Adeva Home Solutions Pty Ltd v Queensland Motorways Management Pty Ltd [2020] QSC 361

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - AMOUNT AND NATURE OF SECURITY - where the defendant applies for security for costs in a class action proceeding - where the parties agree that security for costs in a given amount is warranted but disagree as to the appropriate form of the security - where the plaintiff proposes security by way of a deed of indemnity from an insurer based in England - where the plaintiff has not disclosed the cost of providing a bank guarantee or the cost of the alternative form of security proposed by it - whether the plaintiff's proposed deed of indemnity provides adequate security in all the circumstances - whether the plaintiff's proposed form of security imposes an unacceptable disadvantage on the defendant

Civil Proceedings Act 2011 (Qld), s 103ZA

Corporations Act 2001 (Cth), s 1335

Uniform Civil Procedure Rules 1999 (Qld), r 5, r 670

Blue Oil Energy Pty Ltd v Tan [2014] NSWCA 81, cited

Commissioner of Taxation (Cth) v Vasiliades (2016) 344 ALR 558; [2016] FCAFC 170, cited

DIF III Global Co-Investment Fund LP & Anor v BBLP LLC & Ors [2016] VSC 401, cited

Equititrust Limited v Tucker [2019] QSC 51, cited

Equititrust Limited v Tucker [2020] QSC 269, cited

Financial Conduct Authority v Arch Insurance (UK) Limited & Ors [2020] EWHC 2448 (Comm), cited

Murphy Operator Pty Ltd v Gladstone Ports Corporation Ltd [2019] 3 Qd R 255; [2019] QSC 12, cited

Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 46, cited

Trailer Trash Franchise Systems Pty Ltd v GM Fascia & Gutter Pty Ltd [2017] VSCA 293, cited

P L O'Shea QC, with E J Goodwin, for the applicant/defendant

D J Campbell QC, with B A Hall, for the respondent/plaintiff

Hilton Bradley Lawyers for the respondent/plaintiff

• [1] The defendant applies for security for costs. The plaintiff accepts that security should be ordered. The parties have now agreed about the amount of security to be provided. The issue is the form of security.
• [2] The defendant seeks an order that the security be provided in the usual way: by irrevocable bank guarantee or money paid into Court.
• [3] The plaintiff proposes a deed of indemnity from an insurer based in England. The insurer, AmTrust Europe Ltd, has not indicated that it will sign a deed in that form. The parties before me were unable to agree the terms of a deed of indemnity which AmTrust would be asked to execute in the event I decided that a deed of indemnity from AmTrust was appropriate in all the circumstances as a form of security. Therefore, if I was to resolve the differences between the plaintiff and the defendant about the terms of the deed, one does not know whether AmTrust would be prepared to execute a deed of indemnity in such a form or the price it would demand for doing so.

• [4] Another complication arises as to the amount which should be paid into this Court to protect the defendant in the event that it has to commence separate proceedings in Queensland against AmTrust pursuant to the deed, obtain judgment, then register the judgment in England and possibly take steps in England to enforce the judgment.
• [5] These issues arise against the background of the plaintiff (or the litigation funder that stands behind it) not placing evidence before the Court as to the monetary and other advantages to it in proceeding by way of a deed of indemnity from AmTrust rather than providing, in the ordinary way, an irrevocable bank guarantee. For example, it does not say that it will cost $X to obtain a bank guarantee for the agreed amount of security and $Y to, in effect, buy a deed of indemnity in the form preferred by it from AmTrust. For all I know, the difference between X and Y may be small.
• [6] One may reasonably infer that the funder prefers to use deeds of indemnity. It may also be reasonable to infer that obtaining one is cheaper than obtaining a bank guarantee. It is not said by the plaintiff to be substantially cheaper. If one infers it is cheaper, then it must be cheaper for a reason. The possible reasons may be many and varied and it is inappropriate for me to speculate about them. The deed offers a less convenient and possibly less secure form of security than a bank guarantee for a defendant which is entitled to be provided security for its costs. A bank guarantee has been said by the High Court to be "as good as cash".[1]
• [7] The issue is not whether the defendant is entitled to the best form of security. It is entitled to adequate security in all the circumstances, having regard to the purpose of granting security and the general purpose of civil litigation. It is not entitled to rolled gold security if shining silver security will suffice.
• [8] The plaintiff is entitled to propose security in a form least disadvantageous to it. It is not entitled to an order in a form which is least disadvantageous to it.
• [9] Other considerations arise. One is the cost and complexity of negotiating the terms of a deed of indemnity, debating them before a judge in the event the parties cannot agree those terms, and then guessing whether the overseas insurer will execute such a deed and whether it will do so for the same price as it would charge for a deed which is less protective of the defendant. Another is that contests of this kind generate costs where parties have legitimate reasons to disagree about the form of deed or the amount which should be paid into this Court on account of the potential costs of registering and enforcing a judgment in England.

• [16] If the Court orders a plaintiff to give security for costs, then it has a discretion as to the form of security and the conditions upon which it is given. The defendant's application for security for costs is made pursuant to r 670 of the Uniform Civil Procedure Rules 1999 (Qld) ("UCPR"), s 1335 of the Corporations Act 2001 (Cth), s 103ZA of the Civil Proceedings Act 2011 (Qld) and the inherent jurisdiction of the Court. The parties do not suggest that different principles apply as to the form of security depending upon which of these sources is relied upon to make the order.
• [17] The discretion as to form must be exercised according to:

(c) ultimately, how justice is best served in the particular circumstances of the case.

• [18] The purpose to be served by making an order for security for costs is to ensure that a successful defendant to a claim "will have a fund available within the jurisdiction of the Court" against which the defendant, if successful in defence, can enforce a judgment for costs in the defendant's favour.[2] Such an order for security means that the respondent "does not bear the risk as to the certainty of enforcement in the foreign country".[3]
• [19] The purpose of the rules governing civil litigation is to facilitate "the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense."[4]
• [20] Access to justice and the achievement of this aim means that parties (and the court system) should discourage delay, unnecessary interlocutory applications and unnecessary satellite proceedings with their additional delay and costs.
• [21] Access to justice by plaintiffs favours a form of security which is simple, accessible and relatively inexpensive.
• [22] Access to justice by defendants favours a form of security which is simple and provides adequate security, without complexity and uncertainty as to whether an entitlement to security has been triggered, and prompt payment if it has.
• [23] A defendant which is entitled to security should not be required to carry an unacceptable risk that the security will not be available. Nor should it ordinarily be required to bear the delays or the costs associated with enforcing a form of security in a foreign country. I adopt, with respect, as other judges of this Court have, the observations of Tate and Kyrou JJA in Trailer Trash Franchise Systems Pty Ltd v GM Fascia & Gutter Pty Ltd [5] that a form of security for costs which does not provide a fund which can be accessed without the co-operation of the opposing party or a person who is connected to that party - and may require the commencement of proceedings to enforce it - has the potential to undermine the overarching purpose of civil litigation. As their Honours observed:

"This is because that form of security can give rise to satellite proceedings and additional delay and costs. Such satellite proceedings are contrary to the principle of finality in litigation."[6]

• [24] Therefore, considerations of access to justice and the resolution of civil proceedings expeditiously and at a minimum of expense do not necessarily favour one form of security over another. The appropriate form of security depends upon the circumstances of the particular case.
• [25] In serving its own interests and obtaining access to justice without unnecessary expense a plaintiff may propose security in a form least disadvantageous to it. However, as Beazley P and Tobias AJA stated in Blue Oil Energy Pty Ltd v Tan:

"The true issue [is] whether the form of security ordered [is] adequate to protect the party seeking it".[7]

• [26] The following principles were articulated by Hargrave J in DIF III Global Co-Investment Fund LP & Anor v BBLP LLC & Ors:

"(1) the plaintiff is entitled to propose security in a form least disadvantageous to it;

(2) the plaintiff bears a 'practical onus' of establishing that the proposed security is adequate and does not impose an 'unacceptable disadvantage' on the defendant;

(3) in order to be adequate, the proposed security must satisfy the protective object of a security for costs order, namely, to provide a fund or asset against which a successful defendant can readily enforce an order for costs against the plaintiff; and

(4) based on these and any other relevant considerations, the Court will determine how justice is best served in the particular circumstances of the case."[8]

These principles have been applied in a number of cases.

• [27] In obiter dicta in Trailer Trash, the Victorian Court of Appeal stated:

"The authorities do not preclude an order that security for costs be in the form of a personal undertaking by a third party other than a financial institution. However, where the court has a choice between security in that form and security in a liquid form that enables funds to be accessed with minimum risk that litigation may be required to enforce the security, ordinarily the court should prefer the liquid form."[9]

• [28] The critical issue is whether the form of security to be ordered is adequate to protect the party seeking it.
• [29] Bond J in Equititrust 2020 applied this principle and stated:

"If there is more than one form of security under consideration, the focus should always be on the adequacy of the options to protect the defendants. Forms which do not provide adequate security to the defendants in the circumstances should be excluded from being made the subject of a security for costs order, even if they are in the form least disadvantageous to the plaintiff. There should not be some attempt to strike a balance between disadvantage to the defendants and disadvantage to the plaintiff. If all forms under consideration provide adequate security to the defendants, then the plaintiff is entitled to choose the one least disadvantageous to it and the defendants are not entitled to insist on the form which provides the best advantage to them. That is why the conventional form of order often provides alternative options, leaving it up to the plaintiff to choose the one which suits it best."[10]

• [30] The issue of whether a particular form of security is adequate in all the circumstances requires consideration of whether the disadvantages to the defendant in not being able to access security in liquid form within the jurisdiction are unacceptable. This is because, as Bowskill J has observed, "if the deed is not voluntarily responded to upon a request for payment, [it] would involve the applicants in further proceedings to enforce a costs judgment against AmTrust overseas".[11] Another consideration in deciding whether a form of security is adequate in all the circumstances and does not impose an "unacceptable disadvantage" on the defendant is whether a requirement to provide security by payment into court or a bank guarantee will impose an unacceptable financial impediment to the plaintiff or its litigation funder.[12]
• [31] The principles stated by Hargrave J in DIF III should not be treated as if they were the words of a statute or a rule. They do, however, highlight that in determining whether a form of security is adequate in all the circumstances to protect the defendant there is ordinarily a preference for a liquid form of security that enables funds to be accessed quickly and inexpensively, without the risk that litigation may be required to enforce the security. This is why the plaintiff bears a "practical onus" of establishing that the proposed security is adequate and does not impose an "unacceptable disadvantage" on the defendant.
• [32] It might be said that an "unacceptable disadvantage" means that the proposed form of security is not adequate in all the circumstances. Terms such as "unacceptable disadvantage" and "readily enforce" entail value judgments about what is an acceptable risk, cost or period of delay. The additional delay and costs entailed before an overseas fund or asset is accessed may be acceptable in some circumstances. In others they will not be, since the corresponding advantages to the plaintiff of that form of security are small or uncertain. It is also well to recall that the first three considerations identified by Hargrave J and other relevant considerations go towards the ultimate issue of "how justice is best served in the particular circumstances of the case".[13]

• [33] These principles direct attention to the circumstances of the particular case.
• [34] Where a plaintiff is unable to access a bank guarantee for a price comparable to the price of an alternative form of security which provides a fund or asset against which a successful defendant can readily enforce an order for costs, then the disadvantage to the defendant in not being able to call upon a bank guarantee may be an acceptable disadvantage. The alternative form of security offered by the plaintiff may be adequate in all the circumstances.
• [35] Where, however, the plaintiff is able to provide a bank guarantee, but simply prefers a somewhat cheaper form of security, such as a deed of indemnity from a foreign insurer, then the disadvantage to the defendant of having to pursue a claim against the insurer on the deed, register the judgment in another country and enforce that judgment overseas may not be acceptable in all the circumstances.
• [36] In Murphy Operator Pty Ltd v Gladstone Ports Corporation Ltd,[14] Crow J referred to an acceptance that AmTrust has no assets within the jurisdiction of Queensland and that, ordinarily, where a plaintiff has no assets within the jurisdiction, the courts have required the security of the costs to be given on the basis of "a readily accessible and low risk security such as payment to the court or a bank guarantee". His Honour continued:

"Class action litigation is, however, far from ordinary, and a body of case law in other States has developed in relation to the provision of security for costs where typically, overseas corporations have engaged in the business of funding such litigation."[15]

• [37] I do not interpret the reference to class action litigation being "far from ordinary" as suggesting that the general principles governing security for costs and its form do not apply to them. It may be an observation that class actions generate different issues and, whereas an ordinary plaintiff in an ordinary proceeding may be immune from a security for costs order if the plaintiff is a natural person, or if the person standing behind the corporate plaintiff offers a personal undertaking, class action litigation is conducted on a different scale, requiring consideration of who might benefit from its success, including litigation funders. In any case, Crow J adopted the principle stated in the cases to which I have referred including DIF III and Blue Oil Energy. I make no observation about class action litigation, other than it seems inappropriate to make any general observations about it. I imagine that it comes in all shapes and sizes, as do litigation funders and their preferred practices.
• [38] In Murphy Operator, Crow J observed that deeds of indemnity offered by AmTrust were the subject of decisions which concluded that the form of security in those cases was adequate. However, his Honour correctly, with respect, did not treat those decisions as creating some kind of factual precedent. It would be wrong to do so where the ultimate issue depends on how justice is best served in the particular circumstances of the case and also because circumstances may change. As Crow J stated, although there had been those decisions, the issue was a question of fact to be determined by reference to the deed provided and the evidence in the application, and not by reference to any practice in AmTrust offering a deed of indemnity in other cases.[16]
• [39] In applying the relevant principles which I have earlier identified, the central issue is whether the form of security proposed is adequate to protect the party seeking it. The question of adequacy is associated with the issue of whether the proposed form imposes an "unacceptable disadvantage" on the defendant: the plaintiff bearing the practical onus of establishing that it does not. The issue identified by the New South Wales Court of Appeal in Blue Oil Energy is echoed in the remarks of Hargrave J in DIF III:

"The central inquiry is whether the form of security put forward is adequate to achieve its object as security, namely, whether that form will give a successful defendant a fund or asset 'against which it can readily enforce an order for costs'."[17]

• [40] The cases make clear that the critical issue is not whether one form of security provides a more attractive form of security to the defendant. If that was the critical issue, then what is said to be the ordinary practice of providing security in the form of a bank guarantee or payment into court would become the fixed rule. It does, however, remain for the plaintiff to establish that the proposed security is adequate and does not impose an "unacceptable disadvantage" on the defendant.
• [41] The question of fact for me to decide in the circumstances of this particular case may be stated as follows:

• delay in accessing security;
• risk of not being able to recover; and
• requiring satellite litigation in order to do so,

The circumstances include the fact that in deciding the form of order, the Court should seek to avoid undue delay and expense.[18]

• [42] The plaintiff submits that the deed of indemnity in the form proposed by it represents the form of security least disadvantageous to it and can be readily enforced by the defendant. It submits that this form of deed is adequate to protect the defendant in all the circumstances. The amendments proposed by the defendant are said to be "stylistic only" and not go to the operation or enforceability of the proposed deed. Being permitted to use the form proposed by the plaintiff is submitted to be consistent with it being permitted to provide security in the form least disadvantageous to it.
• [43] AmTrust is submitted to have the financial capacity to meet any claim to indemnification under the deed. Documents relating to its financial capacity are exhibited to the plaintiff's solicitor's affidavit.
• [44] The expected costs to the defendant in having to enforce the deed against AmTrust is submitted to be accommodated by an order requiring the plaintiff to pay into Court the sum of $30,000 as security for the defendant's costs of enforcing the deed of indemnity, should enforcement be required.
• [45] The defendant submits that this form of security is not acceptable. It does not create a readily accessible, liquid fund within the jurisdiction so as to fulfil the essential purpose of security as articulated in Vasiliades and other cases. Instead, if AmTrust does not simply pay an adverse costs order, the defendant has to undertake a number of additional steps after having the costs order assessed:

(a) commence a separate proceeding in this Court against AmTrust to obtain judgment;

(b) obtain judgment in that proceeding after serving AmTrust;

This is said to have the potential to create "satellite litigation" as discussed in Trailer Trash. Any opposition at any stage will create further delay.

• [46] The defendant adds that it may have to go through this process more than once if, for example, it obtains interlocutory costs orders which are not stayed.
• [47] The defendant submits that it should not have to accept a deed of indemnity which has these disadvantages in circumstances in which there is no suggestion or evidence that an order for security in the form sought by it cannot be paid by the funder or will stultify the proceeding.

• [48] The defendant also points to matters which create a level of uncertainty in relation to the English insurance market. One is the general uncertainty as to the effect of COVID-19 on AmTrust's position. Its independent auditor identified unprecedented levels of uncertainty in a rapidly evolving situation which may affect financial and operational performance. The state of the English insurance market has been affected by the recent test case of The Financial Conduct Authority v Arch Insurance (UK) Limited.[19] That case did not involve AmTrust, but has significant implications for policies in respect of business interruption insurance. An additional element of uncertainty concerns the impact of Brexit on the insurance markets in which AmTrust operates. The defendant does not wish to be exposed to the uncertainty of future business conditions in England.
• [49] The defendant proposes amendments to the form of deed proposed by the plaintiff, and notes that there is no evidence that AmTrust has authorised a director to sign the deed of indemnity proposed by the plaintiff. Also, the plaintiff has not proposed any mechanism by which the defendant might check that the signatory had authority to bind AmTrust.
• [50] The defendant also contends that the amount which the plaintiff proposes to pay into Court as security for the defendant's costs of enforcing the deed of indemnity is inadequate and that, on the basis of estimates of taking various steps, the costs could be anywhere between $30,000 and $120,000. It submits that it would be appropriate to make a broad brush allowance of $80,000.

• [51] Most of the amendments proposed by the defendant are reasonable and necessary. They create greater certainty and are not merely "cosmetic". For example, they include an additional provision whereby AmTrust agrees to pay the defendant's costs of obtaining judgment in the Supreme Court of Queensland, registering the judgment in the High Court of Justice in London and enforcing the judgment on a full indemnity basis if it fails to pay an amount in accordance with cl 2 of the deed.
• [52] Amendments which clarify that the amount is payable by AmTrust irrespective of events like challenges to the costs assessor's decision or an adverse costs order are reasonable to give the deed greater certainty. If they do not affect the substance of the deed they should come at no extra cost. It is not unreasonable for the defendant to request these amendments. The form of deed proposed by the plaintiff may be in a form least disadvantageous to it. That is not a sufficient reason to conclude that the deed should be in the plaintiff's preferred form.
• [53] The defendant's concerns that AmTrust has not indicated its preparedness to sign the deed in the form proposed by the plaintiff and the need to ensure that the deed is signed by someone with authority on AmTrust's behalf generate additional transaction costs. However, these matters could be addressed by appropriate orders concerning the date by which the deed has to be signed by AmTrust and the provision to the defendant of suitable evidence of the signatory's authority to execute the deed.

The absence of evidence from the plaintiff about relative costs

• [54] That the form of security proposed by the plaintiff involves delay and additional costs for the defendant in accessing funds to pay its costs compared to the security sought by it (payment into Court or an unconditional bank guarantee from an Australian bank) cannot be denied.
• [55] Such delay and additional costs (the latter being ameliorated by an amount of security paid into this Court in respect of enforcement costs) may be justified in all the circumstances, particularly if the defendant's preferred form of security is unavailable or too expensive. If it was not available to the plaintiff, an order for security in the form preferred by the defendant would have the potential to stultify a viable proceeding and deny access to justice. If it is available, but only at a price which is significantly higher than the alternative, it may unnecessarily increase the costs of litigation. However, where that form of security is not said by the plaintiff (or its funder) to be unavailable or far more expensive, it is not apparent what the real disadvantage to the plaintiff is or its extent.
• [56] The plaintiff has not said what the cost to it or its funder would be to obtain an unconditional bank guarantee from an Australian bank in the agreed amount of $210,000. It has not said what it expects to pay AmTrust to have it execute a deed of indemnity in the defendant's favour to secure a costs order in the same amount. Disclosure of these amounts, or even estimates of those costs, may assist a plaintiff to discharge the practical onus of establishing that its proposed security does not impose an "unacceptable disadvantage" on the defendant. It may permit a court to conclude that the disadvantage to the defendant in obtaining an inferior form of security is not unacceptable in all the circumstances.

Uncertainty as to the risk of delayed payment or non-payment

• [57] As to the financial capacity of AmTrust, the documents before me show it to be a major insurer, solvent and enjoying a credit rating which shows an excellent ability to meet ongoing insurance obligations. The defendant points to the fact that it recently made a loss, has no assets in Australia and is subject to the uncertainties of the English insurance market during the COVID crisis and Brexit.
• [58] I find it unnecessary to set out, as Crow J did recently in another case, the contents of AmTrust's reports.[20]
• [59] It may be necessary for Australian judges running their eyes, either quickly or slowly, over financial statements and reports from London-based insurers and credit agencies to form a view about the risk that such an insurer will meet its obligations under a deed of indemnity. I note in passing that the cost to assemble this kind of information in affidavits and for the parties to analyse it may be significant. In any event, it is important to be clear about the purpose of the exercise. It is to make a fairly rough and ready assessment of the risk that, at some uncertain date in the future, a party in whose favour a deed of indemnity is executed will be paid. The present financial status of the insurer or other foreign corporation is obviously an important source of reference. However, to arrive at some slightly informed assessment of risk, the Court must also consider future matters, including the kind of storm clouds which the defendant points to facing England and English insurance markets.
• [60] The relevant risk is not simply the risk, possibly very small indeed, of not being paid some years from now, after enforcement proceedings are taken in a foreign jurisdiction. There is also the risk of delay in being paid if a foreign corporation in different economic and financial circumstances is slow in paying and puts an obligee under a deed to the trouble of commencing proceedings, obtaining a judgment in Queensland and then registering it in England.
• [61] An Australian judge, in making an assessment about risk and delay, is making a largely intuitive assessment or an educated guess about what a reputable insurer will do and whether, assuming it will be good for the money, it will pay promptly some years from now. That educated guess is not a guarantee.
• [62] All one can reasonably say in a case such as this, where one has a large and apparently secure insurer such as AmTrust, is that the risk of non-payment by it would seem to be small but that there is a risk, which cannot properly be assessed, of an unacceptable delay in the defendant being paid pursuant to the deed of indemnity. That risk of delay and the small risk of not being paid at all need to be viewed in context. The context is that of a defendant which has successfully defended a class action at great expense. In the event of success at trial these are costs to which the defendant should not have been put and payment of its costs must wait an assessment of them. The interests of justice suggest that a defendant in that position should not be put to unnecessary delay in having its costs order met out of a readily accessible fund.

Are these disadvantages unacceptable in the circumstances?

• [64] The present task is not one of weighing disadvantages. It is assessing whether these risks and other disadvantages to the defendant are unacceptable. Where the plaintiff has not identified in any satisfactory form the nature and extent of the disadvantage to it in providing a form of security which provides ready access to a fund in Australia, for example, that the cost of obtaining a bank guarantee ($X) is far too expensive compared to the cost of obtaining a deed of indemnity from AmTrust ($Y), then it is hard to see that the plaintiff has discharged the practical onus of showing that the form of security proposed by it does not impose an "unacceptable disadvantage".

Provision for a sum to be paid into Court for the costs of enforcing the indemnity - the $Z factor

• [65] The parties have advanced competing estimates of the costs of obtaining a judgment in Australia, registering it in England and then enforcing it. The plaintiff submits that in the light of Mr Whiffen's evidence, it is appropriate that the sum of $30,000 be paid into Court for the purpose of meeting any costs incurred by the defendant in registering a foreign judgment. The defendant's solicitor, Mr McDonnell, advances evidence about the different categories of costs and includes advice from a London based lawyer about the costs of registering and enforcing a judgment in England. I find it unnecessary in the circumstances to arrive at an appropriate figure. However, if I had done so, or even if the parties had agreed about an appropriate estimate of the costs of obtaining judgment, registering it in England and then enforcing it (if necessary), another problem would have arisen. If, for example, I had settled upon a figure of $50,000 then what would be the trigger for it to be paid out of Court to the defendant? Would the defendant have been entitled to payment out once it had incurred any costs? Would it only have been permitted to be paid out parts of the sum held in Court and only on proof of costs actually incurred or reasonably incurred, and upon what kind of proof? The question of how and when any sum paid into this Court would be paid out is an unsatisfactory feature of the plaintiff's proposed order.

• [66] The plaintiff accepts that it bears the practical onus of establishing that the form of security proposed by it is adequate and does not impose an unacceptable disadvantage on the defendant. The disadvantage to the defendant is reasonably apparent. Under the plaintiff's proposal, the defendant does not have access to a fund or asset in Australia against which it can enforce an order for costs. Instead, it faces the costs and delay associated with making demand against a foreign based insurer, commencing proceedings on the deed if its demand is not met, obtaining judgment in Australia, registering that judgment in England and then possibly taking enforcement action in England. Those financial costs may be offset by an amount paid into this Court which takes account of the expected costs.
• [67] The defendant faces the risk of delay in being paid by a foreign insurer, quite possibly some years from now after these complex proceedings are tried, determined and a final costs order is made and assessed. The risks of delay in being paid and the small risk of not being paid at all may be acceptable and ones which the defendant might be required to bear in some circumstances. The plaintiff might have established that these and other matters do not impose an "unacceptable disadvantage" on the defendant in circumstances in which security in the form of a payment into Court or an unconditional bank guarantee from an Australian bank was unavailable or came at too high a price to it. However, the plaintiff has not condescended to disclose the expected costs to it of the alternative proposed forms of security. It has not given the Court even an estimate of the difference between X and Y. Therefore, if I had placed a number on Z (being the sum to be paid into Court) as security for the costs of enforcing the indemnity, being a figure of between $30,000 and $80,000, I still would not have been able to ascertain the disadvantage to the plaintiff, overall, of being required to obtain a bank guarantee for X. Expressed differently, the plaintiff has not disclosed how much cheaper the "least disadvantageous" form of security is to it.
• [68] The "least disadvantageous" form proposed by the plaintiff has disadvantages to the defendant in terms of delay in being paid and a small risk of not being paid at all.
• [69] Is it acceptable to require the defendant to bear those disadvantages?

[1] Simic v New South Wales Land and Housing Corporation [2016] HCA 47; (2016) 260 CLR 85 at 113 [88]; [2016] HCA 46 at [88].

[2] Commission of Taxation (Cth) v Vasiliades [2016] FCAFC 170; (2016) 344 ALR 558 at 579 [72], see also at 570 [38].

[3] Ibid at 579 [72], quoting Energy Drilling Inc v Petroz NL (1989) ATPR 40,954 at 50,422.

[5] [2017] VSCA 293 at [59] ("Trailer Trash") cited with approval in Equititrust Limited v Tucker [2019] QSC 51 ("Equititrust 2019") and Equititrust Limited v Tucker [2020] QSC 269 ("Equititrust 2020").

[7] [2014] NSWCA 81 at [22].

[8] [2016] VSC 401 at [40] ("DIF III").

[14] [2019] QSC 12; [2019] 3 Qd R 255 at 262 [11]; [2019] QSC 12 at [11] ("Murphy Operator").

[16] Murphy Operator at 263-264 [15].

[17] DIF III at [38] (citations omitted).

[19] [2020] EWHC 2448 (Comm).

[20] Murphy Operator & Ors v Gladstone Ports Corporation (No 6) [2020] QSC 192 at [102] - [118].