17 As I say, while it would be possible to use mediation as the end of the next stage for security purposes, and the applicant and third respondent have already agreed to do this, I consider having regard to the complex issues of law and fact in relation to actions for loss and damage allegedly arising out of breach of the Trade Practices Act 1974 (Cth) and the Corporations Act 2001 (Cth), where the sum claimed by the applicant (with interest) is in the region of $20,000,000.00, it is inevitable that there will be an overlap of the work required to be done for any substantive mediation, certainly one that is likely to be successful, and the getting up of the action generally for trial. It is this consideration - in effect that the preparation for mediation will benefit from getting up, and that getting up will benefit the mediation - that leads me to allow security to the point of entry.
18 When one also takes into account the fact that the Freehills respondents have limited their claim for security so that it does not include the items listed above, then there is not all that much at stake between the position of the applicant and the Freehills respondents, save for the actual estimation of quantum.
19 So far as quantum is concerned, the Freehills respondents have produced a draft bill of costs in support of their application for further security. This is questioned on a number of fronts by the applicant. I will deal with some of the more important points made in respect of it, as these bear upon the ultimate assessment I need to make.
20 The first item in the draft bill of costs is for "additional work done to date". Counsel for the applicant, rightly in my view, submits that the amount of $20,000.00 included in the calculation for this item is simply designed to increase the initial amount of security provided for of $55,000.00, by $20,000.00. I tend to agree with the applicant that that is not appropriate.
21 While counsel for the applicant suggested that it is open to the Court to vary an order for security where there are materially changed circumstances or discovery of new material which could not reasonably have been put before the Court on the hearing of the original application, I am not satisfied that this is such a case. See generally Gurtler v Finance Now Pty Ltd [2009] FCA 631.
22 The second item is in respect of completing discovery and inspection. For this a total of $40,000.00 is suggested. Item 2.2 concerns inspection of documents held by the liquidators. It seems there are considerable volumes of materials in this category for discovery and that the costs for inspection will be large. The applicant reasonably suggests these need not be inspected for the purpose of mediation. However, on the approach I prefer, they will need to be inspected in due course, although not until after any unsuccessful mediation.
23 Counsel for the applicant also questions whether there will in the circumstances be any proper basis for any further or better discovery, as item 2.3 of the draft bill suggests, by which further costs in the amount of $10,000.00 might be incurred.
24 Item 3 of the draft bill of costs deals with pleadings and particulars. Particular attention has been placed on a proposed amendment to para 44 of the statement of claim. The Freehills respondents say that this raises a number of new directions. The applicant is at pains to contend it should not involve major amendments to the defence. The respondents have anticipated additional work under this item totalling $25,000.00. I suspect overall it may not require quite that much attention but understandably it will need to be carefully regarded.
25 Item 4 of the draft bill of the costs deals with experts. There is a related item 14 dealing with disbursements for expert fees totalling $150,000.00. The Freehills respondents have limited their current estimate to $90,000.00. Counsel for the applicant strongly presses the view that some of the fees of the applicant's experts seem excessive and in any event, that the expert evidence of a chartered accountant, Mr Barry Honey, should be considered unnecessary. In the event, following further exploration of the issues with counsel, I do not believe it can be said that the evidence of Mr Honey is irrelevant and unlikely to be helpful. The respondents through counsel accept that some of the expert fees are high and say they have made appropriate reductions in limiting their estimate to $90,000.00. While there have not been expert evidence orders previously made, the expert reports have been obtained by the respondents in order to deal with that put on by the applicants. There is no dispute between the parties in that regard.
26 Item 5 deals with non‑expert evidence, the applicant says this should not be the subject of security at this point but in light of my ruling I rule to the contrary. Such work may be informed by preparation for mediation and vice versa.
27 Similarly in relation to item 6 concerning additional directions hearings, for which an amount of $15,000.00 is estimated, one would expect up to the time of entry, security in an appropriate sum will be necessary.
28 Item 7, dealing with security for costs, and item 8, dealing with private mediation, also appear to be generally within the bounds of work that must be done leading up to and including the mediation. Calculations of $10,000.00 and $15,000.00 respectively are suggested. These are not the subject of any particular objection by counsel for the applicant.
29 Item 11 of the draft bill of costs is in respect of "general care and conduct" by reference to which an amount of $142,000.00 is estimated, being 20% of the earlier subtotal having regard to matters listed in item 41(a) - (f) of the scale of costs. However, as noted above, for the next stage the respondents estimate $42,000.00. I accept that this is a complex case, both factually and in relation to the matters of law involved and sums claimed, and that the matter will require a considerable amount of care and attention and a proper allowance in this regard ought be provided.
30 There is, by way of general comment, no doubt that the Freehills respondents are entitled properly to prepare their case in response to a claim of this significance. There should be no unreasonable crimping of the work to be done on behalf of the Freehills respondents and so of the estimate of security required.
31 In respect of all work to be done in the proceeding, the draft bill of costs prepared by the respondents estimates total professional fees of $852,000.00 and total disbursements of $626,000.00, making a total of professional fees and disbursements claimed in the sum of $1,478,000.00. However, as noted above, in relation to this application for security, the Freehills respondents say that it is contemplated this stage of the proceedings (up to the matter being set down for trial) would only encompass the items (or part of the items) from the draft bill in items 1 - 8 ($295,000.00), 11 ($42,000.00), 14 ($90,000.00) and 16 ($10,000.00) totalling $437,000.00. In respect thereof, they submit that security be in the sum of $250,000.00, which they say represents a considerable "discount" from the estimate contained in the draft bill of costs.
32 By proposing that this stage of proceedings be up to the matter being set down for trial, but that security should not be calculated by reference to the items 9 (preparation for trial during 2009 totalling $185,000.00), 10 (for trial totalling $230,000.00) and the balance of 11, and none of the disbursements anticipated for counsel's fees in items 12 and 13, the approach of the Freehills respondents is, in my view, a considered and reasonable one.
33 It should also be noted that while the third respondent has consented to an order that $135,000.00 security be provided, by agreement between the respondents, the third respondent does not intend to produce expert evidence and has left the adducing of such evidence to the Freehills respondents. This undoubtedly adds work for the Freehills respondents.