Delta Electricity v Blue Mountains Conservation Society Inc (security for costs)

THE COURT : The applicant seeks leave to appeal from an order made by Pain J in the Land and Environment Court in which her Honour ordered that the respondent pay $20,000 as security for costs (the security for costs matter). The summons is associated with the summons for leave to appeal, in CA 2009/298528, from her Honour’s order in the same proceeding that the maximum costs which may be recovered by one party from another in the proceedings is the sum of $20,000 (the maximum costs order matter).

In the maximum costs order matter, the Court proposes to grant leave to appeal, but to dismiss the appeal. Leave to appeal in the security for costs matter should be refused.

The trial judge held, at [36], that the application for security for costs had to be determined on the basis that her Honour had made an order under UCPR, r 42.4 in the sum of $20,000. The applicant contended that in approaching the matter in this way, the trial judge erred, in that she unjustifiably restricted her discretion, acted upon a wrong principle, and allowed extraneous or irrelevant matters to guide or affect her.

Other arguments were made, but we do not consider it necessary to deal with them. The purpose in ordering security for costs is to provide protection to a party brought into litigation by a party who is unable to meet the costs of that other party, should the litigation be unsuccessful. In the ordinary course, the amount of security is directed to the likely reasonable costs to be incurred. In this case, it has been determined that the maximum costs that may be recovered from the respondent is $20,000. To require the provision of security in an amount which entirely ignores that order would undermine the Court’s existing order.

The summons for leave to appeal in the security for costs matter is dismissed with costs.