Acell Holdings Pty Ltd v Plentygold Pty Ltd [2025] QSC 288

PROCEDURE - COSTS - SECURITY FOR COSTS - where the defendants have applied for security for costs - where the plaintiff opposes the application - whether the threshold question is satisfied - whether in weighing up the discretionary factors security for costs should be ordered - whether the estimate of the quantum of costs is reasonable

PROCEDURE - PLEADINGS - DOCUMENTS REFERRED TO IN PLEADINGS - whether an order should be made pursuant to r 222 Uniform Civil Procedure Rules 1999 (Qld) that the defendants receive a copy of documents referred to in the plaintiffs' pleadings

Corporations Act 2001 (Cth), s 1335

Uniform Civil Procedure Rules 1999 (Qld), rr 222, 670, 671, 672

Amos v Brisbane City Council [2012] QCA 206, cited

Balnaves v Smith [2008] QSC 215; [2008] 2 Qd R 413, cited

Cornelius v Global Medical Solutions Australia Pty Ltd [2014] NSWCA 65; (2014) 98 ASCR 301, applied

DGR Global v PT Ltd [2025] QCA 122, cited

GSM (Operations) Pty Ltd v Suwenda [2010] QSC 33, cited

Hyperion Technology Pty Ltd v Queensland Motorways Ltd [2013] QSC 20, considered

Jazabas Pty Ltd v Haddad [2007] NSWCA 291; (2007) 65 ACSR 276, considered

Kado v Taisei Kanko Australia Pty Ltd [2012] QSC 179, cited

Lilypond Constructions Pty Ltd v Homann [2005] QSC 263; [2006] 1 Qd R 411, considered

Menhaden Pty Ltd v Citibank NA [1984] FCA 193; (1984) 1 FCR 542, considered

Mio Art Pty Ltd v Mango Boulevard Pty Ltd [2018] QSC 31, considered

Monto Coal 2 Pty Ltd v Sanrus Pty Ltd [2018] QCA 309; [2019] 3 Qd R 143, applied

Murphy Operator Pty Ltd & Ors v Gladstone Ports Corporation Ltd (No 6) [2020] QSC 192, considered

PJ Leahy v AR Hill [2018] NSWSC 6, considered

Re Skytraders Pty Ltd [2024] NSWSC 984, cited

Robson v Robson [2008] QCA 36, cited

Stockingham Pty Ltd v Brisbane Angels Nominees Pty Ltd [2023] QSC 155, considered

• [2] This is a case where the plaintiffs have brought an action against the defendants for damages in excess of $200,000,000, alleging that the defendants breached a contract to sell them shares in a gold mine; for breaches of the Australian Consumer Law (ACL) and for unjust enrichment.
• [3] The defendants have applied for:

(a) an order for security for costs in the sum of $200,000; and

(b) an order that the plaintiffs produce documents referred to in the pleadings pursuant to r 222 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR).

(a) Whether an order for security for costs should be made;

(b) What is the quantum of security if an order for security is made; and

(c) Whether an order should be made for the production of documents referred to in the pleadings.

• [5] For the reasons below, it is ordered that the plaintiffs' provide security for costs in the sum of $150,000. The application by the defendant for the production of documents is dismissed.

• [6] The Amended Statement of Claim (ASOC) brought claims as follows:

(a) specific performance of a contract to transfer 9,000 ordinary shares in the first defendant to the second plaintiff;

(b) a declaration that the heads of agreement (HOA) between the parties is a binding and enforceable agreement;

(c) alternatively to (a), a declaration that the defendants hold their shares in the first defendant on constructive trust for the second plaintiff and an order that they transfer the shares;

(d) further or alternatively to (a) and (c), a declaration that the first and/or second defendants hold eight mining leases on constructive trust for the first plaintiff and an order for the transfer of all mining leases mentioned in the HOA held on constructive trust for the second plaintiff;

(e) a declaration that the first plaintiff has a caveatable interest in the mining assets the subject of caveats lodged on 24 January 2025;

(f) damages for breach of contract against the third, fourth, sixth and seventh defendants;

(g) damages for misleading or deceptive conduct pursuant to s 236 of the ACL;

(h) compensation under the ACL for unconscionable conduct;

(i) alternatively to the above, restitution from the defendants of all monies paid by the plaintiffs to the defendants on the basis of monies had and received and unjust enrichment;

(j) equitable compensation or damages in equity; and

(k) an injunction restraining the defendants from selling, transferring, encumbering or dealing with shares in the first defendant or the mining assets.

• [7] It is alleged in paragraph [42] of the ASOC that the damages claimed by the plaintiff exceed $200,000,000.
• [8] In the ASOC itself, it is alleged that the third, fourth, sixth and seventh defendants own shares in the first defendant. The second defendant was a wholly owned subsidiary of the first defendant. The second defendant owned various mining assets in North Queensland.
• [9] It is alleged that the plaintiffs entered into negotiations with the defendants to acquire 90 per cent of the shares in the first defendant and it is alleged that by a course of conduct and in correspondence between the parties, the parties entered into a binding agreement for the sale of 90 per cent of the issued shares in the first defendant to the second plaintiff. The particulars of the alleged HOA are:

(a) a draft HOA dated 9 February 2024;

(b) a draft HOA version 10;

(c) email correspondence dated 20 July 2023;

(d) email correspondence dated 21 July 2023;

(e) email correspondence dated 24 July 2023;

(f) the conduct of the parties, including part performance;

(g) verbal admissions and undertakings provided by the third defendant to representatives of the plaintiffs.

• [10] It is alleged that the purchaser was the second plaintiff and the purchaser agreed to buy 90 per cent of shares in the first defendant for $10,000,000 which was payable in tranches. The assets included mining assets and other assets.
• [11] It is alleged that in reliance on representations made by the defendants, the plaintiffs made substantial financial contributions for the benefit of the first defendant and the other defendants. In particular, it is alleged that between November 2021 and May 2024, $3,255,078 was paid by the plaintiffs to the defendants. It is alleged that this funding was provided by the first plaintiff for the acquisition, maintenance, and furtherance of the mining assets.
• [12] On or about 24 January 2025, to protect its interests in the mining assets, the first plaintiff lodged caveats over 25 mining assets held by the second defendant. Before 28 February 2025, the second defendant commenced proceedings in the Land Court of Queensland seeking orders for the removal of these caveats. It is alleged that the institution and prosecution of these Land Court proceedings constitutes a repudiation of the HOA and an attempt to defeat the plaintiffs' legitimate equitable interests in the mining assets.
• [13] It is further alleged that there were representations made by the natural defendants throughout the negotiations and these representations were misleading or deceptive, contrary to the ACL. It is also alleged that the plaintiffs relied on these representations and the defendants are estopped from denying liability under the HOA.
• [14] It is further alleged that the HOA was breached, and the plaintiffs have been ready, willing, and able to complete it, subject to the defendants fulfilling their obligations.
• [15] As a consequence of the breaches of the agreement, the false representations and the breaches of the ACL by unconscionable conduct, the plaintiffs have suffered loss of damage.
• [16] The unconscionable conduct alleged is that the defendants encouraged and accepted substantial payments from the plaintiffs over an extended period of time in the context of HOA negotiations. The defendants subsequently denied the existence of a binding agreement and/or refused to complete the HOA. It is said that this is unconscionable contrary to the ACL.
• [17] It is also said as a result of the breaches and the conduct, the shares and the mining assets are held on trust for the plaintiff. Further, it is alleged that the receipt of the $3,255,000 is unjust enrichment and restitution is claimed.

• [18] The defendants have filed a Notice of Intention to Defend. It is admitted by the defendants that from around late 2022, there were negotiations with representatives of the plaintiffs for the acquisition of 90 per cent of the issued shares in the first defendant. However, it is said that these negotiations ceased by mid-2024.
• [19] It is said that on or about 8 October 2021, the first plaintiff entered into a written joint venture agreement (JVA) with Aurum Ghost Pty Ltd, with Mr Kenneth Oehlerich as share seller. The share seller agreed to sell, and the first plaintiff agreed to buy 60 per cent of the shares in Aurum Ghost. The parties agreed to assist Aurum Ghost to undertake the Miclere project.
• [20] As to paragraph [13] of the ASOC, the defendants admit that from late 2022 until mid-2024, they attempted to negotiate the HOA with the plaintiffs. It is said the HOA were never finalised or agreed. It is said that meetings which occurred in 2025 were "without prejudice" and were negotiations regarding the dispute.
• [21] The defendants deny the allegation in paragraph [15] of the ASOC and believe the allegation is untrue because the matters pleaded do not establish that a legally binding contract was formed on or about 24 July 2023, and there was no binding HOA between the parties that the defendants agreed to sell 90 per cent of their shares in the first defendant.
• [22] Paragraph [15(b)] sets out the facts relied upon to support the allegation there was no binding agreement, referring to particular documents.
• [23] It is pleaded there was no intention to be bound by any agreement. It is further pleaded that the defendants did not make the representations pleaded in paragraph [13] of the ASOC.
• [24] As to the amounts paid, it is said that the $3,500,000 was paid to the first defendant or the second defendant by or on behalf of Aurum Ghost pursuant to the Aurum Ghost JVA.
• [25] With respect to the caveats, it is submitted that on or about 24 January 2025, the first plaintiff lodged caveats over the mining leases. It denies that the first plaintiff has any equitable interest in the mining leases because there was no binding HOA or acts of part performance. Any alleged representations or estoppel are denied and there is no breach of the HOA because there was no binding agreement and as such, there was no loss and damage, no unconscionable conduct and no entitlement to restitution or equitable remedies. The defendants were not unjustly enriched.

• [26] James Loel[1] notes that the Statement of Claim was served on 5 June 2025, the day before the parties appeared before the Land Court where an application was made by the defendants in that court to remove caveats lodged by the plaintiffs on 28 January 2025.
• [27] On 5 June 2025, Mr Loel wrote to the plaintiff's solicitors noting that the plaintiffs were corporations with modest shareholdings with neither of them holding real estate in Queensland. The plaintiffs were likely to be suing for the benefit of another person. His instructions were that the plaintiffs should pay $200,000 into the Court by way of security for costs.
• [28] On 13 June 2025, the plaintiffs' lawyers responded alleging that the plaintiffs had made substantial financial contributions and payments in excess of $3,000,000 to the benefit of the defendants and in those circumstances, security would be oppressive or would stifle the proceeding.
• [29] In a further letter dated 16 June 2025, Mr Loel suggested that the proceedings were being prosecuted for the benefit of Mr King.
• [30] In an affidavit sworn 23 July 2025[2], Mr Loel says that on 10 February 2025 he applied in the Land Court on behalf of the second defendant for the removal of the caveats lodged by the first plaintiff over several mining leases held by the first defendant. He attaches the affidavit that he swore in the Land Court proceedings. In that affidavit he says at paragraph [11] "the only agreement relevant in any way to the mining leases that the [plaintiff] as a party is a joint venture agreement that it signed with Kenneth Michael Oehlerich on 8 October 2021 which appears to relate to the proposed purchase by it of shares in Aurum Ghost Pty Ltd. A copy of that agreement appears at pages 126 to 144 of Exhibit A."
• [31] On 28 February 2025, the Land Court ordered by consent that the plaintiff file its material by 7 March 2025. The plaintiff did not file the material as ordered. The plaintiff's lawyers then withdrew. On 23 April 2025, new lawyers came onto the record for the plaintiff. The plaintiff filed further material on 19 May 2025, in particular an affidavit of Kerry Hyland. In paragraph [6] Ms Hyland states "On 1 April 2025 representatives of Acell, Tony Abi-Fares and Steven King were able to reestablish contact with William Hayes to continue the previous negotiations that had commenced in January 2025, seeking to obtain agreement on the terms to finalise the purchase of the Plenty Gold Miclere () goldmine and the transfer of eight mining leases paid for by Acell." It was further said at paragraph [10] that these negotiations recommenced after a pause at the end of 2024. She alleges that on 18 January 2025, Mr Abi-Fares advised her that he had met Mr Hayes at a coffee shop and Mr Hayes said that another party based in Western Australia was currently undertaking due diligence in respect of the potential purchase of the PGM project for about $30,000,000. It is further alleged that Mr Hayes acknowledged and offered to transfer the mining leases that had been paid for by Acell.

• [35] Ms Hyland[6] says that the plaintiffs as the buyers and the first, second and third defendants as the sellers negotiated the HOA for the acquisition of certain mining assets. There is reference to an email dated 21 July 2023 in which the fourth defendant Mr Kam anticipated a completion date of on or before 28 July 2023. Ms Hyland alleges that between November 2021 and May 2024, the plaintiff's made payments totalling $3,255,078. A copy of the spreadsheet is found at pages 26-27 of her affidavit. The contributions were paid to the defendants for their benefit directly towards the acquisition and maintenance of the mining assets that are the subject of the HOA. It is said these payments were made in reliance on the terms of the HOA and on representations made by the defendants that the transaction would be completed.
• [36] In late 2022, the third and fourth defendant provided caveat consent forms which acknowledge the plaintiffs' interest in the mining assets. Ms Hyland was informed by Mr King that during a meeting on 25 April 2025, Mr Hayes stated that he had no choice but to transfer the mining leases. It was an obligation because "you've" paid the money. Ms Hyland alleges that the payment of the $3,255,078 has depleted the working capital of the plaintiffs. They are conducting business operations which require the use of their available funds. They have arranged a conditional capital injection of more than $200,000,000 to finalise the acquisition and fund the development and operation of the gold mine project. A condition precedent to the provision of this funding is the completion of the HOA. The funds will become available to the plaintiffs once the HOA is completed. It is said that the plaintiffs do not currently have uncommitted liquid funds sufficient to pay the $200,000 sought and if the order for security for costs is made, the plaintiffs will not be able to fund the ongoing conduct of the proceedings.
• [37] She was informed that on or about 16 January 2025, Mr Abi-Fares representing the plaintiffs met with the third defendant who said that the fourth defendant and he were in discussions to sell the PGM project to another party for approximately $30,000,000. As a result of this, the plaintiffs lodged the caveats on or about 24 January 2025. This led to the second defendant commencing the Land Court proceedings. He denies the proceedings are being brought for the benefit of Mr Steven King.

• [40] Mr King[7] says that he is an investor in the plaintiff companies in the PGM project. He refutes the claim that the proceedings are bought for his benefit. The proceedings were bought for the primary benefit of the plaintiffs.

• [41] Mr Abi-Fares[8] says he worked for the first plaintiff as the operations manager at the PGM gold mine since September 2021. He refers to the fact that $656,537.08 was paid to the defendants for operational costs to maintain the project assets.
• [42] He says, "after a pause in discussions at the end of 2024 I met with Bill Hayes on 17 January 2025." He says Mr Hayes talked about a potential purchase by another party of the PGM project for $30,000,000.
• [43] In another meeting on 17 January 2025 there were further discussions.
• [44] There were further meetings on 1 April 2025 to progress the purchase by the plaintiff.

• [45] In the defence outline of argument[9], it is submitted that there is reason to believe that the plaintiffs will not be able to pay the defendants' costs if ordered to do so. It is submitted the plaintiffs are each companies with limited share capital; they do not own real property in Queensland or New South Wales and there is no evidence they own any other property. The plaintiffs have chosen not to adduce evidence as to their ability to meet an adverse costs order, either in response to correspondence from the defendants' solicitor or in response to the application.
• [46] In oral submissions, Mr Tooth submitted:

(a) that many of the payments constituting the $3,250,000 were made prior to the alleged agreement dated 23 July 2023;

(b) the defendant's contention is that they were for the benefit of Aurum Ghost;

(c) there is insufficient evidence to determine that the defendants' conduct caused the plaintiffs to become impecunious;

(d) as to the merits of the claim, it is submitted there is no concluded contract. This is clear from the draft HOA and the relevant correspondence;

(e) the agreement was never signed;

(f) the case is that the negotiations broke down;

(g) the representations sued upon are based on the agreement which was never concluded;

(h) the pleading at paragraph [37] is deficient;

(i) there is no evidence of the financial means of the plaintiffs and no evidence that the proceedings will be stultified if the order is made;

(j) there is no evidence that any order would be oppressive, particularly bearing in mind there is no evidence of the financial means of those standing behind the plaintiffs (e.g. from the investors); and

(k) in the circumstances, it is just to grant the order for security.

• [47] The plaintiffs submit[10] that its claims are bona fide and supported by extensive evidence. It is submitted that the plaintiffs' current lack of liquidity is directly attributable to their performance of the HOA in particular the $3,250,000 payment.
• [48] It is submitted that the evidence of Ms Hyland shows that the plaintiffs are not in a position to meet the costs order and such an order would terminate the litigation. It should be borne in mind that the defendants initiated the Land Court proceedings to remove the caveats that protected the plaintiffs' substantial investment. An order for security would preclude the plaintiffs from access to justice.
• [49] There is no third-party benefit here. Mr King is merely an investor and not a party. The plaintiffs bring this claim for their own benefit.
• [50] There is no prejudice to the defendants' if the claim is stood over, pending the finalisation of amendments to the pleadings.
• [51] In conclusion, the application should be dismissed but if the Court is minded to make an order the amount should be modest and not stultifying. Any order should permit liberty to apply, and it should be staged and revisited.
• [52] In oral submissions, Mr Campbell submitted:

(a) the proceedings were to protect the plaintiffs' investment;

(b) the proceedings were brought in response to the Land Court proceedings by the defendants;

(c) $3,250,000 had already been expended;

(d) there are triable issues of fact concerning the JVA and the plaintiff has a reasonable case;

(e) the proceedings will be stultified if security is ordered;

(f) it is difficult to form a final view about the state of the case because the pleadings had not been finalised. The issues concerning payment and agreement are live issues to be determined at the trial; and

(g) there is a prima facie case of unjust enrichment.

(1) On application by a defendant, the court may order the plaintiff to give the security the court considers appropriate for the defendant's costs of and incidental to the proceeding.

(2) This rule applies subject to the provisions of these rules, particularly, rules 671 and 672."

• [54] Rule 671 provides as to the prerequisite for security for costs:

The court may order a plaintiff to give security for costs only if the court is satisfied -

(a) the plaintiff is a corporation and there is reason to believe the plaintiff will not be able to pay the defendant's costs if ordered to pay them; or

(b) the plaintiff is suing for the benefit of another person, rather than for the plaintiff's own benefit, and there is reason to believe the plaintiff will not be able to pay the defendant's costs if ordered to pay them; or

(c) the address of the plaintiff is not stated or is misstated in the originating process, unless there is reason to believe this was done without intention to deceive; or

(d) the plaintiff has changed address since the start of the proceeding and there is reason to believe this was done to avoid the consequences of the proceeding; or

(e) the plaintiff is ordinarily resident outside Australia; or

(f) the plaintiff is, or is about to depart Australia to become, ordinarily resident outside Australia and there is reason to believe the plaintiff has insufficient property of a fixed and permanent nature available for enforcement to pay the defendant's costs if ordered to pay them; or

(h) the justice of the case requires the making of the order."

• [55] The discretionary factors concerning security for costs are set out at r 672:

"672 Discretionary factors for security for costs

In deciding whether to make an order, the court may have regard to any of the following matters -

(a) the means of those standing behind the proceeding;

(b) the prospects of success or merits of the proceeding;

(c) the genuineness of the proceeding;

(d) for rule 671(a) - the impecuniosity of a corporation;

(e) whether the plaintiff's impecuniosity is attributable to the defendant's conduct;

(f) whether the plaintiff is effectively in the position of a defendant;

(g) whether an order for security for costs would be oppressive;

(h) whether an order for security for costs would stifle the proceeding;

(i) whether the proceeding involves a matter of public importance;

(j) whether there has been an admission or payment into court;

(k) whether delay by the plaintiff in starting the proceeding has prejudiced the defendant;

(l) whether an order for costs made against the plaintiff would be enforceable within the jurisdiction;

• [56] Section 1335 of the Corporations Act 2001 (Cth) (Corporations Act) provides:

(1) Where a corporation is plaintiff in any action or other legal proceeding, the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his, her or its defence, require sufficient security to be given for those costs and stay all proceedings until the security is given.

(1A) Subsection (1) does not apply to a corporation that is an Aboriginal and Torres Strait Islander corporation.

Note: Similar provision is made in relation to Aboriginal and Torres Strait Islander corporations under section 581 - 20 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 .

(2) The costs of any proceeding before a court under this Act are to be borne by such party to the proceeding as the court, in its discretion, directs."

• [57] It has been said that in deciding whether or not to grant security, there is a three-stage inquiry- as follows:[11]

(a) Whether the jurisdiction is enlivened i.e. the plaintiff being a corporation, is there reason to believe it will not be able to pay the defendant's costs if ordered to pay them?

(b) Having regard to r 672 UCPR, should the court exercise its discretion to order security?

(c) If the answers to the first two questions are in favour of the applicant, what is the quantum to be ordered?

• [58] As to the threshold question, it is to be noted that the onus of proof is on the applicant for security.[12]
• [59] The words "reason to believe" involve an assessment of whether the objective circumstances are sufficient to incline the mind towards accepting that a fact will exist.[13] It is not necessary for the applicant to establish on the balance of probabilities the plaintiff will not be able to pay the costs.
• [60] The expression "will not be able to pay" requires the court to consider whether the plaintiff is likely to be able to pay within a reasonable time.[14] The assessment will be a preliminary one based on limited materials.[15]
• [61] It has been said that the threshold requirement for an order for security under s 1335(1)[16] is a "undemanding test".[17]
• [62] In this case, the threshold question has been satisfied as:

(a) Each of the plaintiff companies has a limited share capital;

(b) The plaintiffs do not own any real property in Queensland or New South Wales and there is no evidence that they own any real property in other jurisdictions;

(c) There is no evidence that the plaintiffs own any property; and

(d) Ms Hyland swears that they cannot afford to pay the security of $200,000 at this time.

• [63] The plaintiffs have chosen not to adduce any detailed evidence of their ability to meet an adverse costs order. In those circumstances, the court can infer the plaintiffs will be unable to pay.
• [64] The prerequisites have been met. It is clearly established on the evidence that the plaintiffs are corporations and, on the affidavit material, there is reason to believe the plaintiffs will not be able to pay the defendants costs if ordered to pay them.
• [65] I now turn to the discretionary factors in this particular case.
• [66] It has been said that once the defendant has satisfied the threshold question, the evidential burden of proof shifts to the plaintiff to raise for consideration evidence of the discretionary factors that tell against the exercise of the discretion.[18]
• [67] The court will take into account the relevant circumstances of the case. Within that range of circumstances, the impecuniosity of the plaintiff company will always be relevant and sometimes of decisive character.[19] Ms Hyland swears that the plaintiffs cannot afford the costs at the present time. That is a significant factor here.
• [68] Turning to the issue of the means of those standing behind the proceeding, in this particular case, Ms Hyland has not descended into any particularity of the means of the directors or investors, including herself. This tells against the plaintiffs.
• [69] Turning to the issue of the strength of the case, in Stockingham Pty Ltd v Brisbane Angels Nominees Pty Ltd[20], it was noted by Freeburn J that it is always difficult to make an accurate assessment of the strength of the plaintiff's case without hearing the evidence. On such an application, there is not to be a mini trial with provisional views formed. Generally, it is appropriate to proceed on the basis that the claim is both bona fide and has reasonable prospects.
• [70] In this case, the defendants argue that on a consideration of the draft HOA and the relevant emails, there is a weak case concerning the existence of the agreement. The fact is this agreement was never signed. In those circumstances, it is submitted that there was no concluded contract. It relies on PJ Leahy v AR Hill. It is submitted that objectively having regard to the material, there was no concluded contract. The plaintiffs submitted to the contrary.

(a) The courts are reluctant to make an order which would have the effect of shutting out a small company from making a genuine claim against a large, well-resourced and amply funded body such as the State, a council or major corporation.

(b) Whether the defendant is an insurer is relevant.

(c) Even if there is a wealthy defendant, why should a wealthy and powerful institution sued by an insolvent company be deprived of the security for cost provisions?

• [74] In this particular case, because of the absence of any detail of the financial positions of the directors or the company aside from the bare assertions made in Ms Hyland's affidavit, the plaintiffs have not satisfied any evidential onus in this regard. It has not been shown definitively that the ordering of security would be oppressive in a financial sense or would shut down these proceedings. If the plaintiffs had put on evidence of the precise financial position of the companies and those who stand behind them, the position may have been somewhat different but that is not the case here.
• [75] There is no issue as to delay. The application for security was bought swiftly.
• [76] In the result when the various discretionary factors are weighed, this is an appropriate case for the making of an order for security for costs.

• [77] The defendants submit that the amount of security in the sum of $200,000 is a conservative one and it is not out of proportion of the quantum of the plaintiffs' claim. It is submitted the amounts deposed to by Mr Loel are not unreasonable.
• [78] The plaintiffs submit that the quantum is too high.
• [79] Mr Loel says that since the proceeding has commenced on 5 June 2025, the defendants' fees are $21,600. Mr Loel estimates future costs at approximately $374,303 to day one of trial on a solicitor client basis. On a party-party basis, this would be $281,296 and as a result he seeks security in the sum of $200,000.
• [80] In his affidavit sworn 9 September 2025,[24] Mr Loel sets out the fact that the costs are now $31,600 in solicitor's fees and $25,600 in counsel's fees and disbursements. He refers to the loss of opportunity claim now pleaded in the further amended Statement of Claim and believes that further expert evidence would be needed to answer this. He now estimates the costs to be approximately $817,846 until the first day of trial.[25]
• [81] In Murphy Operator Pty Ltd & Ors v Gladstone Ports Corporation Ltd (No 6)[26], Crow J set out the principles relevant to the quantum of security- as follows:

(a) parties are not encouraged to devote extensive resources to questions of security;

(b) assessing likely costs in large-scale litigation is not a simple matter and necessarily involves elements of uncertainty;

(c) the amount does not need to be determined with mathematical precision and the process does not require a full assessment of costs but by its nature requires a "broad brush" assessment;

(d) it is not incumbent on the defendant to present evidence on a security for costs application as though it were preparing a costs statement for past costs, or supplementing the statement as if for a final costs assessment;

(e) the process of estimation undertaken by a judge determining a security for costs application embodies to a considerable extent necessary reliance on the "feel" of the case the judge has after considering relevant factors, and the adoption of a broad approach to arrive at a pragmatic outcome which is regarded as appropriate;

(f) while the court does not seek to provide the defendant with an indemnity for the expenses of defending the claim, it should provide protection against the risk that an order for party and party costs in the defendant's favour might not be satisfied;

(g) it is relevant to consider whether the security sought is proportionate to the quantum of the claim; and

(h) the involvement of a funder loosens slightly the stringency which normally attaches to the calculation of the appropriate security amount.

• [82] In other words, in working out the quantum for security of costs, the court should adopt a broad brush rather than strictly a mathematical approach.[27] In ordering security the court does not seek to give out a complete and certain indemnity to the defendant.[28] The ordinary approach is to forecast the recoverable costs to which the plaintiff is exposed by reason of the adverse costs order, and then to discount below that amount to a sum that represents a fair and proper security against the risk of non-payment.
• [83] One must bear in mind that in this particular case, the claim is in excess of $200,000,000.
• [84] The total amount of security is calculated as follows:

(a) The total costs likely to be incurred by the defendants up the first day of trial are $394,903.

(b) The total recoverable costs on a standard basis are likely to be $281,296 (65 per cent of solicitor's fees, 90 per cent of counsel's fees and 100 per cent of other disbursements).

(c) A sum of $200,000 is sought by security, representing approximately 70 per cent of standard costs.

• [85] It is more appropriate in adopting a broad-brush approach to order the amount of $150,000 by way of security. This represents 50% of the alleged costs and more appropriately reflects the risk of non-payment without providing a complete indemnity. It must also be borne in mind that the plaintiffs may win the case. Security of $150,000 is not out of proportion to the quantum the subject of the plaintiff's claim and allows for discounting for contingencies.
• [86] Security in the sum of $150,000 should be ordered.

ISSUE 3- WHETHER AN ORDER SHOULD BE MADE FOR THE PRODUCTION OF DOCUMENTS?

• [87] The defendants seek the production of the following documents under r 222 UCPR:

(a) The third-party proposal prepared by Cobalt Blue Holdings Ltd in March 2025 (Paragraph 37(a) of the ASOC).

(b) The agreement from Springwood Group to invest $5,000,000 (Paragraph 37(b) of the ASOC).

(c) The agreement from Springwood Group for an investment of $25,000 (Paragraph 11(a)(i)) of the further and better particulars dated 14 August 2025.

• [88] The defendants submit that these documents are clearly pleaded, and it is appropriate that an order should be made for inspection and copying.
• [89] The plaintiffs on the other hand submit that there is no clear and unambiguous reference to documents. It is submitted that the agreements as pleaded are a conclusion of fact rather than as specific written agreement or contract. It is submitted that the term "agreement" is ambiguous. The same reasoning applies to the second Springwood agreement referred to in the particulars. It is also submitted that the order of the court would be ineffective because neither specific contractual agreement exists as a written document capable of production.
• [90] With respect to the Cobalt proposal, similar submissions are made. It is also submitted that any proposal is commercial in confidence and is not relied on as a binding contractual instrument but merely as further extrinsic documentary evidence. It is submitted the close of the pleadings will assist the Court in identifying the facts.
• [91] Mr Panetta in his affidavit dated 12 September 2025[29] deposes to the following:

(a) No Springwood Group agreement document exists.

(b) As to Cobalt Blue, this is not a concluded agreement and refers to emails, conversations and one document.

(c) Inspection should occur once the pleadings have closed.

• [92] In Lilypond Constructions Pty Ltd v Homann[30], Mackenzie J noted that the relevant pleading in that case did not expressly refer to documents. He said, "However, it seems to me that r 222 is directed towards a particular situation, that is to say where a document is specifically referred to in the affidavit. Where it is impossible to identify a specific document referred to in the affidavit and the affidavit is ambiguous as to whether any document was in existence at the time relating to the particular reference to instructions, I am not persuaded that r 222 has any operation. In my view r 222 requires a clear and unambiguous reference to a document before it can operate."
• [93] This approach has been adopted in several cases.[31]
• [94] I now turn to the allegations in the pleadings.
• [95] Clause 37(a) relates to a "third party proposal prepared by Cobalt Blue Holdings Ltd in March 2025." However, Mr Panetta deposes to the fact this is not one proposal document but emails, conversations and one document. I consider this is ambiguous and I uphold the plaintiff's objection to the production of this "document" at this stage.
• [96] With respect to paragraph 37(b), there is reference to "an agreement from the Springwood Group." I note Mr Panetta's affidavit and consider this is ambiguous and I uphold the plaintiff's objection to the production of this "document" at this stage.
• [97] For similar reasons I consider the reference to "an agreement from the Springwood Group" is sufficiently ambiguous. I uphold the objection by the plaintiffs to the production of that "document".

• [98] In all the circumstances, I make the following orders:

1. I order pursuant to r 670 of the Uniform Civil Procedure Rules 1999 (Qld) that the plaintiffs provide security for the defendants' costs of and incidental to the proceeding up to and including the first day of trial in the sum of $150,000 with such security to be provided:
   1. within twenty eight (28) days of the date of the Court's order; and
   2. by way of payment to Court, or the provision of security in such other form as is acceptable to the Registrar.
2. I dismiss the defendants' application pursuant to r 222 of the UCPR.
3. I will hear the parties on the question of costs.

[1] Affidavit of Mr Loel dated 4 July 2025 CFI 4.

[2] Affidavit of Mr Loel dated 23 July 2025 CFI 5.

[3] Gold Bullion Enterprises Pty Ltd, the second plaintiff.

[4] Affidavit of Mr Loel dated 14 August 2025 CFI 15.

[5] Affidavit of Mr Loel dated 11 September 2025, filed with leave in these proceedings.

[6] Affidavit of Ms Hyland dated 27 July 2025 CFI 10.

[7] Affidavit of Mr King dated 28 July 2025 CFI 7.

[9] Defendants' outline of submissions CFI 9.

[11] Monto Coal 2 Pty Ltd v Sanrus Pty Ltd [2018] QCA 309; [2019] 3 Qd R 143 at [22].

[12] Robson v Robson [2008] QCA 36.

[13] Monto Coal 2 Pty Ltd v Sanrus Pty Ltd [2018] QCA 309; [2019] 3 Qd R 143 at [43]. DGR Global v PT Ltd [2025] QCA 122 at [62].

[14] Monto Coal 2 Pty Ltd v Sanrus Pty Ltd [2018] QCA 309; [2019] 3 Qd R 143 at [50]- [52].

[15] Monto Coal 2 Pty Ltd v Sanrus Pty Ltd [2018] QCA 309; [2019] 3 Qd R 143 at [41].

[16] Corporations Act.

[17] Re Skytraders Pty Ltd [2024] NSWSC 984 at [20].

[18] Cornelius v Global Medical Solutions Australia Pty Ltd [2014] NSWCA 65; (2014) 98 ASCR 301 at [18]- [20].

[19] Hyperion Technology Pty Ltd v Queensland Motorways Ltd [2013] QSC 20 at [12].

[20] [2023] QSC 155 at [35]- [37].

[21] [2018] NSWSC 6 at [13].

[22] [2013] QSC 20 at [33]- [34].

[23] [2007] NSWCA 291; (2007) 65 ACSR 276 at [75]- [76]; also see Hyperion Technology Pty Ltd v Queensland Motorways Ltd [2013] QSC 20.

[24] Affidavit of Mr Loel dated 9 September 2025 CFI 21.

[25] A higher amount of security was not pressed because this affidavit came in late and the application proceeded on the basis of the first costs estimate. The figure of $817,846 does seem very high and would require greater scrutiny.

[26] [2020] QSC 192 at [119].

[27] Mio Art Pty Ltd v Mango Boulevard Pty Ltd [2018] QSC 31 at [89].

[28] Menhaden Pty Ltd v Citibank NA [1984] FCA 193; (1984) 1 FCR 542 at p 547.

[29] Filed with leave in these proceedings.

[30] [2005] QSC 263; [2006] 1 Qd R 411.

[31] Balnaves v Smith [2008] QSC 215; [2008] 2 Qd R 413 at [7]- [8]; Amos v Brisbane City Council [2012] QCA 206; GSM (Operations) Pty Ltd v Suwenda [2010] QSC 33; Kado v Taisei Kanko Australia Pty Ltd [2012] QSC 179 at [2].