Strategic Financial and Project Services Pty Ltd v Bank of China Limited

Strategic Financial and Project Services Pty Ltd and another v Bank of China Limited involved an application by the respondents for security of costs against the applicants. The dispute centred on whether the applicants could satisfy the burden of disproving that they might be unable to meet any costs order if they were unsuccessful. The case was heard in the Supreme Court of New South Wales. The primary legal issue was whether the applicants could demonstrate that they were financially capable of meeting any potential costs order against them if they lost the case. This required the applicants to provide evidence that they had sufficient assets or income to cover the costs.

The court examined the financial evidence provided by the respondents, including company extracts from ASIC and affidavits from the respondents' solicitor. The evidence suggested that the first applicant had minimal financial resources, with a paid-up capital of only $100, and was unable to demonstrate the ability to pay any costs if unsuccessful. The second applicant, while having a higher paid-up capital of $4,580,000, had not issued any share capital since December 2004 and had shown significant accumulated losses. The applicants attempted to introduce a financial statement for the year ending 30 June 2008, but the court rejected it due to its late submission and the fact that it was an unaudited special purpose financial report.

The court found that the applicants had not discharged the burden of proving that they could meet any costs order. Consequently, the court ordered the applicants to provide security for costs. The first applicant was required to provide $250,000 in the form of a bank guarantee, and the second applicant was required to provide $200,000. The proceedings were to be stayed against each respondent until the respective security was provided. The respondents were also granted liberty to apply to vary the amount of security required. Additionally, the costs of the respondents' notices of motion for security of costs were to be costs in the cause.