Diamond v Baulkham Hills Shire Council

Diamond (the applicant) sought to appeal a decision of the Supreme Court of New South Wales, which had granted an application by Baulkham Hills Shire Council (the respondent) for security for costs against Mr Diamond. The dispute concerned an application by the Council for security for costs to be provided by Mr Diamond, who was not a party to the original proceedings but was alleged to have a sufficient interest and an active role in the litigation.

The primary legal issue before the Court of Appeal was whether the Supreme Court had erred in law by ordering security for costs to be provided by a non-party. This involved considering the circumstances in which a court may exercise its discretion to order security for costs against an individual who, while not formally a party to the proceedings, is alleged to be controlling or funding the litigation and is potentially a "man of straw" unable to meet any costs order.

The Court of Appeal, comprising Sheller JA and Cole AJA, dismissed the application for leave to appeal. Their Honours found no error in the Supreme Court's exercise of discretion. The reasoning likely centred on the established principles allowing for security for costs against a non-party where that party is effectively prosecuting or defending the proceedings and there is a real risk that the costs order would be unrecoverable from them. The court would have considered the extent of Mr Diamond's involvement and financial standing in reaching its conclusion.

The application for leave to appeal was dismissed with costs.