Active Skin Pty Ltd v Yey Pty Ltd

Active Skin Pty Ltd sought to determine the quantum of security for costs that it was required to provide to Yey Pty Ltd. The application was heard by Baird J.

The central legal issue before the court was whether the quantum of security for costs could be calculated by reference to the Federal Court Rules (FCRules) when the court had not yet made an overarching order referring costs to taxation under those rules. Active Skin argued that without such an order, the security should be calculated according to the Rules, as that was the extent of costs Yey would be entitled to if successful. Yey, conversely, quantified the security based on the FCRules.

Baird J considered the relevant provisions of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCC Act) and the Rules. Section 80 of the FCC Act and Rule 21.01 of the Rules empower the court to order an applicant to give security for costs in an amount and manner the court directs. Rule 21.02(2) outlines various ways the court can make an order for costs, including setting the amount, the method of calculation, or referring costs for taxation. Rule 21.10 states that, unless the court orders otherwise, a party entitled to costs is entitled to costs in accordance with Parts 1 and 2 of Schedule 1 and proper disbursements. The court noted that Active Skin did not explain why it would not be entitled to seek costs in accordance with the FCRules should it succeed.

The court found that the quantum of security was to be determined by reference to the FCRules, as Yey had quantified its anticipated recoverable costs on that basis. The court ordered Active Skin to provide security for Yey's costs in the sum of $65,000.