Ok Printing Co Pty Ltd v Preston

In the case of Ok Printing Co Pty Ltd v Preston, the plaintiff company and its director, a named individual, were pursuing a legal action against the defendant. The plaintiff company, Ok Printing Co Pty Ltd, was financially constrained, while the individual plaintiff offered a personal guarantee as a means of securing the company's costs. The dispute centred on whether the court should exercise its discretion to require the plaintiffs to provide security for the costs of the defendant in this litigation. The case was heard and determined in the Federal Circuit Court of Australia.

The primary legal issue before the court was whether the discretion to require security for costs should be exercised given the impecuniosity of the corporate plaintiff and the offer of a personal guarantee by the individual plaintiff. The court was required to weigh the principles of fairness and the likelihood of the defendant being prejudiced by the lack of security, against the potential burden on the plaintiffs in providing such security.

The court determined that the discretion to order security for costs should indeed be exercised in this instance. Given the financial constraints of the corporate plaintiff and the presence of an individual plaintiff who could provide a personal guarantee, the court found it appropriate to require the individual plaintiff to provide a guarantee of $20,000 in a form acceptable to the defendant. The court emphasised the importance of ensuring that the defendant would not be prejudiced by the lack of security while also considering the financial circumstances of the plaintiffs. The order for the guarantee was conditional upon its provision within 28 days, with the threat of the action being stayed if the guarantee was not forthcoming.

The final orders of the court mandated that the male plaintiff provide a guarantee of $20,000 within 28 days for the corporate plaintiff’s costs, in a form acceptable to the defendant. Should the guarantee not be provided, the action would be stayed. Additionally, the costs of the application, as well as any incidental costs, were to be borne by the plaintiffs unless an application for a different order was made within 14 days. The parties retained the liberty to apply to the court upon two days' notice to the other parties.