Wainter Pty Ltd v Freehills (a firm) (No 2)

In the Federal Court of Australia, the case of Wainter Pty Ltd v Freehills (a firm) (No 2) concerns an application for further security for costs in proceedings between Wainter Pty Ltd (the applicant) and Freehills (a firm) (the respondents). The first stage of the proceedings had already been subject to an order for security for costs in the sum of $55,000.00, which was to be provided up until the close of pleadings. The current application concerns the stage for which further security should be ordered and the quantum of that security, with the respondents seeking security for costs up to the stage of the matter being set down for trial, in the sum of $250,000.00. The applicant does not contest that further security should be provided but contests both the stage of the proceeding for which security should be provided and the quantum.

The court was required to decide the stage of the proceeding for which security for costs should be provided and the quantum of that security. The court considered the appropriate stage for which security should be provided, with the respondents arguing for security up to the stage of the matter being set down for trial, and the applicant arguing for security up to the stage of mediation, discovery and inspection of documents, and filing and serving of expert reports. The court also considered the quantum of the security, with the respondents seeking $250,000.00 and the applicant challenging this estimate. The court considered the principles applicable to the determination of the quantum of security for costs, including the broad brush approach and the reliance on the feel of the case after considering relevant factors.

The court considered the arguments of the parties and determined that the approach taken by the respondents to the calculation of security for costs at this stage was generally appropriate. However, the court considered that some of the items in the draft bill of costs were not appropriate for consideration and that the expert fees were on the high side. The court ordered that security for costs be provided in the sum of $220,000.00 (to be provided by bank guarantee). The court also ordered that the applicant provide the security by way of bank guarantee within 14 days of receiving communication from the registrar that the form of the proposed bank guarantee was acceptable. The applicant was also ordered to pay the respondents' costs of and incidental to the application for further security for costs.