here - Gordon & Jackson

delay as the application was brought soon after the defendant first came to
appreciate the true extent of the plaintiff’s financial difficulties. Where the
plaintiff has incurred substantial costs and the defendant has stood by, the
delay factor will probably be decisive in resolving the application. In PG
Gabel Pty Ltd v Katherine Enterprises Pty Ltd (1977) 2 ACLR 400, there
were numerous interlocutory applications and where the defendant had
known of the plaintiff’s pecuniary state from the outset. To adopt any other
course would be grossly unfair to the plaintiff.
Amount of Security for Costs
20. Where there is a counterclaim, this must be “merely defensive” not raise new
issues.
21. In the event the Court exercises its discretion to make an Order for Security
for Costs against a plaintiff, the plaintiff can argue the quantum of the costs
and that it should not be a complete indemnity for the defendant. 26
Security Order may stultify the litigation
22. The court will also give consideration as to whether ordering costs against
the plaintiff may stultify the litigation 27 however “it is the poverty of the
company that attracts the power” even where the plaintiff has a strongly
arguable case.
23 But, the possibility or probability that a corporate plaintiff will be deterred
from pursuing its claim by an order for security is not, without more, a
sufficient reason for not ordering security. 28
Same facts in Claim and counterclaim
24. The Court also needs to consider in exercising its discretion to order security
for costs:
26 Saint-Gobain RF Pty ltd v MAAX SPA Corp Pty Ltd [2004] VSC 335 at [38] per Habersberger J.
27 Epping Plaza Fresh Fruit & Vegetables Pty ltd v Bevendale pty Ltd [1999] 2 VR 191 at 195.
28 Keary Developments Ltd v Tarmac Construction Ltd [1995] 3 All ER 534 at 539.
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