneer Investments (Aust) Pty Ltd [2009] QSC 68, [2] (de Jersey CJ).
Where a plaintiff is in liquidation, that is prima facie evidence satisfying the threshold test. Even if the company in liquidation has substantial assets, the availability of those assets to meet a costs order in future may not be capable of determination: Mio Art Pty Ltd v Mango Boulevard Pty Ltd & Ors [2018] QSC 31 (Daubney J) [21]-[32]
[671C] Address of plaintiff is not stated or misstated in originating process go to top
The use of the phrase “reason to believe” in r 671(c) makes it clear that there is no requirement that the plaintiff satisfy the court on the balance of probabilities of the innocent explanation raised by the plaintiff as to why the address was not stated or was misstated: Robson v Robson [2008] QCA 36, [51] (McMeekin J).
It is for the defendant to establish that the omission or misstatement of the address was done with the intention to deceive, and for the plaintiff to raise any innocent explanation relied on: Robson v Robson [2008] QCA 36, [52] (McMeekin J).
[671E] Plaintiff ordinarily resident outside Australia go to top
The mere circumstance that a plaintiff is resident outside the jurisdiction does not necessarily invite an exercise of discretion in favour of ordering security, the question being how justice will best be served in the particular case. However, the fact that a plaintiff is resident out of the jurisdiction and has no assets within the jurisdiction has been seen as a “circumstance of great weight in determining whether an order for security for costs should be made”: Global Access Limited v Educationdynamics LLC [2010] 1 Qd R 525; [2009] QSC 373, [12] (Applegarth J), citing Energy Drilling Inc v Petroz NL [1989] ATPR 40–954; P S Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321, 323.
[671F] Plaintiff ordinarily resident outside Australia go to top
The mere circumstance that a plaintiff is resident outside the jurisdiction does not necessarily invite an exercise of discretion in favour of ordering security, the question being how justice will best be served in the particular case. However, the fact that a plaintiff is resident out of the jurisdiction and has no assets within the jurisdiction has been seen as a “circumstance of great weight in determining whether an order for security for costs should be made”: Global Access Limited v Educationdynamics LLC [2010] 1 Qd R 525; [2009] QSC 373, [12] (Applegarth J), citing Energy Drilling Inc v Petroz NL [1989] ATPR 40–954; P S Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321, 323.
[671H] Justice of the case requires the making of the order go to top
Where a plaintiff's lack of assets in Australia has been manufactured to defeat an order for costs against the plaintiff which might be made by the court at the conclusion of the proceedings, the policy of the law that poverty should not be a barrier to justice is not infringed. In such a case, the justice of the case will favour the making of an order to prevent a plaintiff from deliberately and cynically thwarting the power of the court to cast the cost burden of unmeritorious litigation upon the plaintiff: Robson v Robson [2008] QCA 36, [25] (Keane JA), cf [36] (Muir JA).
Interaction between rr 671 and 672
The court is not debarred from considering the matters listed in r 672 in its assessment of whether one or more of the prerequisites under r 671 have been satisfied. The matters listed in r 672 encompass many, if not most, of the circumstances that will normally inform the determination under r 671, and in particular will be relevant to a determination under r 671(h) whether the justice of the case requires the making of the order: Robson v Robson [2008] QCA 36, [31]–[33] (Muir JA), [61] (McMeekin J), cf [19] and [22] (Keane JA disagreeing on this point).
Amount to be included in security for costs
The professional costs and disbursements of an Australian lawyer for steps taken on behalf of a prospective defendant to prepare for a notified claim, which entails work that will have to be done in defence of the claim, may be recoverable as costs of the proceeding to be awarded under s 15 of the Civil Proceedings Act 2011 (Qld) and r 681 of the UCPR. Accordingly, there is no reason in principle to exclude those costs from an order for security for costs made under r 671: Lanai Unit Holdings Pty Ltd v Mallesons Stephen Jacques [2016] QSC 2, [34]-[35] (Jackson J).
There is a discernible trend in the cases to discount the amount sought in an application for security for costs. Doing so guards against the risk of over-estimation. It also reflects the idea that the proceeding may end short of the costs of all the steps for which security is sought. However, the latter consideration can be met by staged orders for security, although that may involve the parties in further applications and costs of those applications at a later stage. As well, to focus on the risk of over-estimation distracts from the risk of under-estimation. Courts are not necessarily well placed to intuitively assess that the risk of one is greater than the risk of the other: Lanai Unit Holdings Pty Ltd v Mallesons Stephen Jacques [2016] QSC 2, [44] (Jackson J).
[672] Discretionary factors for security for costs go to top
The list of factors in r 672 is not exhaustive: Robson v Robson [2008] QCA 36, [61] (McMeekin J); Kennedy v Nine Network Australia Pty Ltd [2008] QSC 134, [34] (Dutney J).
[672A] Means of those standing behind the litigation go to top
The court can decline to order security if a corporate plaintiff is able to establish that those who stand behind the company are also without means: Cherbourg Food Processing Company Pty Ltd (in liq) v Enterprises (Qld) Pty Ltd [2012] QSC 162, [30] (Ann Lyons J), citing Bell Wholesale Co Pty Ltd v Gates Export Corp (No 2) (1984) 52 ALR 176, 179.
There is no general principle that where the shareholders or other persons interested in the outcome of the litigation offer to be personally liable for the plaintiff company's costs, an order for security should not be made and other circumstances need not be considered: Specialised Explosives Blasting & Training Pty Ltd v Huddy’s Plant Hire Pty Ltd [2010] 2 Qd R 85; [2009] QCA 254, [39] (Muir JA, Holmes JA and Philippides J agreeing), citing KP Cable Investments (1995) 56 FCR 189, 204 (Beazley J).
[672B] Prospects of success go to top
As a general rule, where a claim is prima facie regular and discloses a cause of action, in the absence of evidence to the contrary, the court should proceed on the basis that the claim is bona fide with a reasonable prospect of success: Base 1 Projects Pty Ltd v Islamic College of Brisbane Ltd [2012] QCA 114, [18] (Wilson AJA, McMurdo P and Applegarth J agreeing), citing Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497, 514.
An application for security for costs is not to become a mini trial with provisional views formed on the prospects of success so as to encourage one or other side. The accepted approach is that the strength and bona fides of the plaintiff’s case are relevant considerations, but usually “the court should proceed on the basis that the claim is both bona fide and has reasonable prospects ... [and] should not go into the merits of the claim in detail unless it can be demonstrated that there is a high degree of probability of success or failure”: Suncare Constructions Australia Pty Ltd v Gainspace (Mackay) Pty Ltd [2016] QSC 67, [11] (Jackson J), citing Base 1 Projects Pty Ltd v Islamic College of Brisbane Ltd [2012] QCA 114, [18]; Jazabas Pty Ltd v Haddad (2007) 65 ACSR 276, 284-285 [30] and 296 [84]; ACN 006 577 162 Pty Ltd (formerly Harrop Engineering Australia Pty Ltd) as trustee for Harrop Family Trust v Beauville Pty Ltd [2014] VSC 298, [8],
It should not be forgotten that the condition for the making of an order for security is the assumption that the defendant may succeed in the proceeding. In this context, the mischief or purpose to which r 670 is directed is the risk that the defendant will be unable to recover an order for costs against the impecunious corporate plaintiff in the event that the defendant succeeds: Suncare Constructions Australia Pty Ltd v Gainspace (Mackay) Pty Ltd [2016] QSC 67, [12] (Jackson J).
[672D] Impecuniosity of a corporation go to top
An impecunious litigant will not lightly be turned away from a court by being compelled to put up security for costs. But where a litigant has had two hearings and been unsuccessful in both, different considerations prevail. An opposite party should not be compelled to defend its victory at risk of being burdened with unsatisfied costs orders: Muir v McGowan [2010] QCA 154, pp. 8-9 (White JA), citing Harpur v Ariadne Australia Ltd (No 2) [1984] 2 Qd R 523.
A company in liquidation against whom an order for security for costs is sought cannot successfully resist such an order merely by proving that it cannot fund the litigation from its own resources if an order for security is made; it must prove that it cannot do so even if it relies on the other resources available to it (the company’s shareholders or creditors): Base 1 Projects Pty Ltd v Islamic College of Brisbane Ltd [2012] QCA 114, [18] (Wilson AJA, McMurdo P and Applegarth J agreeing), citing Hession v Century 21 South Pacific Ltd (in liq) (1992) 28 NSWLR 120, 123 (Meagher JA).
While it is both true and important that poverty must be no bar to litigation, what this means is that the courts must be astute to see that no person pursuing a claim which is not frivolous is precluded from doing so by the erection of obstacles which poverty is unable to surmount; it does not mean that proof of insolvency automatically confers an immunity from statutory provisions which deal with insolvent plaintiffs: Base 1 Projects Pty Ltd v Islamic College of Brisbane Ltd [2012] QCA 114, [18] (Wilson AJA, McMurdo P and Applegarth J agreeing) citing Hession v Century 21 South Pacific Ltd (in liq) (1992) 28 NSWLR 120, 123 (Meagher JA).
[672E] Impecuniosity attributable to defendant go to top
It is for the plaintiff to persuade the court that its impecuniosity was caused by the defendant’s conduct. The plaintiff bears the onus of establishing both the adequacy of their financial position before their dealings with the defendant and that the defendant’s actions have caused or at least materially contributed to the plaintiff’s inability to meet an order for security for costs: Base 1 Projects Pty Ltd v Islamic College of Brisbane Ltd [2012] QCA 114, [26] (Wilson AJA, McMurdo P and Applegarth J agreeing), citing Jazabas Pty Ltd v Haddad [2007] NSWCA 291, [94]-[95] (McClellan CJ at CL).
There must be a real causal connection between the impugned conduct and the plaintiff’s impecuniosity which, in the exercise of the court’s discretion, would make it unjust to require security; and it must be established that the defendants seeking security have been guilty of some form of misconduct or unacceptable business dealings vis-à-vis the plaintiffs. It is not enough to show that the wrongful conduct of the defendants, if established at trial, is a contributing factor to a diminution of the value of the company’s assets: Contamination Control Laboratories Pty Ltd v Reyer [2010] QSC 1, [8] (Daubney J), cited in Bellaluz Pty Ltd v Westpac Banking Corp [2014] QSC 273, [21] (Alan Wilson J). But see Suncare Constructions Australia Pty Ltd v Gainspace (Mackay) Pty Ltd [2016] QSC 67, [33], where Jackson J was of the view that there need not be misconduct or unacceptable business dealings on the part of the defendant.
[672F] Whether plaintiff is effectively in the position of a defendant go to top
A person who is nominally a plaintiff should not be required to give security for costs unless it is the person invoking or resorting to the jurisdiction for the purpose of establishing rights or obtaining relief. Security for costs should not be required where the plaintiff is really defending themselves against attack or against a previous action of the defendant against them: Global Access Limited v Educationdynamics LLC [2010] 1 Qd R 525; [2009] QSC 373, [15] (Applegarth J), citing Willey v Synan (1935) 54 CLR 175 at 184–185 (Dixon J).
In determining whether a plaintiff is effectively in the position of a defendant, the court is guided by substance and not by the form of the matter: Global Access Limited v Educationdynamics LLC [2010] 1 Qd R 525; [2009] QSC 373, [17] (Applegarth J), citing Maatschappij voor Fondsenbezit v Shell Transport and Trading Co [1923] 2 KB 166, 177 (Scrutton LJ).
[672G] Whether order would be oppressive go to top
The defendant’s application for security would be regarded as oppressive if it is being used merely to deny an impecunious plaintiff a right to litigate: Base 1 Projects Pty Ltd v Islamic College of Brisbane Ltd [2012] QCA 114, [18] (Wilson AJA, McMurdo P and Applegarth J concurring), citing M A Productions v Austarama Television (1982) 7 ACLR 97, 100; Yandil Holdings Pty Ltd v Insurance Co of North America (1985) 3 ACLC 542, 545 (Clarke J); Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497, 513.
The risk of an order having an oppressive effect in the sense that it stifles a plaintiff’s ability to take an action to trial is a material one, but it is not to be considered in a vacuum. A large number of potentially relevant factors are listed in r 672 but they are not exhaustive, and should be read conjunctively: Bellaluz Pty Ltd v Westpac Banking Corp [2014] QSC 273, [24] (Alan Wilson J).
What is oppressive must be judged in the broader context of the relationships between the parties to the proceeding: Mt Nathan Land Owners Pty Ltd (in liq) v Morris [2006] QSC 225, [48] (Mullins J), cited in Bellaluz Pty Ltd v Westpac Banking Corp [2014] QSC 273, [24] (Alan Wilson J).
The risk of hardship for the plaintiff must be balanced against the defendant’s right to some protection for costs in an action that the plaintiff has elected to bring: Bellaluz Pty Ltd v Westpac Banking Corp [2014] QSC 273, [27] (Alan Wilson J).
[672H] Order would stifle the litigation go to top
If the plaintiff is impecunious and an order for security for costs may stifle his or her claim, that may very well be a powerful reason for not ordering security: Base 1 Projects Pty Ltd v Islamic College of Brisbane Ltd [2012] QCA 114, [45] (Wilson AJA, McMurdo P and Applegarth J agreeing), citing Thune v London Properties Ltd [1990] 1 WLR 562, 573, (Bingham LJ).
An important consideration in some cases is whether an order for security for costs would stultify the proceeding. In this context, the verb “stultify” is used to mean bring the proceedings to a halt and make them useless to the plaintiff, because the plaintiff cannot provide and will not be able to obtain the security ordered: Suncare Constructions Australia Pty Ltd v Gainspace (Mackay) Pty Ltd [2016] QSC 67, [47] (Jackson J), citing Base 1 Projects Pty Ltd v Islamic College of Brisbane Ltd [2012] QCA 114, [18].
The fact that an order for security for costs might stifle proceedings is not, by itself, a ground for refusing an order, although it does militate against the making of an order: Bellaluz Pty Ltd v Westpac Banking Corp [2014] QSC 273, [34] (Alan Wilson J), citing Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497, 512–13 (French J); Yandil Holdings Pty Ltd v Insurance Co of North America (1986) 7 NSWLR 571 (Rogers J).
This factor is linked to considerations of whether there are any persons standing behind the company who are likely to benefit from the litigation and who are willing to provide the necessary security. The provision of a director’s guarantee is one of the factors to be taken into account: Base 1 Projects Pty Ltd v Islamic College of Brisbane Ltd [2012] QCA 114, [19] (Wilson AJA, McMurdo P and Applegarth J agreeing).
The existence of the litigation funding agreement is a discretionary matter to be taken into account. Although there are some statements that suggest that the existence of a commercial litigation funder who will share in the proceeds but not in the risk of an adverse costs order is a powerful factor in favour of making an order for security for costs, it is but another discretionary factor: Suncare Constructions Australia Pty Ltd v Gainspace (Mackay) Pty Ltd [2016] QSC 67, [48] (Jackson J).
Delay in bringing application for security
Even though delay on the part of the defendant in applying for security for costs is not expressly listed as a factor in r 672, it has always been regarded as an important discretionary consideration: Kennedy v Nine Network Australia Pty Ltd [2008] QSC 134, [38] (Dutney J).
It is axiomatic that applications for security for costs should ordinarily be brought promptly and before the party against whom security is sought has expended a significant amount of costs: Programmed Solutions Pty Ltd v Dectar Pty Ltd [2007] QCA 385, [28] (Dutney J), citing Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744, [69]–[81]; Buckley v Bennell Design & Construction Pty Ltd (1974) 1 ACLR 301.
If the application for security for costs is not made promptly, it is almost inevitable that there will be some prejudice to the plaintiff: Robson v Robson [2008] QCA 36, [68] (McMeekin J).
If the balancing of competing factors favours the making an order for security for costs, delay may still be relevant to the quantum of security to be ordered: Kennedy v Nine Network Australia Pty Ltd [2008] QSC 134, [58] (Dutney J).
More than one plaintiff
Where there is more than one plaintiff, there must be a coincidence of interest to warrant ordering security for costs against each plaintiff. Where all plaintiffs sue in the same interest and by the same solicitors and counsel there is but one set of costs: Molony v ACN 009 697 367 Pty Ltd (In Liq) [2003] QCA 120, [29] (White J), citing Harpur v Ariadne Australia Ltd [1984] 2 Qd R 523, 532 (Connolly J); see also [22] (Williams JA).
Security for costs against natural person
It is well settled that an order for security for costs will not be made against an impecunious plaintiff who is a natural person except in certain limited circumstances: Base 1 Projects Pty Ltd v Islamic College of Brisbane Ltd [2012] QCA 114, [43] (Wilson AJA, McMurdo P and Applegarth J agreeing).
[673] Way security given go to top
It has been long accepted, and well prior to the introduction of the UCPR in 1999, that a personal guarantee can be appropriate security: Fimiston Investments Pty Ltd (in liq) v Pecker Maroo Pty Ltd [2011] QSC 356, [48] (McMeekin J), citing Dwight v FCT (1992) 37 FCR 178, 187; Yandil Holdings Pty Ltd v Insurance Company of North America (1986) 7 NSWLR 571.
[674] Stay or dismissal go to top
The meaning of this rule does not appear to have been considered in any published decision of a Queensland court.
[675] Setting aside or varying order go to top
An order for security for costs is interlocutory in character, and interlocutory orders are, at least to some extent and in some circumstances, susceptible of variation either by the judge who made them or otherwise without necessity for an appeal. What is, however, generally required as a prerequisite to varying or setting aside such an order is new material providing evidence of additional relevant facts, which have arisen or been discovered since the earlier application or order was made, that require a different order from that originally made, or would have done so at the time when that order was made: Goodman v Lorenzen [2000] QCA 11, [6] (McPherson JA, Thomas JA and Byrne J concurring).
Exercising the discretion to vary an order for security for costs also requires taking account of all the circumstances of the case: Aqwell Pty Ltd v BJC Drilling Services Pty Ltd [2008] QSC 266, [12]-[16] (Daubney J).
Where further security is sought
Evidence from a costs assessor of an estimate of costs to be incurred until trial would be relevant, although not determinative, to the assessment of whether further security ought be ordered. Regard is also to be had to the established proposition that an order for security for costs is not an indemnity: Aqwell Pty Ltd v BJC Drilling Services Pty Ltd [2008] QSC 266, [29] (Daubney J).
[676] Finalising security go to top
Once the requirements of r 676(3) have been satisfied the security must be discharged. That discharge can be achieved by an order directing the Registrar to apply from the funds held in court such sum for counsel’s fees as the Registrar considers is reasonable to satisfy the costs of the proceeding, with the balance of the fund being paid out to the plaintiff: Mantonella Pty Ltd v Thompson [2011] QCA 108, [9]-[10] (Jones J, McMurdo P and Cullinane J agreeing).
Rule 676 appears to be the only rule touching on the enforcement of security for costs when ordered. It has been long accepted, and well prior to the introduction of the UCPR in 1999, that a personal guarantee can be appropriate security. There is nothing in the rules to suggest that any different approach was intended to the enforcement of such security: Fimiston Investments Pty Ltd (in liq) v Pecker Maroo Pty Ltd [2011] QSC 356, [46], [48] (McMeekin J), citing Dwight v FCT (1992) 37 FCR 178, 187; Yandil Holdings Pty Ltd v Insurance Company of North America (1986) 7 NSWLR 571.
[677] Counterclaims and third party proceedings go to top
Security will ordinarily only be ordered against a counterclaiming party who is in substance a plaintiff and will not be ordered against a party who brings a counterclaim as a defensive proceeding or who has been forced to litigate: Project Leaders Pty Ltd v Mt Isa Irish Association Friendly Society Ltd [2003] QSC 64, [11] (Mullins J), citing Buckley v Bennell Design and Constructions Pty Ltd (1974) 1 ACLR 301, 306-307 (Street CJ); Interwest Ltd (Receivers and Managers Appointed) v Tricontinental Corp Ltd (1991) 9 ACLC 1218, 1228-1229; KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189, 198.
In many cases, the fact that the counterclaim arises out of the same transaction as the claim will support a conclusion that the counterclaim is a defensive proceeding, but that consideration is not determinative: Project Leaders Pty Ltd v Mt Isa Irish Association Friendly Society Ltd [2003] QSC 64, [12]-[13] (Mullins J), citing T Sloyan & Sons (Builders) Ltd v Brothers of Christian Instruction [1974] 3 All ER 715, 721.