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File Number: SC 494 of 2022 McWILLIAM J:

1. The parties in this proceeding are involved in a now protracted dispute about two commercial leases in respect of premises located at Denman Prospect shopping precinct, from which the first and second plaintiffs respectively operated a café trading as “Morning Dew”, and a bar and restaurant trading as “Honeysuckle”.

2. The lease held by each plaintiff was terminated by the first defendant in 2022 and interim leases were entered into through a deed of settlement, the intent of which was to enable each of the plaintiffs to sell their respective business as a going concern. Those interim leases provided for the plaintiffs to request the consent of the first defendant as lessor to the proposed sale of either business. Such consent was sought but refused in December 2022.

3. The litigation has evolved into a dispute about whether the first defendant’s refusal to consent to the sale of the business by each of the plaintiffs was a breach of the terms of their respective deeds, and if so, the quantum of damages that may arise from the breach.

4. The first defendant has counter-claimed against the plaintiffs, alleging misleading or deceptive conduct under the Australian Consumer Law (ACL) and/or a breach of the contractual duty of good faith by the plaintiffs. The first defendant has also joined the sole director and shareholder of the plaintiffs, Mr Arthur Choi, as a third party to the proceeding (Third Party), alleging that he was knowingly involved in the misleading and deceptive conduct and that he breached the deed of settlement that provided for the interim leases.

Application for security for costs

5. The present application for determination has been brought by Capital Estate Developments Pty Ltd (ACN 137 573 632), as trustee for Capital Estate Developments Trust, the first defendant (the Lessor). It seeks orders for security for costs to be paid into court by the plaintiffs, either jointly or severally, pursuant to r 1900 of the Court Procedures Rules 2006 (ACT) (Rules) or s 1335(1) of the Corporations Act 2001 (Cth) (Corporations Act).

6. The amount of security sought is not quantified in the application. The affidavit in support did not contain any estimate of the future costs from the date of the application. Historical correspondence from October 2023 included an estimate of the future costs amounting to around $200,000 on a solicitor and client basis based on a three-day hearing with both senior and junior counsel instructed. The estimate of the matter is now five days. In correspondence dated August 2024, the first defendant sought the amount of $110,000 as security, either paid into court or their solicitor’s trust fund, or satisfied by either an unconditional bank guarantee or insurance bond drawn in the first defendant’s favour representing security for future costs to be incurred.

7. The first defendant further sought that the proceeding be stayed until the amount of security is paid, pursuant to r 1904(3)(a) of the Rules.

8. As an alternative, the first defendant sought an order that the Third Party provide an undertaking to the Court to be responsible for any adverse cost orders made against the first plaintiff and/or the second plaintiff. That undertaking was not proffered at the hearing of the application on 27 September 2024. The Court is unable to force a party to provide an undertaking, but the lack of an undertaking is not irrelevant, as will be explained below.

Procedural History

9. For the purposes of determining this application, it suffices to refer to the procedural history of the matter that has been summarised in [3]-[19] of a separate judgment delivered by Baker J since the hearing of the present security for costs application, which dealt with the filing of an amended defence: CDLC Pty Ltd v Capital Estate Developments Pty Ltd (No 3) [2024] ACTSC 304 (CDLC (No 3)). These reasons have taken into account the state of the pleadings following that judgment.

10. Of significance to the present dispute, there is a counterclaim brought by the first defendant against each of the plaintiffs and the Third Party, alleging misleading and deceptive conduct in the course of providing the information which was the subject of the plaintiffs’ application for consent to the sale of the businesses. I accept that the first defendant’s claims concern precisely the same issues and arise from the same fundamental facts as those raised in the plaintiffs’ claims.

The enlivenment of the Court’s discretion to order security for costs

11. Upon application, the Court may order the plaintiff to give the security it considers appropriate for the defendant's costs of the proceeding: r 1900 of the Rules.

12. An order for security for costs seeks to protect a defendant by ensuring an available fund to defray costs incurred in defending a frivolous claim, and to discourage the filing of unmeritorious and frivolous claims which may amount to vexatious harassment: Davey v Herbst (No 2) [2012] ACTCA 19 at [15] and Twining v Curtis [2014] ACTCA 19 at [13] per Refshauge J.

13. The applicant must first satisfy one of the requirements set out in r 1901 before the Court may exercise its discretion: Matsebula v Reynolds [2016] ACTSC 55 at [22]. Relevantly here, they include the Court being satisfied that the plaintiff is a corporation and there is reason to believe that the plaintiff will not be able to pay the defendant’s costs if ordered to pay them: r 1901(a).

14. The plaintiffs here did not rely upon any evidence of financial security in respect of either plaintiff. Prima facie evidence of an inability to pay is sufficient: Churchills Ltd v Pilcher (1940) 57 WN (NSW) 109, an oft-cited authority of the NSW Full Court, which has been applied in this jurisdiction in cases such as Master Club Consultants Pty Ltd v Stanbritt Pty Ltd [2000] ACTSC 18 at [3] (in the context of the previous iteration of the rule) and Canberra Data Centres Pty Ltd v Vibe Constructions (ACT) Pty Ltd [2010] ACTSC 20; 173 ACTR 33 at [217].

15. Here, neither plaintiff appears to have traded since February 2024, a date which I have accepted on the basis of the first defendant’s submissions, but which does not appear to be controversial. The first plaintiff is in liquidation. It has unsecured creditors, including the Australian Taxation Office (ATO) who are owed approximately $185,000. The second plaintiff has paid up capital of $1.

16. In the absence of any documentation demonstrating an ability to meet an adverse costs order, I accept that there is reason to believe that neither company will be able to pay the defendant’s costs if an adverse costs order were to be made following a final hearing.

Is an order for security for costs appropriate in the circumstances of this case?

17. The ground enlivening the operation of the relevant rule has been established. The remaining two issues are whether an order should be made as a matter of discretion, and if so, the quantum and terms of any order to be made.

Arguments of the parties

18. The parties each provided helpful written submissions placing emphasis on different discretionary considerations. The legal arguments have been incorporated below in discussing the factors operating on my decision.

19. In short, the first defendant accepts that it has delayed seeking security for costs until now, but says that this is not fatal, and that the delay was attributable to the evolution of the litigation. Initially, the proceeding commenced in December 2022 and was listed for a one-day hearing in March 2023. As at 31 October 2023, the scope of the litigation expanded to a three-day hearing. Since the initial hearing date, the parties have pleaded out their various causes of action and a number of interlocutory applications have been determined. The focus of the litigation has now shifted from relief seeking specific performance to damages (given that interim leases have now expired such that possession is no longer possible). The final hearing has been adjourned twice. A final hearing is unlikely to proceed in 2024.

20. Further, the first defendant argued it only sought security for its future costs, following the first plaintiff entering into liquidation.

21. The plaintiffs submitted that the delay here is significant. Any order now would be unfair as the plaintiffs have spent approximately $400,000 to date, over half of which was incurred after October 2023, when the first defendant initially raised the issue of seeking security for costs, but did not then file any application. A belated order for security, even one that only deals with future costs, deprives the plaintiffs from making an election whether to embark upon the proceeding.

22. The plaintiffs further submitted there are now counterclaims and a third-party claim which traverse the same factual issues as those that are the subject of the claim. The damages claimed against the Third Party include the legal costs of the proceeding. On one view of the third-party claim, an order for security against the plaintiffs would be tantamount to granting the first defendant final relief in respect of that claim at an interlocutory stage, (save for the order being made against the plaintiffs rather than the Third Party).

Applicable principles

23. The guiding principle for whether to order security at all, or in a particular form or amount, is fairness. In All Class Insurance Brokers Pty Ltd (in liq) v Chubb Insurance Australia Ltd [2020] FCA 840, Allsop CJ summarised the principles at [42]-[44] (emphasis added): 42. The Court’s discretion to require the provision of security for costs is broad and the factors informing the exercise of that discretion cannot be stated exhaustively. The only limitation is that the discretion be exercised judicially: Bell Wholesale Co Ltd v Gates Export Corporation [1984] FCAFC 29; 2 FCR 1 at 3. The matter which lies at the heart of the discretion is one of fairness, both in terms of whether security should be granted, and if so, in what amount: Madgwick v Kelly [2013] FCAFC 61; 212 FCR 1 at 21 [92]. The Court aims to achieve a “balance between ensuring that adequate and fair protection is provided to the defendants, and avoiding injustice to an impecunious plaintiff by unnecessarily shutting it out or prejudicing it in the conduct of the proceedings”: Rosenfield Nominees Pty Ltd v Bain & Co (1988) 14 ACLR 467 at 470 (Giles J). 43. The Court’s discretion should be exercised having regard to all of the circumstances of the case (see Merribee Pastoral Industries Pty Ltd v Australia and New Zealand Banking Group Ltd [1998] HCA 41; 193 CLR 502 at 513 [26] (Kirby J)). There are a number of well-established factors relevant to the Court’s exercise. These include (see KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] FCA 76; 56 FCR 189 at 197– 198 per Beazley J): whether the application for security for costs has been brought promptly; the strength and bona fides of the applicant’s case; whether the applicant’s impecuniosity was caused by the respondent’s conduct 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; and 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. 44. An additional factor to add to this list is whether there are aspects of public interest which weigh in the balance against the making of an order (see Equity Access Ltd v Westpac Banking Corporation [1989] FCA 520; ATPR 40-972 at 50,635 per Hill J).

24. The court’s discretion there under consideration was that enlivened by s 1335 of the Corporations Act but the discretionary considerations remain the same in deciding whether the “justice of the case” requires the order to be made, as stated in Jornad Pty Ltd v Sapme Pty Ltd [2018] ACTSC 147 (Jornad) at [17], where Burns J went on to set out well-established guidelines which a court typically takes into account: (a) that such application should be brought promptly; (b) that regard is to be had to the strength and bona fides of the plaintiff’s case, but, 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”; (c) whether the plaintiff’s impecuniosity was caused by the defendant’s conduct the subject of the claim; (d) whether the defendant’s application for security is oppressive, in the sense that it is being used merely to deny an impecunious applicant a right to litigate; (e) 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; and (f) 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.

25. As observed by Burns J at [18], those considerations largely mirror the matters referred to in r 1902(1) of the Rules, although they are not an exhaustive list: r 1902(2). The factors considered below are only those that I consider have some bearing in the circumstances of this case.

26. It is important to record that although I will discuss a number of principles and how they may be applied, the various considerations operate in different ways depending on the circumstances of any particular case. The court’s discretion should not be limited by rules or practices, as the exercise of a discretion judicially requires the court to consider the circumstances of the particular case with a view to determining the justice of the matter: Merribee Pastoral Industries Pty Ltd v Australia and New Zealand Banking Group Ltd (1998) 193 CLR 502 at 513 per Kirby J. The means of the people standing behind the proceeding

27. Where there are solvent shareholders, creditors or directors standing behind an impecunious company, they may be looked to and a stay granted in the absence of provision of security: Bell Wholesale Co Pty Ltd v Gates Export Corp (No 2) (1984) 2 FCR 1 (Bell) at 4.

28. I further accept as a general proposition that where the real benefit of the litigation is for a person other than a nominal plaintiff, security may be ordered: Jet Corp of Australia Pty Ltd v Petres Pty Ltd (1983) 50 ALR 722 at 733. Although a subsequent appeal was successful, that proposition was not contested: see Sent v Jet Corp of Australia Pty Ltd (1984) 2 FCR 201 at 216-217, 236.

29. The rationale was explained in Fiduciary Ltd v Morningstar Research Pty Ltd (2004) 208 ALR 564 at [83] as being that it is fair for the courts to proceed on a basis which reflects the proposition that those who seek to benefit from litigation should bear the risks and burdens that the process entails. The first defendant submitted that Mr Choi should not be able to stand by and obtain, albeit indirectly, the benefits of the litigation without bearing some risk in respect of the defendant’s costs in the event the claim fails, relying on Darelvale Holdings Australia Pty Ltd v Waterjet Designs Pty Ltd [2003] FCA 863 at [12].

30. However, Mr Choi’s personal financial position as the sole director and shareholder of the plaintiffs, and his reluctance to give an undertaking as to security here, are immaterial for three reasons.

31. First, these types of considerations are more significant where the impecuniosity of a company is such that any order for security for costs will stifle litigation or adversely affect the business of the company. That is because where those issues are raised, the party that asserts that effect must satisfy the Court that those who stand behind it or stand to benefit from the plaintiff’s success are unable to provide security for costs: Bell at 2.

32. Here, the plaintiffs do not claim that an order for security will stifle proceedings. They also do not claim that an order for security will adversely affect their businesses (they are not trading).

33. Second, Mr Choi is now joined in the proceeding as a party. He is no longer a person “standing by” the litigation. He is directly involved in it and the relief sought against him includes the damages sought in the primary claims (and any adverse costs order made against the first defendant in respect of those claims). As Baker J stated in CDLC (No 3) at [39] and [46]: 39. An unusual feature of the present case is that the “loss or damage” which the first defendant particularises in its Defence, Counterclaim and Third Party Notice will not crystallise until this Court makes a decision which is adverse to the first defendant in the substantive proceedings. However, there is nothing in the text of the ACL which would preclude a finding that an adverse finding by a court may constitute “loss or damage” within the meaning of ss 236 and 237 of the ACL. Nor would a narrow construction of those words accord with the purpose of the ACL, namely to “enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection”: s 2 of the Competition and Consumer Act 2010 (Cth). … 46․ In its Defence and Counterclaim, the first defendant alleges that the damages it may sustain as a result of the plaintiffs’ misleading and deceptive conduct are of an amount that is equal to the damages that would otherwise be awarded to the plaintiffs on their Further Amended Statement of Claim. The first defendant contends that in those circumstances, all legal equitable or discretionary relief claimed by the plaintiff should be refused, or that, if damages are awarded to the plaintiffs, the Court should award the first defendant damages for misleading and deceptive conduct of an amount that is equal to and-off setting the amount awarded to the plaintiffs.

34. Third, to show that the claim is brought on behalf of another, it must be shown both that the proceedings are not brought for the benefit of the plaintiff and that they are brought for the benefit of some other person: Andrews v Caltex Oil (Australia) Pty Ltd (1982) 40 ALR 305 at 309 (noting that this case dealt with a previous version of the rule which was differently worded). It is not sufficient to demonstrate that some other person will also happen to benefit: Upton v TVW Enterprises Ltd (1984) 57 ALR 361 at 362-363. The plaintiffs here are not “nominal” plaintiffs, because the relief sought is properly for the benefit of each plaintiff. To the extent that creditors now stand behind the first plaintiff, the main creditor is the ATO, not Mr Choi.

The prospects of success or merits of the proceeding and the genuineness of the proceeding

35. If a prima facie cause of action exists, generally it will be assumed the proceeding is bona fide and with a reasonable prospect of success, unless evidence establishes to the contrary: Memutu Pty Ltd v Lissenden (1983) 8 ACLR 364 at 365.

36. Here, it was not put in issue that the claims have reasonable prospects of success.

The corporation’s lack of financial resources and whether the reason is in part attributable to the first defendant’s conduct:

37. Impecuniosity is not decisive on an application for security for costs: Lucas v Yorke (1984) 58 ALJR 20 at 21. A corporation’s inability to pay an adverse costs order will carry little weight if the defendant’s conduct was the material contributing cause.

38. Here, there is a clear logical connection between the first defendant’s refusal to permit the plaintiffs to sell their businesses to the entities proposed and the subsequent loss of possession through the expiration of the interim lease. However, the plaintiffs did not put evidence of their financial position before the Court and it may be that they were each already performing poorly without any conduct by the first defendant. Ultimately, apart from the apparent lack of funds being the gateway to enlivening the court’s discretion, I have given little weight to this factor as a matter in favour of an order for security, given the stage at which the application is being made.

Whether an order for security for costs would be oppressive or would stop or limit the progress of the proceeding

39. An order for security for costs should not be made if it would stifle an action which, in the interests of justice, should be determined on its merits: Benjamin v GB Franchising Pty Ltd [2008] ACTCA 11; 1 ACTLR 287 at [31]. The onus is on the plaintiffs to satisfy the Court that an order would have a stultifying effect: Civil & Civic Pty Ltd v Nova Builders Pty Ltd [2024] ACTCA 5 at [3]-[4]. As already indicated, the plaintiffs did not argue that an order for security for costs would have a stultifying effect here.

Overlapping issues and whether the plaintiff is effectively in the position of a defendant

40. Orders for security for costs will only be made against parties who are in substance plaintiffs: Anutech Pty Ltd v Latent Energy Systems Pty Ltd (Unreported, ACT Supreme Court, Gallop J, 3 February 1997) (Anutech) at 4-5.

41. There is a line of authority that where substantially the same issues are likely to arise on an action brought by an impecunious company against a defendant as on a cross action brought by the defendant against the impecunious company, the Court should be slow to order security: see Sydmar Pty Ltd v Statewise Developments Pty Ltd (1987) 73 ALR 289 at 299-300 and Dalma Formwork Pty Ltd v Concrete Constructions Group Ltd (Unreported, Supreme Court of New South Wales, Rolfe J, 19 June 1998) (unanimously upheld on appeal in Concrete Constructions Pty Ltd v Dalma Formwork Pty Ltd [1999] NSWCA 16 at [25]).

42. The plaintiffs here submitted that where a claim and counterclaim deal with substantially the same issues, the discretion will usually be exercised against the grant of security, because the defendant will not be put to any additional expense in addressing the issues raised in the claim beyond those raised in the counterclaim.

43. I was initially quite attracted to that as a complete answer to the first defendant’s application. However, on reflection, I think the fact that a claim and counterclaim arise out of overlapping factual issues possibly requires deeper analysis. Gallop J made the point in Anutech at 10: It is clear law that the crucial question is whether on analysis the counter-claim operates as a defence, in which case the defendant is really defending himself, or it amounts to a cross action, in which case he is in the position of a plaintiff prosecuting his own claim (Halsbury, 4th ed., Vol. 37, para.303). That passage was quoted by the Master in his reasons for judgment, but he did not go on to quote the very next sentence in Halsbury in the same paragraph, as follows: "Thus, where the claim and the counterclaim arise out of the same matter or transaction, and the counterclaim is in fact the defence to the action, security will not ordinarily be ordered from the defendant who is resident abroad or a limited liability company (Accidental and Marine Insurance Co v Mercati (1866) LR 3 Eq 200; Mapleson v Masini (1879) 5 QBD 144, DC, where the counterclaim was in respect of breaches of the contract sued on by the plaintiff; Neck v Taylor [1893] 1 QB 650, CA).”

44. Here, the claims overlap but the counterclaim remains primarily defensive. The relief sought in the counterclaim is expressly pleaded so that it only arises if the plaintiffs succeed on their actions in breach of contract. Having said that, the counterclaim does bring in another defendant (Mr Choi) and the damage against that defendant is the costs, part of which are the subject of the present application for security. The legal issues involved are also different and the evidence required will be more expansive.

The estimated costs of the proceeding

45. 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.

46. 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.

47. 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.

48. The evidence here estimated the scale costs going forward. $70,000 of the $110,000 sought is for counsels’ fees and the instructing solicitor’s attendance at final hearing. There was no detail as to the estimated work at the point that the litigation had now reached referable to the plaintiffs’ claim. That is an important consideration because the only costs that are sought are those going forward and must necessarily relate in part to the work to be done in respect of the misleading and deceptive conduct case and the case against the Third Party, which deals with different legal issues, even if the factual substratum is largely the same.

Other considerations: Delay

49. Other considerations set out in r 1902 of the Rules do not arise in this case, such as delay by the plaintiff in commencing proceedings, questions of public importance, enforceability of a costs order and whether there has been payment into court.

50. However, the plaintiffs submitted there is a further consideration that should be given determinative weight in the circumstances of this case. That is the delay by the first defendant in seeking security for costs. Where a defendant delays in applying for security for costs, and a plaintiff has incurred legal costs in the meantime, that is a factor weighing against the grant of security, relying on Acohs Pty Ltd v Ucorp Pty Ltd [2006] FCA 1279; 155 FCR 181 at [56]; and Jornad, where Burns J stated at [19] (emphasis added): In the present case there has been a significant delay by the defendants in seeking an order for security against the first plaintiff. These proceedings were commenced in March 2017, but this application was not made until 30 April 2018. The defendants sought to explain this delay in two ways. First, by reference to settlement negotiations which took place in 2017. Secondly, by reference to them only becoming aware of the terms of the Deed of Agreement between the plaintiff and the fourth and fifth defendants in March 2018. These terms apparently caused them concern about the financial position of the first plaintiff because it suggested that the plaintiffs required a period of 12 months to pay off a relatively modest sum to the fourth and fifth defendants. It is clear that the company has no assets and is not trading. These facts could have been ascertained by the defendants in March 2017 or shortly thereafter had they chosen to undertake the appropriate searches. There is unchallenged evidence that the first plaintiff has already expended significant costs in conducting these proceedings to date. This is a matter which weighs heavily against now making an order for security for costs.

51. The authorities show that delay can be productive of unfairness in a number of respects. That point was made by Charlesworth J in Prodata Solutions Pty Ltd v South Australian Fire and Emergency Services Commission [2018] FCA 1665 (Prodata) at [53], citing numerous authorities in which lapses of time proved fatal to a security for costs application.

52. The plaintiffs here argued that the delay in seeking security was lengthy and unexplained, at least insofar as the question of security was first raised with the plaintiffs in October 2023, with no application then brought until September 2024, at a stage when the matter was set down for hearing the following month. While there was no affidavit evidence to support an inference that the plaintiffs incurred considerable expenses in the wrongly induced belief that no security would be sought, it is not necessary for a plaintiff to show prejudice from delay, or to give evidence of what the plaintiff would have done if the application had been made earlier. There may be an inference of prejudice arising from gross delay: Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (1985) 1 NSWLR 114 at 125; Morris v Hanley [2001] NSWCA 374 at [29]-[30], although this is not always the case. The prejudice to a party may be inferred from the mere fact and length of the delay in some cases but not in others: see Prodata at [53] and the authorities there-cited.

53. Of course, if there were evidence that had security for costs been sought earlier, the litigation would not have gone ahead, that may have constituted a powerful consideration against granting security in the case of a delayed application: Green (as liquidator of Arimco Mining Pty Ltd) v CGU Insurance Ltd [2008] NSWCA 148; 67 ACSR 105 at [57]. That is not this case.

54. I accept the first defendant’s position on not applying for security earlier as being directly referable to the scope of the litigation changing over time. It is fair to say that this proceeding has evolved. When the proceeding first commenced, the first plaintiff was not in liquidation. The plaintiffs had possession of the premises that were the subject of each lease. The matter was not anticipated to take the course it has. However, the discretion to be exercised is not about deciding whether the first defendant acted reasonably in delaying an application for security. It is about dealing with the consequences of the delay for the litigation and balancing considerations of fairness. A reasonable position taken by a defendant may still operate prejudicially on the opponent at a later date.

55. In any event, the first defendant had doubts about the plaintiffs’ financial position from at least October 2023, when they wrote to the plaintiffs seeking security for costs, and the concern could only have increased in November 2023 when the plaintiffs lost their right to possession of the premises from which they each traded, following orders made by McCallum CJ: CDLC Pty Ltd v Capital Estate Developments Pty Ltd (No 2) [2023] ACTSC 321. There is a gap in the correspondence before the Court of a number of months before the issue of security was raised again. There may have been very good reasons not to seek security at the initial stages of the litigation, but the delay since October 2023 and the costs incurred by the plaintiffs since that date mean that this is a factor that weighs against an order for security.

Conclusion

56. Taking into account the stage that the proceedings have now reached and the proximity to hearing, the uncertainty about the costs going forward being partially directed to issues arising out of the counterclaim, the delay in making the application and the inferred prejudice arising, and the overlapping issues between the claims and the counterclaims (notwithstanding that I accept the claim remains properly defensive), I am not persuaded that a case has been made out for ordering security for costs at this stage of the litigation.

Orders

57. For the above reasons, the Court orders as follows: (1) The application filed 3 September 2024 seeking security for costs is dismissed. (2) The costs of the application are to be paid by the first defendant, with such costs not to be recovered until the conclusion of the proceeding.

I certify that the preceding fifty-seven [57] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Justice McWilliam. Associate: Date: