Pyx Financial Group Limited v Go Markets Pty Ltd (Security for costs)

[2025] VSC 641

IN THE SUPREME COURT OF VICTORIA Not Restricted

COMMERCIAL COURT
COMMERCIAL LIST

S ECI 2021 04653

BETWEEN:

PYX FINANCIAL GROUP LIMITED (CRN 1841928)	Plaintiff/Defendant by Counterclaim
- and -
GO MARKETS PTY LTD (ACN 081 864 039)	Defendant/Plaintiff by Counterclaim

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JUDGE:	Steffensen AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	24 July 2025
DATE OF RULING:	10 October 2025
CASE MAY BE CITED AS:	PYX Financial Group Limited v Go Markets Pty Ltd (Security for costs)
MEDIUM NEUTRAL CITATION:	[2025] VSC 641

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PRACTICE AND PROCEDURE — Security for costs — Quantum of security — Weight to be attributed to expert evidence and evidence from the parties’ solicitors as to quantum – Impact of potential duplication of work between legal practitioners – Whether quantum should be reduced due to the costs associated with the counterclaim – Whether a further discount is appropriate to account for the risk that specified costs are not incurred — Supreme Court (General Civil Procedure) Rules 2015, r 62.02 — Trailer Trash Franchise Systems Pty Ltd v Go Markets Fascia & Cutter Pty Ltd [2017] VSCA 293 — Grace Christian Chapel v Canaan Holdings Pty Ltd [2019] VSC 5 — Jabiru Satellite Ltd (in liq) (recs and mgrs apptd) v Societe Generale [2022] VSC 521 — Norcast S.ár.L v Bradken Ltd [2012] FCA 765.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	B. Petrie of Counsel	K & L Gates
For the Defendant	A. Roe of Counsel	Baker McKenzie

Contents

A.. Introduction

B.. Applicable principles

B.1          Quantum of security for costs

B.2          The impact of a counterclaim

B.3          Discretion to discount the quantum sought

B.4          Are Pyx’s additional authorities on quantum of assistance?

C.. What weight should be attributed to the parties’ evidence?

C.1          The parties’ arguments

C.2          Consideration

D.. Should costs be estimated on the basis of two junior counsel and two partners?

D.1         Go Markets’ submissions

D.2         Pyx’s submissions

D.3         Consideration

E... Work stages

E.1          Stage 1 – Security for costs application

E.2          Stage 2 – Briefing senior counsel

E.3          Stage 3 – Response to Pyx’s further and better particulars of loss and damage

E.4          Stage 4 – Further amendments to the amended defence, and amendments arising from Pyx’s particulars of its amended reply

E.5          Stage 5 – Directions hearing on 13 June 2025

E.6          Stage 6 – Discovery

E.7         Stage 7 – Lay evidence

E.8          Stage 8 – Expert evidence

E.9          Stage 9 – Pre-trial directions

E.10        Stage 10 – Preparation for trial

E.11        Stage 11 – First day of trial

E.12        Conclusion

F... Should the quantum be reduced due to the counterclaim?

F.1          Parties’ arguments

F.2          Consideration

G.. Should a further discount be applied?

H.. Conclusion

HER HONOUR:

A          Introduction

1. The plaintiff (‘Pyx’) commenced this proceeding against the defendant (‘Go Markets’) by writ filed on 9 December 2021.  Pyx seeks damages for breach of a net profit share agreement it says the parties entered into in respect of trading profits of certain transactions executed by Go Markets.  Pyx is a foreign corporation with a paid-up share capital of HK$1.[1]  It has no assets in Australia.[2] 

   [1]Affidavit of Peter Michael Lucarelli filed on 16 June 2025, [17]–[18] (‘Lucarelli 4’).

   [2]Ibid [15]–[16].

2. By consent, security was ordered to be paid into Court in the amount of $30,000 in respect of the costs of the proceeding up until mediation.  The mediation was held on 20 May 2025, but it did not lead to a resolution of the proceeding.[3] 

   [3]Ibid [13]–[14].

3. This ruling concerns Go Markets’ summons filed on 16 June 2025, pursuant to which it seeks further security in the sum of $812,000 for its costs from after the mediation up until the first date of trial. The application is made pursuant to r 62.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic)[4] and the Court’s inherent jurisdiction. 

   [4]On 8 September 2025, the 2015 Rules were superseded by the Supreme Court (General Civil Procedure) Rules 2025 (Vic). The rules relied upon by the parties remain unchanged.

4. Go Markets relies upon expert evidence in the form of an affidavit from Christopher John Grisenti dated 7 July 2025 to support the quantum of security sought.  Mr Grisenti is an independent accredited costs law specialist.  Exhibited to his affidavit are his two reports dated 13 June 2025 and 7 July 2025.  For reasons delivered ex tempore at the hearing of the summons, Pyx’s objection to the admissibility of Mr Grisenti’s report was overruled and its application to cross-examine Mr Grisenti was refused.[5]  Go Markets also relies upon two affidavits of its solicitor, Peter Michael Lucarelli, being his fourth affidavit filed on 16 June 2025 (but dated 13 June 2025) (‘Lucarelli 4’) and his fifth affidavit filed on 7 July 2025. 

   [5]Revised Ruling, Transcript of Proceedings, Pyx Financial Group Ltd v Go Markets Pty Ltd (Supreme Court of Victoria, S ECI 2021 04653, Steffensen AsJ, 24 July 2025) 65–68.

5. Mr Lucarelli provides evidence regarding his commercial litigation experience, the expected work to be undertaken by the defendant, correspondence exchanged between the parties, and the instructions given to Mr Grisenti.  The instructions to Mr Grisenti included Mr Lucarelli’s estimation that the defendant’s costs for the relevant period would be in the range of $1.2 million to $1.325 million excluding GST.[6] He provides a table describing work stages and the estimated range of costs and disbursements for each stage.[7]  The lower estimates are set out in Annexure A to the first letter of instruction sent to Mr Grisenti, with associated hours allocated to each member of Go Markets’ legal team.[8]  Mr Grisenti gives his opinion as to likely recoverable costs by reference to these work stages.   

   [6]Lucarelli 4 (n 1) [31]–[33].

   [7]Ibid [24].

   [8]Annexure A, Exhibit CJG-1 to the Affidavit of Christopher John Grisenti filed on 7 July 2025, 13–15 (‘Annexure A’).

6. Pyx accepts that security should be provided but disputes quantum.  There is no suggestion that Pyx would be prejudiced if the Court ordered security in the amount sought by Go Markets.  Pyx relies upon the affidavit of its solicitor, Stephen Peter Hume filed on 30 June 2025, to contend that the Court should order the lesser quantum of $150,343.  This amount is based upon Mr Hume’s estimation that Go Markets is likely to incur costs in the sum of $300,686.  In Mr Hume’s view, this amount should be discounted by between 40 and 50% to account for costs associated with the preparation of the defendant’s counterclaim.  Mr Grisenti responds to Mr Hume’s evidence in his second report dated 7 July 2025.

7. I have concluded that the appropriate quantum of security to be provided by Pyx is $340,018.00.  My reasons for this decision are addressed in the following parts:

   (a)In Part B, I address the applicable principles on the question of quantum of security for costs, including the principles to be applied where a defendant is also a counterclaimant and the factors that the court will take into account when determining whether it is appropriate to levy a further discount on the quantum sought.  I also address further authorities relied upon by Pyx on the question of the appropriate quantum by reference to the actual quantum required by other courts.

   (b)In Part C, I address the weight that should be afforded to each party’s evidence and conclude that it is appropriate to place general reliance upon Mr Grisenti’s evidence, subject to necessary adjustments to address aspects of his opinions that lack an evidential foundation or adequate reasoning.

   (c)In Part D, I address Pyx’s argument that the security sought is excessive by reason of allowances for two junior counsel and two partners from Baker McKenzie.  I conclude that it is appropriate to modify Mr Grisenti’s opinion to take into account the risks that costs for two counsel will not be allowed and that unnecessary duplication of work will occur within Go Markets’ legal team.

   (d)In Part E, I set out my reasons as to the appropriate quantum of the 11 work stages.  I conclude that $568,018 is sufficient, subject to any appropriate deduction in respect of the costs of Go Markets’ counterclaim and any further discount.

   (e)In Part F, I set out the reasons for my decision that it is appropriate for the quantum of costs to be discounted by 35% because Go Markets’ counterclaim for breach of fiduciary duty is offensive rather than defensive.

   (f)In Part G, I set out my reasons for levying a further discount of 5% to account for the possibilities that some of the accounted work stages may not be required and that the proceeding may settle.

   (g)In Part H, I summarise my conclusions and direct counsel to confer as to the form of order that ought to arise from this ruling, including on the question of costs.  I also set out the Court’s expectations in respect of any further hearing that may be required to address issues that are not agreed.

B          Applicable principles

B.1       Quantum of security for costs

1. As Pyx is a foreign entity with no assets in the jurisdiction, the purpose of an order for security for costs is to create a fund in this jurisdiction against which Go Markets may enforce a costs judgment in the event that it successfully defends Pyx’s claim.  Such a fund avoids the uncertainties and delays occasioned by attempting to enforce a judgment in the foreign jurisdiction in which Pyx is registered.[9]

   [9]See, eg, Energy Drilling Inc v Petroz NL (1989) ATPR 40-954, cited in Yara Australia Pty Ltd v Oswal [2013] VSCA 156, [114].

2. The Court of Appeal addressed the principles to be applied in the exercise of the Court’s discretion as to the quantum of security in Trailer Trash Franchise Systems Pty Ltd v Go Markets Fascia & Cutter Pty Ltd:

   In deciding what constitutes ‘sufficient security’ …, the court does not seek to provide full protection for the estimated costs of the party seeking security.  Rather, having regard to the fact that the order for security is usually made at an early stage of a proceeding and there are many contingencies that will affect the actual costs incurred by that party, the court fixes an amount that it considers adequate in all the circumstances of the case.  Those circumstances include the nature of the proceeding, the nature and complexity of the steps that need to be undertaken by the party seeking security, the likely costs in undertaking those steps, the length of the trial, any security already provided, and the possibility that the proceeding may settle.

   In determining a sufficient amount for security for costs, the court does not undertake precise mathematical calculations. Rather, it adopts a ‘broad brush’ approach involving ‘guesstimates as much as estimates’.  However, the broad brush approach does not involve an abstract process.  It must have an evidentiary basis.  The court must have regard to the evidence adduced by the parties as to quantum—whether in the form of an affidavit by an experienced litigation lawyer or an expert report by a costs consultant—although it is not bound by the parties’ estimates. The court may scrutinise the individual items in the parties’ estimates, but not to the extent of minute examination akin to a taxation.

   The amount ultimately fixed by the court must not be so low that it fails to provide any real protection to the party seeking security, or so high that it is oppressive to the party required to provide the security.  The amount must be ‘just and reasonable’ in all the circumstances of the particular case.[10]

   [10][2017] VSCA 293, [63]–[65] (‘Trailer Trash’) (citations omitted).

3. In determining the appropriate quantum, the court will have regard to the Civil Procedure Act 2010 (Vic) obligations upon litigants and the court to facilitate the cost-effective resolution of the real issues in dispute when considering lawyers’ estimates of their fees. This may result in discounts being applied to the quantum of security sought where there was duplication of work as between solicitor and counsel, disproportionate costs as between solicitors and counsel for appearances, and where multiple lawyers attend to the same task.[11]  

   [11]See, eg, Armstrong Scalisi Holdings Pty Ltd v Piscopo (Trustee), Re Collins [2017] FCA 423, [23]–[28]; CJMcG Pty Ltd as Trustee for the CJMcG Superannuation Fund v Boral Limited (No 2) [2021] FCA 350.

B.2       The impact of a counterclaim

1. The existence and nature of a counterclaim are relevant to the questions of whether a plaintiff should provide security for a defendant’s costs and, if so, the quantum of security. 

2. In Grace Christian Chapel v Canaan Holdings Pty Ltd, Matthews JR (as Her Honour then was) undertook a review of the authorities and summarised the applicable principles.[12]  Of those principles, the following are relevant to the issues in this proceeding: 

   (a)If a plaintiff is in substance in the position of a defendant, this is a factor that tends against awarding security to the defendant for the costs of defending the plaintiff’s claim.  This will occur where the plaintiff’s claim is a response to the defendant’s self-help measures or where it is responding to a counterclaim.

   (b)If the plaintiff’s claim and the defendant’s counterclaim have the same factual matrix and issues, this will be a factor which tends against requiring the plaintiff to provide security for costs.  This is because of the unfairness of staying the plaintiff’s claim whilst permitting a counterclaim on the same facts and issues to proceed.

   (c)If all or part of the counterclaim is defensive, it will not be appropriate to deny security, but it may be appropriate to reduce quantum for the overlap.

   (d)If the substance of the counterclaim is in the nature of a separate claim or proceeding, this will be a factor against requiring security, or at least a basis for reducing the amount of security.  It may also provide a basis for requiring the defendant to provide security for the plaintiff’s costs of defending the counterclaim, with an adjustment for common issues.

   (e)The question of whether a counterclaim is defensive in substance is for the court to determine.  Expert opinions from costs lawyers will not assist.  The court addresses this question by reviewing the substance of the parties’ claims, and not by reference solely to whether the claim is pleaded in the ‘defence’ or ‘counterclaim’ portion of the pleading.

   [12][2019] VSC 5, [51]–[53] (‘Grace Christian Chapel’).

3. When considering whether security ought to be refused or reduced on account of a counterclaim, the court will consider the extent of the overlap in the facts relied upon in the claim and the counterclaim.  The court will also consider whether the existence of the counterclaim will materially alter the evidentiary or legal matters the plaintiff must prove, such that it will add significantly to the costs of the proceeding.  If the counterclaim will not add significantly to costs, this may indicate that it is largely defensive.[13] 

   [13]See, eg, Kaias Racing Pty Ltd v Burke, [2009] VSC 586, [8] (‘Kaias Racing’).

4. Where the party seeking security proffers an undertaking to the court that it will not pursue its counterclaim if the plaintiff does not comply with an order to provide security, this may put beyond doubt that the counterclaim is defensive.[14]  

   [14]Ibid.

B.3       Discretion to discount the quantum sought

1. In Jabiru Satellite Ltd (in liq) (recs & mgrs apptd) v Societe Generale (‘Jabiru Satellite’),[15] Irving AsJ adopted the following summary of the principles with respect to the court’s discretion to apply a discount to the security sought as follows:

   Without limiting the discretion, the Court generally applies a discount in respect of any sum claimed for security for costs.  The factors warranting such a discount relevantly include (but are not limited to):

   (a)reductions in respect of taxation of costs to make allowance ‘for the unquenchable fire of human optimism and the likelihood that the figure of taxed costs put forward would not emerge unscathed after taxation’;

   (b)a significant discount in respect of taxation may be warranted if the costs are considered to be at the ‘high end’ or reflecting a ‘deluxe approach’;

   (c)similarly, the larger and more expensive a case becomes the higher the discount is likely to be. As Gordon J observed in Norcast S.ár.L v Bradken Ltd, ‘to put it bluntly, the more expensive the lawyers, the larger the discount’;

   (d)the Court may apply a larger percentage discount where there is an insufficiency or imprecision in the evidence substantiating the claim for security, or questions about the reliability of assumptions, particularly since if security proves inadequate as the litigation progresses a further application may be made for more security;

   (e)the Court may apply a discount to reflect the possibility that the case may settle; and

   (f)where the quantum of security has been calculated based upon interstate rates, a discount should be applied to take into account the risk that, upon taxation, particular items will not be allowed at that rate.[16]

   [15][2022] VSC 521.

   [16]Ibid [97].

B.4       Are Pyx’s additional authorities on quantum of assistance?

1. On 13 June 2025, the Court made timetabling orders for the hearing of Go Markets’ summons.  These orders required Pyx to  file and serve its submissions by 14 July 2025.  On the eve of the hearing, Pyx provided two further bundles of authorities not referred to in its written submissions.  Eight of these authorities were referred to in a document handed up by Pyx’s counsel during the course of the hearing entitled ‘Plaintiff’s Aide-Memoir of Comparable Cases’ (‘Aide-Memoire’).  The first page of the document contains this headnote:

   While each case needs to be considered on its own facts and circumstances, the plaintiff relies on the cases summarised below, wherein the applicants sought security for costs in preparation for trials of a similar length to the present case, as being instructive as to the quantum of costs that would be appropriate in the instant case.

2. The remainder of the document is a chart which summarises eight cases which Pyx submits are comparable by reference to matters referred to in the chart, such as the length of the trial, nature of the claim, number of lay and expert witnesses, presence of a counterclaim, and procedural history of each case.  The final column of the chart compares the amount sought as security for costs in each case with the amount actually awarded at the application.

3. At the hearing, Pyx made brief submissions in relation to seven of the Aide-Memoire’s eight cases.  Only one case, TTM Investment Corp Pty Ltd v Hua Chang Pty Ltd (‘TTM’),[17] was referred to for a point of principle, namely that if both parties stand to gain from the outcome of the proceeding and have independent claims, then the court should take this into account when deciding on the quantum of security for costs.[18]  The purpose of the references to the other six cases was to analogise to the present application by highlighting the quantum sought and awarded in each as compared to other details such as the length of trial and nature of evidence expected.[19]  Pyx submits that the cases listed on the Aide-Memoire demonstrate that Go Markets’ application for security is outside the bounds of what the court would normally see for a trial of this kind.[20]

   [17][2018] NSWSC 1078.

   [18]Ibid [27]–[28].

   [19]Re Torrens Constructions Pty Ltd [2024] SASC 136; KTC v David (Security for Costs) [2024] FCA 911; McMahon Services Australia Pty Ltd v Pinkenba Quarrying & Recycling Pty Ltd [2023] FCA 360; Strazdins v ANZ Banking Group Ltd (No 2) [2017] SASC 43; Re Torrens Constructions Pty Ltd [2023] SASC 25; Kupang Resources Ltd v Elias [2018] NSWSC 1553. In addition TTM Investments Corporation Pty Ltd v Hua Chang Pty Ltd [2020] NSWSC 294 was referred to in the Aide-Memoire for context: Transcript of Proceedings, Pyx Financial Group Ltd v Go Markets Pty Ltd (Supreme Court of Victoria, S ECI 2021 04653, Steffensen AsJ, 24 July 2025) 134 (‘Transcript’).

   [20]Transcript (n 19) 131.

1. In response to the Aide-Memoire, Go Markets was granted leave to provide short written submissions responding to the new materials received from Pyx.  Go Markets filed these additional submissions on 30 July 2025.

2. As is evident from the above description of the Aide-Memoire, it is not in truth an aide-memoire.  Rather, it is a further set of submissions in relation to a significant volume of additional authorities circulated by the plaintiff on the eve of the hearing.  The 13 June 2025 Orders were made by the Court to ensure the orderly and efficient conduct of the hearing and determination of Go Markets’ summons.  In my view, Pyx ought to have included any submissions or authorities that it wished the Court to have regard to in its written submissions filed on 14 July 2025.  The last-minute inclusion of this additional material has led to unnecessary and avoidable delay in the determination of this application. 

3. For the reasons addressed in Go Markets’ responding submissions, other than TTM,  the authorities referred to in the Aide-Memoire do not assist the Court in its determination of the appropriate quantum of security for costs.  This is because each case needs to be considered on its own facts and circumstances.  Accordingly, the quantum that other courts have awarded in other cases in other jurisdictions, which have different facts and circumstances, is of limited assistance.

4. Further, to extent that they might assist, the authorities referred to in the Aide-Memoire are imperfect analogies to Go Markets’ application, at best.  None of the cases are Victorian, which is consequential given the different scales of costs in different jurisdictions.  Further, three of the cases are more than seven years old, which gives rise to concerns that the costs scale applied by those courts is well out of date and not comparable to an application for security in 2025.  On a factual level, only one of the Aide-Memoire cases involve an overseas entity without assets within the jurisdiction and involved a discount for an overlap of evidence in a related proceeding.[21]

   [21]KTC v David (Security for Costs) [2024] FCA 911.

5. For these reasons, the six authorities referred to in the Aide-Memoire as examples of appropriate quantum of security were of very limited assistance to the Court, and it is not necessary for them to be addressed further in these reasons.      

C          What weight should be attributed to the parties’ evidence?

C.1      The parties’ arguments

1. The main difference between the parties is in their submissions as to the preference or weight that ought to be given to their respective evidence on quantum.  

2. Go Markets submits that great weight ought to be given to Mr Grisenti’s evidence, because it is an opinion from an independent expert that complies with the Court’s rules for expert evidence. 

3. Pyx submits that the Court ought to prefer the evidence of Mr Hume over that of Mr Grisenti because Mr Grisenti relies unduly upon Mr Lucarelli’s estimate of the actual costs that will be incurred, as set out in Lucarelli 4 and Annexure A to Mr Grisenti’s first letter of instruction.[22]  Pyx submits that the Annexure A estimates are excessive and reflect a deluxe approach, and that they do not address the necessity for particular steps or ensure that Go Markets and its lawyers comply with their obligations to ensure that the matter is run cost-effectively.  Pyx also argues that Mr Grisenti’s report does not provide adequate reasoning for his opinion as to the recoverable hours spent by each team member on a particular work stage, and that the assumptions underlying his opinion lack evidential foundation.

   [22]Lucarelli 4 (n 1) [24]; Annexure A (n 8).

C.2      Consideration

1. The quantum of security for costs is determined having regard to the evidence adduced by the parties.  However, the parties’ estimates do not bind the court.  The court will make its own assessment, albeit in a broad brush way.[23]

   [23]Trailer Trash (n 10) [64].

2. In Norcast S.ár.L v Bradken Ltd (‘Norcast’),[24] the Court describes the two alternative approaches parties may take to provide an evidential foundation for the quantum of security to be provided:[25] 

   (a)The first, described as ‘the traditional approach’, is to engage a costs consultant to prepare an affidavit setting out the steps likely to occur and provide an estimate of the party-party costs that would be recoverable on a costs order made in that party’s favour.  The advantage of this course is that the costs consultant is usually an independent expert whose evidence complies with the court’s rules and protocols, which are aimed to produce objective and impartial assessments.[26] 

   (b)The alternative approach is for the party’s solicitor to give evidence as to the likely steps and the actual solicitor-own client costs to be incurred by the party.  This amount will then need to be discounted by some factor to represent the portion of those actual costs that would be recoverable on a party-party basis.[27]  The disadvantage of this course is that the solicitor is not independent.  A solicitor has a duty to act in the client’s best interests, including minimising the security amount payable where the solicitor acts for the plaintiff.[28]

   [24][2012] FCA 765.

   [25]Ibid [17]–[19].

   [26]Ibid [17]; Jasmin Solar Pty Ltd v Trina Solar Australia Pty Ltd [2020] FCA 1018, [106], [109] (‘Jasmin’). 

   [27]Norcast (n 24) [18], [23].

   [28]Jasmin (n 26) [106]–[110].

3. Here, Go Markets’ evidence is somewhat of a hybrid approach.  According to his instructions, Mr Grisenti assumes Go Markets’ solicitors’ estimation of the required steps and associated time estimates, and then gives his opinion as to the extent to which these costs would be recoverable on a taxation.  Accordingly, his report is not based solely on his own opinion of which steps are required and how long they will take.

4. Go Markets’ solicitors have estimated the actual costs that will be incurred on a solicitor and own client basis, by reference to the number of hours each member of their legal team will spend on each of the work stages, multiplied by their hourly rates.[29]  This estimate of the number of hours per work stage is summarised in Annexure A to Mr Grisenti’s first letter of instruction.[30]  Initially, Go Markets proposed that security be provided at 70% of its lower estimation of actual costs incurred, following the ‘alternative’ approach from Norcast.

   [29]Annexure A (n 8).

   [30]Lucarelli 4 (n 1) [31]–[33]; Annexure A (n 8).

5. In relation to the majority of the work stages, Annexure A sets out minimal detail with respect to the tasks that might be required for each stage.[31]  For example, work stage 3 is described as ‘Consideration of Pyx’s response to Go Markets’ request for further and better particulars of the loss and damage alleged in the statement of claim’, and identifies the hours to be spent by senior counsel (10 hours), the two junior counsel (25 hours total), the two partners of Baker McKenzie (15 hours total), the other two solicitors (30 hours total) and a paralegal (5 hours).[32]  No detail is provided as to what tasks each person might undertake in connection with this work stage.

   [31]See, eg, stages 1, 2, 3, 4, 5, 6, 10, 11, 12, 13 and 15 of Annexure A (n 8).

   [32]Annexure A (n 8), item 3.  Mr Roe and Ms Nadon are junior counsel, Messrs Lucarelli and Prowse partners, Ms Kranjec solicitor, and Mr McLachlan junior solicitor: First Letter of Instruction to Mr Grisenti dated 2 June 2025, Exhibit CJG-1 to the Affidavit of Christopher John Grisenti filed on 7 July 2025, 8 [5.1]–[5.2] (‘First Letter of Instruction’).

6. For other work stages, short dot points are provided as to what the stage might involve.  For example, Annexure A includes dot point examples as to the types of documents that will be included in discovery.[33]  Further, the expert evidence stage refers to the field of expert evidence, and that the stage involves instructions to the expert, and preparation of an initial report and a joint report.[34]  However, there is no explanation as to how these dot points are connected to the hours assigned to each legal team member or the particular tasks that person will undertake.

   [33]Annexure A (n 8) item 7.

   [34]Ibid item 9.

7. Mr Grisenti is instructed ‘to assume that … our estimate of the number of hours for tasks required up to the first day of trial is set out in Annexure A’.[35]  Although this is inelegantly expressed, it is apparent that Mr Grisenti’s instructions are to assume the solicitor’s estimate as to the number of hours for the work stages set out in Annexure A.  Mr Grisenti is also asked to assume that all the tasks in Annexure A include provision for correspondence, taking instructions, the provision of strategic and legal advice and general management of the file; and that the tasks to be performed by solicitors and counsel require legal skill and knowledge.[36]

   [35]First Letter of Instruction (n 32) 9 [6.1(f)].

   [36]Ibid [6.1(h)]–[6.1(i)].

8. Mr Grisenti’s opinion speaks to the likely quantum of professional fees and disbursements Go Markets will recover if a costs order is made in its favour.  In doing so, Mr Grisenti sets out the tasks that will be required in each work stage and gives his opinion as to the reasonable costs that will be recoverable in respect of each step.  As Go Markets’ counsel accepted, Mr Grisenti has assumed that the work set out in Annexure A is required and his opinion is provided as to the extent that work will be recoverable on a party-party basis.[37]  This method avoids the bulk deduction applied to approximate party-party-recovery as part of the ‘alternative approach’ described in Norcast.

   [37]Transcript (n 19) 41.  

9. I make no criticism of the hybrid approach undertaken by Go Markets.  It seeks to meet the criticism that a costs consultant is not best placed to give evidence on the work that will be undertaken to prepare a matter for trial.  It focuses the cost consultant’s report on his expertise, which is in the taxation of costs after the work has been completed. 

10. However, as is the case with any expert opinion, any underlying assumptions will need to be proved.  Here, Go Markets seeks to do this with Mr Lucarelli’s evidence, which is prepared in the ‘alternative’ manner identified in Norcast.  Thus, Mr Lucarelli’s duty to act in his client’s best interests by maximising the security they receive may have influenced his evidence.

11. Pyx submits that the manner in which Go Markets’ evidence has been prepared is somewhat circular because it depends upon the extent to which the assumptions that underlie Annexure A have been proven.[38]  I accept that submission, but I do not accept that the consequence of this is that Mr Grisenti’s evidence ought to be given little weight.  Mr Grisenti by no means ‘rubber stamps’ the solicitors’ estimates in Annexure A.  Mr Grisenti’s evidence identifies the particular tasks involved in each work step in more detail than is provided in Annexure A.  He applies the hourly rates that he opines would be allowed on a taxation under the relevant scale, which are less than their ordinary charge-out rates for all but one solicitor.  For each of the work stages, Mr Grisenti opines that the recoverable hours are less than the actual hours estimated by Go Markets’ solicitors in Annexure A.  His opinion as to recoverability avoids the pitfalls of the ‘alternative approach’ as it does not require any further discount in order to approximate recovery on a party‑party basis. 

    [38]Ibid 107–108.

12. However, to the extent that the assumptions given to Mr Grisenti are not otherwise proved or reasonably available on the evidence before the Court, it would not be appropriate for the Court to adopt his opinion. 

13. Pyx relies upon the evidence of its solicitor, Mr Hume, as to the appropriate quantum security for costs.  In part F of Mr Hume’s affidavit, he sets out his ‘observations in relation to the work required to complete each of the tasks’ and his ‘estimate of the number of hours required for the completion of each task by each appropriate member of the legal team’.[39]  He then quantifies these cost by reference to the hourly rates applied by Mr Grisenti.  Mr Hume estimates that Go Markets should incur costs not in excess of $300,686.00.[40]  He then goes on to express the opinion that this amount should be discounted by between 40 and 50% to allow for the costs associated with Go Markets’ counterclaim.[41]

    [39]Affidavit of Stephen Peter Hume filed on 30 June 2025, [30] (‘Hume’).

    [40]Ibid [81].

    [41]Ibid [82].

14. Mr Hume’s evidence is not prepared in the ‘alternative’ manner described in Norcast.  He does not express his opinion as to the actual costs that Go Markets is likely to incur with a view to levying a discount to reflect the party-party recovery of those costs.  Rather, even though he does not express it in this way, my view is that Mr Hume’s evidence seeks to quantify the cost that might ultimately be allowed on a taxation.  This is evident because he:

    (a)applies the hourly rates that Mr Grisenti opines would be allowable on a taxation, rather than the practitioners’ ordinary hourly rates;[42]

    (b)identifies costs which he says are not reasonable, such as the costs of a second junior counsel and second partner from Baker McKenzie, and describes some costs as ‘unallowable’;[43] and

    (c)does not suggest that it is appropriate to discount his estimate to approximate party-party costs. 

    [42]Ibid [81].

    [43]Plaintiff’s Breakdown of the Estimated Costs, Exhibit SPH-3 to Hume (n 39), 33 (‘Plaintiff’s Breakdown of Estimated Costs’).

15. Mr Hume’s evidence suffers from the same inherent ills as Mr Lucarelli’s.  It is in Pyx’s best interests to minimise the amount of security to be provided, and Mr Hume has a duty to act in Pyx’s best interests.  Further, Mr Hume seeks to quantify what might be recoverable on a party-party taxation without the benefit of experience as a costs consultant.  In addition, much of Mr Hume’s evidence is more accurately characterised as Pyx’s submissions regarding the quality or sufficiency of Mr Grisenti’s evidence.

16. However, contrary to Go Markets’ submission, Mr Hume’s evidence is still of assistance on the question of the appropriate quantum.  Mr Hume provides evidence which addresses the steps required to bring the proceeding to trial, having regard to his experience as a commercial litigator and his knowledge of this proceeding.  It provides a measure against which to consider Mr Lucarelli’s evidence that forms the basis of Mr Grisenti’s assumptions.  I have no doubt that his views, like Mr Lucarelli’s, are honestly expressed. 

17. In my view, given the independence of Mr Grisenti and his experience as a costs consultant, it is appropriate for the Court to place general reliance upon his opinion as to the costs that will be recoverable on a taxation.  This reliance remains subject to any necessary adjustments for unproven or unreasonable assumptions relied upon by Mr Grisenti.  Reasonableness in this regard will be assessed by reference to the circumstances of the proceeding, the competing evidence from Mr Hume, and the nature of the task the court undertakes when determining quantum.  This is the broad brush approach, which involves guesstimates as much as estimates, with a view to arriving at an amount that is adequate in all the circumstances.[44]

    [44]Trailer Trash (n 10) [63]–[65].

18. I will address the weight to be afforded to the parties’ evidence in Part E below, which addresses the evidence adduced in respect of each work stage.

D          Should costs be estimated on the basis of two junior counsel and two partners?

D.1      Go Markets’ submissions

1. Go Markets’ legal team includes one senior counsel (yet to be briefed), two junior counsel (Mr Roe and Ms Nadon), two partners of Baker McKenzie (Mr Lucarelli and Mr Prowse), two solicitors with less than five years’ post-qualification experience (Ms Kranjec and Mr McLachlan), and a paralegal.

2. The composition of Go Markets’ legal team and the manner in which the work will be allocated between them is the subject of Mr Grisenti’s second letter of instruction.  In relation to the costs of the two partners, Mr Grisenti is instructed that:

   (a)Mr Prowse is a junior partner, having been appointed in July 2024.

   (b)There are no senior associates or special counsel on the Go Markets team.

   (c)Mr Prowse performs the functions generally performed by a senior associate or special counsel, but with greater efficiency given his additional experience.

   (d)Mr Prowse’s work includes conducting senior review of solicitor work product that is ultimately settled by Mr Lucarelli.

   (e)Each partner performs different work in order to run the matter as cost-effectively as possible and reduce the number of senior lawyers involved.[45]  

   [45]Letter of Instruction to Mr Grisenti dated 11 June 2025, Exhibit CJG-1 to the Affidavit of Christopher John Grisenti filed on 7 July 2025, 21 [3.1] (‘Second Letter of Instruction’).

3. In relation to Go Markets’ counsel team, Mr Grisenti is instructed that:

   (a)Two junior counsel were briefed initially as it was considered that the quantum of the dispute did not warrant engagement of senior counsel.

   (b)Go Markets now intends to brief senior counsel as the quantum of Pyx’s claim has increased tenfold, to either not less than $12 million or $19 million.[46]

   (c)There is a considerable difference in the experience of the two junior counsel: Mr Roe signed the bar roll in 2018 and Ms Nadon in 2022.

   (d)Ms Nadon performs the majority of the initial drafting and research of pleadings, submissions, and witness statements.

   (e)Mr Roe bears responsibility for final review of the materials drafted by Ms Nadon, as well as assisting the Baker McKenzie team with strategy, correspondence with the Court, preparation of proposed orders and preparation of witnesses for trial.[47]

   (f)Senior counsel’s role will be distinct from that of Mr Roe, entailing settling pleadings, submissions and proposed orders, and having conduct of appearances, including the examination of witnesses.

   (g)The three counsel will work together sensibly with a view to avoiding duplication and ensuring the matter is prepared efficiently.[48]

   [46]Ibid 21 [3.2].

   [47]Ibid 21–22 [3.3].

   [48]Ibid 22 [3.4].

4. In relation to Baker McKenzie’s ‘estimates of significant numbers of hours to complete the requisite stages’ contained in Annexure A, Mr Grisenti is provided instructions as to the features of the key agreements the subject of this proceeding in his second letter of instructions.[49]  He is instructed that the pleadings refer to at least seven agreements, the operation and interrelationship of which is the subject of dispute.[50]  Mr Grisenti is told that these lead to a range of different factual and legal outcomes which present challenges because they affect the time estimates for each work stage.[51]

   [49]Ibid 19–21 [2.1]–[2.9].

   [50]Ibid 19–20 [2.3], [2.5].

   [51]Ibid 21 [2.8].

5. The Supreme Court Scale of Costs effective from 1 January 2025 (‘New Scale’) provides for a range of hourly rates recoverable, which are expressed as maximum hourly rates for legal practitioners of particular post-admission experience.[52]  For admitted practitioners, the maximum rates are $450 per hour for a legal practitioner of less than five years’ experience, $650 for between five and ten years’ experience, and $900 for ten or more years’ experience.[53] 

   [52]Appendix A to Chapter I – Supreme Court (General Civil Procedure) Rules 2015 – Supreme Court Scale of Costs.

   [53]Ibid s 1.

1. Section 2 of the New Scale provides that the reasonableness of hourly rates to be allowed on a standard basis is to be determined having regard to any relevant matter, including the time and labour expended by the legal practitioner, complexity of the issues, and the amount of money involved. 

2. This table outlines the rates allowed by Mr Grisenti for the Baker McKenzie team, along with their actual rates and the maximum allowed under the New Scale:[54]

   [54]First Report of Mr Grisenti dated 13 June 2025, Exhibit CJG-1 to the Affidavit of Christopher John Grisenti filed on 7 July 2025, 31 [29] (‘First Grisenti Report’).

Name	Actual rate (ex GST)	Experience	Max rate under scale	Grisenti Rate
Mr Lucarelli (partner)	$1,100.00	30 years	$900.00	$900.00
Mr Prowse (partner)	$920.00	Over 10 years	$900.00	$750.00
Ms Kranjec (associate)	$600.00	Less than 5 years	$450.00	$450.00
Mr McLachlan (solicitor)	$340.00	Less than 5 years	$450.00	$340.00

1. Mr Grisenti gives the following opinion as to whether two partners would be allowed on a taxation:

   (a)The engagement of two partners at the maximum rate of the New Scale is unlikely to be allowed on a party-party basis.[55]

   (b)However, in his opinion, it is reasonable for two solicitors of over ten years’ experience to act in this matter.[56] This opinion has regard to s 2 of the New Scale, the significant complexity of this matter as detailed in his second letter of instruction, his instructions generally, the division of work to be undertaken by the two partners, the absence of any senior associate or special counsel,[57] and the lower rate he has allowed for Mr Prowse.[58]

   [55]Ibid 31 [28].

   [56]Second Report of Mr Grisenti dated 7 July 2025, Exhibit CJG-1 to the Affidavit of Christopher John Grisenti filed on 7 July 2025, 71–72 [12(a)] (‘Second Grisenti Report’); First Grisenti Report (n 54) 31 [28].

   [57]First Grisenti Report (n 54) 31 [28].

   [58]Second Grisenti Report (n 56) 71–72 [12(a)].

2. The below table sets out the actual rates charged by Go Markets’ counsel team, as compared to the maximum allowed under the New Scale for 2025, and the rate applied by Mr Grisenti.  Mr Grisenti’s opinion is that the junior counsel rates will be allowed on a taxation because they are well within the New Scale, whereas the senior counsel’s rate will be allowed at the maximum rate allowed under the New Scale.[59]  

   [59]First Grisenti Report (n 54) 31–32 [30]–[33].

Counsel	Actual rate (ex GST)[60]	Maximum rate under scale	Grisenti rate
Senior Counsel	$1,090.91	$1,067.00	$1,067.00
Mr Roe	$545.00	$711.00	$545.00
Ms Nadon	$380.00	$450.00	$380.00

[60]These are the rates from 1 July 2025 for Mr Roe and Ms Nadon: Second Grisenti Report (n 56) 64 [3.5].

1. As to the allowance for three counsel, Mr Grisenti acknowledges that it is rare for fees for more than two counsel to be justified and allowed on a party-party taxation.[61] He opines that where there is duplication of work, it will not be recoverable unless the matter is so complex that it requires more than one junior.[62]  However, Mr Grisenti concludes that he has allowed fees for all three counsel on the basis of his instructions that each member of the counsel team is undertaking different work.[63]  Mr Grisenti notes that Ms Nadon’s hourly rate is less than Ms Kranjec’s, which he says supports the reasonableness of Ms Nadon’s involvement as a second junior counsel.[64]

   [61]First Grisenti Report (n 54) 32 [34], citing G E Dal Pont, Law of Costs (LexisNexis) [17.92] and Roger Quick, Quick on Costs (Thomson Reuters) [8.2220].

   [62]First Grisenti Report (n 54) 32 [35].

   [63]Ibid [35]–[36].

   [64]Second Grisenti Report (n 56) 72 [12(a)].

2. In relation to each of the work steps, Mr Grisenti allows the costs of the two partners and two junior counsel in differing amounts of hours.  However, his report does not specify which tasks within each work step are attributed to which junior counsel or Baker McKenzie partner.  As I understand it, Mr Grisenti assumes that there will not be duplication on the basis of his instructions regarding the division of tasks as between junior counsel and the two partners.

D.2      Pyx’s submissions

1. Pyx submits that the inclusion of two partners and two junior counsel in Go Markets’ legal team represents a deluxe approach to this litigation, which does not comply with Go Markets’ obligation to conduct this litigation as quickly, inexpensively and efficiently as possible.[65]  Pyx submits that the evidence does not address the question of whether tasks could be completed less expensively if they were properly allocated amongst the legal team to avoid duplication between counsel, between solicitors, and between solicitors and counsel.  Pyx points to the fact that Annexure A and Mr Grisenti’s evidence allocates time for members of the team to each work stage, without identifying how they are doing different tasks or whether the work could be done more efficiently with a smaller team.  Pyx is particularly concerned with solicitor time on tasks usually reserved for counsel, such as objections to evidence and preparation of written submissions.  Pyx also submits that Mr Grisenti’s opinion as to the allowances for two junior counsel and two partners is conclusory and lacks sufficient reasoning.

   [65]Civil Procedure Act 2010 (Vic) s 10.

2. Mr Hume’s cost estimates are based upon one junior counsel and one partner, to which he has applied Mr Grisenti’s hourly rates for Mr Roe and Mr Lucarelli respectively.  In respect of most of the work stages, Mr Hume’s estimate for junior counsel and partner hours are significantly less than Mr Grisenti’s.[66]

   [66]Exceptions: directions hearing (item 5), Discovery (item 6) Pre-trial directions (item 9).

D.3      Consideration

1. I accept Pyx’s criticism that Mr Grisenti does not provide sufficient detail regarding the division of tasks amongst the legal team to justify more than one junior counsel on a taxation.  Mr Grisenti’s opinion that two junior counsel and two partners are warranted in this proceeding depends on the validity of the instructions he received from Mr Lucarelli about the manner in which the legal team will operate, the legal team’s assurance that different team members will undertake different work, and the complexity of the proceeding.  

2. Go Markets submits that the varying hourly rates applied to each team member address any associated risks: Ms Nadon’s rate is less than Mr Roe’s; Mr Prowse’s rate is less than both Mr Lucarelli’s and the maximum rate for a practitioner of his experience under to the New Scale.  However, this does not address the questions of whether tasks are being duplicated or performed less efficiently because of the larger team.  Each work stage includes work by all team members, which suggests that duplication is inevitable.

3. Mr Grisenti’s opinion as to the allowance of time by two partners and two junior counsel, and the hourly rates allowed in respect of each of them, is also based upon the complexity of the proceeding as per his instructions.  The parties’ respective evidence and submissions put forth very different views as to the complexity of the matters to be determined in this proceeding.  Go Markets has instructed Mr Grisenti that the proceedings are complex because of the different agreements pleaded and the different legal and factual permutations that might arise.  Whereas Pyx describes this as a simple breach of contract case that is not complex enough to warrant the size of Go Markets’ legal team.

4. I accept that the pleadings identify a range of agreements, some alleged to be oral, some alleged to be in writing, and others partly oral and partly written.  This is not a simple case where the parties agree on the terms of the relevant contracts between them.  In this sense, the dispute is more complex than Pyx claims.  

5. However, the complexity or simplicity of the proceeding cannot be definitively concluded at this early stage, and nor can the manner in which it might affect the taxation of a party-party costs order in favour of Go Markets.  This will be dependent upon a range of factors, not least of which the parties’ obligations to narrow the real issues in dispute.  It is too early to conclude that the complexity of this proceeding would warrant a legal team involving three counsel, two partners and two solicitors. 

6. However, given Mr Grisenti’s view that it is rare for a three-counsel team to be allowed on a taxation and his reliance upon his instructions that the team will avoid duplication, it is appropriate to adjust Mr Grisenti’s opinion on reasonable costs to take into account the risk that ultimately costs will not be allowed by reason of unnecessary additional counsel or duplication of tasks within Go Markets’ legal team.

7. I will address the appropriate modification with respect to each work stage below.

E          Work stages

1. I will now address the parties’ submissions with respect to the quantum that ought to be attributed to the 11 work stages. 

E.1       Stage 1 – Security for costs application

1. The parties disagree as to whether the quantum of security should include security for the costs of this application.  I accept Pyx’s submissions that it is appropriate to reserve this question pending the determination of which party ought to bear the liability for costs of this application.

E.2       Stage 2 – Briefing senior counsel

1. Go Markets seeks security in the amount of $47,995 in respect of the costs of briefing senior counsel.  This amount is made up of 77 hours of time spread across each member of Go Markets’ legal team.  This amount is approximately $11,000 less than Baker McKenzie’s estimate of actual costs of this work.  Mr Grisenti sets out the tasks that are ordinarily undertaken to brief senior counsel,[67] but does not give any further explanation as to which team member is involved in each task or why it is reasonable for all team members to be involved.  

   [67]First Grisenti Report (n 54) 34 [43].

2. Mr Hume’s opinion is that costs of $16,571 ought to be attributed to this work stage.  He justifies this figure based on the minimal work that will be required to update the brief recently given to junior counsel in December 2024, and his estimate that the brief will include 150 documents, comprising the pleadings, requests for further and better particulars and the responses thereto, key correspondence, and a selection of discovered documents.[68]  Mr Grisenti responds that it is reasonable to prepare a new brief because substantial amount of work has been done since January 2025, including significant pleading amendments.[69]  Mr Lucarelli describes what he considers to be the considerable evolution of this proceeding since junior counsel was briefed, by reference to new pleadings, particulars, discovery, particulars of loss and damage, and various interlocutory issues in dispute.  

   [68]Hume (n 39) [23(a)].

   [69]Second Grisenti Report (n 56) 70 [10(a)].

3. In my view, Mr Grisenti’s opinion as to the reasonable costs of briefing senior counsel requires adjustment.  This is because he does not set out his reasoning for why all members of the legal team need to be involved in this step.  Mr Grisenti’s instructions as to the division of work between the counsel and solicitor teams do not assist in illuminating his reasoning.  For example, Mr Grisenti’s instructions are that Ms Nadon will be attending to initial drafting and research.[70]  However, the tasks set out as being required in order to brief senior counsel involve no research and only minimal drafting.[71]  Similarly, it is unexplained as to why both partners would spend five hours on this step, in circumstances where one would expect junior team members to perform the bulk of the work, which ought not to require review by both partners.

   [70]First Grisenti Report (n 54) 32 [35(c)].

   [71]Ibid 34 [43].

4. However, I am not satisfied that it is appropriate to adopt Mr Hume’s calculations as to the quantum of this step.  I am satisfied that the development of this proceeding over this course of this calendar year has made the task of briefing counsel more complex than Mr Hume describes.

5. In light of these matters, I consider $26,000 to be sufficient. 

E.3       Stage 3 – Response to Pyx’s further and better particulars of loss and damage

1. Go Markets seeks security for its costs of considering Pyx’s response to Go Markets’ request for further and better particulars of its loss and damage.[72]  Mr Lucarelli refers to the request for particulars of loss and damage dated 22 April 2025 and Pyx’s response of 7 May 2025, which enclosed a spreadsheet calculating loss up to December 2020 of $19,502,328.90 or alternatively $12,214,440.37.[73]  Mr Lucarelli says that Go Markets’ consideration and response to this includes verifying the calculations and cross-referencing to underlying documents.[74]  Mr Lucarelli refers to the need to prepare evidence in response to the particulars of loss and damage and to consider whether consequential amendments to the amended defence are required.[75]  However, other work stages appear to account for the costs of these steps.[76]

   [72]Annexure A (n 8) item 3; Lucarelli 4 (n 1) [33(a)].

   [73]Lucarelli 4 (n 1) [33(a)(i)]–[33(a)(ii)]. 

   [74]Ibid [33(a)(iii)].

   [75]Ibid [33(a)(iii)]–[33(b)(iv)].

   [76]Work stage 4 (amended defence); work stage 7 (lay evidence); and work stage 8 (expert evidence).

2. Mr Lucarelli’s lower estimate of the actual cost of this work stage is $46,000.[77]  However, Go Markets seeks security in the much lower amount of $22,350, by reference to Mr Grisenti’s opinion.[78]  Mr Grisenti allows costs for senior counsel (5 hours), Mr Roe (5 hours), Ms Nadon (5 hours), Mr Lucarelli (2 hours), Mr Prowse (5 hours), Ms Kranjec (7 hours), Mr McLachlan (10 hours), and a paralegal (1 hour).

   [77]Lucarelli 4 (n 1) [24], item 3.

   [78]First Grisenti Report (n 54) 34 [44], 41–42 [74]; Second Grisenti Report (n 56) 70–71 [10(b)].

3. Mr Hume says that Mr Lucarelli’s cost estimate is excessive.  He says that this is because the loss calculations are straightforward, clearly explained, and have been derived from Go Markets’ discovered documents which are cross-referenced on the spreadsheet.[79]  He estimates that 17 hours would be required to attend to this step, with work by senior counsel (1 hour), junior counsel (3 hours), a partner ( 3 hours) and a junior solicitor (10 hours), totalling $8,802.

   [79]Hume (n 39) [23(b)], [38], [40].

4. Mr Lucarelli says that the loss calculations are not simple or straightforward.  He refers to the fact that the calculations rely upon summary-form records that reach back to 2013/2014, which raises technological impediments to their review.  The records have not been audited and Go Markets does not admit them to be a source of truth.[80]

   [80]Affidavit of Peter Michael Lucarelli filed on 7 July 2025, [15(d)(i)] (‘Lucarelli 5’).

5. It is not necessary to modify Mr Grisenti’s opinion as to the quantum of security for this work stage, other than by reference to the risk of duplication of work across the legal team, and the risk that costs of two junior counsel will not be allowed.  This is because Mr Grisenti was briefed with the requests for particulars, the response, and associated correspondence.[81]  The key correspondence was exchanged prior to the finalisation of Mr Grisenti’s expert report.[82]  These documents provide pertinent background to the nature of the tasks that have already been completed in connection with this work stage.  Mr Grisenti  was thereby well-placed to provide his independent opinion as to the reasonable costs recoverable on a standard basis in relation to this work.  For this reason, his evidence ought to be afforded greater weight than the competing evidence of Mr Lucarelli and Mr Hume as to the complexity or otherwise of this work stage.

   [81]First Letter of Instruction (n 32) 11–12.

   [82]Lucarelli 4 (n 1) [33].

6. I consider $19,000 to be sufficient, which is a modification of Mr Grisenti’s opinion to address the risk of duplication of work across the legal team, and the risk that the costs of two junior counsel will not be allowed.

E.4       Stage 4 – Further amendments to the amended defence, and amendments arising from Pyx’s particulars of its amended reply

1. Pyx’s amended reply to the amended defence and amended defence to the amended counterclaim was filed on 31 March 2025 (‘Amended Reply’).  On 12 May 2025, Pyx provided further and better particulars of the Amended Reply in response to a request from Go Markets, along with references to identified discovered documents.[83]  In this correspondence, Pyx specified that it had deleted or amended some of the particulars it provided earlier, presumably because of errors in the previous particulars.  Go Markets noted in its response that it will require additional time to consider the new particulars in order to be sure that there are no further errors.[84]

   [83]Ibid [33(b)(i)], [33(b)(ii)]; Letter from K&L Gates to Baker McKenzie dated 12 May 2025, Exhibit PML-4 to Lucarelli 4 (n 1) 89–99.

   [84]Lucarelli 4 (n 1) [33(b)(iii)].

2. Go Markets seeks security for its costs of considering and preparing further amendments to the amended defence, including any amendments arising in the context of Pyx’s further and better particulars of its Amended Reply.[85]  Mr Lucarelli’s lower estimate of the actual costs of this stage is $28,000.[86]  He identifies two steps that Go Markets will need to undertake: 

   (a)First, Go Markets will have to consider the particulars and the cross-referenced documents to ensure that further errors have not been made.[87]  Mr Hume disputes that this will be a time-consuming task because Pyx has clearly identified the relevant documents.  Mr Hume suggests that four hours undertaken by a solicitor would be sufficient.[88]  

   (b)Secondly, Go Markets will need to consider whether its amended defence requires further amendment in light of Pyx’s particulars to the Amended Reply and its particularisation of its loss.[89]  

   [85]Annexure A (n 8) item 4; Lucarelli 4 (n 1) [33(b)].

   [86]Lucarelli 4 (n 1) [24], item 4.

   [87]Ibid [33(b)(iii)].

   [88]Hume (n 39) [42]–[43].

   [89]Lucarelli 4 (n 1) [33(b)(iv)].

3. Mr Hume considers that it is not appropriate to allow for costs of amending the defence for multiple reasons: it is not necessary to plead to particulars; pleadings have closed; Go Markets has not applied for leave to amend; and Go Markets has not identified any new defences that arise from Pyx’s particulars of its amended defence.  Mr Hume also considers that the costs of amending the defence ought to be significantly lower than the estimates of Mr Lucarelli and Mr Grisenti.  Mr Hume’s estimate is three hours each for senior counsel, one junior counsel, and one partner, together with two hours each for the solicitor and junior solicitor.[90]  Mr Hume’s estimate for this stage, if it is to be allowed, is $9,116.

   [90]Hume (n 39) [44]–[45].

4. Mr Grisenti opines that the reasonable recoverable costs of this stage would be $21,372, comprised of 35 hours split across the legal team.  In reaching this opinion, Mr Grisenti expressly accounts for the duplication as between the costs of this stage and stage 3, and opines that this step will only require counsel to prepare amendments, review the amended defence, draft further changes, write associated correspondence, and attend to filing and service.[91]

   [91]First Grisenti Report (n 54) [45], [75].

5. For the same reasons referred to above in stage 3, it is not necessary to modify Mr Grisenti’s opinion as to the quantum of security for this work stage, other than to account for the risk of duplication of work across the legal team and for the risk that costs of two junior counsel will not be allowed.  Mr Grisenti was properly briefed as to these matters and has given his independent opinion and reasoning as to the recoverable costs.

1. I consider $18,000 to be sufficient, which is a modification of Mr Grisenti’s opinion to address the risks of duplication of work across the legal team, and that costs of two junior counsel will not be allowed.

2. Pyx submits that it is not appropriate that Go Markets be given security for such a contingent item,[92] including for the reason that Pyx may be entitled to its costs thrown away by reason of the amendment.[93]  However, counsel for Pyx accepted that it is appropriate to address the contingent nature of these costs through the possible application of an additional discount.[94]  I address the additional discount in Part G below.

   [92]Plaintiff’s Submissions on Security for Costs filed on 14 July 2025, [84] (‘Pyx’s Submissions’).

   [93]Transcript (n 19) 18.

   [94]Ibid 19.

E.5       Stage 5 – Directions hearing on 13 June 2025

1. Pyx opposes Go Markets’ inclusion of this directions hearing on the basis that it represents past costs because the application for security for costs summons was not filed until after the directions hearing.  I do not accept this argument.  Whilst the summons was only filed after the directions hearing, the application for security in respect of steps after mediation was first foreshadowed on 27 May 2025, which was seven days after the unsuccessful mediation and more than two weeks before the directions hearing.[95] 

   [95]Letter from Baker McKenzie to K&L Gates dated 27 May 2025, Exhibit PML-4 to Lucarelli 4 (n 1) 36–39.

2. The parties’ are almost ad idem as  to the appropriate quantum of costs for this stage.  Mr Grisenti opines the reasonable costs to be $10,480.[96]  Mr Hume’s estimate is $338 greater than Mr Grisenti’s.[97]  Despite the quantum of security for this step clearly not being a real issue in dispute, Mr Hume addresses this over five paragraphs of his evidence.[98]

   [96]First Grisenti Report (n 54) 42 [76].

   [97]Plaintiff’s Breakdown of Estimated Costs (n 43).

   [98]Hume (n 39) [46]–[50].

3. I will therefore allow $10,480 for this stage. 

E.6       Stage 6 – Discovery

1. Go Markets seeks security for its costs of (a) preparing its own further discovery; and (b) reviewing further discovery to be made by Pyx, if either is ordered or agreed to be provided.[99]  Pyx expects that there will be further discovery by both parties, although Mr Hume describes the further discovery as ‘minor’.[100]

   [99]Annexure A (n 8) items 6 and 7. 

   [100]Hume (n 39) [21(a)]–[21(b)].

E.6.1   Further discovery by Go Markets

1. Pyx has requested further discovery of financial records relevant to Go Markets’ trading profit for the period from 1 January 2021 to 21 December 2021.[101]  Go Markets initially responded that it would take time for it to respond because the relevant data is more than four years old and because it needed to ascertain whether it holds material responsive to Pyx’s requests.[102]  

   [101]Letters from K&L Gates to Baker McKenzie dated 22 April 2025 and 12 May 2025, Exhibit PML-4 to Lucarelli 4 (n 1) 100–105, 108–109. 

   [102]Letter from Baker McKenzie to K&L Gates dated 13 May 2025, Exhibit PML-4 to Lucarelli 4 (n 1) 110–111. See Hume (n 39) [54].

2. Mr Lucarelli asserts that Go Markets is diligently working to fulfil the further discovery requests, but that the process is complex and data-driven and will require several weeks to complete.[103]  This is because Go Markets does not hold any particular documents that satisfy the request, and accordingly will have to assess and compile data held in other forms for production.[104]  Go Markets says that it will not address the outstanding further discovery requests until further security for costs is provided.[105]  Mr Lucarelli’s lower estimate of the actual costs for this work is $36,000 with 70 hours of work by all members of Go Markets’ legal team other than the paralegal.[106]  Mr Lucarelli does not give any evidence as to the expected volume or extent of the discovery task that might be undertaken by Go Markets’ legal team, and Mr Grisenti was not provided with any instructions or assumptions addressing this.

   [103]Lucarelli 4 (n 1) [33(c)(iv)(B)].

   [104]Annexure A (n 8).

   [105]Lucarelli 4 (n 1) [28(b)].

   [106]Lucarelli 4 (n 1) 7 [24], item 6; Annexure A (n 8) item 6.

3. Mr Hume considers Go Markets’ estimate that it will take Go Markets over 70 hours to respond to Pyx’s outstanding discovery request to be overstated.  Contrary to Mr Lucarelli’s stance that production will entail a complex extraction of data, Mr Hume considers that the requested information ‘should be readily available from Go Markets’ trading platform’.[107]  In his opinion, this is a task for Go Markets itself that requires little involvement of lawyers.  Mr Hume estimates the costs of this stage to be $3,060, on the basis that it will require two hours each for a partner, junior solicitor and paralegal.[108]

   [107]Hume (n 39) [23(d)(ii)].

   [108]Ibid [62].

E.6.2   Further discovery by Pyx

1. In an email dated 27 May 2025, Go Markets foreshadowed its own request for further discovery from Pyx.  However, this email does not set out any asserted deficiency in Pyx’s discovery or identify the scope of further discovery sought.[109]  

   [109]Lucarelli 4 (n 1) [33(c)(viii)(C)].

2. Mr Grisenti is instructed that Go Markets estimates that Pyx will discover between 100 and 500 additional documents, including emails, photographs and video images (no more than 10 items, with footage being shorter than 10 minutes), invoices, financial accounts, and spreadsheets that may include several hundred rows and a dozen tabs.[110]  Mr Lucarelli’s evidence does not provide any justification or reasoning for the estimates given to Mr Grisenti. Mr Lucarelli’s lower estimate of the actual legal costs for Go Markets’ review of any additional discovery from Pyx is $53,000.[111]

   [110]Annexure A (n 8) item 7.

   [111]Ibid 7 [24], item 7.

3. Mr Hume gives evidence that Pyx has identified 30 documents to be discovered, and estimates that Go Markets’ costs of reviewing this material will be $2,465.[112]  After the filing of Mr Hume’s affidavit, Pyx eventually discovered an additional 42 documents.  However, in Mr Lucarelli’s view, this does not obviate the need for Go Markets to seek further discovery from Pyx.[113] 

   [112]Hume (n 39) [63]-[65].  

   [113]Lucarelli 5 (n 80) 5 [15(c)].

E.6.3   Grisenti opinion

1. Mr Grisenti opines that $74,035 is a reasonable amount for Go Markets’ costs of discovery, which is nearly $15,000 less than Mr Lucarelli’s lower estimate of the actual costs that Go Markets will incur.[114]  In doing so, Mr Grisenti does not differentiate between the costs associated with Go Markets’ further discovery from the costs of reviewing further discovery to be made by Pyx. 

   [114]Lucarelli 4 (n 1) 7 [24], item 7.

2. Mr Grisenti assumes that 300 documents will be discovered, which is the mid-point of Mr Lucarelli’s estimate of the number of documents.  He has assumed that each document has 20 pages.[115]  Mr Grisenti assumes that the bulk of the review will be undertaken by the junior solicitor (Mr McLachlan), then allows for 25% of the material to be the subject of second review, applying an amalgamated rate of $700 per hour for the second review.  The amalgamated rate is the average of the hourly rates he has allowed for the senior solicitors on Go Markets’ legal team, Messrs Lucarelli and Prowse and Ms Kranjec. 

   [115]First Grisenti Report (n 54) 36 [51].

3. Mr Grisenti applies a document review rate of 50 pages per hour, reduced from the ordinary average rate of 100 pages per hour because of the matter’s complexity and the passage of time since the events that are the subject of this proceeding occurred.[116]  Using this rate, he arrives at a figure of 120 hours, which he reduces to 100 because it ‘appears high’.  Mr Grisenti allocates 80 of these hours at the junior solicitor rate and 20 at the amalgamated rate.  He also allows time for senior counsel (5 hours), both junior counsel (Mr Roe – 10 hours; Ms Nadon – 15 hours) and a paralegal (5 hours), as well as additional hours by the junior solicitor and the senior solicitor (at the amalgamated rate) to account for reading Pyx’s affidavit of documents and preparing Go Markets’ list of documents.[117]   

   [116]Ibid 35 [48].

   [117]Ibid 36 [52]–[54], 43 [77].

4. In Mr Grisenti’s second report, he acknowledges that this stage should be moderated if Pyx does not discover the volume of material estimated by Go Markets.[118]  

   [118]Second Grisenti Report (n 56) 71 [10(d)].

E.6.4   Conclusion on costs of discovery

1. For the following reasons, it is appropriate to substantially moderate Mr Grisenti’s opinion as to the reasonable costs of discovery:

   (a)First, Mr Lucarelli’s evidence does not address the extent of the further discovery task to be undertaken by Go Markets and its legal team, in order to justify his estimate of how long his legal team will take to complete this task.  I accept Pyx’s submission that the difficulties in extracting historical data are difficulties that Go Markets itself will encounter in identifying discoverable material.  These difficulties do not directly inform the costs of the time that Go Markets’ legal team may spend reviewing and discovering any relevant materials.

   (b)Secondly, Mr Lucarelli’s evidence does not substantiate or explain his estimates of the volume of further discovery that might be made by Pyx.  The evidence does not address any asserted gap in the discovery made by Pyx to date, despite Pyx having made its discovery many months ago.[119]  Accordingly, there is no light shed on the nature or extent of the further discovery that might be made by Pyx and the associated review task to be undertaken by Go Markets thereafter.  Mr Lucarelli does not explain how the 42 additional documents discovered by Pyx does not obviate the need for Go Markets to seek further discovery from Pyx.[120]

   (c)Thirdly, the amalgamated rate adopted by Mr Grisenti is based upon the average of the hourly rates of the two partners and Ms Kranjec.  This appears excessive and unduly skewed by the inclusion of Mr Lucarelli’s higher rate.  

   (d)Fourthly, account must be taken for the risks of duplication of work across the legal team, and that costs of two junior counsel will not be allowed.  In particular, given the description of the division of workload between the two junior counsel.

   [119]Order of Lyons JA made on 16 November 2023, which required the parties to make discovery by 22 December 2023; Order of Cosgrave J made on 22 October 2024, which required the parties to complete discovery of specified documents within 30 days.

   [120]Lucarelli 5 (n 80) 5 [15(c)].

2. In light of these matters, and taking a broad brush approach, I will allow $20,000 for this stage.  If the future discovery tasks prove to be more substantial, this can be the subject of an application for further security.

E.7       Stage 7 – Lay evidence

1. Go Markets seeks security in the amount of $125,480 for the costs of lay evidence,[121] which is substantially less than Mr Lucarelli’s lower estimate of $200,000 for these costs.[122]  Pyx submits that the appropriate quantum is $66,335, which is a little more than half the amount sought by Go Markets.[123]  

   [121]First Grisenti Report (n 54) 43 [78].

   [122]Lucarelli 4 (n 1) 7 [24], item 8.

   [123]Plaintiff’s Breakdown of Estimated Costs (n 43).

2. The main difference between the parties is in their respective views on the number of witnesses to be called.  Mr Grisenti has been instructed that Go Markets is likely to obtain four lay witness statements and Pyx is likely to have three witnesses.[124]  This is supported by Mr Lucarelli’s evidence.[125]  However, Mr Hume says that his review of the pleadings and discovered documents has identified two witnesses Go Markets may call, and he therefore assumes that the other two witnesses’ evidence will be more confined.[126]  Mr Hume states that the plaintiff intends to call two, rather than three witnesses.[127]

   [124]First Grisenti Report (n 54) 36 [55]; Second Letter of Instruction (n 45) 22 [4.1]–[4.2].

   [125]Lucarelli 4 (n 1) [29(e)], 7 [24].

   [126]Hume (n 39) [68]–[70].

   [127]Ibid [71].

3. Mr Grisenti’s opinion is based upon his instructions as to the likely number of witnesses to be called, instructions which are substantiated by Mr Lucarelli’s evidence.  Mr Lucarelli is better placed than Mr Hume to adduce evidence as to the likely witnesses to be called by the defendant.

4. The extent to which the costs associated with the lay witnesses arise from Go Markets’ counterclaim rather than its defence will be accounted for in the discount addressed in Part F.  

5. Accordingly, in my view, Mr Grisenti’s opinion as to the costs of lay witness evidence only needs modification to address the risks of duplication of work across the legal team, and that costs of two junior counsel will not be allowed.  In light of these matters, I consider $112,000 to be sufficient. 

E.8       Stage 8 – Expert evidence

1. The pre-trial directions provide for the exchange of expert reports and preparation of a joint expert report.  Go Markets seeks security in the amount of $77,815 in respect of its costs of expert evidence.[128]  This amount is less than Mr Lucarelli’s lower estimate of the actual costs Go Markets will incur, which is $94,000.[129] 

   [128]First Grisenti Report (n 54) 43–44 [79].

   [129]Lucarelli 4 (n 1) 7 [24].

2. Mr Grisenti’s opinion is based upon his instructions that the defendant will obtain one responsive expert report and that both parties’ experts will then prepare a joint report, along with his view as to the tasks he expects to be undertaken.[130]  Mr Grisenti gives evidence that in his experience, an hourly rate of between $500 to $1,000 is not uncommon for quantification evidence.  He applies the midpoint of $750.[131]  He also says that in his experience, the cost of expert evidence has a broad range, and that in making an allowance for an expert’s fees, the Costs Court will have regard to the length, content and relevance of the report, as well as the skills and expertise of the expert.[132]  

   [130]First Grisenti Report (n 54) 37 [57].

   [131]Ibid 39 [69]–[70].

   [132]Ibid 39 [68].

3. Pyx disputes that there is a need for expert evidence.  Mr Hume says that at this stage Pyx does not intend to file expert evidence.[133]  Mr Lucarelli disputes Mr Hume’s characterisation of Pyx’s loss calculations and contends that expert evidence will therefore be required.[134]  Pyx submits, and Mr Grisenti accepts, that if Pyx does not file an expert report, the costs associated with this stage will be less because a responsive report and a joint report will not be required.[135]  

   [133]Hume (n 39) [73]–[74].

   [134]Lucarelli 5 (n 80) [15(d)(i)].

   [135]Second Grisenti Report (n 56) 72 [12(d)].

4. Mr Hume says that Pyx’s calculations of its loss and damage are ‘basic arithmetic calculations’, such that in the event that expert evidence is required, it will not be an extensive exercise.[136]  He estimates Go Markets’ costs to be $47,222.[137]

   [136]Hume (n 39) [74]–[76].

   [137]Plaintiff’s Breakdown of Estimated Costs (n 43).

5. It is appropriate to allow for the costs of expert evidence.  This is because the pre-trial timetable provides for this step to be undertaken.  In my view, the contingencies associated with the extent to which expert evidence will be required and its level of complexity are best addressed through the additional discount addressed in Part G.

6. Mr Grisenti has identified the basis for his opinion and it is appropriate for the cost of expert evidence to be allowed subject to modification to account for the risks of duplication of work across the legal team, and that costs of two junior counsel will not be allowed.  In light of these matters, I consider $70,000 to be sufficient.

E.9       Stage 9 – Pre-trial directions

1. Go Markets seeks security in the amount of $14,216 for its costs of attending the pre‑trial directions.  Whilst Pyx contested this figure in its evidence and written submissions, Pyx ultimately accepted this amount to be reasonable.[138] 

   [138]Transcript (n 19) 136.

E.10     Stage 10 – Preparation for trial

1. Go Markets seeks security in the amount of $361,410 for the costs of preparing for trial.[139]  This is substantially less than Mr Lucarelli’s estimate that the actual costs of this work will be between $554,000 to $610,000. [140]

   [139]First Grisenti Report (n 54) 44 [81].

   [140]Lucarelli 4 (n 1) 7 [24], items 11–14.

2. Mr Lucarelli’s instructions to Mr Grisenti divided the costs of preparation for trial into four stages: consideration and preparation of objections to evidence, consideration and preparation of written opening submissions, preparation of any other material for trial and correspondence with the Court, and final preparation for trial.[141]  In relation to each of these four stages, Mr Lucarelli provides his estimate of the hours required from each member of the legal team.

   [141]Annexure A (n 8).

3. Mr Grisenti’s opinion addresses the reasonable costs of preparation for trial on a global basis.  He sets out a list of the tasks likely to be required, which include the four stages referred to by Mr Lucarelli.  However, Mr Grisenti’s evidence does not identify which legal team members will be involved in which task or how many hours each task will require.  Mr Grisenti anticipates that the court book will be substantial having regard to the volume of documents discovered and to be discovered, and the pleadings, thus impacting the costs of trial preparation.  However, he says that a less substantial court book will not limit the totality of the costs of preparation for trial.[142]  

   [142]Second Grisenti Report (n 56) 71 [10(f)].

4. For the counsel team, Mr Grisenti allows 80 hours for senior counsel and 100 hours for each of the two junior counsel, totalling $177,860.  That is the equivalent of 8 days of senior counsel time and 10 days each of junior counsel.  For the solicitor team, Mr Grisenti allows a total of $172,300, comprised of 350 hours: 40 hours for Mr Lucarelli, 60 hours for Mr Prowse, 80 hours for Ms Kranjec, 120 hours for Mr McLachlan, and 50 paralegal hours.  In addition, 15 hours of the expert’s time is allowed, equivalent to $11,250.[143]

   [143]First Grisenti Report (n 54) 44 [81].

5. Pyx submits that the appropriate quantum for trial preparation is $117,771, which it justifies by reference to the hours specific practitioners will spend on the various tasks to be undertaken.[144]  Mr Hume’s evidence pays particular attention to the tasks that might ordinarily be completed by counsel as opposed to solicitors. 

   [144]Hume (n 39) [79].

6. In response to Mr Hume’s evidence, Mr Grisenti opines that the time allowed for counsel by Mr Hume is insufficient because:

   The Hume Affidavit allows for 4.8 days for senior counsel to prepare, and 5.9 days for junior counsel. In my experience, counsel will ordinarily mark at least 1 day of preparation for each day of trial. I have then moderated this down for senior counsel to 8 days and allowed both junior counsel 10 days even though the trial may take longer. Even allowing 2/3 of a day for each day of trial and using the midpoint of 12.5 days of trial calculates at 8.3 days of preparation.[145]

   [145]Second Grisenti Report (n 56) 72 [12(f)].

7. I am satisfied that subject to adjustments for the risk that two junior counsel will not be allowed, and of duplication, Mr Grisenti’s opinion as to the trial preparation time for counsel is reasonable.  Mr Grisenti’s independent opinion is supported by statements as to his reasoning and experience.  It is reasonable to allot 8 days for senior counsel and 10 days for each junior counsel to prepare for a 10 to 15 day trial.

1. Mr Grisenti does not support his opinion as to the solicitor and expert costs with additional reasoning to explain these allocations to the Court.  However, on the other hand, Mr Hume’s estimates are clearly inadequate and do not present a reasonable alternative.  This is best exemplified by the nominal hours allowed for work by the two solicitors, Ms Kranjec (24 hours) and Mr McLachlan (20 hours).  These allowances are unreasonable in light of the extensive tasks that solicitors must undertake to assist with preparation for a 10 to 15 day trial, such as conferences, review of the court book, and preparation of trial documents including a statement of agreed facts, chronology and books of authorities.  Accordingly, it would not be appropriate to adopt Mr Hume’s estimates.  While Mr Grisenti’s allowances lack clear justification, his opinion remains independent and is based upon extensive experience of costs taxation.  It is therefore appropriate to accept Mr Grisenti’s figures with suitable adjustments.

2. Accordingly, in my view, Mr Grisenti’s opinion as to the costs of trial preparation requires modification to address the lack of detailed reasoning supporting his opinion of the solicitor  and expert costs, the risks of duplication of work across the legal team and that costs of two junior counsel will not be allowed.  In light of these matters, I consider $250,000 to be sufficient. 

E.11     Stage 11 – First day of trial

1. Go Markets seeks security in the amount of $28,322 for its costs of attending the first day of trial.[146]  Pyx ultimately accepted this amount to be reasonable, after contending it should be reduced by $1,400 in its evidence and written submissions.[147] 

   [146]First Grisenti Report (n 54) 45 [82].

   [147]Transcript (n 19) 140–41.

E.12     Conclusion

1. For the above reasons, I consider that the appropriate quantum for Go Markets’ costs to be $568,018, as summarised in the below table:

Stage 1 – Security for costs	Decision reserved
Stage 2 – Briefing senior counsel	$26,000
Stage 3 – Response to Pyx’s further and better particulars	$19,000
Stage 4 – Further amendment of Amended Defence, and amendments arising from Pyx’s particulars of its Amended Reply	$18,000
Stage 5 – Directions hearing of 13 June 2025	$10,480
Stage 6 – Further discovery	$20,000
Stage 7 – Lay evidence	$112,000
Stage 8 – Expert evidence	$70,000
Stage 9 – Pre-trial directions hearing	$14,216
Stage 10 – Preparation for trial	$250,000
Stage 11 – First day of trial	$28,322
Total	$568,018

1. I will now consider whether it is appropriate to apply further discounts to this amount by reference to the costs of the counterclaim and the matters referred to in Jabiru Satellite.

F           Should the quantum be reduced due to the counterclaim?

F.1       Parties’ arguments

1. The parties accept that the quantum of security must be reduced to account for any aspects of Go Markets’ counterclaim that are not defensive.

2. However, they disagree on the extent to which the counterclaim is defensive.  Go Markets argues that it is purely defensive such that no reduction is quantum is warranted.  It submits that its undertaking not to pursue the counterclaim in the event that security is not provided puts the defensive nature of the counterclaim beyond doubt.  In the alternative, Go Markets submits that a discount of one third is appropriate, by reference to its breach of fiduciary duty claim, which is one of the three bases on which it brings its counterclaim.

3. Pyx argues that the counterclaim is entirely offensive.  Pyx submits that the Court should follow the analysis undertaken in TTM, which is to assess whether or not the defendant stands to gain from the outcome of the proceeding.[148]  Applying that analysis, Pyx submits that Go Markets stands to gain $1 million if the counterclaim succeeds, and therefore the counterclaim is offensive.[149] 

   [148]Transcript (n 19) 115–116; TTM (n 17) [27].

   [149]Transcript (n 19) 116.

4. Pyx submits that given the offensive nature of the counterclaim, a 50% discount to the security that might otherwise be payable ought to be made, which is the discount the court applied in TTM.[150]  Pyx submits that a lot of the costs of the proceeding derive from the breach of fiduciary claim, which is the offensive aspect of the counterclaim.[151]  Pyx points to the inherent complexity of a claim for breach of fiduciary duty and the need for extensive evidence from various witnesses in order to address this claim.

   [150]Pyx’s Submissions (n 92) [80]–[81]; Plaintiff’s Breakdown of Estimated Costs (n 43); Transcript (n 19) 115-117.

   [151]Transcript (n 19) 119, 121.

5. Pyx submits that the undertaking proffered by Go Markets does not obviate the need for a discount to be applied to the security amount because of the offensive nature of the counterclaim.[152]

   [152]Ibid 119.

F.2       Consideration

1. Pyx seeks damages for breach of a net profit share agreement it says the parties entered into in respect of trading profits in relation to transactions executed by Go Markets in relation to the clients of an entity defined in the pleading as ‘LTG’.  Pyx identifies various contractual bases for its claim, and relies upon payments from Go Markets to Pyx totalling $896,773.48 as evidence of part performance of the alleged contract between the parties. 

2. In short, Go Markets’ defence to the claim is that it has no legal obligation to make such payments to Pyx in respect of net profits, and it seeks declarations that the contracts are void ab initio or unenforceable.  Go Markets admits that it made payments to Pyx, but pleads that it did so under a mistaken belief or basis that there existed a valid legal obligation to make those payments.  By its counterclaim, Go Markets seeks restitution of the value of the payments as money had and received by Pyx. 

3. I am satisfied that insofar as the counterclaim seeks restitution of the payments on the basis of money had and received, the counterclaim is defensive in nature.  The counterclaim is simply the consequence of a successful defence of Pyx’s claim.  Adopting the analysis undertake in Kaias Racing, the existence of the moneys had and received does not materially alter the evidentiary or legal matters that the plaintiff must prove and it is therefore unlikely to add significantly to costs.[153] 

   [153]Kaias Racing (n 13) [8]. 

4. However, Go Markets pleads an alternative claim for breach of fiduciary duty and knowing receipt by Pyx of the payments.  I accept that Go Markets’ fiduciary duty claim is offensive in nature, and will require evidence and submissions that go beyond that which would otherwise be required in connection with the hearing of Pyx’s claim.  Given the payments are admitted by Go Markets, absent the fiduciary duty claim, there would be no need for the Court to hear evidence and submissions as to the circumstances in which the payments were made, including who directed the payments, whether the directions were made in breach of fiduciary duty, or whether Pyx had knowledge of any breach of fiduciary duty.  These are matters are factually and legally complex and will occupy a significant amount of time at trial.  I do not accept Go Markets’ submission that in undertaking this analysis, it is of assistance to have regard to the fact that the quantum of the counterclaim is ‘dwarfed by’ that of Pyx’s claim.[154]  The comparative quantum of a counterclaim is a crude indicator of the extent to which a counterclaim is offensive or defensive, if indeed it is a useful indicator at all.  In my view, it is appropriate to have regard to the substance of the counterclaim, and the extent to which it will require additional evidence and submissions which would not otherwise be required to prosecute the plaintiff’s claim. 

   [154]Defendant’s Outline of Submissions on Security for Costs filed on 7 July 2025, [38].

5. Go Markets’ undertaking not to pursue the counterclaim in the event that the proceeding is stayed for failure to provide security does not negate the need to reduce the quantum of security on account of the fiduciary duty claim.  This is because regardless of the undertaking, it would not be just, having regard to all the circumstances, for Pyx to provide security for Go Markets’ costs of running its offensive fiduciary duty claim.[155]  

   [155]Grace Christian Chapel (n 12) [38].

6. The question is then: what is the appropriate reduction in the quantum of security by reference to the claim for breach of fiduciary duty and knowing receipt?  Pyx submits by reference to TTM that a 50% reduction is appropriate.  In my view TTM does not assist the Court to determine the appropriate apportionment of costs between a claim and cross‑claim.  TTM  is a decision which turns on its own facts, in particular the Court’s analysis of the pleadings and evidence before it and its conclusion that both parties were effectively in the position of a plaintiff.  Here, I have concluded that only a portion of the counterclaim is offensive.

7. In light of the nature of the fiduciary duty claim, which will require evidence and submissions at trial that would not be needed to litigate the contractual issues raised in Pyx’s claim, I consider that a reduction of $200,000 is appropriate, being equivalent to roughly 35%. 

G          Should a further discount be applied?

1. Having regard to the principles set out in Jabiru Satellite, I consider that it is appropriate to levy a further discount of $28,000, or roughly 5%, to account for various risks: that the case might settle; that the issues in dispute may substantially narrow and simplify the proceeding; that some of the work stages accounted for in the quantum may not come to pass or will require substantially less work.  For example, the risk that the plaintiff will not adduce expert evidence, such that a joint expert report will not be required; and the risk that any further discovery will be minimal. 

H          Conclusion

1. I therefore consider that the appropriate quantum to be provided by Pyx is $340,018.00:

Work stages, excluding stage one (security for costs application) (Part E)	$568,018
Less ~35% for the costs of the counterclaim (Part F)	($200,000)
Less ~5% further discount (Part G)	($28,000)
Total	$340,018

1. For the reasons addressed in Part E.1 above, this amount may be increased to allow for security for the costs of this application.

2. I direct counsel retained for the parties to confer on the question of costs and the form of order arising out of this ruling, including any amendment to the quantum of security to account for security for the costs of this application.  Conferral should be in person or via telephone.  

3. In the event that agreement is not reached, a short hearing will be listed at 9:30 am on 17 October 2025 to address any outstanding matters, unless the Court determines it is appropriate for the issues to be determined on the papers.  Proposed minutes of order (whether consent or competing) should be provided to Chambers by no later than 4:00 pm on 15 October 2025. 

4. The parties are discouraged from adducing evidence solely on the question of costs.  Any correspondence relied upon may be provided to the Court together with the parties’ proposed minutes of order.