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1. LEEMING JA: By judgment delivered on 28 April 2026, this Court granted leave to appeal, allowed an appeal, set aside various orders of the Local Court ordering security for costs in the amount of $150,000, noted the deed poll dated 28 October 2025 executed by AMAL Security Services Pty Ltd as trustee for Privity Private Lending Trust and Nostro Claimco Pty Ltd in favour of Titus Tekform Pty Ltd and ordered that Nostro Claimco Pty Ltd pay $20,000 into the Local Court as security for costs for Titus Tekform including the costs of any enforcement against AMAL under the deed poll: Nostro Claimco Pty Ltd v Titus Tekform Pty Ltd [2026] NSWSC 445. Subsequently, both sides have exchanged submissions (in chief and in reply) as to costs, both in this Court and in the Local Court. What follows presupposes familiarity with those reasons.

Costs in this Court

2. The salient matters relevant to the discretion as to costs in this Court are as follows.

3. First, leave to appeal was opposed by Titus Tekform, which also denied material error, and rejected the proffered deed poll. On all these issues, Nostro Claimco succeeded. On that basis, Nostro Claimco seeks its costs.

4. Yet Titus Tekform points to the facts that (a) the summons was amended on the day of the hearing, (b) a further amount of $20,000 of security was offered on the day of the hearing, and (c) substantial additional evidence was supplied on the day before the hearing. Titus Tekform maintained that either there should be no order as to costs, or that it should pay a fraction of Nostro Claimco’s costs.

5. The starting point is that costs follow the event. The appeal was allowed, and the orders for which Nostro Claimco contended were made over the opposition of Titus Tekform. On all three of the principal issues in this Court, Nostro Claimco succeeded and Titus Tekform failed. Is there any sound basis to depart from the rule that costs should follow the event?

6. The amendment to the summons reflected (a) the settlement of the proceedings involving the other former client sued in the Local Court, and (b) the fact that AMAL had executed another deed poll and was willing to proffer $20,000 by way of security. Thus the amendment does not add to the second point. Turning to the third point, the additional evidence reflected the current financial position of AMAL and the trust assets. It was in better form, but did not materially affect the re-exercise of discretion to order security for costs. I do not regard that as materially informing the discretion as to costs.

7. The real question is whether the different stance adopted by Nostro Claimco – namely, a somewhat differently worded deed poll, this time executed in advance of the hearing and so available to Titus Tekform irrespective of the outcome of the appeal, together with $20,000 paid into Court – warrants departure from the ordinary rule in UCPR r 42.1. I do not think that it does. The differences are relatively minor. Further, Titus Tekform made it clear during the hearing that it rejected the benefit of a promise in a deed poll, and maintained its claim that it sought $150,000 or something like that amount, actually paid into Court or supported by a bank guarantee, and so the different stance did not alter the matters in issue between the parties.

8. The result is that there is no sound basis to depart from the ordinary rule. Titus Tekform should pay Nostro Claimco’s costs of its appeal.

Costs in the Local Court

9. Nostro Claimco seeks an order that Titus Tekform pay its costs on an indemnity basis, by reason of the notice of motion being dismissed, the uncommercial approach adopted by Titus Tekform, and the inflated and untenable claims for security. On the other hand, Titus Tekform says that Nostro Claimco should pay its costs, either in their entirety, or by way of fall-back, until 21 August 2025 when Nostro Claimco first propounded a deed poll, with no order as to costs thereafter. It says that the result of the appeal is that it obtained security, and not merely in the form of a deed poll, but also in the payment of $20,000 into court. It says that it was “entirely justified” in filing its motion, and that the real issues were the form of any security and quantum. In the alternative, it says that because Nostro Claimco has succeeded on a different basis, there should not be any order for costs after 21 August 2025 when the deed poll was proffered.

10. The salient matters relevant to the discretion as to costs of the Local Court are as follows.

11. First, neither party contends that the other led the Local Court astray in reasoning that the proffered deed poll was inadequate because it could not be enforced by Titus Tekform, even though that company was named in it. Instead, that was an error reached by the Local Court independently of the parties’ submissions.

12. Secondly, Nostro Claimco was a third party assignee of the debts of another, of no worth, and prima facie should be required to provide security or explain why it should not.

13. Thirdly, the claimed security sought by Titus Tekform was extravagant and untenable. As was made clear in the earlier judgment, I do not accept that $350,000 or anything like it could be a genuine estimate of Titus Tekform’s assessed costs, nor that the costs of five former clients all sued for the amounts owed on a closing-out of their accounts was $1.75 million or anything like it. When the time came to adduce evidence of the future costs, some 40% of the claim was abandoned, and significant aspects of what remained were, to say the least, problematic. Some of those difficulties are identified in my earlier reasons. The two proceedings in the Local Court, based on claims for debts of $90,501.60 and $46,307.19, were said to give rise to costs of $491,711.50. It simply cannot be right that the costs for which a defendant is entitled to security are more than triple the costs of the claims.

14. It is worth pausing on aspects of the significance of this. It is not merely that the demands should never have been made. The effect of propounding untenable demands for security was to lead to a dispute that was incapable of resolution other than by the Court. It is difficult to conclude other than that at least some of the clients and their lawyers failed to adhere to the obligations imposed on them to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

15. Consistently with the above, Nostro Claimco promptly pointed out that the costs were unjustified and unjustifiable, to which there was no meaningful response.

16. Fourthly, at no time did Nostro Claimco deny that some form of security for costs was appropriate.

17. In short, from the outset, Nostro Claimco behaved reasonably. From the outset until the hearing in this Court, Titus Tekform behaved unreasonably.

18. I have considered whether, in order to mark the Court’s disapprobation of Titus Tekform’s costs, it should pay the whole of Nostro Claimco’s costs on an indemnity basis. However, I think that should not occur, in circumstances where ultimately Titus Tekform obtained the benefit of security exceeding that which was proffered in the Local Court. I do not accept Nostro Claimco’s submission that the notice of motion was dismissed. The order made by this Court, standing in the shoes of the Local Court, was that the motion be otherwise dismissed, in light of the security which Nostro Claimco belatedly proffered.

19. I have also considered Titus Tekform’s submissions based on separate costs orders for different temporal periods. I do not think that is appropriate. For one thing, these are costs of an interlocutory application in the Local Court, and should not be overly complex. But the main reason is that so far as the evidence discloses (and exactly what occurred between February 2025 and the filing of the motion is not clear) Nostro Claimco behaved reasonably and Titus Tekform did not.

20. Ultimately the position is that Titus Tekform has obtained security for costs, in substantially the form proffered by Nostro Claimco, but with the additional benefit of $20,000 paid into Court. That tells in favour of an intermediate exercise of discretion. On the other hand, the inappropriate conduct of Titus Tekform was in substance the major cause for the incurring of all of the costs. I think the appropriate order is for Titus Tekform to pay one half of the costs of Nostro Claimco of the motion.

21. To be clear, I am conscious that there were in fact two motions in the Local Court, both seeking security for a very substantial sum, in respect of the two separate proceedings brought by Nostro Claimco against Titus Tekform and another former client. One of those proceedings has, relatively recently, been compromised, on terms not known to me. It is quite possible that Nostro Claimco’s costs of Titus Tekform’s motion are considerably less than its costs opposing the security that was sought in the Local Court, because some of those costs are attributable to the other proceeding. But so far as I can see, the fact that the other proceeding has been settled on terms not known to me has no relevant bearing on the exercise of the discretion as to costs, and neither party has made any submission to the contrary.

Orders

22. The result is that Titus Tekform should pay Nostro Claimco’s costs in this Court, and one half of its costs of the motion for security of costs in the Local Court. The costs order in this Court includes the costs of the applications for costs, where in substance Titus Tekform has failed.

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