Plaintiff v Defendant

1 By summons dated 30 January 2026, the defendant, Vitrafy Life Sciences Ltd ('Vitrafy'), seeks an order for security for its costs of discovery in the amount of $90,000 from the plaintiff, Edward El Zain ('Mr El Zain'). The application is made in reliance upon the inherent jurisdiction of the Court to order security for costs. It has some unorthodox features in that Vitrafy seeks to rely upon the Court's inherent power to order security for costs rather than under r 62 of the Supreme Court (General Civil Procedure) Rules 2025 (Vic) ('the Rules') as is more common.

2 Further, Vitrafy seeks to rely upon the Court's inherent power in circumstances where the plaintiff is an individual ordinarily present in the jurisdiction, and where the applicant for security accepts that, on the present evidence, Mr El Zain will have the capacity to satisfy any adverse costs order. The basis of Vitrafy's application is that the interests of justice require the making of an order for security because there is a real risk that Mr El Zain will be unwilling to satisfy any costs order, with the consequence that Vitrafy will be forced to incur the additional expense of enforcement action and that such is contrary to the interests of justice.

3 In order to place Vitrafy's application in its proper context, it is convenient to set out some of the relevant background.

4 Mr El Zain commenced this proceeding against Vitrafy by writ filed 4 October 2021.

5 Mr El Zain and Vitrafy were parties to a memorandum of understanding entered into on 18 December 2018 ('the MOU'). The MOU concerned intellectual property related to high-speed ultra-low temperature chilling technology designed to preserve food and biological material. The MOU's stated purpose was to provide a framework for the facilitating and granting of an exclusive licence from Vitrafy to Mr El Zain.

6 The MOU was extended for 12 months by notice in writing given by Mr El Zain, dated 29 December 2019 ('the first notice').

7 The first notice extended the term of the MOU for 12 months. Shortly before the expiry of the that extended term, Mr El Zain purported to further extend the period of the MOU by issuing a second notice dated 29 December 2020 ('the second notice'). Vitrafy disputed the validity of the second notice, taking the position that the MOU could only be extended once.

8 The writ included a prayer for relief in the form of a declaration that the second notice was valid and that the period of the MOU had been further extended by 12 months to 31 December 2021. Additionally, the writ included a claim for damages, with the statement of claim identifying breaches of the MOU that occurred in the period prior to the giving of the second notice.

9 On 5 November 2021, orders were made by consent pursuant to r 47.04 of the Supreme Court (General Civil Procedure) Rules 2015 ('the 2015 Rules') that there be a trial of a separate question:

On its proper construction does clause 4.7 of the MOU dated 18 December 2018 allow for more than one extension of the MOU?

10 The answer to the separate question necessarily determined that part of Mr El Zain's claim in which he sought declaratory relief as to the efficacy of the second notice. The answer would also determine whether it was open to Mr El Zain to serve further notices after the expiry of the extension of the MOU resulting from the second notice (assuming that it was valid).

11 The trial of the separate question took place on 7 December 2021, and judgment was delivered on 25 February 2022.[1] The reasons for judgment concluded that, on its proper construction, clause 4.7 did not allow for more than one extension of the term of the MOU. Orders were made to the effect that the second notice was ineffective to further extend the MOU and that no further extension notices could be issued.

12 Mr El Zain subsequently sought leave to appeal. That application was refused by orders of the Court of Appeal made 13 September 2022[2]. A subsequent application by Mr El Zain for special leave to appeal to the High Court was dismissed on 9 February 2023. On 22 March 2023, consent orders were made adjourning the directions hearing then listed for 24 March 2023 to a date to be fixed, pending the conclusion of conferral between the parties as to the consequences that followed from the dismissal of the special leave application.

13 At the Court's instigation, the proceeding was then listed for further directions on 16 August 2024, at which time Mr El Zain informed the Court that he had recently provided Vitrafy with a proposed amended statement of claim. Vitrafy submitted that Mr El Zain should not be permitted to proceed with any amended claim until such time as he had paid the costs ordered against him following the determination of the separate question on 25 March 2022, as well as Vitrafy's costs of the application for leave to appeal and its costs of the application for special leave to appeal. Relevantly, at that time, the costs ordered by this Court on 25 March 2022 had not been the subject of an order for immediate taxation.

14 Following an application by Vitrafy, the Court made orders on 28 March 2025 that Vitrafy's costs ordered to be paid by Mr El Zain on 25 March 2022 be taxed immediately.[3]

15 On 16 June 2025, following a mediation before a Costs Registrar Mr El Zain was ordered (by consent) to pay certain costs of the defendant referable to the determination of the separate question and the application for leave to appeal to the Court of Appeal, fixed in the sum of $152,500. The order required payment by 15 August 2025. When the time for payment fell due, no such payment was made.

16 On 30 November 2025, Vitrafy initiated an application for dismissal of the proceeding for non-payment of the costs order by sending correspondence to the Court that was to stand as its submissions in that application. Vitrafy had earlier put Mr El Zain on notice of a proposed application based on the non-payment of the costs order by letter dated 4 November 2025. On 1 December 2025, the costs were paid satisfying the costs order.

17 Evidence tendered on Mr El Zain's behalf in opposition to this application includes a bank statement for an account held by him at the National Australia Bank, which relevantly shows that Mr El Zain has held at least $2 million in that bank account for almost a year and, in particular, throughout the period from August to December 2025.

18 Against that background, Vitrafy submits that there should be an order made for the provision of security for its costs of discovery in the amount of $90,000, as the interests of justice require the making of such an order.

20 First, it submits that Mr El Zain's past conduct in failing to comply with the consent order made 16 June 2025, which required payment of costs by 15 August 2025, evidences an unwillingness on his part to comply with any costs order that may be made consequent upon his claim being dismissed, and that in such circumstances, Vitrafy will be required to incur the additional expense of enforcement action. It notes that Mr El Zain's belated payment of the 16 June 2025 costs order occurred only after Vitrafy had foreshadowed an application to strike out the proceeding for non-compliance with that order. Vitrafy further notes that, in the event that Mr El Zain's claim is dismissed at trial, no such incentive will remain. Ultimately, Vitrafy argues that the evidence discloses a real risk that it may face an unacceptably high degree of difficulty or delay in obtaining satisfaction of a costs order against Mr El Zain, and that this weighs powerfully in favour of ordering security.[4]

21 Secondly, Vitrafy notes that the oft-cited disinclination of courts to order security against natural persons is based on the rationale that impecuniosity should not prevent a natural person from accessing the courts.[5] Vitrafy submits that this rationale does not arise in the present case, as the evidence to date indicates that Mr El Zain could readily pay security in the sum now sought without the litigation being stultified.

22 Thirdly, Vitrafy submits that the claim that remains following the determination of the separate question faces significant hurdles, which weigh in favour of ordering security. It notes that Mr El Zain's case is one confined to common law damages for alleged loss suffered by reason of alleged breaches of cooperation and/or good faith obligations imposed by the express terms of the MOU or alternatively implied terms, and that in order to make out such a claim, Mr El Zain will be required to establish a causal connection between such breaches of the MOU and his alleged loss. In order to do so, it submits that Mr El Zain must establish the elements of a counterfactual, which requires proof of what a third party actor would do within certain confined timeframes. It argues that proof of what the third party actors would have done as opposed to what the plaintiff, or those within control of the plaintiff, would have done, is a challenging task.

23 In those circumstances, Vitrafy submits that the Court can proceed on the preliminary basis that:

(a) it is likely to be difficult for Mr El Zain to prove the counterfactual on which he relies in establishing causation; and

(b) on the face of it, Mr El Zain faces not insubstantial difficulties in making good that part of his claim.

24 In support of these submissions, Vitrafy points to Mr El Zain's apparent lack of enthusiasm in the prosecution of his case subsequent to the exhaustion of his appeal rights in respect of the separate question.

25 Mr El Zain does not contest that the Court's inherent jurisdiction to order security for costs permits an order, in an appropriate case, for provision of security for costs by an individual. The Court recognises that the purpose of this power is to ensure that a successful respondent to a claim will have a fund available within the jurisdiction of the Court, against which the respondent, if successful, can enforce a judgment for costs in their favour.[6] However, Mr El Zain submits that his delayed compliance with the previous costs order does not justify the inference that he will breach an order made in the future to pay costs such that the costs will not be paid.

26 Secondly, Vitrafy submits that a party's unwillingness to meet a costs order, taken alone, is not a sufficient basis to justify an order for security for costs. Rather, it submits that a party's past unwillingness to pay costs, often evidenced by the taking of steps to structure themselves so as to be judgment-proof, is a relevant factor which may heighten a court's concern that a costs order will not be discharged at all, rather than merely delayed.

27 Thirdly, Mr El Zain submits that the purpose of the discretionary power to order security is not to obviate the need of a defendant to enforce a costs order.

28 In essence, Mr El Zain submits that Vitrafy is asking the Court to order the provision of security from a natural person, resident in the jurisdiction, not shown to be impecunious and with no outstanding costs orders or unmet financial obligations, for its own convenience, so as to avoid any potential need for enforcement steps.

29 Further, whilst Mr El Zain acknowledges that the risk of an order for security stultifying a proceeding is a factor which often points against the making of such an order, it does not follow that the ability to comply is a factor in favour of the making of an order for security. Rather, he submits that the absence of any evidence of stultification simply removes one argument otherwise available to a person confronting an application for security.

30 Finally, Mr El Zain submits that his case is an arguable one that raises in a conventional way a claim for damages for a lost opportunity resulting from Vitrafy's breach of contract. In those circumstances, he submits that the Court is not in a position to make a meaningful assessment to Mr El Zain's detriment based on the pleadings alone.

31 The Court's inherent jurisdiction to order security for costs is an adjunct to its power to regulate its own procedure. This inherent jurisdiction permits the Court to require security for costs where that is necessary in the interests of justice in circumstances that fall outside the categories found in r 62.02 of the Rules.[7]

32 The exercise of the discretion to order security for costs involves a balancing exercise. In Stuart v Said,[8] Maxwell P and McLeish JA described the balancing exercise as one which involved a court's concern not to place obstacles in the way of a plaintiff who seeks to invoke its jurisdiction to secure a remedy using its processes, against the concern that a defendant who is ultimately successful in resisting a claim might find that order to be worthless. In such a case, the operation of the costs regime, designed to discourage unnecessary litigation, may be undermined.[9]

33 Whilst the breadth of the inherent jurisdiction does empower the Court to make an order for costs in circumstances where an individual plaintiff who is not impecunious may merely be unwilling to comply with a future costs order, the proper exercise of that jurisdiction will only arise in circumstances where such an order is necessary in the interests of justice.

34 In my view, the fact that, on a previous occasion, Mr El Zain failed to comply promptly with an order that he pay a costs order does not permit the necessary inference that the same unwillingness may arise in the future. Moreover, even if I were to infer that a similar want of promptitude may arise at the conclusion of the trial if Mr El Zain's claim were to fail, I would not regard it as necessary in the interests of justice to order the provision of security in order to accommodate inconvenience or delay by Vitrafy in recovery of its costs.

35 Whilst inconvenience or delay in recovering costs may, in an appropriate case, alongside other matters, be relevant to the exercise of discretion in favour of an order for security for costs, such unwillingness is almost invariably accompanied by additional circumstances, such as the claim being brought by a corporate entity[10] or where an individual has already failed at trial such that a court on appeal, hearing an application for security for the costs of appeal, is well placed to form a view as to the likelihood of success.[11]

36 Whilst I accept that Mr El Zain's case is far from straightforward, given the challenges of proof properly identified by Vitrafy, any difficulty in ultimately adducing the necessary proofs in order to obtain a remedy aside from nominal damages consequent upon success of an orthodox claim for breach of contract, is not a matter which can appropriately be assessed by a court at the pleading stage.

37 Whilst Mr El Zain's apparently dilatory prosecution of the claim is regrettable, such conduct does not, in itself, speak to a weakness in the claim such as would now justify an order for security. As part of the balancing exercise, it is necessary to bear in mind that the common law has long regarded it as a fundamental right of a citizen to have access to the courts. Save in limited circumstances, an individual plaintiff is not required to provide security at the trial stage.[12] Although an order for security in the present case would not deprive Mr El Zain of that right, given that he is not impecunious, an order that a plaintiff provide security for costs will give rise to some prejudice because that party is held out of funds for the duration of a proceeding. In any case it will produce an additional hurdle in the prosecution of the action.

38 Having regard to my conclusion that this is not an appropriate case for ordering security, it is unnecessary to consider the appropriate quantum save to say that the amount of security sought which relates to the costs between now and the completion of discovery, the sum of $90,000, does not appear unreasonable.

39 It follows, therefore, that the application for security will be dismissed. My preliminary view is that costs should follow the event. If there is any objection to this, my chambers should be notified within 24 hours. In the absence of such notification, orders will be made requiring Vitrafy to pay Mr El Zain's costs of the application.

[1] El Zain v Vitrafy [2022] VSC 79.

[2] El Zain v Vitrafy Life Sciences Ltd [2022] VSCA 195.

[3] [2025] VSC 144.

[4] Charwood Industries Pty Ltd v Cubitt IR [1995] FCA 126 (per Gummow J).

[5] Knight v Beyond Properties Pty Ltd [2005] FCA 764, [32] (per Lindgren J).

[6] Commissioner of Taxation v Fasiliades [2016] FCAFC 170, [72].

[7] Von Marburg v Aldred [No 3] [2017] VSC 146, [39].

[8] (2021) 65 VR 50, [23].

[9] Troiano v Voci (2019) 61 VR 511, 518 [23] (Riordan J).

[10] Such as in Charwood Industries, which was part of a group of companies and whose own financial circumstances were somewhat opaque.

[11] Briar v Wilson [2020] VSCA 338, [15].

[12] For example, such as those circumstances referred to in Rules 62.02(1)(a)-(e) of the Rules.