Home / Workflows / Preparing a NSW security for costs application
NSW · Litigation

Preparing a NSW security for costs application

Security for costs is discretionary relief requiring the court to balance the defendant's interest in protection against the plaintiff's right of access to justice. Plaintiffs who are corporations, non-residents, or insolvent are most commonly ordered to provide security.

In short

This is an 8-step workflow for preparing a NSW security for costs application by a defendant under the UCPR r 42.21 and s 1335 of the Corporations Act 2001 (Cth).

Time: 10-20 hours depending on quantum evidence and response.
Audience: NSW litigation lawyers acting for a defendant seeking security for costs against an impecunious corporate, non-resident, or individual plaintiff.
Run this workflow with Quillio — free trial
Prerequisites

Before you start

  • Statement of claim served and defence contemplated or filed
  • Client costs budget for the proceedings prepared
  • Information about the plaintiff's financial position gathered
  • Instructions on the desired quantum and form of security
8 steps

The workflow

1

Identify the statutory basis

Identify the statutory or rule-based ground — UCPR r 42.21, s 1335 Corporations Act, or the inherent jurisdiction — and the factors relevant to discretion.

Tools: Quillio
Uniform Civil Procedure Rules 2005 (NSW) r 42.21
2

Investigate the plaintiff

Investigate the plaintiff's financial position through ASIC searches, property searches, and any publicly available information.

Tools: ASIC
Corporations Act 2001 (Cth) s 1335
3

Quantify the costs

Prepare an estimate of party/party costs through to the next procedural stage, supported by a costs consultant's affidavit where possible.

4

Draft the notice of motion

Draft the notice of motion seeking the specific form and amount of security, with a schedule setting out the quantum calculations.

Tools: Quillio
5

Prepare supporting affidavits

Prepare supporting affidavits from the solicitor and costs consultant addressing financial position, costs estimate, and delay in making the application.

Tools: Quillio
6

Draft written submissions

Draft written submissions addressing each of the Bell Wholesale factors and analogous considerations relevant to the discretion.

Tools: Quillio
Bell Wholesale Co Ltd v Gates Export Corp (1984) 2 FCR 1
7

File, serve and manage response

File and serve the motion. Review the plaintiff's response affidavit and prepare any reply evidence addressing stultification arguments.

8

Attend the hearing and implement order

Attend the hearing and, if successful, implement the order (bank guarantee, payment into court, bond) and set the timetable for stay if security is not provided.

Outcome

What you will have at the end

An order for security for costs in an appropriate amount and form, providing the defendant with protection and creating leverage for early resolution.

Common issues

  • Delay in making the application undermining the discretion
  • Under-evidenced costs quantum
  • Not addressing the stultification argument
  • Overlooking the ability of shareholders to fund the plaintiff
  • Choosing a form of security the plaintiff cannot provide, leading to stay
Use with Quillio

Run this workflow on a real matter

Quillio drafts the motion, affidavit skeleton, and written submissions mapping the Bell Wholesale factors to the evidence. See /practice-areas/litigation-lawyers or start a free trial.

This workflow is a general guide for NSW. Federal Court practice differs and should be confirmed for federal proceedings.

Try this workflow with Quillio.

Quillio can run this workflow on a real matter, with citations to current AU authority on every step. The free trial requires no credit card.

Start your free trial