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[2026] ACTCA 26
procedural. GRE Sales was ordered to provide $40,000 security for the Commissioner’s costs by 4.00pm on 23 September 2026; the Commissioner was granted leave to file and serve the specified notice of...
The Commissioner sought security for appeal costs from two corporate appellants and permission to file a notice of contention late. The Court concluded that government representation did not prevent the Commissioner from recovering legal costs. It ordered GRE Sales to provide $40,000, rejecting the higher estimate sought, because the company's own capacity to pay was not established and assets elsewhere in its corporate group could not simply be treated as its assets. The Court refused security against GB because GB had largely succeeded in the proceedings below and was appealing only the costs order. The Court also permitted the Commissioner to file the late notice of contention, noting the absence of demonstrated prejudice, the lack of a fixed appeal date, and that the issue was not settled by the authorities discussed. The underlying appeals were not decided.
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2,450 words · generated 07/10/2026
The judgment concerns interlocutory applications within a group of related appeals arising from the marketing and sale of apartments in Grand Central Towers, a residential development in Phillip, ACT. The Commissioner for Fair Trading alleged that five entities associated with the Geocon corporate group contravened the Australian Consumer Law through misleading or deceptive conduct. The present reasons address only applications made by the Commissioner in three of the appeals, not the merits of the underlying appeals.
At first instance, the primary judge found that GRE Sales and GZ Developments contravened the ACL, while Geocon Bowes Street JV Pty Ltd (GB), Bowes Street Developments and Zapari did not. GRE Sales and GZ Developments were ordered to pay pecuniary penalties and publish corrective notices. They were also ordered to pay costs. Despite succeeding on the ACL allegations, GB, Bowes Street Developments and Zapari were ordered to pay 90% of the Commissioner's costs of the proceedings against them ([3]). The first-instance hearing had taken 17 full sitting days.
The related appeals were being case managed together, but the Commissioner sought security only from GRE Sales in ACTCA 14 and GB in ACTCA 15. The Commissioner also sought leave to file a notice of contention out of time in ACTCA 15 and 16 ([5]). The Commissioner's proposed security was $141,545.60 from GRE Sales and $81,030.40 from GB. The Court ultimately ordered $40,000 from GRE Sales, refused security against GB, and granted leave to file the notice of contention. The application costs were made costs in the cause ([42]).
The judgment therefore does not decide whether the primary judge's ACL findings, penalties or costs orders were correct. It deals with the costs-related protections and procedural steps pending appeal.
The first disputed question was whether the Commissioner could recover legal costs for services supplied by the ACT Government Solicitor. The appellants argued that the Legal Services Directions 2023 (ACT), particularly para [3.2], did not authorise a charge against the Commissioner in these circumstances. They also argued that the Commissioner had not produced the necessary determinations or authorisations.
Muller J rejected the proposition that the Directions barred recovery. The Court read para [3.2] as contemplating recovery from an agency in discretionary terms, with categories that were not exhaustive. It also treated the Crown solicitor costs principle as independently relevant: a party represented by a Crown solicitor is not necessarily deprived of costs merely because it has no personal liability to that solicitor. The judgment relied on authorities including Inglis v Moore (No 2), as discussed in Jorgensen v Wilson (No 3) and Dahler v ACT ([12]-[15]). The conclusion was limited to rejecting the asserted bar in this case, not a comprehensive ruling on every possible arrangement between an agency and a government solicitor.
For security, the Court treated r 1901(a) as the relevant test. As explained at [16], the rules apply the civil costs provisions to appellate proceedings, and security may be ordered where the appellant is a corporation and there is reason to believe it will not be able to pay the respondent's costs if ordered to do so. The judgment also referred to factors identified in Natcraft, including financial position, prospects, delay, and the need not to require more security than necessary ([17]).
GRE Sales said that resources elsewhere in the Geocon group could be made available. The Court accepted that other entities might hold substantial assets, but found no corporate structure, agreement or other evidence obliging those entities to meet GRE Sales' debts. Those assets therefore did not establish GRE Sales' capacity to meet an adverse costs order. The Court also rejected reliance on GRE Sales' costs orders from the primary proceedings because their value had not been particularised or quantified in detail ([22]). The decision illustrates an evidentiary distinction between the apparent wealth of a corporate group and the resources legally or practically available to the particular corporate appellant.
GB was treated differently. Its appeal concerned only the costs order, and it had otherwise succeeded in the proceedings below. The Commissioner's success against GB was limited to costs. In those circumstances, the Court saw no proper basis to protect the Commissioner with a security order in GB's appeal ([24]). The reasoning is tied to the unusual combination of GB's substantive success and the nature of the appeal; it does not establish that security can never be ordered where the appeal concerns costs.
The amount of security was a separate question. The Commissioner estimated recoverable costs of $302,576 and apportioned that estimate between appeals, taking account of undertakings from other appellants. GRE Sales and GB challenged the charge-out rates, the allocation methodology and the consistency of the estimates ([27]-[30]). The Court accepted that there was merit in those criticisms. It relied on the proposition that security need only be sufficient and need not necessarily provide a complete indemnity. It also warned against allowing inaccurate estimates to create unfairness ([31]).
Muller J was not satisfied that the Territory's standard charge-out rates reasonably reflected the costs of defending the appeals or that the proposed apportionment was fair. The Court also considered that the Commissioner had accepted $40,000 as a reasonable compromise amount for other appellants, without differentiating fully between their appeal issues. The public interest in permitting the regulatory issue in GRE Sales' appeal to be argued was also relevant. The result was an order for $40,000 rather than the larger figure sought ([32]).
The notice of contention application succeeded because the hearing date had not been fixed, and the appellants conceded there was no prejudice from the delay. The Court accepted that the proposed issue arose from the way the primary judge framed the reasons, so the Commissioner had not had an earlier opportunity to make submissions in reply ([35]-[38]). On prospects, the Court accepted that the authorities did not settle the issue. It considered that TerraCom could reasonably be seen as turning on its facts and noted the Commissioner's reliance on ACCC v Employsure ([39]). Taken together, the timing, lack of prejudice and arguable status of the issue supported leave ([40]).
The judgment presents the starting point for appellate security as no general requirement for an appellant to provide security, subject to the Court's power to order otherwise under r 5302. It then explains that the relevant security provisions apply through rr 5001 and 5302 and pt 2.17 of the Court Procedures Rules 2006 (ACT), with r 1901(a) supplying the corporate inability-to-pay criterion ([16]). The judgment does not recast that statutory framework; it applies it to the evidence about these appellants.
On government legal costs, the decision applies an existing principle rather than announcing a new one. As set out in the reasons, the Crown solicitor principle permits a successful party to recover costs even where it has no personal liability to the Crown solicitor. The Court found that para [3.2] of the Directions did not displace that principle or otherwise bar recovery in the circumstances before it ([12]-[15]).
The decision also illustrates the practical significance of evidence about corporate-group relationships in a security application. It treats assets held by related entities as insufficient, without evidence of an obligation or agreement to meet the appellant's liabilities ([22]). It does not hold that group resources can never be relevant; rather, the record in this case did not establish that GRE Sales could call on them.
On quantum, the judgment reinforces that security is not automatically a full indemnity. The Court considered whether the estimated costs and apportionment provided a fair and reasonable basis for the amount, and fixed security at a lower figure ([31]-[32]). Its result is case-specific and depends on the estimates, undertakings and appeal circumstances described in the reasons.
For notices of contention, the judgment applied the Court's power under r 5115(2)(a) to extend time. It considered delay, prejudice, the appeal timetable and the arguability of the proposed issue. The reasons do not establish a general rule that a change of counsel's view will always explain delay; rather, the Court considered the full procedural circumstances here ([35]-[40]).
At [14], the Court said the Legal Services Direction “clearly contemplates a charge being made for legal services provided to an agency.” In plain English, the Court did not read the Directions as a blanket rule that government legal services must always be free to the agency, or that the Commissioner could not recover costs from an unsuccessful party.
At [22], the Court explained that assets elsewhere in a corporate group could not support GRE Sales' asserted ability to pay where no obligation or agreement required another group company to meet its debts. In plain English, the financial position of related companies was not enough by itself; the evidence needed to connect those resources to GRE Sales' liabilities.
At [24], the Court said it saw “no proper basis” to give the Commissioner security against GB. The important context was that GB had succeeded on the substantive allegations and was appealing only the costs order. The passage does not decide the merits of GB's costs appeal.
At [31], the Court adopted the approach that security should be sufficient but need not necessarily be a complete indemnity. It also noted the risk of unfairness from inaccurate cost estimates. In practical terms, the requested estimate was not automatically accepted simply because it was based on projected legal work.
At [32], the Court identified the $40,000 amount as appropriate for GRE Sales. The Court's reasons included concern about the charge-out rates and apportionment, the amounts accepted from other appellants, and the public interest in the regulatory appeal. The amount was a discretionary assessment on this record, not a general tariff.
At [40], the Court granted leave despite non-compliance with the filing deadline. The result depended on the circumstances identified earlier: no hearing date had been set, no prejudice was demonstrated, and the issue raised by the notice remained arguable.
The judgment is relevant to an application for security for costs against a corporate appellant where the respondent relies on evidence that the appellant may not meet an adverse costs order. It is especially pertinent where the appellant points to assets held by related companies. The reasons indicate that the connection between those assets and the appellant's liabilities matters: in GRE Sales' case, no obligation or agreement to meet its debts was shown ([22]).
It may also be relevant where the appellant relies on costs orders made in its favour below as evidence of capacity to pay. The Court did not treat GRE Sales' orders as a sufficient asset because their value was not detailed or quantified ([22]). That reasoning makes the quality and specificity of the evidence important.
The decision may be relevant where the party seeking security succeeded only on a costs issue against an appellant that otherwise won at first instance. GB's appeal challenged the costs order alone, and the Commissioner was not considered the successful party in the substantive proceedings against it ([24]). The facts of the appeal and the respective success below were central to the refusal of security.
The decision is also relevant when the amount sought is based on estimates of government legal work, charge-out rates, and allocation across related appeals. The Court examined whether the rates and apportionment reasonably reflected anticipated costs and whether they treated the appellants fairly ([27]-[32]). A party relying on estimates may need to explain the basis and allocation of those figures.
Finally, the notice-of-contention ruling is relevant to late filing applications where the appeal timetable remains open, the opposing party identifies no prejudice, and the proposed point emerges from the primary judge's reasons. The Court distinguished Leda Commercial Properties because that application came much closer to the appeal hearing and raised an issue not ventilated below ([38]).
The judgment itself contains no account of decisions made after 26 August 2026 applying or distinguishing its reasoning. On the supplied text alone, later judicial treatment cannot be established.
The reasons do identify the earlier authorities Muller J considered. On Crown solicitor costs, the judgment relied on the principle in Inglis v Moore (No 2) as discussed in Jorgensen v Wilson (No 3) and Dahler v ACT ([12]-[15]). For security considerations in appeal proceedings, it referred to Natcraft and other authorities addressing financial position, prospects, undertakings and the amount of security ([17]-[21]). For assessing the amount, it drew on CDLC and Civil and Civic Corporation ([31]).
For the notice of contention, the Court distinguished Leda Commercial Properties on its timing and the fact that the point there had not been raised before the primary judge ([38]). It considered TerraCom and Employsure in assessing whether the regulatory-cost issue was settled, and accepted that TerraCom could reasonably be viewed as fact-specific ([35], [39]). These are the authorities' roles as described in this judgment; the reasons do not establish how later courts have treated the present decision.
The underlying appeals were not determined. The judgment therefore leaves open whether the primary judge's findings of ACL contraventions, penalties and costs orders will be upheld or varied.
The reasons note that no submissions were made about the status of the primary orders or any demonstrated inability to meet the liabilities they imposed. The Court treated that question as neutral for the applications before it ([23]). The relationship between those liabilities and the appellants' financial capacity was therefore not resolved.
The Court did not determine a full indemnity figure for the Commissioner's appeal costs. It found the proposed rates and apportionment unsatisfactory and ordered $40,000 for GRE Sales instead ([31]-[32]). The reasons do not set out a universal method for valuing security where several related appeals share preparation or hearing work.
The order did not include a stay if GRE Sales failed to provide security. The Court considered that a stay could delay the other appeals or fragment shared issues, and found that risk sufficiently significant to decline a stay ([33]). The order fixes a payment deadline, but the reasons do not resolve what procedural consequences might follow from non-compliance.
Finally, the notice of contention concerns the apportionment of costs in proceedings involving regulatory penalties and offers of compromise. Leave was granted, but the merits of the Commissioner's proposed basis were not decided. The Court's discussion of TerraCom and Employsure was directed to whether the issue was sufficiently arguable to permit filing, not to the final costs question ([34]-[40]).
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Source: the ACT Courts (www.courts.act.gov.au). Converted to plain text by ZoeLaw. Not the official version.
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY COURT OF APPEAL
Case Title: GRE Sales Pty Ltd v Commissioner for Fair Trading Citation: [2026] ACTCA 26 Hearing Date: 11 February 2026 Decision Date: 26 August 2026 Before: Muller J Decision: (1) On the First Respondent’s application in proceeding dated 27 October 2025 filed in ACTCA 14 of 2025, the appellant is to provide $40,000 security for the First Respondent’s costs by 4.00pm on 23 September 2026. (2) On the First Respondent’s application in proceeding dated 27 October 2025 filed in ACTCA 15 and 16 of 2025, leave is granted for the First Respondent to file and serve a notice of contention in the form of the draft notice appended to the affidavit of Sarah Kate Arthur affirmed 27 October 2025 and filed in ACTCA 14 of 2025. (3) The First Respondent’s applications in each of the matters are otherwise dismissed. (4) The costs of each of the applications are to be costs in the cause. Catchwords: CIVIL LAW – APPEALS – Security for costs – whether government solicitor entitled to recover costs – whether appellant is impecunious – whether costs judgment in primary proceedings provides sufficient capacity to meet adverse costs order on appeal – relevance of successful party in primary proceedings – whether amount for security of costs is reasonable CIVIL LAW – APPEALS – Notice of contention – whether leave should be granted to file notice out of time – whether change of mind by counsel a legitimate basis for delay – whether any prejudice suffered by delay – whether the notice raises an issue with reasonable prospects of success Legislation Cited: Court Procedures Rules 2006 (ACT), rr 1901, 5001, 5115, 5302, Pt 2.17 Law Officers Legal Services Directions 2023 (ACT), para [3.2] Cases Cited: ACCC v Employsure Pty Ltd [2023] FCAFC 5; 407 ALR 302 ASIC v TerraCom Ltd (No 2) [2025] FCA 959 Benjamin v GB Franchising Australia Pty Ltd [2008] ACTCA 11; 1 ACTLR 287 CDLC Pty Ltd v Capital Estate Developments Pty Ltd (No 4) [2024] ACTSC 345 Civil and Civic Corporation Pty Ltd v Nova Builders Pty Ltd [2024] ACTCA 5 Dahler v ACT [2016] FCA 257 Davey v Herbst (No 2) [2012] ACTCA 19 Esined No 9 Pty Ltd v Moylan Retirement Solutions Pty Ltd (No 3) [2020] NSWSC 930 Inglis v Moore (No 2) (1979) 25 ALR 453; 46 FLR 470 Jorgensen v Wilson (No 3) [2023] ACTSC 124 Leda Commercial Properties Pty Ltd v Tuggeranong Town Centre Pty Ltd [2018] ACTCA 27 Natcraft Pty Ltd v DET Norske Veritas [2002] QCA 241 University of Canberra v Zierholz@UC Pty Ltd [2020] ACTCA 45 Parties: GRE Sales Pty Ltd (Appellant) Commissioner for Fair Trading (First Respondent) Bowes Street Developments Pty Ltd (Second Respondent) Geocon Bowes Street JV Pty Ltd (Third Respondent) Zapari Property Bowes Street Pty Ltd (Fourth Respondent) GZ Developments Pty Ltd (Fifth Respondent) Representation: Counsel WDB Buckland (Appellant and Third Respondent) N Sharp SC with S Spiers (First Respondent) C Alden (Second and Fourth Respondents) P Hall (Fifth Respondent) Solicitors Clayton Utz (Appellant and Third Respondent) ACT Government Solicitor (First Respondent) King and Collins (Second and Fourth Respondents) MV Law (Fifth Respondent) File Numbers: ACTCA 14 of 2025 ACTCA 15 of 2025 ACTCA 16 of 2025 Decision Under Appeal: Court: ACT Supreme Court Before: Curtin AJ Date of Decision: 17 October 2024 Case Title: Commissioner for Trading v Bowes Street Developments Pty Ltd (No 3) Citation: [2024] ACTSC 315 Court File Number: SC 415 of 2019 Decision Under Appeal: Court: ACT Supreme Court Before: Curtin AJ Date of Decision: 29 April 2025 Case Title: Commissioner for Fair Trading v Bowes Street Developments Pty Ltd (No 5) Citation: [2025] ACTSC 165 Court File Number: SC 415 of 2019 MULLER J:
These disputes arise from the conduct of five entities involved in the promotion and sale of apartments in a residential development in Phillip, ACT, now known as the Grand Central Towers (the Towers).
The ACT Commissioner for Fair Trading (the Commissioner) contended the five entities (who are now the appellants) contravened the Australian Consumer Law (the ACL) by engaging in misleading and deceptive conduct in the marketing of Towers. Each of the entities are part of the Geocon corporate group. Their roles in relation to the Towers are identified below:
Defendant/ Matter Role Appellant
GRE Sales ACTCA 14 Marketed and sold units in Towers as agent for the developer, GZ Developments.
Geocon Bowes ACTCA 15 Jointly owned GZ Developments. (GB)
Bowes Street ACTCA 16 Jointly owned GZ Developments. Developments (BSD)
Zapari ACTCA 16 Owner of the land on which Towers was built.
GZ Developments ACTCA 17 Developer of Towers.
In Commissioner for Trading v Bowes Street Developments Pty Ltd (No 3) [2024] ACTSC 315, Curtin AJ found GRE Sales and GZ Developments contravened the ACL but GB, BSD and Zapari did not. In Commissioner for Fair Trading v Bowes Street Developments Pty Ltd (No 5) [2025] ACTSC 165, Curtin AJ ordered GRE Sales and GZ Developments to pay pecuniary penalties and publish corrective notices. They were each also ordered to pay costs. GB, BSD and Zapari were ordered to pay 90% of the Commissioner’s costs of the proceedings against them notwithstanding the primary judge’s finding they were not in breach of the ACL provisions. The first instance hearing extended over some 17 full sitting days.
Each of the five entities appeals separately from the decisions of the primary judge. There is some complexity in the appeals and the parties provided an initial hearing estimate of five days. The Court has indicated four days will be allocated for the appeal hearing and a date is yet to be fixed for that to occur. Although in each of the appeals multiple grounds are identified, the substance of them may be summarised below:
Defendant/ Matter Appeal issue Appellant
GRE Sales ACTCA 14 Appeals from findings of breaches of the ACL, pecuniary penalties and costs order.
GB ACTCA 15 Appeals from the costs orders.
BSD ACTCA 16 Appeals from the costs orders.
Zapari ACTCA 16 Appeals from the costs orders.
GZ Developments ACTCA 17 Appeals from part of the findings of breaches of the ACL, pecuniary penalties and costs order.
The appeals are being case managed together as the issues and parties overlap. However, the interlocutory applications presently before me are brought by the Commissioner and only relate to three of the five appeals: (a) In ACTCA 14 and 15, the Commissioner seeks orders under r 5302 of the Court Procedures Rules 2006 (ACT) for GRE Sales and GB to provide security for costs in the amount of $141,545.60 and $81,030.40 respectively. No security is sought from the remaining appellants as each has provided an undertaking to meet the Commissioner’s costs if an adverse costs order is made. (b) In ACTCA 15 and 16, the Commissioner seeks leave to file a notice of contention filed out of time.
The applications are each opposed.
The Commissioner reads the affidavits of Sarah Arthur, solicitor for the Commissioner, affirmed 27 October 2025 (the First Affidavit) and 19 December 2025 (the Second Affidavit). GRE Sales and GB read the affidavit of Mr Geoffrey Shaw, solicitor on record for those companies, sworn on 5 December 2025. Should a security for costs order be made?
Can the Commissioner recover costs?
GRE Sales and GB submit the ACT Government Solicitor is not authorised to charge the Commissioner for legal services. The ACT Government Solicitor provides services for free subject to exceptions set out in the Law Officers Legal Services Directions 2023 (ACT) at para [3.2]: The Government Solicitor may recover from an agency the cost of Territory legal work: (1) undertaken on behalf of a TOC; or (2) undertaken on behalf of an agency which is part of the public trading enterprise sector; or (3) as otherwise determined by the Chief Solicitor and approved by the Attorney-General.
GRE Sales and GB contend (1) and (2) do not apply to the Commissioner and, on the evidence, (3) cannot apply. The Commissioner has not produced any determinations by the Chief Solicitor as to whether the ACT Government Solicitor can recover costs. Without those documents, the Court cannot be satisfied the Commissioner has any legal obligation to pay legal costs or whether costs are proportionate. The authorities which say a party represented by the Crown solicitor is not disentitled to costs, even if they have no personal liability to the Crown solicitor for costs, only apply once the Crown solicitor has been authorised to act.
The Commissioner says in response there is evidence the ACT Government Solicitor is authorised to charge in a costs disclosure letter dated 27 March 2019 and in Ms Arthur’s First Affidavit confirming she has charged the Commissioner. In any case, the ACT Government Solicitor is covered by the exception for Crown solicitors identified above.
The Commissioner also relies on the presumption of regularity. Applying the presumption here, there is a lawful entitlement for the Commissioner to claim costs unless there is evidence showing the power for her do so was not lawfully exercised. There is no evidence to rebut that presumption.
As to the entitlement of the ACT Government Solicitor to recover costs, reliance is placed on Jorgensen v Wilson (No 3) [2023] ACTSC 124 at [80]–[93] (Mossop J), and Dahler v ACT [2016] FCA 257 at [61]–[67] (Katzmann J). In Jorgensen, Mossop J applied the principle articulated in Inglis v Moore (No 2) (1979) 25 ALR 453; 46 FLR 470, namely that “A successful party who is represented by the Crown Solicitor in litigation in which the Crown has an interest is not disentitled to costs from an unsuccessful party merely because he is not under a personal liability to the Crown Solicitor for costs”. His Honour concluded at [92]: Although the principle articulated in Inglis v Moore (No 2) was expressed in the context of a Crown Solicitor acting for the Commonwealth employee, in my view, the same principle applies in circumstances where private sector lawyers are engaged by the Commonwealth to act on behalf of current or former Commonwealth employees who are sued upon allegations arising out of their conduct as such employees. The principle operates as an exception to the general requirements of the indemnity principle described above and there is no proper basis for distinguishing between legal services provided by a Crown Solicitor and legal services provided by private practitioners engaged to act for the Crown. That is because the exception to the general requirement of the indemnity principle is one designed to recognise and protect the legitimate interests of the government in defending its conduct even when only its employees or former employees are joined in the proceedings. The recognition and protection of that legitimate interest is not affected by a change in the identity of the solicitors engaged to act for the government.
Can the appellants meet the Commissioner’s costs?
The Commissioner accepts in appeal proceedings the starting point is there is no requirement for an appellant to provide security for costs, unless the court orders otherwise: r 5302 of the Rules. As to the circumstances in which a court may otherwise order costs, r 5001 of the Rules expressly applies the cost rules in pt 2.17 for appellate proceedings. The civil rules dealing with costs in pt 2.17, including those dealing with security for costs, are at div 2.17.8. As a consequence, in appellate proceedings, before making an order for security on appeal, the court must be satisfied one of the factors set out in r 1901 applies. The parties agree the factor of relevance in this case is r 1901(a) which provides: The court may order a plaintiff to give security for costs under rule 1900 only if satisfied— (a) the plaintiff is a corporation and there is reason to believe the plaintiff will not be able to pay the defendant’s costs if ordered to pay them; …
Additional factors prospectively relevant to an application for security in appeal proceedings are identified by Jarrad JA in Natcraft Pty Ltd v DET Norske Veritas [2002] QCA 241 at [9] as follows: A number of decided cases have established matters which are relevant on such applications. These include: • The appellants' prospects of success on the appeal. • The financial position of the appellants. Where an appellant is without funds or assets this factor is important, and provides what this court has described as a "persuasive" reason for ordering security for costs. This is because that appellant would be unable to satisfy any order for costs made against the appellant should the appeal be unsuccessful. • The fact an impecunious appellant, impecunious at trial, has already had a "day in court" and lost on the merits. That circumstance increases rather than reduces the likelihood of the exercise of a discretion in favour of an order for security for costs. • The fact that the appellant blames impecuniosity on a respondent who asks for orders for security for costs. This matter has a diminished significance at appellant level, by contrast with its significance at trial level. • That it is inappropriate to order an impecunious appellant to provide a greater security than is absolutely necessary. • That the giving of a personal undertaking by one who stands behind a company does not preclude an order for security for costs. • Whether there has been any delay in bringing the application for security for costs. (Internal citations omitted.)
The Commissioner submits as GRE Sales and GB are corporations, they satisfy the first requirement in r 1901(a). As to the second requirement, there is reason to believe neither GRE Sales nor GB can meet an adverse costs order. An appellant’s impecuniosity may be a ground for ordering security for costs: Benjamin v GB Franchising Australia Pty Ltd [2008] ACTCA 11; 1 ACTLR 287 at [30] (Refshauge J). The Commissioner says: (a) For GRE Sales, an inference is open that large sums of money were being moved in and out of the company in the form of sale proceeds over the course of the development, but there is no evidence the company has cash assets currently available to satisfy even the penalties at first instance if GRE is unsuccessful on appeal. (b) For GB, the company was a special purpose vehicle incorporated for the sole purpose of the Towers development. The development having now been completed, there is no or little reason for its continued existence. This is reflected in its financial documents evidencing little to no assets left in the company.
Are there other considerations in ordering costs?
During the hearing of this matter, I raised the Court may make an order for security for costs under r 1901(h). That is, where the justice of the case requires the order to be made. GRE Sales and GB said, in response, the appeal raises significant regulatory issues. The appellants should be permitted to ventilate those issues without a fetter upon it, particularly when they bear the bulk of the cost in preparing for the appeals.
For the reasons given above, I have determined it is not appropriate for any security to be provided by GB. As for GRE Sales, the fundamental difficulty with the argument is the nature of the fetter created by an order for security against that entity is not explained. Underpinning the position of GRE Sales on the application is its status as a trading company with the capacity to meet its debts. If that is so, the imposition of an order for security has not been shown to stifle the appeal. I do consider it to be a matter of relevance in determining in the exercise of my discretion an appropriate sum for security, which I will address further below.
Is the security amount sought reasonable?
The Commissioner sets out her methodology for calculating prospective costs by relying upon Ms Arthur’s First Affidavit. Although Ms Arthur has revised the Commissioner’s estimated costs upwards in her Second Affidavit, the Commissioner presses the calculation set out in the First Affidavit asserting a likely recoverable amount for costs of $302,576. The calculation is based on: (a) Solicitor fees on a charge-out rate set out in the Legal Services Direction, the number of solicitors Ms Arthur considers appropriate and estimated work involved. (b) Counsel fees on: (i) rates which have been approved by the Attorney-General which are higher than what is provided for in the Legal Services Direction noting the expertise of Senior Counsel engaged; and (ii) the total time estimate involved for pre-hearing and hearing work.
The amount of $302,576 has been split 60:40 between GRE Sales and GB as reflecting the estimate of ACTCA 14 taking greater time and preparation than ACTCA 15. Once the Commissioner deducts the undertaking of $40,000 given by GZ in ACTCA 14, the amount of $141,545,60 is arrived at for GRE Sales. When the same deduction is made for BSD and Zapari’s joint undertaking of $40,000 in ACTCA 16, the amount of $81,030.40 is arrived at for GB. Based on those calculations, the Commissioner submits the estimates are reasonable and so are the assumptions Ms Arthur has made underpinning her estimates.
The Commissioner also submits despite the appeals not being consolidated, they are being managed together. Courts have made parties joint and severally liable for costs despite separate proceedings: Esined No 9 Pty Ltd v Moylan Retirement Solutions Pty Ltd (No 3) [2020] NSWSC 930.
GRE Sales and GB say the amount is not reasonable: (a) First, “charge out” rates lead to an excessive estimate of fees and do not reflect the costs incurred by the ACT Government. The measure should be by reference to the wages paid to the individuals involved. If that measure is used, as set out in the relevant Enterprise Agreement, then each individual is charging at least twice as much as their “cost”. The use of standard charge-out rates to determine an appropriate amount for security is therefore unreasonable. (b) Secondly, the security is incorrectly apportioned. The preferable way is to seek security in equal amounts as a substantial portion of work is common to each appeal. The Commissioner discounting $40,000 from each appellant who has given an undertaking is unprincipled. Such an undertaking does not diminish that party’s liability in the appeal and so is not a basis upon which to assess costs. (c) Thirdly, the Commissioner’s evidence on costs is disputed. The Commissioner has estimates of revised costs and disbursements but has been inconsistent in how those costs are allocated.
There is some merit in the arguments made on behalf of GRE and GB. As McWilliam J observed in CDLC Pty Ltd v Capital Estate Developments Pty Ltd (No 4) [2024] ACTSC 345 at [45], were an application for security for costs is successful, the court has a discretion to order the amount to be paid in security it considers sufficient and a complete indemnity for costs is not required (although it may be given). In Civil and Civic Corporation Pty Ltd v Nova Builders Pty Ltd [2024] ACTCA 5, McCallum CJ noted the court must be careful not to allow inaccurate costs estimates to create unfairness in the balancing of the interests of the parties. Reliance upon costs estimates without real consideration of what constitutes a reasonable allowance for costs should be avoided.
Should leave be granted for filing the notice of contention?
The notice of contention seeks orders (9)-(12) in Fair Trading v Bowes (No 5) be confirmed, either in addition to, or substitution of, the reasons Curtin AJ gave at [186]. Orders (9)-(12) relate to the way costs were apportioned at first instance. Acting Justice Curtin found no special order for costs could flow in respect of GB, BSD and Zapari as they achieved a result which was no better than the offers of compromise they made to the Commissioner. The Commissioner in her notice of contention says the additional or substituted basis in the reasons should be that there are different public interest objectives in pecuniary penalty proceedings.
GRE Sales and GB concede there is no prejudice as a consequence of the delay in filing the notice of contention. The Court is empowered under r 5115(2)(a) of the Rules to allow such further time for the filing of the notice as it sees fit. The primary bases offered by GRE Sales and GB in opposition of leave being granted for the filing of the notice is a change of mind by counsel is not sufficient explanation for delay and in any event, the notice has poor prospects of success in reliance upon the decision of the Federal Court in ASIC v TerraCom Ltd (No 2) [2025] FCA 959, where Jackman J observed at [11]: In my view, there is no general principle to the effect that regulators occupy a special position in relation to orders for indemnity costs. ASIC has very substantial executive power and litigious resources which must be used responsibly, and orders for indemnity costs provide one way of holding ASIC accountable. If ASIC decides to conduct litigation which is doomed to fail because of some ultimate policy objective, it should generally face the risk of indemnity costs in the same way as any other litigant. The consequences of such litigation for wrongly accused parties (in terms of the expense of money and time, personal strain and obstacles to business or career progression) are at least as great where the claimant is a regulator as they are where the claimant is a commercial entity. Further, it is clearly in the public interest, consistently with ASIC’s statutory obligations, that decisions about the institution of civil penalty proceedings be made with care: Australian Securities and Investments Commission v Lindberg (No 2) [2010] VSCA 19; (2010) 26 VR 355 at [51] (Maxwell P, Buchanan and Weinberg JJA). That said, there may well be particular features of cases which arise because the proceedings are brought by a regulator, and those particular circumstances may well need to be taken into account. An example is provided in the reasons of Allsop J (as his Honour then was) in Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd [2005] FCA 860 at [12], where his Honour said, in the context of an application for indemnity costs against the ACCC based on the ACCC’s rejection of an offer of compromise, that a rejection of an offer in a civil penalty case brings with it considerations of public responsibility for the administration of an important piece of Commonwealth legislation that do not apply to an offer in a civil suit. As Wigney J said in ACCC v Colgate-Palmolive at [16], the point Allsop J was making (at [8]) was that the nature of penalty proceedings, involving as they often do important questions of public policy arising from the enforcement of regulatory legislation, does not make them as amenable to commercial settlement as ordinary civil litigation, and the issues involved in such litigation extend well beyond commercial considerations.
Orders
I certify that the preceding forty-two [42] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Muller.
Associate: Date:
GRE Sales Pty Ltd
Commissioner for Fair Trading
(1979) 25 ALR 453
(1979) 46 FLR 470
(2001) 15 NSWLR 333
(2010) 26 VR 355
GRE Sales was ordered to provide $40,000 security for the Commissioner’s costs by 4.00pm on 23 September 2026; the Commissioner was granted leave to file and serve the specified notice of contention in ACTCA 15 and 16; the applications were otherwise dismissed, with costs in the cause.
In Dahler, adopting the same principle, Katzmann J observed at [61]: It is a long standing principle that a successful party who is represented by a Crown solicitor is not disentitled to costs from an unsuccessful party merely because the successful party is under no personal liability to the Crown solicitor for costs: see, for example, Inglis v Moore (No 2)(1979) 46 FLR 470 at 472 (St John and Brennan JJ); Commonwealth Bank of Australia v Hattersley (2001) 15 NSWLR 333 at 338–9. In Lord Advocate v Stewart (1899) 36 Sc LR 945 at 945 Lord Stormonth Darling said: So long as the fees proposed to be charged are reasonable in amount … there is no reason why [the unsuccessful party] should escape part of the consequences of his unrighteous litigation merely because of this arrangement between the Crown and its officers. In one sense, no doubt, he does not cause any additional expense to the Crown; because the salaries would have to be paid whether he litigated or not. But it is to be presumed that the salaries have been calculated on the footing of there being an average amount of litigation, and each salary, therefore, may be said to contain the equivalent of each separate fee. If so, there is no injustice in the Crown being recouped to that extent by the losing party.
There was, in oral submissions, an acceptance by counsel for Geocon of the proposition that in the case of government lawyers, regardless of the capacity to charge for their fees, there is a recognised entitlement to an indemnity for the costs of the lawyers’ services. However, counsel maintains the Legal Services Direction, as it does not expressly provide for a charge to be made for services provided in these circumstances, and in the absence of express authorisation from the Attorney-General for a charge to be raised, acts as a bar to the Commissioner’s recovery of legal costs in these proceedings. I do not accept that proposition for two reasons. First, the Legal Services Direction clearly contemplates a charge being made for legal services provided to an agency. The entitlement to pursue such recovery is expressed in discretionary terms and the particular categories where recovery may be pursued are not described in exhaustive terms. Secondly, regardless of the entitlement to charge for legal services, the authorities make clear there is a well-established principle entitling the recovery of legal costs by a party represented by the Crown solicitor in litigation even in circumstances where no personal liability is owed to the Crown solicitor for costs.
I am therefore satisfied the Legal Services Direction does not act as a bar to the recovery of costs by the Commissioner in this instance.
The Commissioner also submits no substantive evidence has been forthcoming from the directors of GRE Sales or GB going to the companies’ financial positions. Neither have the directors of the companies offered a guarantee or indemnity. As the companies are without funds or assets, the Court needs to be persuaded as to why security for costs should not be ordered: Davey v Herbst (No 2) [2012] ACTCA 19 at [22] (Refshauge J).
GRE Sales submits it can pay an adverse costs order because it is not impecunious. Despite no evidence of a binding agreement or corporate relationship obligating other legal entities in the Geocon corporate group to meet the debts of GRE, there are significant financial resources available which can be transferred from other members of the corporate group to meet an adverse costs order.
GB says it can pay an adverse costs order because it has interlocutory costs orders against the Commissioner available for set-off or realisation. They are a material asset which prospectively exceed the security the Commissioner seeks against GB. They assert the Commissioner bears the onus of establishing by evidence there is reason to believe the companies will not be able to pay the costs of the Commissioner if ordered to pay them and that onus has not been satisfied. As to the absence of evidence proffered on behalf of the companies, they rely upon Benjamin and University of Canberra v Zierholz@UC Pty Ltd [2020] ACTCA 45.
In relation to GRE Sales, the evidence establishes it is an ongoing business, the nature of which is to receive from time to time large sums of money in the nature of sale proceeds, presumably deposits held until the completion of sales. Those sums are then paid out by GRE Sales as the sales process reaches completion. As a consequence, the evidence does not demonstrate substantial cash holdings are available at any point in time. There is no evidence of any asset source, other than cash, available to meet the debts of the company. I accept there may be at any time substantial assets held by other entities in the Geocon corporate group. Where there is no corporate structure obligating a related entity to meet the debts of GRE Sales and there is no evidence of an agreement to that effect, the presence of substantial assets elsewhere in the group cannot be relied upon to support the proposition GRE Sales has a capacity to meet its debts. I do not accept, as counsel for GRE Sales submits, costs orders in favour of GRE Sales in the primary proceedings should be regarded as an asset available to meet debts by way of offset. The value of those costs orders is not particularised or quantified in any detailed way. In those circumstances, I consider there is a proper basis for believing GRE Sales will not be able to pay the costs of the Commissioner if ordered to pay them.
In passing, I note no submissions were made concerning the status of the orders in the primary proceedings. These appeals do not operate as a stay of those orders. One factor of relevance in the context of the present applications would be any demonstrated incapacity to meet the liability comprised in the orders made in the court below. As I have received no submissions on this issue, I have determined it to be a neutral matter on the applications.
The situation is somewhat different in relation to GB. The appeal brought by GB is concerned only with the costs order made by the primary judge. GB was otherwise successful in the primary proceedings. The costs order made is not the usual order in the sense that it did not follow the outcome in the proceedings as they related to GB. On the contrary, GB was ordered to pay 90% of the Commissioner’s cost notwithstanding the Commissioner was the unsuccessful party in that part of the proceedings. GB is therefore in large part the successful party in the proceedings below. I am therefore satisfied there is a substantive issue to be addressed on appeal. As the Commissioner is not to be properly regarded as the successful party in the substantive proceedings brought against GB and in circumstances where her success is limited to the issue of costs, I see no proper basis for affording her the protection of a security for costs order on the appeal.
In this case, I am not satisfied the charge out rates offered by the Territory as its standard rates reasonably reflect the cost to be incurred in the defence of the appeal proceedings. I am also not satisfied the apportionment methodology proposed by the Commissioner operates in a way that is fair. I am mindful the Commissioner has demonstrated a preparedness to accept $40,000 from each of the other appellants as a reasonable compromise amount for security for the appeals brought by each of them. In respect of those appellants, no distinction is drawn on the basis of the substance of the particular appeals notwithstanding for two of the appellants, the appeal is limited to the issue of costs and for the third it relates also to the primary liability issue and the quantification of the penalty amount. I am also mindful of the public interest considerations in permitting an appeal on the regulatory issue identified in the context of the GRE Sales matter. I do not consider this to be a matter in which a full indemnity for costs is warranted, nor am I able to determine on any reasonable basis what a full indemnity figure would be. As a consequence, I consider the appropriate order for security as against GRE Sales to be an order consistent with the undertakings given by the other appellants, in the amount of $40,000.
In usual circumstances, an order would be made for a stay of the proceedings or alternatively dismissal of the proceedings where the security payment is not met. I accept, as the appellants submit, an order for a stay carries the risk of delaying the other proceedings or alternatively may force fragmentation of arguments on shared issues. I consider that risk to be sufficiently great to prevent a stay order being made.
The Commissioner accepts the notice was filed one month out of time. However, leave should still be granted because: (a) The Commissioner’s counsel changing her mind is a satisfactory reason to file the notice. The Commissioner says she is unwilling to waive legal privilege over the advice which changed the position. (b) The appellants have not demonstrated dealing with the notice would take an inordinate amount of time. (c) There are sufficient prospects in the notice because there is controversy in the authorities over the issue presented.
I note a date for the hearing of the appeal has not been set. There remains some prospect as the appeal hearing date approaches, and with the benefit of an exchange of written submissions, there will be some crystallisation or narrowing of the issues between the parties so as to reduce the present hearing time estimate. On any view, an appeal hearing estimate of four days is substantial.
Dealing first with the explanation for delay, GRE and GB place reliance on Leda Commercial Properties Pty Ltd v Tuggeranong Town Centre Pty Ltd [2018] ACTCA 27. The circumstances in that matter were quite different to the present. First, the application was made only one week prior to the date set for the hearing of the appeal. Secondly, the issue sought to be ventilated in the notice of contention was one not ventilated before the trial judge and raised for the first time in the context of the appeal. Here, as I have indicated above, there is no pressing hearing date. I accept the submission of the Commissioner the issue sought to be articulated in the notice of contention is one arising out of the manner in which his Honour’s reasons were framed and is thus not a matter about which there was any opportunity to make submissions in reply.
As to the second point and the issue of prospects with reference to the decision in TerraCom, the Commissioner relies upon the decision of the Full Court of the Federal Court in ACCC v Employsure Pty Ltd [2023] FCAFC 5; 407 ALR 302 at [111]-[112] (Rares, Stewart and Abraham JJ) in support of her submission the issue sought to be ventilated by the notice of contention is not one that is settled. The Commissioner also highlights the decision in TerraCom was one which may reasonably be viewed as turning on its particular facts. I accept that submission.
In all the circumstances, I consider this to be an appropriate matter in which to grant leave for filing of the notice of contention notwithstanding non-compliance with the time constraint in r 5115(2) of the Rules.
Finally, in relation to the issue of costs, the Commissioner has enjoyed only partial success in her application for security. She has been successful in her application for leave to file a notice of contention, but in circumstances where that application was only necessitated as a consequence of delay on her part. As each of the parties has enjoyed some success in the positions they adopted leading to the subject applications, I consider the appropriate order for costs to be an order for costs in the cause in each of the appeals.