Waters v Commonwealth of Australia (Australian Taxation Office)

Waters v Commonwealth of Australia (Australian Taxation Office) concerned an application for security for costs brought by the respondent, the Australian Taxation Office (ATO), against the applicant, Ms Waters. The ATO sought an order for Ms Waters to provide security for the costs of the proceedings, arguing that her financial circumstances and conduct in previous litigation warranted such a measure. The court had to decide whether to grant the application for security for costs, considering factors such as the impecuniosity of Ms Waters, whether such impecuniosity was caused by the ATO's conduct, and whether the order would stultify the action.

The court found that Ms Waters had not established that the litigation would be stifled if security for costs was ordered. It considered that the ATO had a legitimate interest in seeking protection for its legal costs given Ms Waters' past conduct and failure to disclose her financial position. The court concluded that an order for security for costs was appropriate, given the totality of circumstances, including the amount of $30,000, which it deemed not to be oppressive. The court decided that the security should be lodged with the District Registrar of the Court rather than directly with the ATO's solicitors. It also determined that the proceedings should be stayed until security was provided, rather than being dismissed if not provided within a specified period.

The court's orders included requiring Ms Waters to provide security for the costs of the proceedings in the amount of $30,000, to be lodged with the District Registrar within 21 days. The court further ordered that the proceedings be stayed until the security was provided. It also mandated that Ms Waters pay the ATO's costs of the interlocutory application, with liberty to apply on 48 hours’ notice.