NICOLAOU v AIR LIQUIDE WA PTY LTD [No 2] [2025] WASC 360

(a) 29 April 2025 (Hobson April 2025 Affidavit), except for paragraphs 24 - 27, which were not read; and

(b) 18 August 2025 (Hobson 18 August 2025 Affidavit).

1. The defendant was also given leave to rely on a further affidavit of Michael Ian Hobson sworn on 27 August 2025 (Hobson 27 August 2025 Affidavit), which was filed without leave after hours yesterday, 27 August 2025. No objection was raised to the filing of that affidavit by the plaintiffs, which was also read by the defendant.
2. The defendant also relies on an outline of submissions filed on 18 August 2025.
3. The plaintiffs have not filed any evidence in relation to the Application. They rely on an outline of submissions filed on 25 August 2025. They accept that, in the absence of evidence of a change in the plaintiffs' circumstances, it will be appropriate for the Court to make orders requiring the plaintiffs to provide further security for the defendant's costs.
4. Whilst the plaintiffs accept that orders for further security are appropriate, there remains a dispute between the parties as to the stage of the proceedings for which security should be ordered and the quantum of the further security to be provided by the plaintiffs. That is the extent of the issues to be determined.

1. Attached to the Hobson April 2025 Affidavit is a draft bill of costs for the purpose of the Application, which Mr Hobson states sets out the defendant's estimated costs, taxed on a party/party basis, based on the maximum scale allowances in relation to the work relating to discovery and expert evidence, as set out at paragraph 21 of that affidavit. The defendant estimates such costs total $247,500 and it seeks security for its costs in that amount.
2. The draft bill of costs does not set out the hours estimated for each of the items of work referred to. Nor is the amount divided between the senior and junior practitioner.
3. In relation to discovery, the total amount estimated is $35,000, made up of:

(a) the defendant seeking and providing discovery of an estimated 300 - 500 documents at an estimated cost of $15,000;

(b) reviewing and considering discovery provided by the plaintiffs at an estimated cost of $12,500; and

(c) counsel's fees of $7,500 for counsel to settle the defendant's discovery and consider the plaintiffs' discovery.

1. Mr Hobson's estimate of future costs and the draft bill of costs in relation to discovery does not include costs of any interlocutory application concerning discovery. Mr Hobson deposes in the Hobson 18 August 2025 Affidavit that he estimates the defendant's reasonable assessed costs of such applications to be in the range of $8,000 - $12,000 per application. It was submitted that some allowance may be made for the prospect of such interlocutory applications being necessary.
2. The draft bill of costs then provides an estimate of costs for expert evidence from three separate experts in the fields of engineering, forensic accounting and business analysis. For each proposed expert, the defendant's estimated costs are $67,500, which includes estimated legal costs for:

(a) identifying a suitable expert of $2,500;

(b) engaging and briefing the expert of $5,000;

(c) the expert's fees for preparing the report and, if necessary, attending the site of $45,000; and

(d) conferral of expert witnesses and production of a joint report of $15,000.

1. No further breakdown is provided. The defendant's total estimated costs relating to expert evidence is $212,500.
2. The draft bill of costs also includes an additional amount of $10,000 under the heading 'Other Work Required', which includes preparation and attendance at an estimated three case management hearings, corresponding with the plaintiffs and other unidentified disbursements.
3. In the Hobson 27 August 2025 Affidavit, Mr Hobson deposes to reasons why, in the defendant's view, there should not be a mediation until after expert evidence. Counsel for the plaintiff elaborated on this issue in oral submissions.
4. Mr Hobson also sets out in the Hobson 27 August 2025 Affidavit his estimate of the defendant's reasonable party/party costs of preparing for and attending a mediation conference of one day's duration after discovery and before exchange of expert evidence. He estimates such costs would be $38,000, as set out in that affidavit.

The defendant's position in relation to further security for costs

1. The plaintiffs accept that the appropriate next step in the proceedings is the completion of discovery but do not agree that it is appropriate for the parties to exchange expert evidence immediately following discovery. They submit that, as is usual, the parties ought to be required to attend a mediation conference following completion of discovery. Then, if the matter is not settled at mediation, the plaintiffs say, it will be appropriate for the parties to prepare the matter for trial which may include the exchange of expert evidence.
2. The plaintiffs refer to case management principles as set out in O 1 r 4B RSC and submit that the parties should not be required to incur (and the plaintiffs should not be required to provide security in respect of) the significant costs of obtaining expert evidence in circumstances where the matter may be resolved at mediation.
3. The plaintiffs further submit, in effect, that at this early stage of the proceedings and prior to completion of discovery, it is premature to determine the nature and scope of any expert evidence, and to require the plaintiffs to provide security for any costs relating to expert evidence.
4. The plaintiffs submit that the appropriate course is for the matter to proceed to a mediation conference following completion of discovery, and that orders be made requiring the plaintiffs to provide security for the defendant's costs up to and including attendance at a mediation conference. It was submitted on the plaintiffs' behalf that, having regard to the nature of the plaintiffs' claim, a reasonable estimate of the recoverable party/party costs the defendant would incur, up to and including attendance at a mediation conference, would be in the order of $20,000 to $30,000.

1. The relevant principles to be applied in considering an application for security for costs are well established and were set out in Nicolaou v Air Liquide.[2] They are not in dispute, and it is not necessary that I repeat them.
2. There is no evidence of any change in the financial position of the plaintiffs. As such, as is accepted on their behalf, it is appropriate that the plaintiffs should provide further security for costs. Consistent with my earlier decision in Nicolaou v Air Liquide, such security should be provided by the plaintiffs jointly and severally.
3. Having considered the defendant's affidavits and the parties' submissions and having regard to case management principles generally, I have determined that further security for costs should not be given, at this stage, in relation to expert evidence.
4. Although it is the defendant's view that there should not be a mediation until after all of the steps outlined in the Hobson 27 August 2025 Affidavit have been completed, I am not persuaded that there is no utility in a mediation at an earlier stage of the proceedings.
5. What is proposed by the defendant, effectively requires all steps relevant to expert evidence in the three disciplines referred to having been completed, including conferral between experts and the filing of joint reports. The defendant's estimated costs of $212,500 associated with such are significant.
6. As acknowledged on behalf of the plaintiffs, there are no fixed rules as to when a mediation should take place. This will vary having regard to the facts, circumstances and nature of each case, and the matters in issue.
7. In relation to this case, I am not persuaded that it is necessary for the parties to have completed expert evidence before engaging in a mediation conference. In accordance with general case management principles, in my view, once discovery has been provided by the parties, the matter should be referred to mediation before further significant expense is incurred, and which may militate against a resolution of the proceedings.
8. Discovery and inspection should be completed before any orders are made for leave to adduce expert evidence. Further consideration will then need to be given to the nature and extent of the expert evidence required and, having regard to the significant costs indicated from the defendant's perspective, the most efficient way in which such may be dealt with.

1. For these reasons, I will make orders that further security is to be provided by the plaintiffs, limited, at this stage, to security for the defendant's costs from close of pleadings until the completion of discovery and inspection and the parties' attendance at a mediation conference. I have determined that the amount of the further security to be provided is $42,500.
2. I consider that amount is just in the circumstances of this case, and reflects a reasonable estimate of likely taxable costs, having regard to the applicable costs determinations and scales, noting it is not a precise arithmetical exercise.
3. I will hear from the parties as to the form of the orders to be made to give effect to these reasons and in relation to the costs of the Application.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Nicolaou v Air Liquide WA Pty Ltd [2024] WASC 309 (Nicolaou v Air Liquide).

[2] Nicolaou v Air Liquide [26] - [33].