Aligned Investment Management v Aligned FM

In the Federal Court of Australia, Aligned Investment Management sought security for costs from Aligned FM. Aligned Investment Management is the plaintiff in a proceeding seeking damages for breach of fiduciary duty and negligence, while Aligned FM is the defendant. The plaintiff's sole asset is a right of indemnity from the assets of a trust. Aligned FM applied for the plaintiff to provide security for costs, which the plaintiff opposed, arguing that the court lacked jurisdiction because its only asset was a right of indemnity. The court had to determine whether the jurisdiction to order security for costs was enlivened under these circumstances, and if so, whether the court should exercise its discretion to order security.

The court considered the relevant authorities and held that the jurisdiction to order security for costs was indeed enlivened. The plaintiff's right of indemnity from the trust assets constituted an asset that could potentially be used to satisfy a costs order. However, the court also noted that the practical effect of ordering security would be limited due to the existence of cross-claims between the parties. The court held that the plaintiff's right of indemnity from the trust assets was an asset that could potentially be used to satisfy a costs order, and therefore the jurisdiction to order security for costs was enlivened. However, the court exercised its discretion not to order security due to the limited practical effect of such an order given the cross-claims.

Ultimately, the court dismissed the application for security for costs. The court found that while the jurisdiction to order security was enlivened, the discretionary factors weighed against ordering security in this case. The limited practical effect of ordering security, coupled with the existence of cross-claims, led the court to conclude that ordering security would not serve a just or proportionate outcome. Therefore, the application was dismissed.