Queensland Supreme Court orders security for costs nearly six years into proceedings

Lavan is pleased to have successfully acted for Ertech (Queensland) Pty Ltd (Ertech) in obtaining an order for security for costs in long-running Supreme Court proceedings.

In the decision of ADLU Pty Ltd v Ertech (Queensland) Pty Ltd & Anor [2025] QSC 328, the Supreme Court of Queensland ordered the Plaintiff (Spence) to provide security for Ertech’s costs under the Uniform Civil Procedure Rules 1999 (Qld) (UCPR), notwithstanding that the proceeding had been on foot for almost six years.

The decision is discussed below.

Threshold test

The threshold test for a security for costs application is whether there is reason to believe the plaintiff will be unable to pay the defendant’s costs if ordered to do so.

In this decision, the Court was satisfied that threshold test was met.

Delay and the discretionary balance

Spence opposed the application on the basis, among other things, that Ertech had delayed almost five years before seeking security for costs, despite the issue being raised in 2021.

The Court accepted Ertech’s evidence explaining why security was not pursued earlier.  In 2021, Ertech raised the issue but did not proceed after Spence asserted that it was financially sound and capable of meeting any adverse costs order.  The Court found it was consistent with both rule 5 of the UCPR and the precondition in rule 671, that Ertech did not seek security at that time.

Change in financial position 

The Court accepted that Ertech’s position changed in 2025, when it became aware of information which it said indicated a change in the financial position of Spence to that communicated in 2021.

The Court accepted that the information relied upon by Ertech was sufficient to explain why concerns regarding Spence’s financial position, and the recoverability of costs, only crystallised for Ertech at that later stage.

In the absence of any demonstrated prejudice to Spence, the Court was satisfied that the timing of Ertech’s application did not outweigh its asserted need for protection against the risk of unrecoverable costs.

Significance of the decision

While a security for costs application is typically brought early, this decision appears to be the first time the Queensland Supreme Court has ordered security after a proceeding has been on foot for almost six years.

The decision confirms that, in certain circumstances, defendants are not precluded from seeking security simply because proceedings are advanced, particularly where earlier restraint was justified and later evidence reveals a materially different financial reality.

The Lavan team acting on behalf of Ertech included Partner Tamica D’Uva, Senior Associate Samuel Speechly and Lawyer Niamh Rooney.

Disclaimer

The information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.