Green & Associates Pty Ltd t/as Green & Associates Solicitors v Shea

These are the reasons for orders that I made on 24 April 2026 dismissing the proceedings pursuant to r 42.21(3) of the Uniform Civil Procedure Rules 2005 (NSW) (the UCPR), requiring the plaintiff to pay the defendants’ costs of the proceedings on the ordinary basis, and staying those orders for a period of 28 days.

The plaintiff in these proceedings is an incorporated legal practice which is acting for itself in these proceedings. Its principal solicitor, Mr Green, is the solicitor on the record for the plaintiff.

On 13 February 2026, the plaintiff was ordered to provide security for costs in the sum of $240,000, in three tranches of $80,000 each. The plaintiff was ordered to pay the first tranche within 28 days – that is, by 13 March 2026. The proceedings were stayed pending payment of the first tranche: see Green & Associates Pty Ltd t/as Green & Associates Solicitors v Shea [2026] NSWSC 102.

The plaintiff has not paid the first tranche of security. The proceedings therefore remain stayed.

The defendants’ solicitors wrote to the plaintiff on 20 March 2026 and again on 27 March 2026 foreshadowing that they would file a notice of motion for dismissal of the proceedings pursuant to r 42.21(3) of the UCPR and/or for want of prosecution in light of the plaintiff’s failure to pay the first tranche of the security.

On 2 April 2026, the defendants filed a notice of motion seeking:

When the defendants’ motion was called on for hearing in the Applications List at 2:00pm on 24 April 2026, Mr Gray, solicitor, appeared for the plaintiff. Mr Gray sought an adjournment of the hearing of the motion on the grounds that the motion was premature in circumstances where the plaintiff had, that very afternoon, commenced appeal proceedings against the order made on 18 February 2026 for security for costs. While the hearing was in progress, my chambers received an email from the plaintiff at 2:17pm attaching a summons for leave to appeal and other documents relating to the appeal proceedings. My chambers received a further email from the plaintiff at 2:19pm attaching an affidavit of Lori Kadish made on 24 April 2026 and filed on JusticeLink at 2:15pm. Notwithstanding that those emails were received while the hearing was in progress, they were brought to my attention by my Associate and Tipstaff. A copy was printed and made available to the defendants’ counsel and to Mr Gray.

I declined to adjourn the hearing of the defendants’ motion in circumstances where the plaintiff had consented to the hearing date at a directions hearing on 20 April 2026, the hearing date had been confirmed in email correspondence with my chambers initiated by the plaintiff on 22 April 2026, the affidavit of Lori Kadish disclosed that the plaintiff had not made any attempts to arrange representation for the hearing of the defendants’ motion until 23 April (when the plaintiff had sought to engage an alternative solicitor) and 24 April 2026 (when the plaintiff had sought to brief counsel), and there seemed to me to be no prejudice to the plaintiff in proceeding with the hearing given that Mr Gray informed the Court that the appeal proceedings were the sole ground of the plaintiff’s opposition to the motion, and I had determined to allow the plaintiff to rely on the documents relating to the appeal proceedings notwithstanding that they had been provided to the defendants and to the Court for the first time while the hearing of the motion was in progress.

As I have said, the first tranche of the security remains unpaid.

It is well settled that, in determining whether to exercise its power under r 42.21(3) to dismiss proceedings on account of a plaintiff’s failure to comply with an order for the payment of security for costs, the Court must take into account all relevant circumstances and, consistently with the interests of justice, should strain wherever practicable to avoid taking the radical step of denying the plaintiff its day in court. The matters to be taken into account include, but are not limited to: the period that has elapsed since the security was ordered; the notice given to the plaintiff of the application for dismissal; the seeming inability of the plaintiff to further fund the proceedings; the prejudice to the defendant of the proceedings remaining on foot; and the position of the Court. [1]

In the present case, a period of ten weeks has elapsed since the order for security for costs was made. A period of six weeks has elapsed since the first tranche of that security was required to be paid in accordance with those orders.

The evidence adduced by the defendants establishes that the plaintiff was warned on 20 February 2026 that the defendants would apply for dismissal of the proceedings in the event that the plaintiff failed to comply with the order for security for costs, and that the defendants notified the plaintiff of their intention to make that application on 20 March and again on 27 March 2026. The notice of motion was filed on 2 April 2026.

There is no evidence that the plaintiff intends to pay the security, or that it has the capacity to do so.

As the defendants submitted, there is no minimum time for which a plaintiff must fail to comply with an order for security before the Court will exercise the power of dismissal under r 41.21(3). Something more than a mere technical or accidental default is required. [2] In the present case, the plaintiff’s default is neither technical nor accidental for the reasons explained above.

The documents relating to the appeal proceedings comprise an affidavit of Mr Green described as being made in support of an application for leave to file a summons seeking leave to appeal out of time, a summons seeking leave to appeal from the orders made on 13 February 2026 and also from the orders made on 6 February 2026 which fixed the defendants’ notice of motion for security for costs for hearing on 13 February 2026, a proposed notice of appeal, and a document entitled “Appellant’s Summary of Argument”. At the time of the hearing of the defendants’ motion, it was my understanding that the summons seeking leave to appeal had been filed in the Court of Appeal that afternoon. I do not doubt that Mr Gray believed this to be true when he made a statement to the Court to that effect. In the course of preparing these reasons after the conclusion of the hearing and after already making orders determining the defendants’ notice of motion on the assumption that appeal proceedings were on foot, I noticed that it was not clear from the face of the documents emailed to my Associate during the course of the hearing whether they had in fact been filed in the Court of Appeal. The Summons for Leave to Appeal did not bear any marking indicating that it had been filed. Mr Green’s affidavit, although styled as an affidavit made in appeal proceedings in support of a summons seeking leave to appeal, had been filed in these proceedings. The “Appellant’s Summary of Argument” had also been filed in these proceedings. A search of the JusticeLink system on the morning of 28 April 2026 did not disclose any filed application for leave to appeal from the orders made in these proceedings on 13 February 2026.

I accept the defendants’ submission that they are prejudiced by the proceedings remaining on foot, albeit that they are stayed. The statement of claim makes serious allegations against the first defendant, including allegations that she misappropriated money of the plaintiff while she was employed by the plaintiff. The continued existence of the proceedings in which such allegations are made is, in itself, a prejudice to the first defendant in circumstances where the proceedings will not move towards final determination unless and until the plaintiff complies with the order for security for costs, the plaintiff’s failure to comply with that order has persisted now for six weeks, and there is no evidence of any prospect that the plaintiff will comply with the order in the foreseeable future. The continued existence of the proceedings against the second defendant is also prejudicial to him in circumstances where the statement of claim pleads no cause of action against him. I reject the plaintiff’s submissions to the contrary.

It is not consistent with the interests of justice, let alone the efficient administration of justice in this case, for the plaintiff to be permitted to use the Court’s processes to keep these proceedings on foot for a prolonged period of time during which they are stayed as a result of the plaintiff’s failure to comply with the orders for security for costs in circumstances where the plaintiff has delayed the making of an application for leave to appeal from the security orders, although it now appears that it intends to apply for an extension of time to do so imminently.

For all of those reasons, but believing that the plaintiff had commenced appeal proceedings, I determined that the Court should exercise its discretion to dismiss the proceedings pursuant to r 42.21(3) of the UCPR, but that it was in the interests of justice that the dismissal order should be stayed for a period of 28 days in order to spare the plaintiff from being denied its day in court in these proceedings without first being afforded an opportunity to prosecute its application for an extension of time for leave to appeal, application for leave to appeal (if the extension is granted) and appeal (if leave is granted), including by applying to the Court of Appeal for an order staying the security for costs orders pending the determination of those applications should the plaintiff wish to do so. I did not consider that the prejudice to the defendants of the proceedings remaining on foot for a further period of 28 days warranted denying the plaintiff that opportunity. The subsequent discovery that the plaintiff has not yet commenced appeal proceedings has not caused me to change my view in circumstances where the evidence suggests that the plaintiff intends to do so imminently.

It is not necessary to consider the alternative grounds of the defendants’ application for dismissal of the proceedings.

The costs of the proceedings should follow the event of the dismissal. The defendants seek an order that the plaintiff pay their costs on an indemnity basis rather than on the ordinary basis. The defendants rely on the plaintiff’s failure to accept what they described as an offer to compromise the proceedings made on 20 February 2026, the plaintiff’s failure to respond to subsequent correspondence concerning the defendants’ intention to apply for dismissal of the proceedings on account of the plaintiff’s failure to comply with the order for security for costs, and the plaintiff’s conduct in failing to comply with the order.

I decline to make an order for indemnity costs on those grounds. The plaintiff’s failure to comply with the order has led to the dismissal of the proceedings and its liability to pay the defendants’ costs. Something more would be required in order to persuade the Court to order that those costs be paid on an indemnity basis. The plaintiff’s failure to respond to the defendants’ correspondence is merely an incident of the failure to comply with the order for security. The plaintiff’s failure to accept the defendants’ offer made on 20 February 2026 was not unreasonable. Acceptance of the offer would have required the plaintiff to capitulate by agreeing to the dismissal of the proceedings (noting that the offer expired before the first tranche of security was required to be paid), and to pay the defendants’ costs of the proceedings in the sum of $75,000. In my view, the plaintiff could not reasonably be expected to consent to pay such a sum for the defendants’ costs of the proceedings that were commenced in November 2025 and in which the defendants have not yet filed a defence, without being presented with evidence of the amount of costs actually incurred.

The following orders were made at the conclusion of the hearing on 24 April 2026:

The date in order 4(c) was an error. Order 4(c) should have referred to order 1 made on 13 February 2026.

Having regard to the fact that the plaintiff has not yet commenced any proceeding in the Court of Appeal in respect of the orders for security for costs made on 13 February 2026, and to correct the slip in the date referred to in order 4(c), I made an order in chambers on 28 April 2026 varying order 4 to read as follows: