Global Finance Group Pty Ltd (in liq) v Marsden Partners (a firm)

The case before the court involved a dispute between Global Finance Group Pty Ltd, in liquidation, and Marsden Partners, a firm. The primary issue was whether the plaintiff, who had no assets in Western Australia and was subject to a litigation funding agreement, was required to provide security for the costs of the proceedings and, if so, the appropriate amount and form of such security. Specifically, the dispute centered on whether an undertaking or a deed of guarantee by the litigation funder would suffice, or if a bank guarantee was necessary.

The court had to determine the principles governing the requirement of security for costs, particularly in the context of a plaintiff in liquidation with no assets within the jurisdiction. The case referenced Associated Euro Atlantic Shipping Corporation v Maritime Union of Australia & Ors, where the Federal Court had previously considered the issue of security for costs. The judge in the current case noted that the real contest was over the amount and form of the security. The plaintiff proposed that security should be provided in the form of a "P & I Club" letter of undertaking, which is commonly used in Admiralty cases. However, the judge found that there was no precedent in the general jurisdiction of the Federal Court for accepting such letters of undertaking as security for costs.

Regarding the amount of security, the judge decided to order a sum that would cover the costs up until the hearing was set, reserving the right for the parties to apply to vary the amount later if circumstances changed materially. The judge emphasized that the amount should be a conservative estimate of the likely taxable costs and that the court does not aim to provide a complete indemnity to the respondent at this early stage. The judge also considered the possibility of settlement before the matter was fully prepared for trial.