Equititrust Limited v Tucker [2020] QSC 269

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - AMOUNT AND NATURE OF SECURITY - where, on a previous application, the plaintiff was ordered to provide security for the defendants' costs up to the filing of defences - where that security was ordered to be provided by way of payment into Court, payment into a solicitors' trust account or bank guarantee - where the defendants now apply for security for costs up to the first day of trial - where the plaintiff agrees that further security should be provided, but disagrees as to the quantum and form of that security - where the plaintiff proposes security in the amount of $670,000 per group of defendants, calculated so as not to exceed the funding limit under its litigation funding agreement - where the plaintiff proposes security in the form of a deed of indemnity between a foreign third party insurer of the plaintiff's litigation funder and the defendants - where the proposed form of security is in substantially the same form as the previous occasion save for some amendments to the terms of the proposed deed - whether the form of security proposed is adequate and does not impose unacceptable disadvantage on the defendants

Corporations Act 2001 (Cth), s 1335

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

Bell Wholesale Co Ltd v Gates Export Corp (No 2) (1984) 2 FCR 1; [1984] FCA 34, considered

Blue Oil Energy Pty Limited v Tan [2014] NSWCA 81, considered

DIF III Global Co-Investment Fund v BBLP LLC [2016] VSC 401, applied

Equititrust Limited v Tucker [2019] QSC 51, considered

Murphy Operator v Gladstone Ports Corporation (No 6) [2020] QSC 192, applied

Ollerenshaw v The Uniting Church in Australia Property Trust (NSW) [2017] NSWSC 1637, cited

Rosengrens Ltd v Safe Deposit Centres Ltd [1984] 3 All ER 198, cited

Todd v Novotny [2000] WASC 308, cited

S Couper QC, with N J Derrington, for the plaintiff

M R Hodge QC, with D Tay, for the Tucker defendants

D G Clothier QC, with B Kabel, for the Cowen defendants

• [1] The plaintiff is a company in liquidation. Its prosecution of this proceeding is funded pursuant to a litigation funding agreement with Vannin Capital Operations Limited (Vannin).
• [2] Vannin is part of a group of companies which contends that it is one of the largest litigation funding houses in the world. That group has obtained insurance cover against its liability for adverse costs orders from AmTrust Europe Limited (AmTrust), a London based insurer.
• [3] In a previous security for costs application in this proceeding which dealt with security for costs up to the filing of defences, Bowskill J rejected the plaintiff's contention that the security should be provided by way of deeds of indemnity executed by AmTrust in favour of the defendants, together with $30,000 paid into Court to cover potential enforcement costs against AmTrust in the United Kingdom if that ever became necessary.[1] Her Honour required security in the form of cash payment into Court or the plaintiff's solicitors' trust account, or by way of bank guarantee.
• [4] Security for costs up to the filing of defences was provided. Defences having been filed, the defendants applied for security for costs up until the first day of trial.
• [5] Mr Tucker[2] and the second defendant (the Tucker defendants) applied for an order that the plaintiff pay $935,228.05 into Court as further security for the Tucker defendants' costs up until the first day of the trial. The Tucker defendants also sought an order that the proceeding against them be either dismissed or stayed if security was not paid into Court within seven days of the date of the order. The Tucker defendants further sought security for costs of the trial beyond the first day. In this regard, they sought orders that the plaintiff pay a sum to be agreed or otherwise determined by the Court by three months before the trial and that, in default of compliance, the proceeding be dismissed or stayed.
• [6] For their part, Mr Cowen and the sixth defendant (the Cowen defendants) applied for an order that the plaintiff should pay $1,058,637.60 into Court as further security for the Cowen defendants' costs up until the first day of the trial. The Cowen defendants also sought an order that the proceeding against them be stayed if security was not paid into Court within seven days of the date of the order. They did not seek security for the costs of the trial beyond the first day.

Indeed, I am informed by a director of Vannin, Mr Matthew Cox (to whom I report) and I believe that if Equititrust is ordered to provide substantial further security by way of payment of cash or bank guarantee, it will probably decline to provide security in that form and terminate the amended litigation funding agreement, in accordance with clauses 21.3 and 24.1 of the LFA.

I say that meaning no disrespect to this Honourable Court: this is a matter on which Vannin cannot presently be dogmatic. For example, if only a small sum was to be provided by way of cash and the lion's share of any security by way of Deeds of Indemnity, Vannin would be more likely to elect to provide such security, as against an order that all security be given in cash, in which case, Vannin will almost certainly elect not to provide any security. For reasons which I trust I have adequately explained, Vannin much prefers to provide any further security for costs by way of the Deeds of Indemnity.

• [11] The defendants objected to having to meet a further contest as to the form of security in this proceeding. They characterised the plaintiff's application and the arguments presented in support of it as an attempt by the plaintiff via its funder to negotiate with the Court to find out what might be the least amount of variation to the originally non-variable form of AmTrust deed of indemnity to render it an acceptable form of security. They objected to that process. They also complained about such a process occurring against the background of what they contended was a lack of transparency concerning the nature of the arrangements as between the plaintiff and Vannin and as between Vannin and AmTrust. If I did embark upon a fresh consideration of the question of the form of the security, they developed arguments that the proposed form was still unsatisfactory.
• [12] I turn first to outline the case which the plaintiff advances in this proceeding.

• [13] The plaintiff is trustee of the Equititrust Premium Fund (EPF). The plaintiff's business, as trustee of the EPF, was the lending of money secured by way of mortgage security over real property.
• [14] The plaintiff's assets consisted principally of cash on deposit with banks and the EPF Loan Book, that term being a reference to the rights which the plaintiff as trustee of the EPF had to recover debts owed to it by those to whom it had lent monies, and the rights which it had pursuant to the mortgage and other securities in respect of those loans.
• [15] The plaintiff's liabilities included the debts it incurred by borrowing monies for the purpose of on-lending to others. One such debt was owed to BOS International (Australia) Limited (BOSI). The plaintiff and BOSI were parties to a facility agreement and the principal securities for the plaintiff's indebtedness to BOSI were various mortgage and other securities over the assets held by the plaintiff as trustee of the EPF, including the assets in the EPF Loan Book (the BOSI securities).
• [16] Mr Tucker and Mr Cowen were partners in the law firm Tucker & Cowen, which had acted for the plaintiff for some years pursuant to a number of retainers between 2006 and 2011. Mr Tucker was the partner with primary responsibility for the retainers. The sixth defendant is an incorporated legal practice which succeeded to the business of Tucker & Cowen in 2016. Mr Tucker was a director of the plaintiff from September 2010 until October 2011. He also controlled the second defendant until March 2018.
• [17] The plaintiff was placed into administration on 15 February 2012. BOSI appointed receivers and managers over the trust property of the EPF on 21 February 2012. Consequent upon a creditors' resolution, the plaintiff was placed into liquidation on 20 April 2012.
• [18] In mid-2012, the plaintiff says it was indebted to BOSI for about $6.8 million (the BOSI debt) secured by the BOSI securities. On 11 July 2012, another company, AET SPV Management Pty Ltd, acquired from BOSI, amongst other things, the rights of BOSI against the plaintiff. Two days later on 13 July 2012, MS Asia Debt Acquisition Limited (MS Asia), a Hong Kong company incorporated in June 2012, acquired from AET SPV Management Pty Ltd the rights of BOSI against the plaintiff for the sum of $2 million.

(a) as directors of the plaintiff (alleged to be a contravention of s 183 of the Corporations Act 2001 and a breach of fiduciary duties);

(b) in Mr Tucker's case, as the company's solicitor (alleged to be a breach of fiduciary duty) and

(c) in Mr Kennedy's case, as a senior employee (also alleged to be a breach of fiduciary duty).

(a) all funds deposited to the trust account of Tucker & Cowen were received on behalf of the plaintiff as their client and were dealt with in breach of trust;

(b) Mr Cowen is vicariously liable under ss 13 and 14 of the Partnership Act 1891 for the misapplication of funds received;

(c) Mr Cowen and the second defendant were each knowingly concerned in the breach by Mr Tucker of s 183 of the Corporations Act and of his fiduciary duties; and

(d) Tucker & Cowen failed, in breach of a contractual duty arising from their retainers, to inform the plaintiff of information held by Mr Tucker, namely that the BOSI debt and the BOSI securities could be obtained for a very cheap price ($2 million), so as to improve substantially the financial position of the beneficiaries of the EPF.

• [24] Amongst other things, the plaintiff seeks the following relief:

(a) restoration of funds banked and paid away in breach of trust;

(b) compensation orders under s 1317H of the Corporations Act;

(c) equitable compensation or an account of profits for breach of fiduciary duty; and

• [25] Not every claim for relief is quantified, but at least in relation to the amount claimed from Tucker & Cowen, the plaintiff has claimed an order that about $16.6 million be paid to the plaintiff.
• [26] It is not presently necessary to essay a summary of how the two groups of defendants resist the plaintiff's claims. It suffices to observe that much of the plaintiff's case is disputed.
• [27] The litigation undoubtedly gives rise to very many complex issues of fact and law. It seems to me very likely that it will give rise to a complex trial, the preparation for which would necessarily be complex and intensive, and likely to involve significant interlocutory disputation.

The quantum of the security which should be provided

• [28] In her decision on the security which should be provided up to the filing of the defences in this proceeding, Bowskill J observed:[4]

The relevant principles are uncontroversial. Rule 670(1) of the UCPR confers discretionary power on the court to order a plaintiff to give the security the court considers "appropriate" for the defendant's costs. The applicants rely also upon s 1335 of the Corporations Act, which refers to "sufficient" security. In determining what is appropriate or sufficient, the court does not give a full indemnity, and the amount is not determined with mathematical precision but rather on the basis of a "broad brush" approach.

• [29] A more expansive summary of relevant principles, albeit to similar effect, appears in Murphy Operator v Gladstone Ports Corporation (No 6) [2020] QSC 192 per Crow J as follows:[5]

(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.

• [30] The Cowen defendants sought security in the amount of $1,058,637.60 calculated as follows:

(a) their reasonable costs likely to be incurred from the filing of defences up to the first day of trial, in the amount of $876,607.40; plus

(b) their reasonable costs incurred up to the filing of defences (excluding costs relating to the amended strike out application filed 15 July 2019, or GST on disbursements or outlays), in the amount of $215,187.31; less

(c) $33,157.11, being the amount remaining from security ordered by Bowskill J once one subtracts, from the $150,000 provided by way of security, $116,842.89 in respect of costs which the plaintiff was ordered to pay in respect of previous interlocutory applications.

• [31] The first item was supported by the opinion of the Cowen defendants' expert costs assessor, Mr Petersen, as to the Cowen defendants' estimated recoverable fees on the standard basis (under the Court's scale) up to and including the first day of trial. Mr Petersen's evidence was given in affidavit form and was prepared having regard to his duty as an expert under UCPR r 426. The Cowen defendants submitted that there was no good reason to discount this further, and security should be ordered in the amount they claimed.
• [32] The Tucker defendants sought security from the filing of defences to the first day of trial in the amount of $935,228.05. They too had retained Mr Petersen and he had prepared a separate opinion in respect of their costs on the same basis as his other opinion. They adduced evidence of an estimate from their solicitor in the amount of $1,185,165, but were content to seek the smaller amount on the basis that it was supported by Mr Petersen's expert opinion. They suggested that Mr Petersen's opinion, prepared by the application of the Court's scale, was, in a matter of this nature and complexity, appropriate and reasonable and likely conservative.
• [33] The plaintiff had also retained an expert to prepare a report. However, no report was tendered and no explanation was advanced for its absence. Instead, the plaintiff relied on opinion evidence from its solicitor. He expressed a different estimate, namely $413,366.51.
• [34] I make a number of observations before forming a view on the appropriate quantum of security.
• [35] First, I do not regard the plaintiff's solicitor's estimate as a reliable basis from which to form the broad brush view as to the quantum which should be ordered. The matters which persuaded me to draw this conclusion were:

(a) he had allowed for three further directions hearings between the filing of defences and trial, but since the commencement of the proceeding there have already been eight directions hearings and three review listing dates and (having regard to my assessment of the feel of this litigation) it seems to me almost inevitable that there will be more;

(b) he had not allowed for any further interlocutory applications, but there had been more than 25 applications filed in the proceeding to date and (having regard to my assessment of the feel of this litigation) it seems to me almost inevitable that there will be more;

(c) he had not allowed for any expert evidence, despite the fact that the plaintiff's pleading asserted that loss would be assessed after expert reports are provided and despite the fact that the nature of the issues in the case strongly suggests the likelihood of expert opinion in areas such as forensic accounting evidence and banking and lending practice;

(d) he had allowed for 40 emails and 60 letters to be exchanged between the parties between the filing of defences and trial which, even on a cursory examination of the material presently before me (and informed by my assessment of the feel of this litigation), seems very inadequate;

(e) he had allowed only five days for the defendants to review and prepare their disclosure which, in light of the allegations in the proceeding and the period under examination, seems likely to be a significant underestimate;

(f) he had made no allowance for senior counsel's input into the preparation of any evidence, including conferring with witnesses or settling witness statements, when such a step would be usual and appropriate for a case of this nature; and

(g) his estimate of $413,366.51 for costs from the filing of the defences to the first day of trial seems unrealistic when one has regard to the fact of the plaintiff's own claim that its recoverable costs for a two-day interlocutory hearing before Bowskill J were $238,801.19.

• [36] Second, the plaintiff offered an amount of security which it contended was effectively equal to the limit of its indemnity for costs under its funding arrangement. It offered an amount of no less than $670,000 (plus the additional $30,000 in cash offered to secure foreign enforcement of the deed), calculated by subtracting from $2 million (which it said was the limit of funding) the $400,000 security already provided, $60,000 on account of the proposed enforcement costs, and provisions of $200,000 for Mr Tucker's costs in a Federal Court proceeding, and then dividing by two. It then proposed a form of words in the deed that would ensure that, once the liability to Mr Tucker in the Federal Court proceeding had been determined, the amount of the security would be increased to take into account whatever remaining amount of the policy limit was available. However, the basis on which the offer was made seems to me to be irrelevant to the question of what the appropriate quantum should be for security for the defendants' costs.
• [37] Third, I would reject any criticism of the defendants' evidence on the basis that there is supposedly some flaw in the two groups of defendants determining that they should be separately represented. The personal conduct of Mr Tucker is criticised. So is the personal conduct of Mr Cowen, although not to the same extent. There is in this case real potential for conflict between the two groups. It appears to me to be reasonable that there is separate representation. I do not accept that there should be some automatic discounting on the basis that the conduct of the two defences would involve unreasonable duplication of work for which the plaintiff should not pay security.
• [38] Fourth, whilst it is true that the Court does not set out to give a complete and certain indemnity for the defendants' expenses of defending the proceeding, the plaintiff seemed to suggest that that must mean the quantum would necessarily have to be something less than the amounts Mr Petersen had estimated. I reject that submission. Mr Petersen is an experienced costs assessor who deposed to being familiar with the difference between assessing costs on a standard basis and assessing costs on an indemnity basis. His two estimates were expressly prepared as estimates of costs on a standard basis in accordance with the Supreme Court scale and the UCPR. Costs calculated on that basis are most unlikely to give a complete and certain indemnity. If I base the quantum of security which I arrive at substantially on such estimates I would not be setting out to give a complete and certain indemnity to the defendants.

(a) The estimates allowed $67,964.60 for professional fees involved in attendances necessary to produce disclosure for each group of defendants: see item 4 of the Tucker estimate and item 14 of the Cowen estimate. The estimates allowed $78,000 and $100,000 for costs of preparing documents for disclosure including barcoding and scanning: see item 5 of the Tucker estimate and item 15 of the Cowen estimate. The criticism was that even if it were appropriate for the two groups of defendants to have separate representation, efficient management of disclosure would not require such a duplication of professional fees or expense. The further criticism was that the Cowen estimate ignored the $78,000 external provider estimate obtained for the Tucker defendants. Accordingly, it was suggested that for each estimate the total of these two items should be effectively halved, with the result that the Tucker estimate would reduce by $72,982.30 and the Cowen estimate by $94,982.30. Curiously, this would take the figures below the $116,000 amount that even the plaintiff's solicitor estimated for the comparable exercise. Mr Petersen was not cross-examined so these matters were not put to him. There was no evidence supporting the criticism; they were just matters pointed out by the plaintiff's counsel. It does not seem to me that a submission by counsel pointing these matters out is a satisfactory basis not to accept the otherwise apparently cogent evidence of Mr Petersen.

(b) The estimates each allowed for three further interlocutory applications: see items 8 to 11 of the Tucker estimate and items 16 to 19 of the Cowen estimate. The criticism was that allowance should be made for only one further interlocutory application. I see no reason to accept that criticism. It is unrealistic for a case of this nature.

(c) The Tucker estimate allowed five days for senior and junior counsel to confer and settle lay witness statements: see items 17 and 18. The criticism was that the Tucker estimate should be reduced to three days. The Cowen estimate allowed one day for senior and junior counsel to confer and settle expert witness statements: see items 28 and 29. The criticism was that no such allowance should be made, but it was not supported by evidence. I see no reason to accept either criticism.

(d) The estimate allowed 15 days of trial preparation for each of senior and junior counsel: see items 39 and 40 of the Tucker estimate and items 43 and 44 of the Cowen estimate. This was criticised on the hypothesis that it was inconsistent with some instructions that the trial would be a 10-day trial. If I accepted the criticism, I would reduce the estimate by hypothesising that only 10 days of preparation would be required, and therefore the Tucker estimate would reduce by $52,500 and the Cowen estimate by $72,500. I see no reason to accept the criticism. In a case of this complexity there is nothing apparently extravagant in the estimate.

• [41] I have not been persuaded that the matters identified by the plaintiff form an adequate base for not accepting Mr Petersen's evidence. I am not prepared to reduce the cogent estimates prepared by Mr Petersen simply for the sake of it. I am not prepared to reduce them because so doing would take the quantum down to an amount which would meet the limit of indemnity under the plaintiff's funding agreement with Vannin. Adopting the approach described in the authorities, in my view the amounts estimated by Mr Petersen would be appropriate and sufficient security for the costs of the defendants up to the first day of trial. As they are estimates only, I will round the figure which I order down to the nearest thousand dollars. Accordingly, the quantum of security which I would require for each group of defendants would be:

• [42] Section 1335 of the Corporations Act provides that the Court may "require sufficient security to be given" by the plaintiff, and UCPR r 670 provides that the Court may order the plaintiff "to give the security the court considers appropriate". The discretion so conferred must be exercised in the way which best suits the interests of justice in the particular circumstances. As with all applications which call for the exercise of discretion, it should be firmly kept in mind that UCPR r 5 provides:
  1. Philosophy - overriding obligations of parties and court

(1) The purpose of these rules is to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.

(2) Accordingly, these rules are to be applied by the courts with the objective of avoiding undue delay, expense and technicality and facilitating the purpose of these rules.

• [43] The defendants' applications for security for costs sought to have the Court exercise the discretion so conferred to make an order requiring security covering a different period than was covered by their previous application. In respect of this period they sought orders requiring security to be provided in a particular quantum and a particular form. I have dealt with the question of quantum. As to form, the Tucker defendants' application sought an order that the security be provided by way of payment into Court "or by such other means as determined by this Honourable Court". The Cowen defendants' application sought an order that security be provided by payment into Court.
• [44] As I have mentioned, the plaintiff cross-applied for an order that security should be provided by way of a varied AmTrust deed of indemnity executed by AmTrust, together with $30,000 paid into Court to cover potential enforcement costs. During argument before me, the plaintiff suggested a form of order which required the plaintiff to provide security in the form of the varied AmTrust deed "provided that [the plaintiff] can procure the amendment of that form in accordance with Annexure A to this order and as necessary to insert the details of the Defendants". Annexure A set out a schedule proposing certain amendments which responded to some of the criticisms which the defendants had made of the varied AmTrust deed. The plaintiff's position was that the varied deed, as further varied by Annexure A, would provide satisfactory security in this case, and was reason enough to reach a different view on that question than reached by Bowskill J.
• [45] I turn first to identify the approach taken by Bowskill J.

• [46] On 7 January 2019, the Tucker defendants filed an application for security for costs up to the filing of defences. The quantum sought was $373,885. On 29 January 2019, the Cowen defendants also applied for security for costs up to and including the filing of defences. The quantum sought was $161,705.61.
• [47] The plaintiff and the Cowen defendants reached an agreement that the quantum of the security which should be provided for the Cowen defendants' costs was $150,000. The result was that the issues before Bowskill J, like those before me, concerned the form and (in relation to the Tucker defendants) the quantum of the security which should be provided. As to the form of the security, the plaintiff argued that it should be permitted to provide security for costs in the form of a deed of indemnity from AmTrust together with $30,000 paid into Court for the expenses of enforcing any judgment against AmTrust.
• [48] Bowskill J identified and dealt with the central question before her in these terms:[6]

[132] In any event, the fact that the plaintiff contends the form of security it proposes is the least disadvantageous to it is not the answer to the central question, which is whether the plaintiff has discharged the practical onus of demonstrating that the proposed security, in the form of a deed of indemnity from AmTrust to the applicants, is adequate (in the sense of providing a fund or asset against which the applicants, if successful, can readily enforce an order for costs against the plaintiff) and does not impose an unacceptable disadvantage on the applicants.

[133] There are examples of cases in which a court has been satisfied that a deed of indemnity (provided by AmTrust) does provide adequate security. But as acknowledged by Crow J in one of those cases, the question whether the provision of security in the form of a deed of indemnity is adequate in any particular case is to be determined by reference to the deed provided and the evidence in the application, not by reference to any seemingly acceptable practice in AmTrust offering a deed of indemnity in other cases.

[134] It has been held that in exercising the discretion as to the form of security to be provided, the issue is not to be approached by embarking upon a comparison exercise of assessing the relative attributes of the proffered security on the one hand, and the "conventional" or "familiar" forms of security (by cash deposit or bank guarantee) on the other, with a view to determining which form of security would be superior and which would be inferior.

[135] In contrast, in Trailer Trash Franchise Systems Pty Ltd v GM Fascia & Gutter Pty Ltd [2017] VSCA 293 at [59] the Victorian Court of Appeal (Tate and Kyrou JJA) said this, by way of obiter:

"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. The need to prefer the liquid form where a choice is available has become more acute since the commencement of the CPA because:

(a) section 8(1) requires a court to seek to give effect to the overarching purpose in the exercise of any of its powers;

(b) section 7(1) provides that the overarching purpose is 'to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute';

(c) section 9(1) provides that in making an order in a civil proceeding, a court must further the overarching purpose by having regard to a number of objects, including: the efficient conduct of the business of the court (s 9(1)(c)); the efficient use of judicial resources (s 9(1)(d)); and the timely determination of the civil proceeding (s 9(1)(f)); and

(d) a form of security for costs which does not provide a fund which can be accessed without the cooperation 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. 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."

[136] I note in this regard that the evidence before the court includes correspondence from Mr Russell, the solicitor for the plaintiff, to Mr Tucker, of 2 December 2018 in which it is said:

"Rather than engage in any argument, and consistent with UCPR 5, the plaintiff agrees to provide reasonable security for the costs of Tuckerloan and you, by way of deposit to our firm's trust account, such sum to be invested pending further order."

[137] The plaintiff's position subsequently changed, on the basis of the evidence, given by its solicitor, Mr Russell, as to the preference of the litigation funder. But as both the Cowen applicants and the Tucker applicants submit, there is no evidence that the plaintiff, or its funder, are unable to provide security in the form of payment into court, or into a trust account, or by way of a bank guarantee.

[138] I accept, on the evidence before the court, that AmTrust is an entity of substance; and that the process of enforcing a costs judgment of this court in the United Kingdom is a relatively straightforward one, the cost of which would be expected to be covered by the additional $30,000 cash security covered. But as against that, AmTrust is a foreign third party to the proceeding, the terms of the proposed deed of indemnity in some respects require the applicants to depend upon AmTrust's cooperation (in respect of which it has "absolute discretion"), and if the deed is not voluntarily responded to upon a request for payment, would involve the applicants in further proceedings to enforce a costs judgment against AmTrust overseas. Those matters raise the considerations referred to in the Trailer Trash case referred to above.

[139] As against that, there is no basis in the evidence to conclude that there would be any impediment to the plaintiff, or its litigation funder, providing the security by payment into court, or a bank guarantee.

[140] On balance, I am not satisfied the plaintiff has discharged its practical onus of establishing that the proposed security, in the form of a deed of indemnity, is adequate and does not impose an unacceptable disadvantage on the applicants (defendants). Accordingly, the order of the court will be that the plaintiff provide the security for costs by payment into court, or into a solicitors' trust account, or in the form of a bank guarantee.

• [49] Bowskill J published reasons for judgment on 12 March 2019, directing the parties to confer to provide a draft order reflecting her decision. The order so prepared was made on 18 March 2019, and required the plaintiff to provide $150,000 as security for the Cowen defendants' costs until the filing of defences and $250,000 as security for the Tucker defendants' costs until the filing of defences. The order required that security be provided by way of one of the following options:

(b) payment into the plaintiff's solicitors' trust account on the following terms:

(i) the payment is to be held in the names of the plaintiff and the relevant group of defendants;

(ii) the payment is to be invested in an interest-bearing account with an Australian bank agreed by the plaintiff and the relevant group of defendants;

(iii) the payment and any accretions are not otherwise to be dealt with except in accordance with an order of the Court or the agreement of the plaintiff and the relevant group of defendants;

(iv) the plaintiff shall promptly provide the solicitors for the relevant group of defendants with copies of any statements evidencing the making and investment of the payment; or

(c) the provision of a bank guarantee in a form acceptable to the Registrar.

The approach which should be taken to evaluate the plaintiff's revised proposal

• [50] As it was before Bowskill J, it was common ground before me that in an exercise of the Court's discretion as to the form of the security which should be provided, the approach summarised by Hargrave J in DIF III Global Co-Investment Fund v BBLP LLC [2016] VSC 401 at [40] applies, namely:

(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.

• [51] However, one point should be made about the way in which the principles so summarised should be applied. The plaintiff's argument before me sought to use the first listed principle as a justification for adducing material aimed at proving the comparative disadvantages to the plaintiff of providing security by way of cash or bank guarantee as compared to providing security by way of an AmTrust deed. The plaintiff sought to persuade me that the form of the funding agreement was such that the plaintiff and the creditors would be substantially worse off if the plaintiff were required to provide security by way of cash or bank guarantee.[7] It sought to have me balance those disadvantages against what might be thought to be the disadvantages to the defendants of the form proposed, with a view to asking me to conclude that the disadvantages to the defendants were not unacceptable and that my discretion should be exercised in favour of the form of security which the plaintiff proposed.
• [52] In my view, this approach was wrong, and, unless it was relevant to the plaintiff's argument that a particular form of security might stifle the litigation (a question to which I will return), the plaintiff's invitation to embark upon a consideration of the relative merits to the plaintiff of different forms of security constituted an excursus into irrelevance.
• [53] In formulating the first listed principle, Hargrave J relied on Rosengrens Ltd v Safe Deposit Centres Ltd [1984] 3 All ER 198. The correct approach to that authority was that expressed in the New South Wales Court of Appeal in Blue Oil Energy Pty Limited v Tan [2014] NSWCA 81 at [21] to [22] per Beazley P and Tobias AJA:[8]
  1. ... It was submitted that the correct approach was for the Court to only order security in a form which was the least disruptive or disadvantageous to Blue Oil and Blue Diamond. It was submitted that such an approach was correct as a matter of principle, the authority for which was said to be a passage from the reasons of Parker LJ in As the respondents observed, his Lordship stated (at [200j]) that the process of giving security "" and that often "". In that context, his Lordship relevantly continued (at [200j]-[201a]):

"So long as the opposite party can be adequately protected, it is right and proper that the security should be given in a way, which is the least disadvantageous to the party giving that security.

It may take many forms. Bank guarantee and payment into court are but two of them. Frequently security is considered wholly adequate when it is provided merely by a London solicitor's undertaking. So long as it is adequate, then the form of it is a matter which is immaterial ... as long as it is adequate to protect the opposite party, it is not his concern whether it should be in one form rather than another."

1. As the respondents submitted, his Lordship was not laying down some general proposition to the effect that security can only be ordered in favour of a defendant in a manner which is the least disadvantageous to a plaintiff. The true issue was whether the form of security ordered was adequate to protect the party seeking it.

• [54] If only one form of security is under consideration, then the sole question is whether that form of security is adequate to protect the defendants. 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.
• [55] In the present case, the forms of security under consideration are the alternatives which were ordered by Bowskill J and the option which is now proposed by the plaintiff. There is no dispute that the forms ordered by Bowskill J would provide adequate security for the defendants. The question is whether the AmTrust deed as varied or further varied would do so. It is irrelevant to that inquiry to consider, as the plaintiff sought to have me do, whether the terms of the litigation funding agreement are such that it would be better for the plaintiff to provide security by AmTrust deed than to provide security by way of cash or bank guarantee. If a plaintiff and a litigation funder want to enter into a funding arrangement which seeks to privilege a particular form of security, that is a matter for them. But they cannot thereby influence a judicial discretion, which is aimed at protecting the party seeking a security, into accepting a form of security which does not satisfactorily protect that party.
• [56] The only remaining question to be considered is what principles inform the approach I should take to the defendants' complaint concerning having to relitigate the question of the form of the security.
• [57] As I have mentioned, the Cowen defendants contended that I should not embark upon consideration of the plaintiff's application to alter the form of any security which I required to be provided. They contended that the question of the appropriate form of security in this proceeding had been considered and security had been provided. They contended there was no reason to put the defendants to the inconvenience of having two separate forms of security or to the expense of a further contest over the appropriate form. They submitted that there was no reason to permit the plaintiff to relitigate an issue which it had ample opportunity to address previously and lost. In this respect, the Tucker defendants adopted the Cowen defendants' submissions.

I would regard it as open to me, however, as a matter of discretion to dismiss the second application. In exercising that discretion it is appropriate inter alia to take into account whether the failure to adduce the additional evidence now relied on when the first application was made is satisfactorily explained as well as the various matters which tell against the relitigation of an issue which has already been fully argued and judicially determined between the same parties, even if only in an interlocutory hearing. These include the risk of conflicting decisions, unnecessary vexing of respondents, judge-shopping, the diminution of certainty in the conduct by respondents of their affairs, the potential harm to public confidence in the integrity of judicial decisions, and the unnecessary expenditure of time and money which relitigation involves; cf Nominal Defendant v Manning at [72].[12]

• [61] But the present applications cannot be characterised as a straightforward repetition of the applications heard by Bowskill J, nor applications to vary the orders which her Honour had made. The defendants' applications call for a fresh exercise of discretion in the way referred to at [42] above. The plaintiff is entitled to resist the orders sought by the defendants. I should exercise the discretion based on the circumstances which appear to me at the time the discretion is to be exercised, not bound by the previous exercise of discretion by Bowskill J.

• [62] I share the defendants' concern as to the iterative approach taken by the plaintiff. It was troubling that AmTrust could initially give instructions to the plaintiff that the deed was non-variable as a basis for the contention that security should be provided in that form, and then the plaintiff could happily engage with variation of the deed without troubling to explain why the approach changed.
• [63] Applications such as these are not opportunities for a party to conduct a negotiation with the Court. Nor are they opportunities for the Court effectively to be invited to advise one party as to what alterations would have to be made to a proposal in order for the proposal to find favour with the Court. That said, my discretion is to be exercised in the way I have explained at [42] above. Conditioning a security for costs order on variations to be made to an extant proposal may well be an appropriate course in a particular case.
• [64] Annexure A to this judgment identifies the complaints which the defendants made about the form of the deed as currently proposed, the plaintiff's responses, and my conclusions as to the validity of the complaints. For reasons which there appear, some, but not all, of the defendants' complaints could be addressed if I were prepared to make an order requiring security in the proposed form of AmTrust deed, but conditioned on AmTrust agreeing to further changes to that proposal.
• [65] I am not prepared to take that course. First, although the plaintiff has proposed a number of changes to the deed considered by Bowskill J which would address some concerns with its form, and has proposed still further changes which address some other concerns, not all of the issues of form are satisfactorily addressed. I am disinclined to formulate amendments which do so and to make a conditional order for security as the plaintiff invites me to do. Second, and importantly, even if I were, the central problem would still remain that the proposal carries with it a real potential to involve the defendants in further proceedings to establish AmTrust's liability and then to enforce a judgment against AmTrust.
• [66] The plaintiff says that the concern is illusory because it can be assumed that AmTrust will pay if obliged under the deed, as there is evidence that its practice is to behave in that way. But that is a proposition advanced without demonstrating that the form of the deed has been the same on each previous occasion as is presently proposed. And, in any event, the proposition begs the main question, namely whether AmTrust will accept that it is in fact and law obliged under the deed. In this regard, the truth is that the deed does not actually set out an unconditional undertaking to pay. The central obligation is expressed in cl 2 in these terms:

Subject to this provision and to 3., 4., 5, 6., 8., 9., 12. and 13 below, AmTrust hereby unconditionally and irrevocably undertakes to pay to the Respondent any sum or sums which the Claimant is legally liable to pay to the Respondent in respect of the Respondent's costs in the Claim which relate to the cost incurred up to and including the costs of the first instance determination only of the Claim.

• [67] It is plain that despite the use of the word "unconditionally" in that clause, AmTrust's promise to pay is highly conditioned by reference to multiple clauses and, thereby, multiple defined terms which concern themselves with the particular steps which have been taken to establish the plaintiff's legal liability to pay costs in a particular amount. As proposed, and even if further amended in the way the plaintiff says it might be, the potential still exists for the form of security to give rise to arguments over whether all the pre-conditions to AmTrust's liability have been established, and therefore to satellite proceedings and to additional delay and costs. That is not a potential I am prepared to countenance.
• [68] A truly unconditional undertaking by a surety would be indifferent to the question whether, as between the principal and the obligee, the principal is yet obliged to pay the obligee in a particular amount (and therefore justified in making a demand on the surety in a particular amount). A familiar example is the security which a building contractor is often required to provide an owner under a building contract. Such forms of security do not concern themselves with whether particular steps have yet been taken to establish that the state of obligation as between building contractor and owner is sufficient to justify the owner making a demand on the security in a particular amount; they simply require the surety to pay when a demand is made (at least until the limit of the security is met). Whether that model could be adapted to permit of the provision of security for costs by an insurance bond by a foreign surety in such a manner as would reduce or eliminate the risk I have referred to in the previous paragraph is not a matter with which I am presently concerned. I am presently evaluating the particular security which has been proposed by the plaintiff, not comparing its attractiveness to other potential forms of security. My evaluation of the proposed form of security is that expressed in the preceding paragraphs.
• [69] I am not prepared to make a finding on the evidence before me that the plaintiff's proposal does not impose an "unacceptable disadvantage" on the defendant. The plaintiff's cross-application should be rejected. An order for security should be made in the same manner as was ordered by Bowskill J.

• [70] The plaintiff resists the orders sought by the defendants on the grounds that they would stifle or frustrate the litigation. I accept the Cowen defendants' submission that the same principles inform the Court's approach to that issue whether the resistance is founded on a suggestion that the litigation might be stifled by ordering security in a higher quantum than the plaintiff's litigation funder wishes to meet, or on a suggestion that the litigation might be stifled by ordering security in a form other than the form which the litigation funder wishes to provide.
• [71] The leading authority in this regard is Bell Wholesale Co Ltd v Gates Export Corp (No 2) [1984] FCA 34; (1984) 2 FCR 1 at 4, where Sheppard, Morling and Neaves JJ observed:

In our opinion a court is not justified in declining to order security on the ground that to do so will frustrate the litigation unless a company in the position of the appellant here establishes that those who stand behind it and who will benefit from the litigation if it is successful (whether they be shareholders or creditors or, as in this case, beneficiaries under a trust) are also without means. It is not for the party seeking security to raise the matter; it is an essential part of the case of a company seeking to resist an order for security on the ground that the granting of security will frustrate the litigation to raise the issue of the impecuniosity of those whom the litigation will benefit and to prove the necessary facts.

• [72] That approach has been approved by McHugh J in PS Chellaram & Co Ltd v China Ocean Shipping Co [1991] HCA 36; (1991) 102 ALR 321 at 323, by the New South Wales Court of Appeal in Hession v Century 21 South Pacific Ltd (in liq) (1992) 28 NSWLR 120 at 123, and by Macrossan CJ in the Queensland Court of Appeal in Impex Pty Ltd v Crowner Products Ltd (1994) 13 ACSR 440 at 446. It has been followed many times in single judge decisions.
• [73] A litigation funder in Vannin's position is plainly a party who should be regarded as a party standing behind the plaintiff within the conception of the Bell Wholesale observations: see Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664; (2004) 208 ALR 564 at [81] per Austin J. There is evidence of Vannin's unwillingness to fund the plaintiff in certain circumstances, but as Walton J recently observed in Ollerenshaw v The Uniting Church in Australia Property Trust (NSW) [2017] NSWSC 1637 at [49], "a proceeding cannot be regarded as stultified unless those who stand behind the impecunious plaintiff are unable (not unwilling) to provide the requisite security for costs".

Should an order now be made for security for costs of the trial beyond the first day?

• [82] The only real argument in favour of dealing with the issue now as opposed to a time closer to the trial is that of efficiency. My acceding to the Tucker defendants' somewhat hopeful proposal would have the potential that a further application and hearing might be avoided if the parties could reach agreement on the form and quantum of any further security.
• [83] I am not sufficiently sanguine that further disputation will be avoided to attempt to make an order on this subject now. Accordingly, I decline to make the order which the Tucker defendants seek.

• [84] I make the following orders:
  1. In this order, reference to:

(a) "the Cowen defendants" is a reference to Richard Terrick Cowen and the sixth defendant; and

(b) "the Tucker defendants" is a reference to David Robert Walter Tucker and the second defendant.

1. The plaintiff must provide $1,058,000 as security for the Cowen defendants' costs up to and including the first day of trial.
2. The plaintiff must provide $935,000 as security for the Tucker defendants' costs up to and including the first day of trial.
3. The plaintiff's application filed 29 August 2019 is dismissed and the security referred to in the previous two orders must be provided by way of one of the following options within 28 days:

(b) payment into the plaintiff's solicitors' trust account on the following terms:

(i) the payment is to be held in the names of the plaintiff and the relevant group of defendants;

(ii) the payment is to be invested in an interest-bearing account with an Australian bank agreed by the plaintiff and the relevant group of defendants;

(iii) the payment and any accretions are not otherwise to be dealt with except in accordance with an order of the Court or the agreement of the plaintiff and the relevant group of defendants;

(iv) the plaintiff shall promptly provide the solicitors for the relevant group of defendants with copies of any statements evidencing the making and investment of the payment; or

(c) the provision of a bank guarantee in a form acceptable to the Registrar.

1. I will hear the parties as to the costs of the three applications before me.

The Tucker defendants contended that the plaintiff had not demonstrated the adequacy of the financial position of AmTrust. Only financial statements for the 2018 calendar year were produced and they demonstrated a trading loss for that year, with no dividends being paid. No financial statements for the 2019 calendar year were produced and, although its financial rating as at August 2019 was presented and was satisfactory, nothing more recent had been presented. Nothing taking into account the likely adverse impact of the COVID-19 pandemic had been produced.

The plaintiff submitted that AmTrust is a well-regarded international insurer that is an entity of substance. Bowskill J accepted that was the position in her judgment in March 2019. Since then the financial statements for the 2018 calendar year were published. They evidence AmTrust's compliance with the minimum capital requirements imposed upon it by regulation in the UK and by the EU. AmTrust is also rated by Best's, an international credit agency, as having an A- credit rating, and Best's website reviewed at the time of argument had not materially downgraded that position.

The conclusion drawn by Bowskill J previously is still warranted based on the material put forward by the plaintiff. The defendants' speculation that the pandemic may have altered the financial circumstances of AmTrust was not a sound basis to reach a different view.

Problems created by the conditional nature of AmTrust's obligation to pay

AmTrust's obligation to pay is conditioned, amongst other things, on cl 3. Under that clause, it is a condition precedent of AmTrust's liability under the deed that the defendant must first have made a valid "Indemnity Demand". That is a defined term which, amongst other things, requires a written demand being accompanied by a relevant court order, or a "Certified Costs Determination Certificate" or a "Costs Agreement". The definition of Certified Costs Determination Certificate is such that if a defendant applied for a review after an assessment to increase the assessment, AmTrust would have no liability to pay even the uncontroversial amount until the whole of the review is determined.

The plaintiff proposed I should make the order for security which it sought subject to a proviso that it obtain AmTrust's agreement to make an amendment to the definition of "Certified Costs Determination Certificate", which would mean this could not happen.

The plaintiff's proposal would defuse the expressed concern.

Further to the condition that the defendant must first have made a valid Indemnity Demand, the defined term requires the demand to be for a sum which could not be higher than the defined term "Maximum Limit". That term requires a money amount to be inserted, but none has been.

The plaintiff proposed that I should make the order for security which it sought subject to a proviso that it obtain AmTrust's agreement to make an amendment to the definition of "Maximum Limit", which would insert a formula allowing the amount to be defined. The effect of the proposal was that the limit would be not less than $670,000 but its precise amount would await a future event.

The plaintiff's proposal was not satisfactory. If the AmTrust deed proposal were otherwise satisfactory, it would be necessary that a particular figure, representing the quantum of security that I had determined was appropriate, be placed here.

Further to the condition that the defendant must first have made a valid Indemnity Demand, an Indemnity Demand could only be made after a "Claim Event". The definition of that term includes an order of the Court but not a consent order.

Although the definition of a Claim Event excludes a costs order entered by consent, it does not exclude an agreement between the parties for the payment of costs. Such an agreement will inevitably precede any consent order being entered (and the defendants could insist upon one). In any event, this is a matter of form that could be addressed by an order on terms.

It might be arguable that a consent order for payment would fall within the definition of "Costs Agreement", thereby amounting to a Claim Event. However, there should be no ambiguity. I agree that the definition of "Claim Event" is unsatisfactory in the respect identified. If the AmTrust deed proposal were otherwise satisfactory, this issue could be dealt with by making the order subject to a proviso that the plaintiff obtain AmTrust's agreement to make this amendment.

AmTrust's obligation to pay is conditioned, amongst other things, on cll 8 and 9. Under those clauses, the plaintiff could prevent or delay crystallisation of AmTrust's obligation to pay merely by requesting reasons from the costs assessor under UCPR r 738 or by application to review under UCPR r 742, without obtaining any order of the Court for a stay.

The plaintiff proposed that I should make the order for security which it sought subject to a proviso that it obtain AmTrust's agreement to make an amendment to the definition of "Certified Costs Determination Certificate": see item 2. Otherwise the plaintiff rejected the contention that this was the proper construction of the deed.

In oral submissions the plaintiff submitted that if I concluded there was a problem with the clause it could be addressed by an order on terms.

I agree with the defendants' submission. Pursuant to cl 8, by the simple medium of sufficiently broad requests for reasons under UCPR r 738 or an application for review under UCPR r 742, the plaintiff would bring about the position that neither cl 8 nor cl 9 would impose any obligation to pay. Liability to pay could only then arise in some other way. There could not be a Certified Costs Determination Certificate because that would contemplate a registrar's order under r 740, which could not, ex hypothesi, occur. The obligation to pay would only arise once a relevant court order was required. The deed operates to permit the plaintiff to arrogate to itself the ability to cause an effective stay of recourse to the security and removes the issue of recourse to the security from the control of the Court. It is not acceptable.

The proposed alteration to the definition of "Certified Costs Determination Certificate" did not address these concerns. The proposal that I could condition any order on the deletion of cl 8(b) was not a sufficient response. I am not prepared to engage in a process of drafting a form of amendment to address this point.

Pursuant to cl 17, if AmTrust failed to pay on demand, the defendants would have to take the additional step of joining AmTrust to enter judgment against AmTrust for costs in the present proceeding, ex hypothesi after the proceeding had been finally determined. Then, having obtained a judgment against AmTrust in the Australian proceeding, the defendants would have to register and subsequently enforce that judgment in the UK.

The plaintiff contended that there was nothing to suggest that enforcement against AmTrust would be required, and the defendants' concerns were illusory.

I reject the plaintiff's submission. First, before cl 17 could apply, a failure to pay in accordance with cl 2 of the deed would have to be established. That would engage the need for the defendants to meet all the conditions called up by cl 2 of the deed before cl 17 could be engaged. Second, having engaged cl 17, the defendants would then have to go through the further process of obtaining judgment. Considerations of delay and cost are relevant to evaluation of whether the proposed security would involve unacceptable disadvantage to the defendants and whether I should regard the proposed security as appropriate or sufficient.

There was doubt as to the ability of the defendants to join AmTrust to the present proceeding after it is finally determined, as opposed to having to commence a new proceeding against it.

The plaintiff proposed to deal with the doubt concerning the ability to join AmTrust to the present proceeding by amending the clause to delete "case number 7399/2018", thereby requiring only that judgment be entered in Queensland against AmTrust for costs in any proceeding. The plaintiff proposed I should make the order for security which it sought subject to a proviso that it obtain AmTrust's agreement to make this amendment.

The plaintiff's proposal would defuse the expressed concern.

In any event, there was the burden of having to take the step and incur costs and then having to take further steps in the UK which would involve unacceptable delay and costs. A form of security which can give rise to satellite proceedings and additional delay and costs is unacceptable and contrary to the principle of finality in litigation.

The plaintiff contended that there was nothing to suggest that enforcement against AmTrust would be required, and the defendants' concerns were illusory.

I reject the plaintiff's submission. Considerations of delay and cost are relevant to evaluating whether the proposed security would involve unacceptable disadvantage to the defendants and whether I should regard the proposed security as appropriate or sufficient. That cost is relevant is in fact recognised by the terms of the plaintiff's proposal and its offer to pay $30,000 into Court.

The plaintiff's proposed payment into Court in Australia of $30,000 is not a satisfactory solution.

• There was no clarity as to the terms on which the $30,000 would be held.
• It is irrelevant to delay.
• The proposal did not address at all the costs of having to obtain and register a Queensland judgment before proceeding to register and enforce in the UK.
• The defendants had presented evidence that costs of registration in the UK might be as high as £20,000.
• It would be necessary to add the costs of enforcement, which could range from about £1,200 (if only a statutory demand were presented) to approximately £18,000 (for a third party debt order or charging order) to between £40,000 and £50,000 for a winding up petition.
• Costs would be affected by the COVID‑19 pandemic.

Enforcement in the UK would be a relatively straightforward exercise.

The suggestions that costs might be increased, and that there might be delays in proceeding in London given the pandemic, are speculative and premised on there being a need to enforce the judgment within the next three months. There would be no need to travel personally to the UK in the event that enforcement proceedings were necessary.

I do not regard the plaintiff's response as sufficient. The concerns about increased costs and logistical difficulties caused by the pandemic are realistic.

In cl 7(b), the words "a certified copy of the relevant" should be deleted because "Certified Costs Determination Certificate" is defined as a sealed copy of relevant court orders, and the further step of obtaining a certified copy of a sealed court order is unnecessary.

I agree with this complaint. If the AmTrust deed proposal were otherwise satisfactory, this issue could be dealt with by making the order subject to a proviso that the plaintiff obtain AmTrust's agreement to make this amendment.

Clauses 15 and 16 provide for notices to be sent by hand or by pre-paid first class recorded delivery post. Notices should be copied to an identified email address, but emails are expressly stated not to amount to service of a notice. Given the geographic location of the parties, notices should be permitted to be given by email.

I agree with this complaint. There is no satisfactory reason why electronic service of notices should be excluded. If the AmTrust deed proposal were otherwise satisfactory, this issue could be dealt with by making the order subject to a proviso that the plaintiff obtain AmTrust's agreement to make this amendment.

The sub-clauses to the first cl 16 are numbered 14.1, 14.2 and 14.3 and should be renumbered 16.1, 16.2 and 16.3.

The plaintiff proposed I should make the order for security which it sought subject to a proviso that it obtain AmTrust's agreement to make this amendment.

The plaintiff's proposal would defuse the expressed concern.

There are two cl 16s. Accordingly the second cl 16 and the subsequent clauses need to be renumbered.

The plaintiff proposed I should make the order for security which it sought subject to a proviso that it obtain AmTrust's agreement to make this amendment.

The plaintiff's proposal would defuse the expressed concern.

[1] See Equititrust Limited v Tucker [2019] QSC 51.

[2] The plaintiff has chosen to structure the litigation by identifying Mr Tucker as the first defendant, and Mr Tucker and Mr Cowen together as the fifth defendant. Mr Tucker and the second defendant (on the one hand) and Mr Cowen and the sixth defendant (on the other) are, however, separately represented.

[3] As filed, the plaintiff's application had also sought orders postponing the determination of the amount of any further security and adjourning all three applications, but that part of the application was not pressed in argument before me.

[4] Equititrust Limited v Tucker [2019] QSC 51 at [111], citations omitted.

[6] Equititrust Limited v Tucker [2019] QSC 51 at [132]- [140] (citations omitted).

[7] The plaintiff's argument was that, when one considered the terms of the funding agreement between it and Vannin, and in particular the provisions governing the imposition of a "funding multiple", the marginal cost to the plaintiff of requiring security to be paid in cash was ten times the cost of an order for security in the form of an AmTrust deed. Whether the plaintiff had in fact demonstrated this to be true was contested before me.

[8] See also to similar effect, In the matter of Tiaro Coal Limited (in liq) [2018] NSWSC 746 at [10] to [12] per Gleeson JA.

[9] See Santos v Delhi Petroleum Pty Ltd [2002] SASC 272 at [399] per Lander J (Williams and Besanko JJ agreeing); Inasmuch Community Inc v Bright [2006] NSWCA 99 at [60] per Beazley JA (Mason P and McColl JA agreeing); Castillon v P&O Ports Ltd [2007] QCA 364; [2008] 2 Qd R 219 at [49] per Holmes JA (with whom Wilson J agreed).

[10] Castillon v P&O Ports Ltd at [50]-[51] per Holmes JA (with whom Wilson J agreed), applying Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853 at 935 and Kuligowski v Metrobus [2004] HCA 34; (2004) 220 CLR 363 at 373.

[11] Castillon v P&O Ports Ltd at [58] per Holmes JA (with whom Wilson J agreed).

[12] This passage was referred to with approval in Clairs Keeley (a firm) v Treacy (2004) 29 WAR 479 at [16] per Steytler, Templeman and McKechnie JJ.