Lin v One Funds Management Limited (Security for Costs)

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FEDERAL COURT OF AUSTRALIA

Lin v One Funds Management Limited (Security for Costs) [2025] FCA 973  

File number(s): NSD 1148 of 2025
Judgment of: CHEESEMAN J
Date of judgment: 15 August 2025
Catchwords: PRACTICE AND PROCEDURE – application for security for costs – where applicant is a natural person ordinarily resident outside of the jurisdiction – where applicant has insufficient assets in the jurisdiction to meet an adverse costs order where applicant has unpaid legal debts in the jurisdiction - whether risk that an order for costs will not be satisfied – whether leave to appeal has reasonable prospects of success – whether discretion should be exercised to make an order for security for costs – Held: application granted with costs  
Legislation: Federal Court of Australia Act 1976 (Cth) ss 24(1A), 56(1)
Cases cited:

Barton v Minister for Foreign Affairs [1984] FCA 108; 2 FCR 463

Bell Wholesale Co Pty Ltd v Gates Export Corporation (No 2) [1984] FCA 34; 2 FCR 1

Decor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 844; 33 FCR 397

DRE Capital Pty Ltd v Wixels Property Holdings Pty Ltd [2025] NSWSC 874

Frigger v Banning [2016] FCA 359

Frigger, in the matter of Computer Accounting and Tax Pty Ltd (in liq) (No 2) [2018] FCA 612

Gallo v Dawson [1990] HCA 30; 93 ALR 479

Gentry Brothers Pty Ltd v Wilson Brown & Associates Pty Ltd [1992] FCA 592; 8 ACSR 405

Hardingham v RP Data Pty Ltd [2020] FCA 1062

Horizons (Asia) Pty Ltd v Enagic Co Ltd [2022] FCA 365

Kemppi v Adani Mining Pty Ltd [2018] FCA 2012

KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189

Madgwick v Kelly [2013] FCAFC 61; 212 FCR 1

McCardle v Johnson [2023] FCA 1369

Ninan v St George Bank Ltd [2012] FCA 905; 294 ALR 190

One Funds Management Limited, in the matter of One Funds Management Limited [2025] FCA 475

One Funds Management Limited, in the matter of One Funds Management Limited (No 2) [2025] FCA 602

Pleash (Liquidator) v Tucker [2018] FCA 168

Wikeley v Kea Investments Ltd [2024] FCA 631

Damian T and Rich A, Schemes, Takeovers and Himalayan Peaks (4th ed, Herbert Smith Freehills, 2021) 

Division: General Division
Registry: New South Wales
National Practice Area: Commercial and Corporations
Sub-area: Corporations and Corporate Insolvency
Number of paragraphs: 37
Date of last submission/s: 13 August 2025
Date of hearing: Determined on the papers
Solicitor for the Applicant: Hall Partners
Solicitor for the Respondent: Allens

 

ORDERS

NSD 1148 of 2025
BETWEEN:

ENYING LIN

Applicant
AND:

ONE FUNDS MANAGEMENT LIMITED ACN 117 797 403

Respondent

ORDER MADE BY:

CHEESEMAN J

DATE OF ORDER:

15 AUGUST 2025

THE COURT ORDERS THAT:

1.Pursuant to s 56 of the Federal Court of Australia Act 1976 (Cth), the Applicant provide security in the sum of $30,000 paid into Court for the Respondent’s costs incurred in relation to the application for an extension of…

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Details
Case
[2025] FCA 973
Decision Date

CaseChat Overview and Summary

The matter before the Federal Court involved a dispute between Lin, a natural person ordinarily resident outside of Australia, and One Funds Management Limited (OFML) over an application for security for costs. OFML sought an order for security for costs, arguing that Lin had insufficient assets in Australia to meet any potential adverse costs order and had unpaid legal debts in the jurisdiction. Lin opposed the application, arguing that the application was an abuse of process and that the amount of security sought was excessive. The court was required to decide whether the discretionary factors supported making an order for security for costs and, if so, in what amount. The court considered various discretionary factors, including Lin's ordinary residence outside the jurisdiction, the absence of quantifiable assets in Australia, and her unpaid debts in the jurisdiction. The court concluded that there was a real risk that OFML would not be able to recover its costs if Lin's application for an extension of time and leave to appeal was unsuccessful. Therefore, the court exercised its discretion to make an order for security for costs. The court ordered Lin to provide security in the sum of $30,000 by a specified date, and if Lin failed to do so, the proceedings would be dismissed. The court also ordered Lin to pay the costs of the interlocutory application.
The court's decision was based on the discretionary factors outlined in the applicable principles. The court found that Lin's ordinary residence outside the jurisdiction and the absence of quantifiable assets in Australia supported making an order for security for costs. Additionally, the court found that Lin's unpaid debts in the jurisdiction created a real risk that OFML would not be able to recover its costs if Lin's application for an extension of time and leave to appeal was unsuccessful. The court also noted that the amount of security sought was not excessive, given the potential costs involved in the proceedings. The court concluded that the discretionary factors supported making an order for security for costs, and it exercised its discretion accordingly.

Orders

Orders of the court

1. Pursuant to s 56 of the Federal Court of Australia Act 1976 (Cth), the Applicant provide security in the sum of $30,000 paid into Court for the Respondent’s costs incurred in relation to the application for an extension of time and leave to appeal up to the conclusion of the hearing of that application.

2. The Applicant provide the security in accordance with order 1 by 9 September 2025.

3. In the event of the Applicant’s default in providing security in accordance with order 1 by the time specified in order 2, the proceeding be dismissed.

4. The Applicant pay the costs of this interlocutory application.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

For the reasons which follow, I am satisfied it is appropriate to exercise the discretion to make an order for security for costs against Ms Lin in the limited amount and for the limited period sought by OFML.EVIDENCE In support of the relief it seeks, OFML relies upon the affidavits of Christopher Michael Prestwich, solicitor, sworn on 23 July 2025 and 5 August 2025 (respectively, the First Prestwich Affidavit and the Second Prestwich Affidavit) and Exhibit CP-1 to the First Prestwich Affidavit (Exhibit CP-1). Ms Lin relies upon the affidavits of Simran Kaur sworn on 7 July 2025 and 12 August 2025 (respectively, the First Kaur Affidavit and the Second Kaur Affidavit).APPLICABLE PRINCIPLES The applicable principles are well established and were not in dispute on this application at the level of principle. They may be briefly stated. The Court may order an applicant to give security for the payment of costs that may be awarded against that applicant: s 56(1) of the FCA Act. The Court’s jurisdiction in relation to security for costs is broad and unfettered and in each case will depend on its own circumstances: Bell Wholesale Co Pty Ltd v Gates Export Corporation (No 2) [1984] FCA 34; 2 FCR 1 at 4 (Sheppard, Morling and Neaves JJ) and Madgwick v Kelly [2013] FCAFC 61; 212 FCR 1 at [6] (Allsop CJ and Middleton J). On any application for security for costs the Court has a discretion that is to be exercised having regard to whether the interests of justice would be best served by making or refusing the order: Gentry Brothers Pty Ltd v Wilson Brown & Associates Pty Ltd [1992] FCA 592; 8 ACSR 405 at 411 (Cooper J). As Colvin J observed in Frigger, in the matter of Computer Accounting and Tax Pty Ltd (in liq) (No 2) [2018] FCA 612 (Frigger (No 2)) at [6]-[8]: [6]The jurisdiction to make an order for security is not limited by the terms in which the Rules of the Court as to security for costs may be expressed: Bell Wholesale at 3 applied in Commissioner of Taxation v Vasiliades [2016] FCAFC 170 at [71].[7]Further, as was stated by Kenny and Edelman JJ in Commissioner of Taxation v Vasiliades at [72]:The purpose to be served by making an order for security for costs is to ensure that a successful respondent to a claim will have a fund available within the jurisdiction of the Court against which the respondent, if successful in defence, can enforce a judgment for costs in the respondent's favour. This purpose is, of course, relevant to an exercise of discretion.[8]An applicant may have access to funds from outside the jurisdiction or from a third party to enable the prosecution of a claim in Court. However, the problems that a successful respondent may face in enforcing a costs order obtained against the applicant due to difficulties or an inability to resort to that same source of funds has long been recognised as a significant factor that supports the making of an order for security for costs. The power may be exercised to grant security in favour of a respondent to an application for leave to appeal, and to order that the proceedings be dismissed or stayed in the event of non‑compliance: see, for example, Wikeley v Kea Investments Ltd [2024] FCA 631 (Dowling J); Horizons (Asia) Pty Ltd v Enagic Co Ltd [2022] FCA 365 (Stewart J); McCardle v Johnson [2023] FCA 1369 (Stewart J); Pleash (Liquidator) v Tucker [2018] FCA 168 (Greenwood J).

Decision

Reasons for decision

Having regard to the matters outlined above, in particular Ms Lin’s ordinary residence in China, the absence of any presently quantifiable assets in the jurisdiction against which an adverse judgment could be enforced and her unpaid and unquantified other debts in the jurisdiction, I am satisfied that OFML have established a real risk that OFML will not be able to recover its costs if Ms Lin’s Extension and Leave Application is unsuccessful. I am satisfied that I should exercise the discretion to make an order for security for costs, and that security be provided in advance of the hearing of the Extension and Leave Application. In the event of default in providing security in the amount and by the date required, the Extension and Leave Application will be dismissed. CONCLUSION For the reasons outlined above, I will make orders substantially in accordance with those sought by OFML.

Ratio Decidendi

Legal Principle Established

Relevantly on the present application, the following discretionary factors arise for consideration — I will not recite the cases in which these factors have been considered in the context of security applications:(1)Whether the applicant is ordinarily resident outside of the jurisdiction; (2)Whether the applicant has assets in the jurisdiction against which an adverse costs order can be enforced; (3)The risk that an order for costs will not be satisfied, including whether such a risk should be inferred where the applicant has a history of non-compliance with court orders or has unpaid legal debts;(4)Whether the party seeking security for costs brought its application promptly; and(5)The merits of the applicant’s case.CONSIDERATIONDiscretionary factors I will address the discretionary factors that arise on this application in turn. As to the first, the evidence in relation to whether Ms Lin is ordinarily resident outside of the jurisdiction is unsatisfactory. The evidence is given by Mr Kaur, a law clerk employed by Ms Lin’s firm of solicitors. Mr Kaur’s evidence is essentially at the level of assertion. It is not supported by identification of the sources of information upon which he has relied for information that is outside his personal knowledge and where he purports to give evidence that is “within [his] own knowledge or based on matters that [he has] become aware of as a result of [his] work completed on the file”, he does not substantiate with any particularity the basis upon which he has formed his understanding. Even if I was to overlook the quality of the evidence given by Mr Kaur, and that Ms Lin herself has not provided an affidavit, the gap in the evidence on the issue of Ms Lin’s ordinary place of residence is stark. In the First Kaur Affidavit, which predates the filing of the Security Application, Mr Kaur deposed that Ms Lin “currently resides” in the People’s Republic of China but is however a “Permanent Resident of Australia”. In the Second Kaur Affidavit, filed in support of Ms Lin’s opposition to the making of a security for costs order, Mr Kaur deposes that Ms Lin is a “Permanent Resident of Australia” who “periodically resides” in China. Mr Kaur gives further generalised evidence, unsupported by primary records, in which he purports to give evidence of the context in which Ms Lin obtained a visa. I understand Mr Kaur’s references to Ms Lin being a “Permanent Resident of Australia” reflects Mr Kaur’s understanding of Ms Lin’s visa status. He does not give any evidence from which I would be prepared to infer that Ms Lin is ordinarily resident in the jurisdiction. Ms Lin was in a position to place evidence to that effect before the Court. She did not do so. On the basis of the evidence on this application, I infer that Ms Lin currently resides in China, that is outside the jurisdiction. I further infer from Mr Kaur’s description of Ms Lin residing in China both currently and periodically, that Ms Lin is ordinarily resident outside the jurisdiction. This discretionary factor weighs in favour of the grant of security. Ms Lin’s absence from the jurisdiction raises a genuine concern that OFML may well face difficulties enforcing any adverse costs order it obtains against her.