Understanding Security for Costs in Queensland

Security for costs is a critical procedural mechanism in Queensland's civil litigation system that protects defendants from the financial risk of pursuing legitimate defences against unmeritorious claims. Under the Uniform Civil Procedure Rules 1999 (UCPR), the Court has discretionary power to order a plaintiff to provide security for the defendant's legal costs as a condition of continuing their action.

This article examines the legal framework, application process, and strategic considerations surrounding security for costs in Queensland courts, incorporating recent developments from the Queensland Supreme Court.

What is Security for Costs?

Security for costs is a court order requiring a plaintiff (or in some cases, an appellant) to deposit money or provide an alternative form of security as a guarantee that they can pay the defendant's legal costs if the plaintiff's case is unsuccessful. The fundamental purpose is to ensure defendants are not left out of pocket when forced to defend proceedings brought by plaintiffs who may be unable to satisfy an adverse costs order.

The security typically takes the form of a cash deposit paid into court, a bank guarantee, or an undertaking from a third party with sufficient financial means. The amount ordered must be reasonable and proportionate to the estimated costs the defendant will likely incur in defending the proceedings through to trial or other resolution.

As explained by Einstein J in Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744 at [52]:

'The purpose of a security for costs order is a protective jurisdiction to ensure that the primary purposes for having costs orders themselves can be achieved. A defendant is protected against the risk that a costs order obtained at the end of the day may turn out to be of no value by reason of the impecuniosity of the plaintiff. The jurisdiction assists both the compensation purpose as well as the public interest objective.'

The rationale behind security for costs provisions was articulated by the Queensland Court of Appeal in Harpur v Ariadne [1984] 2 Qd R 523 at 532, where the court explained that an individual who conducts business affairs by medium of a corporation without assets would otherwise be in a position to expose an opponent to a massive bill of costs without hazarding his own assets. The purpose of an order for security is to require such persons to bring their own assets into play.

When Can Security for Costs be Ordered?

Under Rule 671 of the UCPR, the court may order security for costs in several defined circumstances. The most common grounds include situations where the plaintiff is ordinarily resident outside Queensland (Rule 671(b)), where the plaintiff is a corporation and there is credible evidence they will be unable to pay the defendant's costs if ordered to do so (Rule 671(a)), or where the plaintiff has failed to provide proper details of their address for service within Queensland (Rule 671(c)).

The Overseas Plaintiff Ground

The ground based on the plaintiff being ordinarily resident outside Queensland has particular significance given Australia's increasing cross-border commercial relationships. In the recent case of Zhao v CN-AU Capital Pty Ltd; In the matter of CN-AU Capital Pty Ltd [2025] QSC 290, the Queensland Supreme Court considered an application for security for costs against Chinese plaintiffs, who were ordinarily residents outside Australia. The Court emphasised two important principles:

1. that satisfaction of Rule 671(b) (plaintiff ordinarily outside Australia) does not reverse the onus of proof, which remains on the applicant for security throughout; and
2. that a critical discretionary factor is whether a security for costs order would actually be enforceable within the plaintiff's home jurisdiction.

This recent decision highlights that even where a plaintiff is ordinarily resident overseas and the threshold requirement under Rule 671(b) is established, the Court must carefully consider whether ordering security would serve its protective purpose. If a costs order could not realistically be enforced in the plaintiff's home jurisdiction, this may weigh significantly in the exercise of discretion, as the practical utility of ordering security is diminished where enforcement prospects are uncertain.

The Corporate Impecuniosity Test

The threshold test for establishing inability to pay was comprehensively analysed by the Queensland Court of Appeal in Monto Coal 2 Pty Ltd v Sanrus Pty Ltd [2018] QCA 309; Gotterson JA (with whose reasons McMurdo JA and Boddice J agreed) adopted the reasoning of Macfarlan JA in Cornelius v Global Medical Solutions Australia Pty Ltd (2014) 98 ACSR 301; [2014] NSWCA 65 at [16]-[17], emphasising that the words "reason to believe" acknowledge that on an application for security for costs, a Court will not be able to undertake as thorough an examination of the financial position of a plaintiff as it would at a final hearing.

Nevertheless, for the power to order security to arise, the outcome of the assessment must be that the court considers there is "reason to believe" that the plaintiff "will be" unable to meet an adverse costs order.

A conclusion that there is a risk that that will, or may, be the case is insufficient.

Drawing from George v Rockett (1990) 170 CLR 104 at 116, the Queensland Court of Appeal in Monto at [42] explained that for a reason to believe that a fact will exist, the objective circumstances must be sufficient to incline the mind towards accepting, rather than rejecting, that the fact will exist. By way of contrast, the requisite belief is not merely that the circumstance may come into existence, or that there is some risk that it may. It is a belief that the fact will come into existence.

The Court's discretion to order security for costs is not exercised lightly. Queensland courts apply a two-stage test:

1. the applicant must demonstrate that one or more of the prescribed grounds under Rule 671 exists;
2. the Court must be satisfied that it is just in all the circumstances to make the order. Even where a ground is established, the Court retains discretion to refuse the application if ordering security would stifle the plaintiff's legitimate claim or would otherwise be unjust.

Relevant considerations at the discretion stage were outlined by Beazley J in KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] FCA 76; (1995) 56 FCR 189 at 197-198 and include the merits and bona fides of the plaintiff's case, any delay in making the application, the quantum of security sought, the plaintiff's ability to provide security, and whether the impecuniosity was caused by the defendant's conduct. The onus rests on the applicant to establish both the jurisdictional ground and that the discretion should be exercised in their favour.

Understanding "Unable to Pay"

The meaning of "will be unable to pay" was also considered in Monto at [50]-[52], where the court clarified that this expression does not require that a company must have available liquid funds sufficient to meet the costs order on the date that the order is made. Citing von Doussa J in Beach Petroleum NL v Johnson (1992) 7 ACSR 203 at 205, Gotterson JA noted that a corporation will be unable to pay the costs within the meaning of the section if it can only do so if given extended time to realise assets which might be difficult to realise, at least at a price sufficient to provide a surplus over the liabilities sufficient to pay the costs.

Rather, the period of time likely to be required for determination by assessment, and allowing for resolution of any disputes, is to be taken into account, as is the opportunity that the plaintiff corporation will have within that period to realise non-liquid assets to pay the quantum of ordered costs. As emphasised in Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd [1985] 1 NSWLR 114 at 117, the threshold question must be decided in relation to the time at which the potential liability for costs is first likely to accrue.

It is important to note that security for costs is generally not available in proceedings where the plaintiff is suing for personal injury or where a statute specifically excludes the Court's power to order security. Additionally, Courts are reluctant to order security in circumstances where doing so would effectively deny access to justice for plaintiffs with meritorious claims but limited financial means.

How to Apply for Security for Costs in Queensland

The application for security for costs must be made by way of an interlocutory application filed in the existing proceedings. Rule 672 of the UCPR sets out the discretionary factors for the Court to consider.

The application should be made as early as possible in the litigation, preferably before substantial costs have been incurred. As emphasised in Christou v Stanton Partners Australasia Pty Ltd [2011] WASCA 176 at [20], security for costs is not a card that a defendant can keep up its sleeve and play at its convenience. Delay is an important consideration because it is capable of causing prejudice or unfairness to the plaintiff, who is entitled to know at the earliest opportunity, before committing substantial disruption or distraction in conducting the case.

The application must be supported by an affidavit setting out the factual basis for the order sought. This affidavit should address the specific ground relied upon under Rule 671, provide evidence of the plaintiff's financial position or residence, and include a detailed estimate of the likely costs to be incurred in defending the proceedings.

Costs estimates should be broken down by stage of the litigation and be realistic and properly particularised. As confirmed in Austcorp Project Number 20 Pty Ltd v LM Investment Management Ltd (in liq) [2014] FCA 1371 at [87], it is appropriate to have regard to the Costs Schedule of the Federal Court Rules and the National Guide to Counsel's fees as rates that would probably be allowed on a party and party taxation of costs (with similar principles applying in Queensland).

Burden of Proof

The burden of proof was considered by the Queensland Court of Appeal in Monto at [48]-[49], which confirmed that it is the applicant for security who bears the persuasive onus of establishing that there is reason to believe that the other party to the litigation will be unable to pay the costs of the litigation if unsuccessful, citing Wollongong City Council v Legal Business Centre Pty Ltd [2012] NSWCA 245 at [29]-[30]. However, once the defendant has established the threshold test, an evidentiary burden falls upon the plaintiff to satisfy the court that, taking into account all relevant factors, the court's discretion ought be exercised by either refusing to order security or by ordering security in some lesser amount than was sought by the defendant.

As observed by Daubney J in Hambleton v Idec Solutions Pty Ltd [2020] QDC 17 at [29], if the applicant's evidence alone is insufficient to meet the threshold test, but evidence led by the respondent added to that of the applicant is sufficient, then it is open to the court to conclude that the applicant has discharged the onus to make out the threshold issue. This is particularly relevant where the respondent to the application has gone into evidence.

Upon filing, the application will be set down for hearing before a judge or registrar depending on the complexity of the matter. Both parties will have the opportunity to present evidence and submissions. The plaintiff will typically file material in response addressing their financial capacity, the merits of their claim, and any discretionary factors weighing against the making of the order.

If security is ordered, the court will specify the amount, the form the security must take, and the timeframe within which it must be provided. The court may order security in stages corresponding to different phases of the litigation rather than requiring the full amount upfront. This approach balances protection for the defendant with preserving the plaintiff's ability to pursue their claim. As explained in Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 190-191, the amount awarded as security is no more than an estimate of future costs and it is not reasonable to expect a defendant to make further applications at every stage when it appears that costs are escalating.

Consequences of Failing to Provide Security for Costs

The consequences of failing to comply with an order for security for costs are severe. Under Rule 674 of the UCPR, if a plaintiff fails to give the security ordered within the time specified, the proceeding is stayed so far as it concerns steps to be taken by the plaintiff or the defendant may apply to have the proceeding dismissed. The Court will generally grant such an application unless the plaintiff can demonstrate a reasonable excuse for non-compliance and a genuine capacity and intention to provide the security.

A stay of proceedings prevents the plaintiff from taking any further steps in the action until the security is provided. This effectively halts the litigation while preserving the plaintiff's right to continue if they subsequently comply with the order. Dismissal, on the other hand, permanently ends the proceeding, which will naturally affect the plaintiff's rights regarding the claim (or any further claim).

The inability to provide ordered security often signals the end of the plaintiff's claim in practical terms. Even where dismissal is without prejudice, the costs and procedural hurdles of commencing new proceedings, combined with the ongoing financial barriers, mean that most plaintiffs cannot pursue their claims further. For this reason, security for costs orders can be case-determinative, particularly for impecunious plaintiffs or those backed by litigation funders with limited resources.

Defendants should act promptly once the time for compliance has expired, as courts may be less sympathetic to enforcement applications made after significant delay. Conversely, plaintiffs facing difficulty in meeting a security order should immediately engage with the defendant and the court to seek an extension of time or variation of the order rather than simply allowing the deadline to pass.

Tips for Successfully Obtaining Security for Costs

For Defendants: Strategic Considerations

For defendants seeking security for costs, early application is crucial. Courts view delay in seeking security as suggesting the applicant does not genuinely need the protection, particularly if substantial costs have already been incurred. In Opes Prime Group Ltd v Niako Investments Pty Ltd [2014] VSC 414 at [30], Derham AsJ observed that a company in financial difficulties is entitled to know its position in relation to security at the outset and before it embarks to any real extent on its litigation, and certainly before it makes a substantial financial commitment toward litigating the claim.

The quality and comprehensiveness of evidence filed in support is often determinative. The affidavit material should clearly establish the jurisdictional ground through primary evidence where possible, such as corporate searches showing financial difficulties or evidence of overseas residence.

In Southern Equity Pty Ltd v Timevale Pty Ltd [2015] FCA 1364 at [31], the court noted that where one party must prove a negative and the facts are peculiarly within the knowledge of the other party, slight evidence may be sufficient unless explained away by the party with the knowledge, citing Hampton Park Ltd v Crooks [1957] HCA 28; (1957) 97 CLR 367 at 371-372. The costs estimate must be detailed, reasonable, and prepared by a legal practitioner with appropriate experience. Inflated or poorly particularised estimates will undermine the application's credibility.

Defendants should be strategic about the amount of security sought. While the order should provide meaningful protection, seeking excessive security may lead the court to conclude the application is designed to stifle the plaintiff's claim rather than provide legitimate protection.

As noted in Reinsurance Australia Corporation Ltd v HIH Casualty & General Insurance Ltd (in liq) [2003] FCA 803 at [94]-[100], in determining an appropriate amount of security, the court does not sit as a taxing officer but rather seeks to fix such amount as it thinks fit in all the circumstances of the case, adopting a "broad brush" approach per Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd [1995] FCA 1778; (1995) 134 ALR 187 at 200-201. The amount will not exceed the estimate of party and party costs but it may be less.

Discretionary Factors to Address

Anticipate and address discretionary factors in advance. The guidelines set out by Beazley J in KP Cable Investments are well-established and include consideration of:

1. Whether the application has been brought promptly.
2. The strength and bona fides of the applicant's case.
3. Whether the applicant's impecuniosity was caused by the respondent's conduct.
4. Whether the application is oppressive.
5. Whether there are persons standing behind the company willing to provide security.
6. Whether personal undertakings have been offered.
7. Whether security will only be ordered against a party who is in substance a plaintiff.

Additional factors identified in Equity Access Ltd v Westpac Banking Corporation (1989) ATPR 40-972 at 50,635 include whether there are aspects of public interest which weigh in the balance against making an order, and whether there are any particular discretionary matters peculiar to the circumstances of the case.

Defendants should consider whether the defendant voluntarily assumed the risk of the plaintiff's financial position by entering into a commercial relationship with the plaintiff. In Mecrus Pty Ltd v Industrial Energy Pty Ltd [2015] FCA 103 at [68]-[70], Murphy J found this to be a significant factor weighing against security, adopting the reasoning in Letore Pty Ltd v Associated International Finance Pty Ltd (Unreported, Supreme Court of Victoria, McDonald J, 28 May 1993) and Harrop Engineering Australia Pty Ltd v Beauville Pty Ltd [2014] VSC 298.

Multiple Plaintiff Situations

For multiple plaintiff situations, defendants should be aware of the principles established in Molony v International Jockey School Pty Ltd [2003] QCA 120 at [22] and Wong & Global Cement Australia Pty Ltd v Huisman [2009] QSC 266. As Williams JA explained in Molony, citing Harpur v Ariadne [1984] 2 Qd R 523 at 531-532, "if the defendants have an opponent who is worth powder and shot they have as much as any litigant is fairly entitled to." Unless there is ground for making an order for security against all the plaintiffs, it generally cannot be made against any, because each plaintiff is liable for the whole of the defendant's costs.

However, where the claims of each plaintiff are significantly different and the substantial claim justifying the proceeding is one in which only the corporate plaintiff is interested, security may still be ordered. The issue turns on whether there is a complete overlap in the causes of action. As Peter Lyons J observed in Wong, the substance of the action and whether the natural person plaintiff truly has a claim are key considerations.

Litigation Funders

Where litigation funders are involved, defendants should note the observation in Green v CGU Insurance Ltd [2008] NSWCA 148; 67 ACSR 105 at [51], adopted in Austcorp Project Number 20 Pty Ltd v LM Investment Management Ltd (in liq) [2014] FCA 1371 at [35], that courts should be readier to order security for costs where the non-party who stands to benefit from the proceedings is not a person interested in having rights vindicated (such as a shareholder or creditor of a plaintiff corporation), but rather is a person whose interest is solely to make a commercial profit from funding the litigation.

For Plaintiffs: Resisting Security Applications

For plaintiffs facing a security for costs application, focus on demonstrating that the claim is genuinely meritorious and brought in good faith. As stated in Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd [1987] FCA 102; (1987) 16 FCR 497 at 514, where a claim is prima facie regular on its face and discloses a cause of action, in the absence of evidence to the contrary, the court should proceed on the basis that the claim is bona fide with a reasonable prospect of success. Evidence of serious engagement with the legal merits, the retention of experienced counsel, and compliance with procedural requirements all support the argument that the claim deserves protection from orders that might stifle its prosecution.

Where the merits are contested, note the principle established in Power Infrastructure Pty Ltd v Downer EDI Engineering Power Pty Ltd [2010] FCA 1222 at [22] that the basis upon which the court is obliged to approach the jurisdictional or threshold question of impecuniosity is that the respondent will succeed. The court should not embark on a detailed consideration of the merits unless the claim is obviously hopeless. As stated in Mecrus Pty Ltd v Industrial Energy Pty Ltd [2015] FCA 103 at [42], some authorities indicate that the court should not go into the merits of a claim in detail unless it can be clearly demonstrated that there is a high degree of probability of success or failure, citing Keary Developments Ltd v Tarmac Construction Ltd [1995] 3 All ER 534 at 540.

If impecuniosity is an issue and the plaintiff wishes to resist an application on the basis that the defendant's wrongful actions brought about the lack of means, the plaintiff bears an evidentiary onus to establish this with relatively straightforward and unambiguous evidence of a fairly compelling nature. As noted in Jazabas Pty Ltd v Haddad [2007] NSWCA 291; (2007) 65 ACSR 276 at [95], quoting GE Dal Pont's Law of Costs (LexisNexis Butterworths, 2003) at [29.96], it is not enough that the defendant's conduct is merely a contributing factor—it must be the material contributor to or cause of the plaintiff's impecuniosity.

Persons Standing Behind the Company

Where persons are standing behind the plaintiff company who will benefit from the litigation, the plaintiff should consider whether those persons can provide undertakings or security. As emphasised in Bell Wholesale Co Pty Ltd v Gates Export Corporation [1984] FCA 34; (1984) 2 FCR 1 at 4, a court is not justified in declining to order security on the ground that to do so will frustrate the litigation unless the company establishes that those who stand behind it and who will benefit from the litigation if it is successful (whether they be shareholders or creditors or beneficiaries under a trust) are also without means.

However, the value and enforceability of any undertaking offered is critical. As noted in Austcorp Project Number 20 Pty Ltd v LM Investment Management Ltd (in liq) [2014] FCA 1371 at [33], citing Prynew Pty Ltd v Nemeth [2010] NSWCA 94 at [45], the purpose of the security for costs jurisdiction would be rendered ineffective if a defendant sued by an impecunious company was denied security because persons, themselves impecunious, were prepared to offer to be responsible for the costs of the litigation.

If impecuniosity is established, consider whether litigation funding or other financial support might be available to satisfy any ordered security while also addressing the court's concerns about ultimate ability to meet an adverse costs order. Be prepared to negotiate on quantum and timing—a willingness to provide some security or security in stages may demonstrate good faith and result in a more favorable outcome.

Natural Person Plaintiffs

For natural person plaintiffs, note that as explained in Idoport at [53], the mere fact that the plaintiff is impecunious does not provide a gateway into security for costs. However, as acknowledged by the High Court in Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75 at [91] per Heydon J, there will be circumstances where it is appropriate to order an impecunious plaintiff to provide security for costs. These include instances where the plaintiff has dissipated assets, failed to pay previous costs orders, brings a weak case to harass the defendant, or brings a case primarily for the benefit of others.

Get Expert Legal Advice on Security for Costs

Navigating security for costs applications requires strategic legal expertise and a thorough understanding of Queensland civil procedure. Whether you are a defendant seeking to protect your position or a plaintiff facing a security application, the outcome can be case-determinative.

At Odyssey Legal, we are Queensland's trusted litigation and dispute resolution experts, with extensive experience in security for costs applications across the Queensland Supreme Court, District Court, and QCAT (as well as Federal Court). Our team combines deep technical knowledge of the UCPR with practical commercial insight to deliver strategic, results-driven solutions tailored to your unique circumstances.

Our experienced litigation team can help you:

• Assess the strengths and weaknesses of your position on a security for costs application;
• Prepare compelling affidavit evidence and comprehensive, properly particularised costs estimates;
• Develop strategic arguments addressing all relevant discretionary factors from KP Cable Investments and recent cases like Zhao v CN-AU Capital;
• Negotiate with opposing parties to achieve practical outcomes, including staged security arrangements;
• Present persuasive oral submissions to maximise your prospects of success;
• Navigate the complex interplay between UCPR provisions, case law principles, and commercial realities; and
• Enforce or resist enforcement of security orders under Rule 673 UCPR,

Don't leave your litigation strategy to chance. Early legal advice can make the difference between protecting your interests and facing an adverse outcome that impacts the entire proceeding. Our proactive approach helps you understand your rights, obligations, and options from the outset.

Servicing All of Queensland

Whether you're on the Sunshine Coast, in Brisbane, on the Gold Coast, in Central Queensland, North Queensland, or anywhere else across the state, Odyssey Legal is here to assist with your security for costs matter. We offer free 15-minute consultations to discuss your situation and provide clear, practical guidance on your next steps.

Contact Odyssey Legal today:

Phone: (07) 5370 8759
Email: info@odysseylegal.com.au
Website: www.odysseylegal.com.au

Speak with our litigation experts who understand the nuances of Queensland civil procedure and are committed to achieving the best possible outcome for you. We pride ourselves on our responsiveness, integrity, and depth of industry knowledge across litigation, construction disputes, commercial matters, and debt recovery.

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Frequently Asked Questions

What happens if I cannot afford to provide security for costs?

If you cannot afford to provide security for costs, you should immediately seek legal advice. There may be options including seeking funding from litigation funders, obtaining financial support from persons standing behind your company, negotiating a reduced amount or staged payment with the defendant, or arguing that the order would stifle your legitimate claim. As established in Yandil Holdings Pty Ltd v Insurance Co of North America (1985) 3 ACLC 542 at 545, the fact that ordering security will frustrate the plaintiff's rights to litigate because of financial condition usually operates as a powerful factor in favour of exercising the court's discretion in the plaintiff's favour. However, you must provide credible evidence of both your impecuniosity and that those standing behind you are also without means.

How much security will the court order me to pay?

The amount of security is determined on a case-by-case basis using a "broad brush" approach. The court will consider the defendant's estimate of their likely costs through to trial or resolution, but the amount ordered will not necessarily match this estimate. As noted in Reinsurance Australia Corporation Ltd v HIH Casualty & General Insurance Ltd (in liq) [2003] FCA 803, the court does not sit as a taxing officer but fixes an amount it considers fit in all circumstances. The security amount typically covers party-party costs (not solicitor-client costs) and may be ordered in stages rather than as a lump sum. Courts aim to provide adequate protection to defendants while avoiding unnecessarily shutting out plaintiffs from pursuing legitimate claims.

Can security for costs be ordered against me as an individual plaintiff?

Generally, security for costs cannot be ordered against natural persons based solely on impecuniosity. As explained in Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744 at [53], the mere fact that a natural person plaintiff is impecunious does not provide a gateway into security for costs. However, the High Court in Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75 acknowledged that additional circumstances may justify such orders, including where the plaintiff has dissipated assets, failed to pay previous costs orders, brings a weak case to harass the defendant, or sues primarily for the benefit of others. Rule 671(b) may also apply if you are ordinarily resident outside Queensland.

How long do I have to provide security once ordered?

The court will specify the timeframe for providing security in its order. This period varies depending on the circumstances but typically ranges from 14 to 60 days. If you fail to provide security within the specified time, the defendant can apply to have your proceeding stayed or dismissed under Rule 673 of the UCPR. If you anticipate difficulty meeting the deadline, you should immediately apply to the court for an extension of time before the deadline expires, supported by evidence explaining the delay and demonstrating genuine capacity and intention to provide the security.

Will my case be dismissed if I don't provide security?

Not automatically. Under Rule 673 UCPR, the defendant must apply to the court for either a stay or dismissal if you fail to provide security within the specified time. The court retains discretion and will consider whether you have a reasonable excuse for non-compliance and genuine capacity to provide the security. A stay halts the proceeding until security is provided but preserves your right to continue if you later comply. Dismissal terminates the proceeding, though typically without prejudice to commencing fresh proceedings. In practice, however, failure to provide security often ends the litigation because the financial barriers that prevented compliance initially continue to exist.

Can the amount of security be reduced or paid in instalments?

Yes. Under section 56(3) of the Federal Court of Australia Act 1976 and the court's inherent jurisdiction in Queensland, the court has power to reduce or increase the amount of security ordered and vary the time, manner, or form in which security is given. Courts frequently order security in stages corresponding to different phases of litigation rather than requiring the full amount upfront, as noted in Knight v FP Special Assets Ltd (1992) 174 CLR 178. If you believe the amount ordered is excessive or would cause genuine hardship, you can apply to vary the order, though you will need to provide detailed evidence supporting your application. Early negotiation with the opposing party may also result in agreement on staged payments.

What if the defendant caused my company's financial problems?

If the defendant's conduct caused or materially contributed to your impecuniosity, this is a relevant discretionary factor that may weigh against ordering security. However, you bear the evidentiary burden of establishing this connection. As emphasised in Jazabas Pty Ltd v Haddad [2007] NSWCA 291 at [95], you must support this allegation with relatively straightforward and unambiguous evidence of a fairly compelling nature. The defendant's conduct must be the material contributor or cause of your impecuniosity, not merely a contributing factor. You should also provide evidence of your financial position before dealings with the defendant commenced. If established, this factor may result in the court refusing to order security or ordering a reduced amount.

Does being an overseas plaintiff automatically mean I have to provide security?

No. Being ordinarily resident outside Queensland (Rule 671(b) UCPR) establishes the jurisdictional basis for seeking security, but it does not automatically result in an order. As recently confirmed in Zhao v CN-AU Capital Pty Ltd [2025] QSC 290, satisfaction of Rule 671(b) does not reverse the burden of proof, which remains on the applicant throughout. The court must still exercise its discretion considering all relevant factors, including whether a costs order would actually be enforceable in your home jurisdiction. If enforcement would be difficult or impossible, this may weigh significantly against ordering security. Other discretionary factors such as the strength of your case, whether you have assets in Queensland, and whether the application was brought promptly will also be considered.