Its Eco Pty Ltd v BPS Financial Limited

The matter of Its Eco Pty Ltd v BPS Financial Limited was before the Federal Court of Australia, which was tasked with determining the application for security for costs in relation to a class action. The dispute involved Its Eco and Ms McManus, as lead applicants, seeking an order for security for costs against multiple respondents. The legal issue at hand was whether the court should grant an order for security for costs, considering the nature of the class action and the financial standing of the applicants.

The Full Court reviewed the principles governing the grant of security for costs, particularly in the context of class actions. The court acknowledged the Full Court's decision in Augusta Ventures Ltd v Mt Arthur Coal Pty Ltd (2020) 283 FCR 123, but disagreed with the notion that such orders should not be made in unfunded class actions. The court emphasised the importance of fairness in litigation and the need to prevent one party from litigating without the risk of consequences should the litigation not result in their favour. This principle extends to those who stand behind the applicants and who may benefit from the successful outcome of the action.

After considering the financial circumstances of the lead applicants, the court determined that both Its Eco and Ms McManus were without the means to meet any adverse costs order if the action were unsuccessful. Based on the established principles, the court found that the inability of the applicants to meet an order for costs was a significant factor in favour of granting the application for security. The court made orders for security for costs in the amounts of $350,000, $200,000, and $200,000 against the first, second, and third respondents respectively, with the proceedings stayed until the security was provided. The court also directed the parties to be heard on the question of costs.