Davaria Pty Limited v 7-Eleven Stores Pty Ltd (No 5)

Davaria Pty Limited sought variation of an earlier order for security for costs, while 7-Eleven Stores Pty Ltd opposed the application. The dispute was heard by the Federal Court. The applicants sought an increase in the amount of security they were required to provide for costs, as well as a variation of the dates on which the security was to be paid. The legal issues before the court were whether the applicants' expenditure on discovery had exceeded what was anticipated when the earlier orders for security were made, and whether it was appropriate to vary the orders in light of this. The court considered whether it was relevant that the applicants had not informed 7-Eleven of the increased costs, and how this should be taken into account in determining the quantum of security required.

The court held that the applicants' expenditure on discovery had exceeded that anticipated when the earlier orders were made, and that it was appropriate to vary the orders accordingly. The court took a broad-brush approach to determining the appropriate amount of security, and found that it was not relevant that the applicants had not informed 7-Eleven of the increased costs. The court emphasised that the purpose of security for costs was to ensure that the applicant was able to meet their costs if they were unsuccessful in the proceedings, and that the amount of security required should be sufficient to achieve this. The court held that it was appropriate to vary the orders to require the applicants to provide a seventh tranche of security in the sum of $301,500, to be paid in eight instalments over the next year. The court also varied the dates on which the security was to be paid, to allow the applicants more time to meet their costs.

The orders of the court were that the earlier orders for security be vacated, and that the applicants provide a seventh tranche of security for 7-Eleven's costs in the sum of $301,500, to be paid in eight instalments over the next year. The court emphasised that if the applicants failed to provide the security in accordance with the orders, the proceedings against 7-Eleven would be stayed until such time as the security was provided, or further order of the court. The court's decision highlights the importance of ensuring that adequate security for costs is provided in complex litigation, and the need for parties to keep each other informed of their costs expenditure.