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The power to order security for costs

8. The court has a discretion under r 1900 of the Court Procedures Rules 2006 (ACT) (the Rules) to order the plaintiff to give security in the amount it considers appropriate for the defendant’s costs of the proceeding. Rule 1901 of the Rules limits the circumstances in which the discretion may be exercised to particular categories, one of which must be satisfied, although the last of the categories is “the justice of the case requires the order to be made”. That has the effect of constraining the discretion only in terms of interest of justice considerations.

9. Rule 1902 of the Rules provides a non-exhaustive list of discretionary factors to which the court may have regard. Those factors apply in their terms not only to whether an order should be made, but also to the task of quantifying the sum to be required. For example, the court is to have regard to the estimated costs of the proceedings and also whether an order for security would be oppressive.

What is an appropriate sum?

10. In CDLC Pty Ltd v Capital Estate Developments Pty Ltd (No 4) [2024] ACTSC 345 at [45]-[47], McWilliam J helpfully set out the relevant principles in setting a security sum: The court has discretion to order the amount it considers sufficient. In determining what constitutes “sufficient” security, the court does not set out to give a complete indemnity: Brundza v Robbie & Co (No 2) (1952) 88 CLR 171 at 175. An estimate of the likely party-party costs should appear in the affidavit in support of the application, although the court is not bound to accept the estimate: M A Productions Pty Ltd v Austarama Television Pty Ltd (1982) 7 ACLR 97 at 101. A plaintiff is not required to give security for the costs of any third-party proceedings commenced by the first defendant: Bruce Pie & Sons Pty Ltd v R H Mainwaring, English and Peldan (1985) 1 Qd R 401 at 403-4.

11. Over the time since the issue of security was first raised in this case, there has been some evolution in the estimates provided by Ms Isarabhakdi’s solicitor of their likely costs of defending the action. Initially the recoverable component of an adverse costs order at the conclusion of defended proceedings was estimated to be in the range of $195,000 – $260,000. In subsequent communications the figure was revised downwards resulting in what is presented by Ms Isarabhakdi’s lawyers as a compromise position of a figure of $140,000.

12. Ms Isarabhakdi points to the complexity of the proceedings in terms of the number of variations upon which the claim by Boss Building Pty Ltd is based. She also relies on the detail of the estimate underpinning the request for security, prepared as it is by a partner and senior associate of the law firm representing her.

13. In litigation of this nature there are so many variables it is difficult to settle on a figure likely to cover the costs liability of a party successfully defending the claim. As soon as costs are based on hourly rates and time spent, a high degree of uncertainty is introduced to the estimating process. Precisely what steps will in fact be required in the conduct of the defence may be estimated, but those estimates are in large part speculative. It is for that reason often a staged approach to the application of security orders is taken.

14. The task of the court is not necessarily to set security on an indemnity basis, but to determine an allowance that is reasonable in the circumstances of the case after weighing all the competing considerations. As the court observed in Procon (GB) Ltd v Provincial Building Co Ltd [1984] 2 All ER 368 at 567, the correct principle is that “the security should be such as the court thinks in all the circumstances of the case is just”.

15. In this case I accept there is considerable detail in the calculation of estimated costs relied upon by Ms Isarabhakdi. However, the estimate remains speculative in the sense that the proceedings are at an early stage, and it is reasonable to allow for some narrowing of the issues with the passage of time and the advantages of exchanged evidence. That is particularly so where the initial defence costs estimate was roughly equal to the quantum of the claim. That factor alone should provide some encouragement to the parties to narrow the issues, reduce the matters in contest and reduce the likely costs to be incurred in bringing this dispute to a conclusion. Taking into account all of the material before me, I will make a staged order for security in the sum of $100,000 payable in two tranches of $50,000.

Orders

16. The orders I make are: (1) The plaintiff is to provide $100,000 in security for the defendant’s costs. (2) Such security is to be provided by payment in tranches as follows: (a) $50,000 by 29 July 2026; and (b) $50,000 by 29 October 2026. (3) The parties have liberty to apply on 3 days’ notice for further orders settling the method of payment if required. (4) The defendant is granted liberty, from 29 October 2026, to apply to the court for further security for costs if she contends the above security is inadequate. (5) In the event of failure by the plaintiff to pay the amounts required by these orders the proceedings will stand dismissed. (6) The plaintiff has liberty to apply to seek an extension of the time for payment of any of the amounts required by these orders.

I certify that the preceding sixteen [16] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Muller. Associate: MG Malouf Date: 22 July 2026