PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS –
SECURITY FOR COSTS – AMOUNT AND NATURE OF SECURITY
– where the first
and second defendants successfully applied for security for costs – where
Source
Original judgment source is linked above.
Catchwords
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS –SECURITY FOR COSTS – AMOUNT AND NATURE OF SECURITY– where the firstand second defendants successfully applied for security for costs – wherethe plaintiff was orderedto provide security for costs in favour of the firstand second defendants up to mediation, by payment into court or in such otherform as is acceptable to the registrar – where the plaintiff applies foran order under r 673(1) of the Uniform Civil Procedure Rules 1999 (Qld)that a policy of after the event insurance with an anti-avoidance endorsement isan adequate form of security to satisfy thesecurity for costs order –where the plaintiff amends its application to seek the same relief by avariation of the initialsecurity for costs orders pursuant to the inherentpowers of the court, or by a variation of the initial security for costs orderspursuant to r 675 of the Uniform Civil Procedure Rules 1999 (Qld) –whether the court should order the after the event insurance policy with an
anti-avoidance endorsement as the form of
security to be provided, under either
r 673 of the UCPR, r 675 of the UCPR, or the inherent powers of the
court
Uniform Civil Procedure Rules 1999 (Qld), r 5, r 670, r 673,
r 675
Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc
[1981] HCA 39
(1981) 148 CLR 170
Adeva Home Solutions Pty Ltd v Queensland Motorways
Management Pty Ltd [2021] QCA 198
(2021) 9 QR 141
APFC No. 1 Corporation v Insurance
Australia Limited [2024] NSWSC 534
Brimaud v Honeysett Instant Print
Pty Ltd (1988) 217 ALR 44
Chanel Ltd v FW Woolworth & Co Ltd
[1981] 1 All ER 745
CleanFin Pty Ltd v Forest Carbon Methodology Pty
Ltd (No 2) [2025] FCA 163
DIF III Global Co-Investment Fund LP v BBLP
LLC [2016] VSC 401
Goodman v Lorenzen [2000] QCA 11
Great
Barrier Reef Yacht Club Villas Pty Ltd v Insurance Australia Ltd [2024] QSC
320
Manolakis v Director of Public Prosecutions (Cth) (2009) 108 SASR
451
(2009) 264 LSJS 86
[2009] SASC 193
Michael Phillips
Architects Ltd v Riklin [2010] EWHC 834
Musst Holdings Ltd v Astra
Asset Management UK Ltd [2024] EWHC 2310 (Ch)
Petersen Superannuation
Fund Pty Ltd v Bank of Queensland Ltd [2017] FCA 699
Pivotel
Satellite Pty Ltd v Optus Mobile Pty Ltd [2010] FCA 121
Premier
Motorauctions Ltd (in liq) v Pricewaterhousecoopers LLP [2017] EWCA Civ 1872
[2018] 1 WLR
2955
Re Tiaro Coal Ltd (in liq) [2018] NSW SC 746
Rockett v
Moneycorp Securities Pty Ltd [2008] QCA 142
Judgment (71 paragraphs)
[1]
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - AMOUNT AND NATURE OF SECURITY - where the first and second defendants successfully applied for security for costs - where the plaintiff was ordered to provide security for costs in favour of the first and second defendants up to mediation, by payment into court or in such other form as is acceptable to the registrar - where the plaintiff applies for an order under r 673(1) of the Uniform Civil Procedure Rules 1999 (Qld) that a policy of after the event insurance with an anti-avoidance endorsement is an adequate form of security to satisfy the security for costs order - where the plaintiff amends its application to seek the same relief by a variation of the initial security for costs orders pursuant to the inherent powers of the court, or by a variation of the initial security for costs orders pursuant to r 675 of the Uniform Civil Procedure Rules 1999 (Qld) - whether the court should order the after the event insurance policy with an anti-avoidance endorsement as the form of security to be provided, under either r 673 of the UCPR, r 675 of the UCPR, or the inherent powers of the court
G D Beacham KC with P O'Brien for the first defendant
[21]
D B O'Sullivan KC with A P McKinnon for the second defendant
[22]
[1] After a two day hearing in which each of the plaintiff, the first defendant and the second defendant were represented by King's Counsel, two security for costs applications were determined by her Honour Justice Wilson on 20 December 2024. Relevantly, the plaintiff was ordered to give security for costs:
[23]
(a) in favour of the first defendant up to mediation in the sum of $437,549; and
(b) in favour of the second defendant up to mediation in the sum of $863,898.
[24]
[2] The order in favour of each defendant then provided that that security was to be:
[25]
"...by payment of that sum into court, or by the provision of security in such other form as is acceptable to the registrar, and in default, the claim be stayed until such time as security is provided."[1]
[26]
[3] Her Honour delivered lengthy reasons. This reflected how hard fought the security for costs applications had been between the parties. The plaintiff had opposed the suggestion that any security should be given at all. While the plaintiff did not have any of its own assets to speak of, it advanced the argument that it operated in a similar way to a body corporate for a strata title scheme. The plaintiff had contended that it would be able to raise the funds in the form of levies in a similar way to levies imposed on lot owners in such a strata title scheme. That contention was not successful.
[4] The plaintiff now seeks the court to effectively endorse, as the operative form of security, a policy of after the event insurance with an accompanying anti-avoidance endorsement. It seeks to do so by way of three routes, namely:
(b) by a variation of Wilson J's orders pursuant to the inherent powers of the court; or
(c) by variation of Wilson J's orders pursuant to r 675 of the UCPR.
[28]
[5] Routes (b) and (c) above were not advanced by way of the application filed by the plaintiff on 23 July 2025, but were advanced in writing in the plaintiff's written submissions in reply and orally by the plaintiff's counsel at the hearing before me on 12 September 2025. I will treat the application as amended so as to include the routes sought by (b) and (c) above.
[6] I have determined that the application, as amended, should fail. My reasons for this conclusion are as follows.
[29]
[7] The plaintiff is a body corporate associated with a development known as "Great Barrier Reef Yacht Club Villas", which is a villa complex located on Hamilton Island (the "Development").
[8] The plaintiff described the Development as being structured in a way that was broadly analogous to a strata title scheme although it is not such a scheme. For the purposes of this application, it can be described in the following terms:
[30]
(a) the Development comprises 36 lots, forming a portion of land leased by the State of Queensland to Hamilton Island Enterprises Pty Ltd ("HIE") under a statutory perpetual lease;
(b) one of the lots, Lot NM, is subleased by HIE to the plaintiff, with Lot NM effectively being the common area ("common area") for the Development;
(c) the other 35 lots have villas constructed on them, which are subleased by HIE to the various persons or entities;
(d) the plaintiff functions, in effect, in a way analogous to a body corporate for the Development; and
(e) the plaintiff is governed by a written constitution ("Constitution").
[31]
[9] The substantive claim brought in the proceedings by the plaintiff concerns alleged defective work performed by the second defendant which was arranged by the first defendant pursuant to a claim on an insurance policy held by the plaintiff in respect to damage caused by Cyclone Debbie.
[10] On the hearing of the initial security for costs applications, the plaintiff made submissions that it should not be ordered to pay security for costs at all. It was contended that the persons who sub-leased the villas were wealthy individuals or corporations of such individuals. The plaintiff gave an undertaking that it would seek to call meetings in order to obtain a vote to levy any funds necessary to meet any costs order which may be made in the proceeding from time to time. In effect, the submission was that by this mechanism, there was no practical risk that a costs order would go unmet.
[11] The undertaking referred to was set out in an affidavit filed and read on behalf of the plaintiff at the hearing of the initial applications. I note that it was not an undertaking provided to the court, but rather was put forward as evidence that the plaintiff could and would effectively take steps to seek to bring about a levy of whatever funds were needed to pay any costs order.
[12] As set out above, Wilson J ordered security for costs, and in doing so, relied upon the substance of the undertaking as indicating that the plaintiff could and would seek to raise funds so as to answer the security for costs order which she was making.
[13] Ultimately, Wilson J did not find that the undertaking given by the directors of the plaintiff provided a sound basis for finding that the plaintiff ought not be ordered to provide security. The decision of Wilson J was not appealed from by any of the parties.
[14] What then occurred may be summarised as follows.
[15] The orders for security were not met within the 28 days ordered and, as at the date of the hearing, still had not been met. No monies have been paid into court in accordance with the orders, nor has a form of security acceptable to the registrar been sought.
[16] Instead, the plaintiff unilaterally took another course. The solicitor for the plaintiff, Mr Orford, in his affidavit of 23 July 2025 deposed to the following:
[32]
"[8] I am informed by Mark Evans, a director and the Chairperson of the Club [the plaintiff], and believe that Mr Evans:
[33]
(a) first became aware that "after the event" (ATE) insurance was available in Australia, that Litica offered such policies in Australia and that, as a result, ATE insurance might be used as a form of security in the proceeding in late December 2024, after the order made by the Court on 20 December 2024; and
[34]
(b) was not aware of ATE insurance being available in Australia as at 20 December 2024 or prior to this time."
[35]
[17] The "Litica" referred to in the affidavit is a policy agent. The ATE insurance (the "Policy") is a policy ultimately underwritten by a number of Lloyd's Syndicates which have taken, in the usual way, discrete percentages of the insurance liability.
[18] On 13 January 2025, Mr Orford was instructed by the plaintiff to make contact with Litica.
[19] Discussions took place between the solicitors for the plaintiff and Litica in relation to the provision of the Policy as a form of security. Those discussions occurred over the period between 14 January 2025 and 1 April 2025.
[20] The plaintiff's solicitor said that he had been informed by Mr Evans and believed that on or around 31 March 2025, Mr Evans decided (in consultation with other directors of the plaintiff) to recommend to the villa members the taking out of the Policy through Litica (which was ultimately underwritten by the Lloyd's Syndicates).
[21] On 31 March 2025, Mr Evans caused an extraordinary general meeting ("EGM") of the plaintiff to be called for 22 April 2025, where the amount of $1 million (including GST), being $28,500 per villa, was sought to be authorised to be raised as a special contribution to be used in part to "...fund the ongoing costs of the Dispute and support the Security For Costs Facility, and, if the funds [were] no longer required for that purpose, [then] for any other permitted purposes."[2]
[22] At the EGM, 12 villa members and one ordinary shareholder voted in favour of the resolution.
[23] On the instructions of the plaintiff, on 15 May 2025, the Policy was incepted by Litica with the Lloyd's Syndicates.
[24] On 19 May 2025, for the first time, the solicitors for the plaintiff wrote to the solicitors for the defendants identifying that security would be sought to be provided by the Policy which had been taken out, together with an anti-avoidance endorsement ("Endorsement"), which was intended to be taken out if the Policy and Endorsement were accepted as security for the purposes of the order.
[25] Subsequent to that communication, there were exchanges between the plaintiff's solicitors on the one part and each of the first defendant's and second defendant's solicitors on the other part.
[36]
[31] The relief sought by the plaintiff in the application the subject of this hearing was as follows:
[37]
"Pursuant to r 673(1) of the [UCPR], it is ordered that the [Policy] and the proposed [Endorsement] issued by Litica...in the proposed amended form exhibited to the affidavit of Andrew Orford sworn 23 July 2025, is adequate security for the purposes of satisfying the order of Wilson J made on 20 December 2024."
[38]
[32] Rule 673 of the UCPR provides as follows:
[39]
(1) If the court orders the plaintiff to give security for costs, the security must be given in the form, at the time, and on any conditions the court directs.
[40]
(2) If the court does not specify the form of security to be given -
[41]
(a) it must be given in a form satisfactory to the registrar; and
(b) the registrar's approval of the form of security must be written on the order before it is issued.
[42]
(3) The plaintiff must as soon as practicable after giving security serve on the defendant written notice of the time when, and the way, the security was given."
[43]
[33] Rule 673(1) of the UCPR provides that if security is ordered by the court, the security must be given in the form and at the time and on the conditions which the court directs.
[34] Rule 673(2) of the UCPR provides for a default scenario where the court does not specify in the order the form of the security. The rule automatically provides for the security to be in a form "satisfactory to the registrar" and that the registrar's approval of the form of the security must be written on the order itself before it is issued.
[35] Here, the security for costs orders made by Wilson J on 20 December 2024 directed the form of which the security had to be given. That form was "...by payment of that sum into court, or by the provision of security in such other form as is acceptable to the registrar..."
[36] This wording of the orders was expressly sought by both the first defendant and the second defendant in their written submissions which were read at the hearing of the first applications.
[37] The plaintiff contends in the current application that r 673 of the UCPR still empowers the court to make a further order as to the form of the security without constituting a variation of the orders of Wilson J.
[38] The plaintiff further sought to justify the granting of the desired relief by submitting that because Wilson J had not had the Policy and Endorsement before her, the plaintiff was therefore not presently asking the court to revisit a question which the learned judge at first instance considered.
[39] In addition, the plaintiff submitted that the granting of the relief sought would not be inconsistent with the prior order, particularly where there was an express power in
[44]
r 673 of the UCPR for the court to "direct" the form of the specific security which must be given. The plaintiff submitted that the power in r 673 cannot have been spent by Wilson J.
[45]
[40] These submissions may be disposed of in brief compass.
[41] The orders made by Wilson J set the amount of the security and the form of the security.
[42] There was no scope for a further exercise of a power under r 673(1) of the UCPR, as the power had been spent by the court. The orders made by her Honour had fully disposed of the first applications to the extent they dealt with the issue of the form of the security.
[43] The plaintiff is incorrect in submitting that this application is not relitigating an issue which was before Wilson J.
[44] Both the first defendant and the second defendant had specifically asked for the form of security which her Honour ordered. The fact that the plaintiff did not ventilate an alternative form of security at the prior hearing before Wilson J, whether constituted by the Policy and Endorsement or otherwise, does not equate to the form of security issue not being raised and determined. It simply reflects that the plaintiff did not run an alternative case on that issue. That was its forensic decision to make. An omission to address an issue does not equate to the issue not having been the subject of a determination.
[45] The use of the word "directs" in r 673(1) of the UCPR also does not assist the plaintiff's case. The word "directs" in the context of that rule simply means stipulates. The stipulation of the form of the security forms part of the order of the court and represents part of the overall substantive determination by the court.
[46] The application to the extent it is based on r 673 of the UCPR fails.
[46]
Relief based on the inherent power of the court
[47]
[47] The first alternative basis for the relief is the inherent power of the court to vary an interlocutory order.
[48] The plaintiff submitted that the ultimate touchstone for the exercise of this inherent power is the interests of justice as informed by the circumstances of the particular case. One such circumstance which may engage the interests of justice in a given case is said to be that identified by McPherson JA (with the whom the other members of the Court agreed) in Goodman v Lorenzen[2000] QCA 11 at [6] in the following terms:
[48]
"The stage has now been reached where it is possible to consider the appeal now before us. As regards the plaintiff's application to set aside the order for security made on 27 May 1998, his Honour, in referring to it in his reasons delivered in December 1998, said that, except on an appeal against it, there was no power to set aside or vary that order. That was, in law, not altogether correct. The order in question was interlocutory in character, and interlocutory orders are, at least to some extent and in some circumstances, susceptible of variation either by the judge who made them or otherwise without necessity for an appeal. What is, however, generally required as a prerequisite to varying or setting aside such an order is new material providing evidence of additional relevant facts, which have arisen or been discovered since the earlier application or order was made, that require a different order from that originally made, or would have done so at the time when that order was made. See ex p Edwards[1989] 1 Qd R 139, 142. Without material of that kind, a further such application would, as Taylor J described it in Hall v Nominal Defendant[1966] HCA 36; (1966) 117 CLR 423, 440-441, ordinarily prove quite "fruitless"."
[49]
[49] In the circumstances of this case, the plaintiff contends that the discretion under the inherent power ought to be exercised to grant the variation request, so as to permit the security to be in the form of the Policy and Endorsement. This is said to be so for the following reasons.
[50] First, it is said that the evidence supports a finding that Mr Evans, the relevant director of the plaintiff, did not know of the availability of insurance in the nature of the Policy at the time of the hearing of the initial applications. He only became aware of its existence somewhere between 20 December 2024 and 31 December 2024. Accordingly, the present application is founded on facts which were not known to the plaintiff prior to the determination of the initial applications. This is said to favourably support the exercise of the discretion based upon the circumstance identified in Goodman.
[51] Secondly, the variation is said to be a technical one rather than substantive. In particular, the part of the orders allowing for the obtaining of the registrar's acceptance is referred to by the plaintiff in support of this proposition.
[52] Thirdly, it is said that the Policy and Endorsement should be found to be an adequate form of security to meet any risks associated with the plaintiff's ability to meet any future costs orders.
[53] Fourthly, once there is a determination that the security is adequate, the plaintiff says that the discretion in the inherent power of the court ought to be exercised in favour of the grant of the security in the form which is least disadvantageous to the plaintiff. The plaintiff ultimately submitted that the core issue is whether the form of the security is adequate to protect the party seeking it. The plaintiff referred to authority in support of this proposition, which included:
DIF III Global Co-Investment Fund LP v BBLP LLC[2016] VSC 401 per Hargrave J at [40];
Re Tiaro Coal Ltd (in liq)[2018] NSWSC 746 per Gleeson JA at [22]; and
Adeva Home Solutions Pty Ltd v Queensland Motorways Management Pty Ltd ; per Bond JA at [24] and [29].
[50]
[55] The starting point for the defendants' contentions is their contrary submission to the underlying principle informing the exercise of the inherent power to vary interlocutory orders. The defendants identify the ordinary rule of practice for the variation of interlocutory orders as one requiring there to be a material change of circumstances since the original application was heard and determined, or the discovery of new material or evidence which could not reasonably have been put before the court on the hearing of the original application. In doing so, they rely upon the observations of McLelland J in Brimaud v Honeysett Instant Print Pty Ltd(1988) 217 ALR 44, particularly at 46 and 48, and the authorities referred to therein, including Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc[1981] HCA 39; (1981) 148 CLR 170 at 178 per Gibbs CJ, Murphy, Aickin, Wilson and Brennan JJ and Chanel Ltd v F W Woolworth & Co Ltd[1981] 1 All ER 745 at 751-752 per Buckley LJ.
[56] The observation in Adam P Brown at 178 was relevantly as follows:
[51]
"...A Court must remain in control of its interlocutory orders. A further order will be appropriate whenever, inter alia, new facts come into existence or are discovered which render its enforcement unjust..."
[52]
[57] The above observation footnoted the decision of Chanel at 751, which includes the following statement:
[53]
"...Even in interlocutory matters a party cannot fight over again a battle which has already been fought unless there has been some significant change of circumstances, or the party has become aware of facts which he could not reasonably have known, or found out, in time for the first encounter. The fact that he capitulated at the first encounter cannot improve a party's position..."
[54]
[58] The defendants say that this is the relevant principle to apply to a security for costs order, which is an interlocutory order of a substantive nature.
[59] By reference to the above statement of principle, the defendants contend that the inherent power in this case ought to be exercised against the plaintiff for the following reasons.
[60] First, they say that the plaintiff has not shown by way of evidence that the availability of the Policy and Endorsement could not reasonably have been known or found out about prior to the determination of the initial applications. They submit that absent such evidence, the plaintiff's application is an abuse of process or vexatious.
[61] Secondly, the defendants submit that the present application is separately vexatious or an abuse of process because it is inconsistent with how the initial applications were opposed by the plaintiff. It is said that the initial applications were opposed on the basis that the lessees of the lots were wealthy persons (or the entities of wealthy persons) and that monies could readily be raised by the plaintiff by the calling of general meetings and the seeking of resolutions authorising the imposition of levies on the lessees.
[62] Thirdly, it is submitted that the variation sought is not a mere technicality. It is said the variation will alter the form of the security ordered by Wilson J.
[63] Fourthly, the defendants say that what is being sought by this application is a variation for the mere convenience of the plaintiff, and that this is an inappropriate basis to justify the exercise of the discretion to vary the order.
[64] Fifthly, it is said that the plaintiff is incorrect to submit that the authorities in this State support that if the court were to form a view that the Policy and Endorsement were an adequate form of security, then the court should order the form of security which is least onerous to the plaintiff. The defendants rely upon the observations of Bond JA (with whom Fraser JA and Wilson J agreed) in Adeva Home Solutions Pty Ltd v Queensland Motorways Management Pty Ltd[2021] QCA 198; (2021) 9 QR 141 as follows:
[55]
"[22] Fifth...Ordinarily, a Court would prefer to require security for costs in a form that enables funds to be accessed within the jurisdiction with a minimum of risk, including risk of cost and delay. A form of security for costs which does not provide a fund which could be accessed without the cooperation of the opposing party or a person who is connected to that party - and which might require the commencement of proceedings to enforce it - would have the potential to undermine the purpose of the rules as stated in UCPR r 5, because it would carry with it the risk of satellite proceedings and additional delay and costs.
[56]
[23] Sixth, it would, however, be wrong to conclude that an order in a form which did not provide a fund within the jurisdiction which would be accessible with a minimum of risk, including risk of cost and delay, could never be regarded as appropriate security. What is required is the exercise of a discretionary judgment, conducted with an appreciation of the protective purpose for which the power to order security has been conferred and the goals specified in r 5, and having regard to all of the circumstances of the particular proceeding, including the factors mentioned in UCPR r 672. In a particular case, there might well be evidence of countervailing considerations which could suggest that the provision of security for costs in the form of a right enforceable in a foreign jurisdiction is appropriate. Evidence might demonstrate, for example, that an order in any other form would be oppressive, or would stifle the proceeding. There may be other considerations which are sufficient to justify ordering the provision of security in such a form. Hard and fast rules cannot be laid down..."
[57]
[65] I note that these quoted statements occur in the context of a larger review of the principles applicable to the grant of security for costs and the form of the grant. His Honour Bond JA ultimately concluded that the form of the security for costs order should be that which best serves the interests of justice in the circumstances of the particular case in which the discretion is to be exercised.
[66] The defendants say that Wilson J ordered a form of security which was primarily constituted by the creation of a fund paid into court. They submit that having effectively required the creation of a security in the form of a fund located within the jurisdiction and ultimately controlled by the court, there is then nothing raised by the plaintiff in the nature of a countervailing consideration which would justify the exercise of the discretion to vary it to a different form.
[67] Sixthly, the defendants submit that the Policy and Endorsement still carry risks.
[68] The defendants say that even though the Endorsement to the Policy quells much of the risk of the Lloyd's Syndicates failing to answer a claim on the Policy, it cannot exclude altogether that risk. The defendant submitted that, unlike a fund controlled by the court, there is a residual potential for satellite litigation. No specific example was given for this risk, other than to say that it could still manifest in circumstances where the Syndicate was acting in good faith in refusing a claim made on the policy.
[69] Seventhly, it was submitted that the presence of r 675 of the UCPR ought to constrain the operation of the inherent jurisdiction. The defendants say that r 675 only allows for the variation of security for costs orders made pursuant to rr 670 and 673 of the UCPR where there are "special circumstances". It was said that this constraining criteria ought to also apply to the inherent jurisdiction.
[58]
[70] I have determined that the discretion pursuant to the inherent power of the court ought to be exercised against the varying of the order of Wilson J. My reasoning is as follows.
[71] First, the principles applicable to the exercise of the inherent power to vary substantive interlocutory orders are most usefully articulated in the decision of Pivotel Satellite Pty Ltd v Optus Mobile Pty Ltd[2010] FCA 121 by Jagot J at [26]. They may be summarised as follows:
A court has an inherent jurisdiction to vary or set aside an interlocutory order, but the relitigation of issues already decided, even on an interlocutory basis, is undesirable having regard to the need for finality (Brimaud v Honeysett Instant Print Pty Ltd(1988) 217 ALR 44 at 46).
The overriding principle governing the approach of the court to interlocutory applications is that the court should do whatever the interests of justice require in the particular circumstances of the case (Brimaud at 46).
The interests of justice should be assessed having regard to the nature of the interlocutory order in question. Interlocutory orders that are merely procedural are different from substantive orders made after a contested hearing and intended to operate until the final hearing. In the latter case, the general rule is that there must be a material change in circumstances or the discovery of new material which could not reasonably have been put before the court on the earlier application (Brimaud at 46).
There is a debate in the authorities between approaches that are more and less permissive. Nevertheless, the approach generally adopted is one in which an applicant seeking to vary a substantive interlocutory order made after a contested hearing must persuade the court that one or more of the following factors has occurred or is satisfied:
there is new material or new evidence which was not available, or reasonably available to them at the time the orders were made;
[59]
(a) by reasonable inquiries, have become aware of the existence of insurance such as the Policy and Endorsement; and
(b) could have put evidence of the Policy and Endorsement before Wilson J at the initial hearing.
[60]
[83] Accordingly, the new evidence now relied upon was available to the plaintiff had it made reasonable inquiries prior to the hearing of the initial applications.
[84] The failure of the plaintiff to discharge its onus to show that the new facts relied upon by it were not reasonably ascertainable prior to the hearing of the initial applications is a strong consideration against the exercise of the discretion in favour of varying the orders.
[85] Fourthly, there is no other material change of circumstances pointed to which would otherwise warrant the exercise of the discretion.
[86] The initial applications had been run on the basis that the plaintiff would be able to readily raise significant funds from the wealthy persons who either were lessees, or wealthy persons who stood behind corporate lessees, by calling meetings seeking resolutions to levy the required funds. There was nothing in the affidavit material which suggested that this position had changed.
[87] It has not been suggested in this application that the existing orders cannot be complied with. The only submission made is that compliance with the orders will cause further delay. That last submission holds no weight where the delay to date has been caused by the plaintiff's unilateral decision not to comply with the orders, but to instead pursue an alternative form of security.
[88] The variation sought by the plaintiff to alter the form of the security to the holding of the Policy with the Endorsement is a matter which, in truth, is for the convenience of the plaintiff. The proposed form of security is one which the plaintiff prefers in comparison to having to seek to bring about the levies required.
[89] In the decision of CleanFin Pty Ltd v Forest Carbon Methodology Pty Ltd (No 2)[2025] FCA 163, McDonald J rejected an application to vary the form of an existing security for costs order so as to replace it with insurance similar to the Policy. In that case, McDonald J noted that the court was not taken to any evidence as to whether the provision of the insurance had been explored, or why security in that form had not been proposed when the issue of security for costs first arose, was argued and then decided.
[61]
"...It would be an unusual situation where the mere presence of some statute or rule of court which arms the court with a method of dealing with a particular problem in a particular manner, would exclude the inherent power to deal with that problem in another way..."[6]
The court may set aside or vary an order made under this chapter in special circumstances."
[64]
[109] The plaintiff contends that the "special circumstances" in this case are constituted by the following matters:
the plaintiff only found out about the Policy and Endorsement after the determination of the initial applications;
the plaintiff has sought to have the defendants agree to the proposed form of security prior to bringing the application; and
the proceeding is and has been case managed on the Building, Engineering & Construction List ("BEC List").
[110] The plaintiff contends that the necessary existence of "special circumstances" does not require that the case have some rare or unique feature, but rather requires the identification of some factor which justifies a variation. The plaintiff says that such a justifying factor will include the event of new facts coming to light. The plaintiff cites for this proposition Goodman at [6] and Rockett v Moneycorp Securities Pty Ltd[2008] QCA 142 at [10] per Holmes JA (as her Honour then was and with whom the other members of the Court agreed).
[111] This argument can be disposed of relatively quickly. The two authorities cited by the plaintiff in this respect do not stand for the proposition contended for. Goodman did not consider r 675 of the UCPR at all. Further, no substantive articulation of the construction of r 675 to the effect submitted was made in Rockett. Rather, Holmes JA noted that both parties had suggested that the test for "special circumstances" should be regarded as being akin to the test for seeking to set aside or vary interlocutory orders, namely one would generally require new material with evidence of additional facts which have arisen or been discovered since the order was made so as to require a different order.
[112] Her Honour Justice Holmes did not attempt any substantive articulation of the proper construction of the test required under r 675 of the UCPR.[7] Rather, Holmes JA found that it was plain that the applicant's material did not amount to special circumstances, whether in the form of new material or in any broader sense. Her Honour did not articulate with specificity what was meant by "special circumstances", other than to note that it was not present on the facts of the case before her.
[65]
[122] The application, as amended, is dismissed.
[123] I will hear the parties on costs.
[66]
[1]Great Barrier Reef Yacht Club Villas Pty Ltd v Insurance Australia Ltd[2024] QSC 320.
[67]
[2] Affidavit of A J Orford, dated 23 July 2025 at [14(b)(c)].
[26] At no stage did either of the defendants agree to the Policy and Endorsement standing as security which would satisfy the order.
[27] Equally, at no stage did the plaintiff seek the registrar's acceptance of the Policy and Endorsement as a form of security.
[28] On the hearing of this application, counsel for the plaintiff stated that it would have been fruitless to go to the registrar with the Policy and Endorsement, when both defendants had said they did not agree to it as a form of security and would oppose it.[3]
[29] That observation by the plaintiff was a reasonable one. The primary form of security which was ordered was actual money paid into court. It seems improbable that the registrar would have accepted anything short of the equivalent of cash. Such an equivalent to cash may have included an irrevocable and unconditional bank guarantee, which has on numerous occasions been accepted by courts as being as good as cash, or monies paid into an interest bearing deposit in the name of the registrar. Ultimately, it would be a matter for the registrar as to what form of security would be acceptable.
[30] Before leaving the background facts, it is relevant to note that the affidavit material of the plaintiff provided no explanation of how and by what means Mr Evans found out about the availability of the Policy.
[54] Fifthly, the plaintiff says the exercise of the discretion contained in the inherent power of the court to vary an interlocutory order is not adversely affected by the requirement in r 675 of the UCPR for "special circumstances" to exist.
there has been a material change in the circumstances since those orders were made;
there are exceptional circumstances which warrant re-consideration of the matter; or
as a matter of discretion, the justice of the matter requires that the applicants be allowed to revisit the matter.
[72] This statement of principles has repeatedly been applied in the Federal Court of Australia and, in my view, accurately reflects the principles which inform the inherent power to vary interlocutory orders within this court.
[73] The principles as articulated above are not inconsistent with Goodman. In that decision, McPherson JA was discussing relevant principles at a general level only and certainly was not asked to consider whether the new material or evidence had to be not reasonably available at the time the original order was made.
[74] The justification underlying the nuanced part of the principle in question is self-evident. When a party contests an application, it is incumbent on it to seek to lead evidence on all aspects of the dispute it wishes to oppose. That obligation includes making all reasonable investigations on the potential bases of opposition. If the principle were otherwise, then a party could seek to relitigate the underlying subject matter of an application solely on the basis that it had not turned its mind to an argument or had not made any relevant inquiries of the underlying facts, regardless of whether such conduct was unreasonable. The presence of the nuance holds parties responsible for how they conduct their cases at first instance and reflects that even interlocutory determinations ought to have a desired level of finality.
[75] Secondly, the variation sought here is not a technical one. An order was made by this court after a two-day contested hearing where all sides were represented by King's Counsel. The order dealt with both the quantum of the security and the form of the security. A variation to the form of a security which has been ordered is a variation of a substantive character rather than one which is merely procedural.
[76] Thirdly, the plaintiff bears the onus of proof that it could not reasonably have discovered and then put before the court at the prior hearing evidence of the Policy and Endorsement as an available form of security.
[77] The plaintiff has not discharged that onus. The only material that it has put before the court is information and belief evidence derived from Mr Evans, a director and chairperson of the plaintiff, that he did not know of insurance such as the Policy until an unidentified date between the making of the orders of Wilson J on 20 December 2024 and the end of December that year, a matter of 11 days. This period included Christmas Day and Boxing Day.
[78] Mr Evans does not identify how he found out about the Policy, including the circumstances in which he was informed of it and who informed him of it.
[79] No evidence was put on by the plaintiff to suggest that the existence of the Policy and Endorsement could not have reasonably been discovered prior to the determination of the initial applications.
[80] To the contrary, there is evidence in the form of prior case authority, which shows that insurance policies of the general nature of the Policy have been available in the British and Australian marketplaces for some time. In that regard, reference may be made to:
APFC No. 1 Corporation v Insurance Australia Limited[2024] NSWSC 534.
[81] This evidence was bolstered by the fact that within days of the order being made by Wilson J, Mr Evans was able to identify the availability of insurance such as the Policy. That supports an inference, which I draw, that this was the first time Mr Evans turned his mind to whether the plaintiff might provide security other than by payment of money into a fund. I note submissions were made by counsel for the plaintiff which also alluded to this possibility.[4]
[82] By reason of both the position demonstrated by the authorities and the inference which I draw, there is a proper basis to find that if prior to the hearing and determination of the initial applications the plaintiff had turned its mind to what form of security it wished to offer as an alternative to the payment of cash into a fund, the plaintiff would:
[90] In CleanFin, McDonald J found that the applicant had not established that there had been any relevant external circumstances that had changed, only that the plaintiff in that case had subsequently negotiated the relevant insurance.
[91] The only difference in this case is that there is information and belief evidence derived from Mr Evans that he personally was not aware of insurance such as the Policy at the time the initial applications were determined. Whilst I acknowledge that particular difference in the evidence between the two cases, the underlying conclusion in CleanFin stands true in this case. Mr Evans' personal new-found knowledge of the Policy does not provide a material change in circumstance, where the existence of insurance in the nature of the Policy was reasonably ascertainable prior to the hearing and determination of the initial applications.
[92] There is no satisfactory answer for why the plaintiff had, inferentially, not turned its mind to putting forward alternative reasonably identifiable forms of security when the issue of the form of security was always in play in the initial applications.
[93] Fifthly, and related to the last point, the reasoning of Bond JA in Adeva does not assist the plaintiff.
[94] The most obvious point is that Adeva deals with principles applicable on the hearing of a security for costs application at first instance. That is not the circumstance of this application.
[95] As identified above, quite separate principles are in play where a substantive interlocutory order is sought to be varied. Accordingly, the potential adequacy of the Policy and Endorsement is not determinative of the exercise of the discretion on the issue as to whether such an interlocutory order ought to be varied.
[96] I accept that the Policy and Endorsement potentially might have been found to be an adequate form of security at the hearing of the initial applications. However, whether Wilson J would have ultimately favoured the Policy and Endorsement over the order that her Honour made would have depended on the application of the totality of the principles identified by Bond JA in Adeva.
[97] I accept that the Endorsement has significantly reduced the risk of the Policy failing to answer. I also note that on the evidence there seems to be available Australian assets in the vicinity of $3 billion to answer calls on a collection of policies of insurance which includes this Policy. All of this goes towards the Policy and Endorsement being potentially adequate security.
[98] However, it is also relevant to note there are some continuing drawbacks of the Policy and Endorsement. One drawback is that they may be terminated by the Lloyd's Syndicates prior to the mediation. Costs incurred up to the date of termination are said to be covered. However, that allows for a level of uncertainty and disputation as to how the calculation of such costs might be determined.
[99] More importantly, the pre-emptive ability of the Syndicates to terminate the Policy and Endorsement creates a risk that the security for costs order will cease to be complied with prior to the mediation.
[100] If that were to occur, it would cause further delay to the proceeding and a potential additional hearing for a further variation of the security for costs orders. The prospect of that delay and associated costs would run counter to the underlying tenets of r 5 of the UCPR, namely the object of avoiding undue delay, expense and technicality, and facilitating the just and expeditious resolution of the real issues in a civil proceeding at a minimum of expense.
[101] It is unfruitful to muse further on whether Wilson J would have adopted the Policy and Endorsement over the form of security which her Honour ordered.
[102] Even on the assumption that the Policy and Endorsement were an adequate form of security, there is no persuasive basis which supports the variation of the security for costs orders from a designated fund controlled by the court. Such an assumed adequacy of the Policy and Endorsement as a form of security does not outweigh the other factors, which point strongly against the exercise of the discretion to allow the variation.
[103] In conclusion, all of the above considerations point against the exercise of the inherent power of the court to vary the security for costs orders in the way sought by the plaintiff.
[104] Whilst it is strictly unnecessary to do so, I should record that I do not accept the submission of the defendants that r 675 of the UCPR partially restrains the operation of the inherent power of the court to vary an interlocutory security for costs order.
[105] It is a common feature both of the UCPR and other forms of legislation to provide powers which coincide with the subject matter of the court's inherent power to control its own processes. The power to grant a security for costs order against a corporation is a prime example. Those powers are found in the Corporations Act 2001 (Cth), the UCPR and the inherent power of the court.
[106] In my view, r 675 of the UCPR does not contain either clear words or a compelling inference which would justify a restriction on the inherent power to vary interlocutory orders.
[107] I agree with the general observations of Gray J in Manolakis v Director of Public Prosecutions (Cth)(2009) 108 SASR 451, including the approval of a statement of Keith Mason QC (as his Honour then was) [5] expressed in the following terms:
[113] In much the same way, it is unnecessary for me to try and extol some definitive boundary for the words "special circumstances".
[114] On any view, there are no special circumstances present here.
[115] First, the fact that this proceeding is case managed on the BEC List is not a special circumstance. Many proceedings in this court are case managed via a variety of lists. The existence of a case managed process for this proceeding does not imbue this application with "special circumstances", in contrast to matters which are not case managed.
[116] Secondly, the fact that the plaintiff sought to have the defendants agree to the Policy and Endorsement (including iterations of them) before bringing this application, again, does not create special circumstances. At no stage did the defendants agree to the Policy or Endorsement as an accepted alternative form of security.
[117] Thirdly, the fact that Mr Evans was unaware of insurance such as the Policy until a few days after the determination of the initial applications by Wilson J also does not create special circumstances. As with considerations relevant to the exercise of the inherent power to vary interlocutory orders, unless it can be shown that the existence of insurance such as the Policy was not reasonably ascertainable prior to the determination of the initial applications, the absence of that knowledge will not constitute special circumstances.
[118] Failing to consider a live issue in an application such as the form of the security and failing to make reasonable inquiries in respect of alternative forms of security which could have been proposed are not "special circumstances".
[119] To find otherwise would allow parties to relitigate interlocutory applications simply on the basis that they had not turned their minds to and made reasonable inquiries in respect of one or more issues in dispute on the first instance hearing. The inherent undesirability of that proposition is immediately apparent.
[120] Even if I were incorrect on the issue of "special circumstances" being present, the existence of such special circumstances merely engages a discretionary power to consider whether to allow a variation of a security for costs order. On the exercise of that discretion, all of the factors that I have otherwise identified under the inherent power of the court to vary interlocutory orders would equally be relevant to the exercise of the discretion under r 675 of the UCPR. They point against the exercise of the discretion to allow the variation for the reasons previously explained.
[121] Had the discretion under r 675 of the UCPR been enlivened, I would have declined to exercise that discretion so as to allow the variation on the same basis I declined to exercise the discretion under the inherent power.