The festive season has officially arrived! Whilst work Christmas parties are a fantastic way to celebrate a successful year, it is important that employers and employees alike remain cautious and aware of their responsibilities when hosting or attending a work function.
Christmas parties are notorious for safety-related incidents. With the recent passage of the Respect@Work Bill, employers have a positive duty of care to ensure that the work functions are safe, supervised and reduce the risk of sexual harassment and discrimination.
For the record, a Christmas party has been determined by the Fair Work Commission to be a work-related function attracting responsibilities on both the employer and employee.[1]
A key issue at work functions is the supply of alcohol. Employer’s must ensure that they remain compliant with any responsible service of alcohol restrictions that may be imposed in their state or territory. As such, employers should organise work functions that are properly supervised, managed and supplemented by food and activities. A cost-effective solution is to allocate staff members, particularly in managerial roles, to assume a sober supervisory role.
In circumstances where an employee consumes excessive alcohol at a work-approved function, the employer has an obligation to ensure that the employee is safely transported home. We recommend employers invest in taxi vouchers or hiring a shuttle bus.
Vicarious liability does not disappear during the festive season. Employers may still be held liable for their employee’s actions or wrongdoing at a work function, further emphasising the need for stringent safety and supervisory measures. To mitigate this risk, they must show that they took all reasonable steps necessary to prevent any wrongdoing. Consequently, employers should use a workplace function as a reminder to reassess their workplace policies to ensure that appropriate policies and reporting mechanisms exist that allow for internal complaints that are addressed in a timely manner.
In short, employers have a duty to:
An employee must be aware that the same standard of behaviour expected in the workplace is expected at a workplace function. They must continue to follow any applicable policies or standards that govern their workplace.
Ultimately, employees:
In the case of McDaid v Future Engineering and Communication Pty Ltd [2016] FWC 343, the Commission ruled in favour of the employer who terminated an employee, where the employee had engaged in unacceptable behaviour and misconduct at the staff Christmas party.
As we head into the midst of the silly season, employers should ensure that they:
The Workplace Law Team at Chamberlains Law Firm can assist with preparing and reviewing your policies and procedures.
[1] Drake & Bird v BHP Coal Pty Ltd [2019] FWC 7444.
The Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA) provides that once an adjudicator has determined that the respondent is to pay an adjudicated amount to the claimant, the respondent must pay this amount within 5 business days of serve of the determination on the respondent or by the due date of payment, whichever is the later (s23 of SOPA).
If the respondent does not pay the claimant the adjudicated amount in accordance with s 23 of SOPA, s 24 allows the claimant to receive an adjudication certificate from Adjudicate Today. This adjudication certificate can then be filed as a judgment for a debt in any court of competent jurisdiction and is enforceable accordingly (s25 of SOPA).
s25(4) of SOPA also entitles the respondent to commence proceedings to have the judgment set aside. Although the respondent cannot challenge the adjudicator’s determination, raise any defence in relation to matters arising under the construction contract, or bring any cross-claim against the claimant, the respondent can raise arguments to set aside the determination on a number of jurisdictional grounds.
Although a respondent may want to do this to avoid having a judgment debt registered against them as it can have an adverse impact on credit ratings, the respondent is typically driven to do this if they have a view to bring separate proceedings against the claimant for claims such as defects or contractual disputes. This is especially salient in circumstances where the claimant is in financial difficulty, in voluntary administration or has displayed a risk of going insolvent. If a respondent was to pay the adjudicated amount and then commence proceedings, there is a risk that the financially challenged claimant may not have enough money (or even be in operation) to pay back the adjudicated amount to the respondent if a Court finds that the respondent’s claim ultimately succeeded.
Section 32(B) of SOPA provides that a corporation in liquidation:
“(1) …cannot serve a payment claim on a person under this Part or take action under this Part to enforce a payment claim (including by making an application for adjudication of the claim) or an adjudication determination.
(2) …has made an adjudication application that is not finally determined immediately before the day on which it commenced to be in liquidation, the application is taken to have been withdrawn on that day.”
On a reading of this provision, it seems that corporations not in liquidation, and still in voluntary administration, are entitled to the adjudication process and thus receiving the adjudicated sum by the respondent if so determined. This makes sense given that a company in liquidation is not entitled under s 8 of SOPA to a progress payment as by virtue of being in liquidation they cannot undertake construction work or to supply related goods and services.
However, the common law position has attempted to extend this to companies in voluntary administration and companies at risk at becoming insolvent.
In the vein of the case law position, given the increasing insolvencies of businesses in the construction industry, it becomes hard to see why a company would even roll the dice and commence an adjudication application if the judgment can be ‘stayed’ by a Court based on the strength of a respondent’s potential claim against the risk the claimant may be insolvent. Certainty however, how a Court may consider the matter in a post-covid world with today’s current challenges facing the construction industry including increasing inflation and supply chain disruptions, may change the balance of the two competing policy considerations of Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA), namely to promote cash flow and to ensure the rights of the parties under the construction contract are upheld.
When considering whether to grant the stay of an adjudicator’s judgment, the Court in Hakea Holdings Pty Limited v Denham Constructions Pty Ltd; BaptistCare NSW & ACT v Denham Constructions [2016] NSWSC 1120 looked to the two competing policy considerations of SOPA, namely to:
The Court went further by identifying key factors for the Court’s consideration when balancing these two competing policies:
On appeal from the District Court to the Supreme Court in Adelaide Interior Linings v Romaldi Constructions [2013] SASC 110, the claimant sought to have the District Court’s granting of an injunction set aside and thus be granted the ability to seek the enforcement of the adjudicated amount pursuant to SOPA.
In considering the competing policy considerations of SOPA, the Supreme Court held that the process contemplated by SOPA involved the claimant enforcing payment of the adjudicated amount and that, by preventing this, the District Court had permitted the respondent to circumvent the provisions of SOPA.
His Honour Justice Anderson commented on the respondent’s submissions of the possible future insolvency of the claimant that would entitle the respondent to obtain a stay on enforcing the determination of an adjudicator. Further to this, his Honour noted the clear balancing act of the competing policy considerations of SOPA and that this may be irrecoverable to a successful respondent in any future proceedings. His Honour concluded that there had to be a high level of likelihood of insolvency before any stay will be granted. With respect to the respondent’s submissions about the claimant’s potential insolvency, his Honour found this to be hearsay. The claimant’s director provided clear contrary statements that they were not at a risk of going insolvent.
Ultimately, the Court upheld the objective of SOPA, being that cash flow for contractors and subcontractors needs to be protected under a ‘pay now, argue later’ mechanism which allows subcontractors to be paid adjudicated amounts for construction work, regardless of any ongoing disputes relating to the performance of the contract.
In the decision of Modcol v National Buildplan Group [2013] NSWSC 380, the Court considered on appeal at [40] whether the granting of a stay would be contrary to the purpose of a voluntary administration. The Court noted that the purpose of a voluntary administration is to maximise the chances of the claimant at financial risk to continue to trade. It was noted that this can only happen if the claimant received a cash injection by way of the respondent paying the adjudicated determination amount owed to the claimant. This would also maximise the chances of a DOCA being entered into following the second creditors meeting.
His Honour considered at [38] the submissions on behalf of the claimant’s Counsel that their:
“claim was based on its rights under SOPA…the object of the Act was to enable persons in his client’s position to obtain prompt payment of progress payments for construction work and related goods and services, and to provide mechanism for the enforcement of that right. Thus, he submitted, the policy of SOPA provided a basis for justifying the grant of leave and, indeed, for enabling his client to pursue its rights through in full: that is to say, to recovery of judgment and the obtaining of a s 7 certificate.”
However, His Honour ultimately concluded that the granting of leave to be revoked and that proceedings to be stayed at [42] because if in the event the claimant was liquidated, the respondent would be disadvantaged:
“If, however, there is no arrangement and the company does not continue in business, the likely result is winding-up. Clearly, a payment which would have the effect of giving a significant advantage to one unsecured creditor over others would not be consistent with the scheme of the Act for winding-up on insolvency.”
The judgment of Stevenson J in the Supreme Court of New South Wales (‘Court’) in MGW Engineering Pty Ltd t/a Forefront Services v CMOC Mining Pty Ltd [2021] NSWSC 514 (‘MGW’) provides guidance on what constitutes valid service of a payment claim on an organisation.
Claimants must strictly adhere to the statutory provisions of the Building and Construction Industry Security of Payment Act 1999 (NSW) (‘SOPA’) and Corporations Act 2001 (‘CA’) in order to validly serve a payment claim on a respondent. A failure to serve payment claims in the prescribed manner under statute can have significant monetary implications for a claimant.
Case Summary
Between 4 February 2020 and 9 August 2020, MGW Engineering Pty Ltd, trading as Forefront Services (‘the plaintiff’) entered into four contracts (‘the contracts’) with CMOC Mining Services Pty Ltd (‘the defendant’) for the provision of services at a mine in central New South Wales.
On 3 February 2021 at 5.15pm, an employee of the plaintiff physically handed an employee on duty in the access control room four payment claims relating to the contracts for a total amount of $6,161,020.35. On 4 February 2021, the plaintiff delivered the four payment claims to the defendant using a cloud-based document sharing software.
In establishing whether the payment claims served on 3 or 4 February 2021, the plaintiff contended that the payment claims were served on 3 February 2021 on the grounds of serving the payment claims (i) “personally” (s 31(1)(a) SOPA), (ii) “lodging..during normal office hours” (s 31(1)(b) SOPA) and (iii) in a “manner…provided under” the contracts (s 31(1(e) SOPA).
The defendant maintained the payment claims were served on 4 February 2021.
Section 31 of SOPA provides:
“Any document that by or under this Act is authorised or required to be served on a person may be served on the person:
(a) by delivering it to the person personally; or
(b) by lodging it during normal office hours at the person’s ordinary place of business; or
…
(e) in the case of service by a party to a construction contract on another party to the construction contract – in the manner that may be provided under the construction contract.
…
The provisions of his section are in addition to, and do not limit or exclude, the provisions of any other law with respect to the service of documents.
In this section:
‘document’ includes written notice or determination
‘serve’ includes give, send or otherwise provide.”
Clause 47.1 of the contracts provides:
“[25] …Any notice served on CMOC or the other defendants “must” be marked with the attention of ‘the Company Secretary’”
Clause 47.2 of the contracts provides:
47.2 Notices deemed given
A Notice will be taken to be duly given:
in the case of delivery by hand, when delivered;
…
but if the result is that a Notice would be taken to be given or made on a day that is not a Business Day or the Notice is sent or is [delivered] later than 4.00pm (local time) it will be taken to have been duly given or made at the commencement of business on the next Business Day.”
Section 109X of the CA provides:
“For the purposes of any law, a document may be served on a company by:
As per s 14 of SOPA, the payment schedule must be served within 10-business days after receipt of the payment claim.
On 18 February 2021, the defendant served its payment schedule in response to the payment claims. This represented 10-business days after 4 February 2021, and 11-business days after 3 February 2021. As the defendant maintained that the payment claims were served on 4 February 2021 and their payment schedule was served within time, the plaintiff was entitled to no more than $180,912.05.
The plaintiff contended that service of the payment claims was effected on 3 February 2021. Thus, the defendant’s service of its payment schedule on 18 February 2021 fell outside of the 10-business day statutory time limit prescribed by SOPA. A failure of the defendant to adhere to the time limit would not have entitled them to raise a defence or cross-claim. As such, the plaintiff argued this entitled them to a judgment of the full payment in the sum of $6,161,020.35.
When deciding whether the payment claims were served personally on 3 February 2021, His Honour noted that s 31(3) of SOPA operated in conjunction with other statutory provisions with respect to document service. His Honour looked to s 109X of the CA and clause 47.1 of the contract in coming to a decision. His Honour dismissed the plaintiff’s claim that the payment claims were delivered on 3 February, and contended that the defendant did:
“[37] …not see the Payment Claims until he attended the Mine on 4 February 2021”
His Honour held that the payment claims were not lodged until 4 February 2021, in particular:
“[43]…in order that a Payment Claim be ‘lodged’ with a corporation, more is required than simply leaving the document with an employee, no matter what the employee’s functions were nor how junior the employee was, at any location within the corporation’s business premise. Some further step, the effect to which would likely be bringing the Payment Claim to the attention of the relevantly responsible person, is necessary..”
His Honour maintained that although:
“[49] The Mine operates continuously 24 hours a day, 7 days a week and every day of the year…”
this does not extend the interpretation of “normal office hours” in s 31(1)(b) of SOPA to hours outside the typical working hours of administrative staff.
His Honour based his determination on evidence given by the defendant’s office administration staff to conclude:
“[68] …that CMOC’s ‘normal operating hours’ at the mine commenced between 7 and 7:30am and concluded around 4 to 4:30pm.”
His Honour did not accept the defendant’s access control room satisfied the interpretation of s 31(1)(b) of SOPA as an ordinary place of business. His Honour held that as the payment claims were served after 4pm, they were effectively delivered on 4 February 2021.
However, His Honour noted that if the plaintiff met the other requirements for service of the payment claim on the defendant, a breach of clause 47.2 of the contract would not prevent service from being effected. Accordingly, payment claims were served by the plaintiff to the defendant on 4 February 2021.
The recent decision of the New South Wales Supreme Court (Court) in Anjoul v Anjoul [2021] NSWSC 592 (Anjoul) has re-emphasised the importance of ensuring agreements for the completion of residential works are in writing, even amongst family members. Although the Court found that this can be remediated in a later agreement subject it to it being entered into without evidence of duress or unconscionable conduct, the agreement between the parties will ultimately be subject to the statutory requirements of the Home Building Act 1989 (NSW) (HBA).
In April 2009, Ashley Anjoul (the defendant) was issued an owner-builder permit by the NSW Department of Fair Trading for the property at Winston Hills (property). After receiving the permit, the defendant then engaged her former brother-in-law, contractor Jerry Anjoul (the plaintiff) to organise subcontractors to complete the renovation works. No written contract was entered into between the defendant and the plaintiff.
In early 2010, the works were completed. In mid-2013, the plaintiff became concerned that the defendant would not reimburse him for payments made to the subcontractors. Between 31 October 2013 and 14 November 2013, a deed was executed by the defendant and the plaintiff. In the deed the defendant acknowledged she was indebted to the plaintiff in the amount of $700,000.00. Due to the increase in the consumer price index, when the plaintiff filed his amended statement of claim, this amount increased to $743,353.45.
Around the time of executing the deed, the defendant’s husband was arrested and incarcerated for indictable criminal offences. As a result, the defendant suffered significant psychological and physical medical conditions.
The plaintiff maintained that he paid all the subcontractors and was entitled to the reimbursement from the defendant. The plaintiff did not tender any evidence of contracts, invoices or payments made to the subcontractors. The plaintiff claimed that the defendant was in good health at the time of executing the deed and that there was significant negotiation with the defendant as to the terms of the deed.
The defendant maintained that the plaintiff was barred from accessing reimbursement because of the statutory requirements under the HBA for a a written building contract agreement (s7), for the contractor to be licenced (s19) and insured (s92).
The defendant claimed that although she signed the deed, the deed was unenforceable because her signature was the product of duress and undue influence. The defendant held that the deed was only signed by her based on the reliance of the plaintiff that this would protect the property from being seized by the NSW Crime Commission in the active indictable criminal proceedings against her husband.
Additionally, the defendant claimed that the value of the works was less than the amount claimed by the plaintiff and that the amounts claimed were irrecoverable under the statutory requirements of the HBA.
The defendant also filed a cross-claim seeking an order that the deed was void and unenforceable under the Contracts Review Act 1980 (NSW) (CRA) because of the plaintiff’s unconscionable conduct.
The Court dismissed the defendant’s claim that there was no debt due under the deed. His Honour found that the plaintiff was not barred under the HBA from his claim of a reimbursement because even if the plaintiff entered into contracts with the subcontractors in his own name, he did so as an agent for the defendant who was the owner-builder, and not as a contractor which required a building license.
Although His Honour dismissed the defendant’s claims that under the deed there was no debt due, His Honour found that the deed was an unjust contract under the CRA. As a result, the deed was unenforceable under applicable equitable principals of duress and unconscionable conduct.
However, His Honour found it would not be conscionable for the defendant to enjoy the whole benefit of the residential renovation works without compensating the plaintiff for his efforts as agent for the owner-builder defendant.
Due to the inadequacy of the evidence for payments made and invoices available to the Court, His Honour gave the parties an opportunity to determine the appropriate amount of compensation that the defendant should pay the plaintiff.
The general premise of advancing a security of costs application under rule 42.21 in the Uniform Procedure Rules 2005 (NSW) (“UCPR”) is to minimise the risk of substantial collateral financial loss in the event your impecunious plaintiff opponent is unsuccessful in its case and is ultimately ordered to pay you costs. In summary, this is sought by pressing an application under rule 42.21 of the UCPR in court to seek its discretionary authority to secure the potential windfall of a monetary costs order from your opponent, early on in the litigation timetable.
Although the advancing of a security of costs application may be seen to be at odds with the fundamental principle of securing the right of any litigant to pursue the enforcement of their rights in court, the court essentially employs a balancing act to ensure justice between the parties. That is, that the defendant is adequately protected, against avoiding injustice to a penurious plaintiff by prejudicing it in making a security of costs order against them.
The defendant bringing a security of costs application against the plaintiff needs to demonstrate a sufficient reason to believe that in the event the court makes an adverse costs order, the plaintiff will be unable to meet it.
The court in Warren Mitchell Pty Ltd v Australian Maritime Officers Union (1993) 12 ACSR 1 at [61] had cause to consider whether the mere suspicion that a plaintiff will not be able to meet an adverse costs order was sufficient alone to meet the court’s threshold:
“The evidence to be relied on must have some characteristic of cogency. Further, speculation as to the insolvency or financial difficulties experienced by the plaintiff company is insufficient to ground the exercise of the discretion”
The criteria of considerations of the Court in exercising their discretion to order security are set out by Her Honour Beazley J in the Federal Court case of KP Cable Investments Pty Ltd v Meltglow Pty Ltd & Ors (1995) 56 FCR 189, namely:
Further, the matter of Kennedy v Nine Network Australia Pty Ltd [2008] QSC 134 regarded the delay of the defendant filing a security of costs application as another salient discretionary factor in the court making an order for security.
Ultimately, it is at the court’s discretion as to whether an order for security will be made.
This is demonstrated in the decision of King v Commercial Bank of Australia Limited [1920] HCA 62 at [292]:
“The legislature […] has left absolute discretion to the court, and has done so without prescribing any rules for its exercise. In these circumstances, no rules can be formulated in advance by any judge as to how the discretion shall be exercised. It depends entirely on the circumstances of each particular case. The discretion must, of course, be exercised judicially, which means that in each case the judge has to inquire how, on the whole, justice will be best served…”.
Applications for security for costs in Western Australia aim to reduce the risk that a successful defendant will be unable to recover its legal costs from an impecunious plaintiff. The framework is primarily found in s 1335(1) of the Corporations Act 2001 (Cth) and Order 25 of the Rules of the Supreme Court 1971 (WA), which allow the Court to require a plaintiff, typically a corporation, to provide security before the matter progresses further.
As with other jurisdictions, WA courts must balance the defendant’s legitimate need for protection against the risk that a security order may unjustly prevent a plaintiff from pursuing a genuine claim.
Section 1335(1) Corporations Act 2001 (Cth)
This provision allows the Court to order a corporate plaintiff to give security for the defendant’s costs where there is credible testimony giving reason to believe the corporation will be unable to meet an adverse costs order. This is a threshold jurisdictional requirement.
The threshold is described as modest. The applicant must show a real chance that the plaintiff will not be able to satisfy a costs order if unsuccessful.
Order 25: Rules of the Supreme Court 1971 (WA)
Once the jurisdiction is enlivened, Order 25 governs the form of security, the procedure for obtaining it, and the consequences if security is not provided.
To satisfy the mandatory threshold under s 1335(1), the defendant must produce credible evidence showing that:
Evidence often includes company searches, financial statements, insolvency indicators, or a lack of assets in the jurisdiction.
In Nicolaou v Air Liquide WA Pty Ltd [2024] WASC 309, the Court emphasised that this threshold is not demanding but must be established with cogent financial evidence.
Once the threshold is met, the Court exercises a broad discretion. Common factors include:
These factors were central in Trafford Nominees Pty Ltd v Everstone Group Pty Ltd [2025] WASC 282, where the Court analysed both the plaintiff’s financial position and the practical consequences of ordering security.
A defendant seeking security must file material demonstrating:
Failure to provide proper evidentiary support may result in the application being dismissed, even where impecuniosity is suspected.
Nicolaou v Air Liquide WA Pty Ltd [2024] WASC 309
The Court reaffirmed that the s 1335 threshold requires only credible testimony showing a real chance of non-payment. Once satisfied, the discretionary evaluation is wide-ranging and must account for justice between the parties.
Trafford Nominees Pty Ltd v Everstone Group Pty Ltd [2025] WASC 282
The Court considered several discretionary factors, including merits, stultification, persons behind the plaintiff, and enforceability, and stressed that even when the threshold is met, security will not automatically follow.
Lawless v Mackendrick [2014] WASCA 105
In the appellate context, the Court explained that security protects a respondent from having to defend an appeal with no realistic prospect of recovering costs. The Court must balance protection against unfairly foreclosing an appeal.
Ultimately, whether a security for costs order will be made in Western Australia depends on:
WA courts consistently emphasise that the discretion is broad but must be exercised judicially, ensuring that defendants are protected from unrecoverable costs without preventing plaintiffs from litigating genuine disputes.
The purpose of a security for costs application in the Australian Capital Territory is to reduce the risk that a defendant will be left unable to recover its legal costs if an impecunious plaintiff is ultimately unsuccessful. Under the Court Procedures Rules 2006 (ACT), a defendant may apply early in the litigation process for an order requiring the plaintiff to provide security, usually via a payment into court or another acceptable form of guarantee.
Although such applications protect defendants from unrecoverable costs, they must also be weighed against a plaintiff’s right to pursue a claim. As in other jurisdictions, the ACT courts conduct a careful balancing exercise to ensure that ordering security does not unjustly stifle a genuine cause of action.
An application must be supported by an affidavit, setting out the factual basis and the grounds relied on for security. This includes evidence of the plaintiff’s financial position, residence, supporting parties, prospects, and any other material relevant to the statutory tests.
Before the Court can consider discretion, at least one ground in r 1901 must be established:
If one of these criteria is met, the jurisdiction to order security is enlivened.
Once the threshold is satisfied, the Court turns to a broad range of discretionary considerations, including:
The discretion is broad and requires the Court to evaluate what outcome best serves justice in the circumstances.
ACT courts have developed a consistent approach to applying the rules:
Atarashii Stone Pty Ltd v Granite Transformations (No 3) [2017] ACTSC 139; [2017] ACTSC 198
Security of $50,000 was ordered after the Court examined the plaintiff’s financial position and the likely costs of the proceeding. The case demonstrates that the Court may rely on inherent jurisdiction where the CPR does not expressly apply.
Benjamin v GB Franchising Australia Pty Ltd [2008] ACTCA 11
The Court confirmed that the default position is that no security is payable unless the applicant establishes grounds for it. Impecuniosity alone is relevant but not conclusive. Each case must be assessed on its own facts.
Twining v Curtis [2014] ACTCA 19
Security of $25,000 was ordered where the respondent was impecunious and the appeal lacked prospects. Delay in bringing the application was not sufficient to defeat it.
As in other jurisdictions, even if the prerequisites for security are met, the ACT Court retains a broad discretion. The ultimate question is always:
The Court will not allow security to be used oppressively, nor permit a defendant to exploit the process to extinguish a legitimate claim. Conversely, it will not require a defendant to bear the real risk of unrecoverable costs where the plaintiff cannot meet an adverse order.
The general premise of advancing a security for costs application in Queensland under Chapter 17 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR (Qld)”) is to minimise the risk that a defendant will suffer financial loss where an impecunious plaintiff is ultimately unsuccessful and cannot satisfy an adverse costs order. A defendant may, early in the litigation process, apply for an order requiring the plaintiff to provide security (usually a payment into Court or bank guarantee) to safeguard the potential recovery of costs.
While such applications can be seen as limiting access to justice, the Court engages in a balancing exercise. It must ensure that a defendant is properly protected, without unjustly stifling a plaintiff who may have a legitimate claim but limited financial resources.
The defendant must establish that the statutory grounds for security exist, and then persuade the Court that, in its discretion, security is appropriate in all the circumstances.
Rule 670 sets out that, on a defendant’s application, the Court may order security for costs “as appropriate”, subject to the requirements in rules 671 and 672.
At least one of the following must be satisfied before the Court’s power is enlivened:
Evidence such as financial statements, ASIC searches, or proof of overseas residence is commonly required to satisfy rule 671.
Once a ground in r 671 is met, the Court then considers a range of discretionary factors, including:
These factors mirror the balancing exercise undertaken in NSW but are expressly codified in r 672.
If security is ordered:
Security for costs applications in Queensland follow a clear two-step analysis:
In Zhao, the Supreme Court of Queensland considered applications for security under rr 671–672. Key findings included:
The case reinforces that even where r 671 is met, the Court will carefully apply r 672 to ensure that ordering security does not unfairly hinder legitimate litigation.
Ultimately, even where the rule 671 threshold is satisfied, the Court retains a broad discretion. The question is always:
Courts consistently warn that security for costs should not be used oppressively, nor to extinguish a genuine claim. Equally, defendants should not be exposed to the real risk of unrecoverable legal costs.
This requires weighing the defendant’s legitimate interest in cost protection against the plaintiff’s right to pursue their claim without unfair hindrance.
It is now a legal requirement that directors of a company, body corporate, registered Australian Body or registered foreign company, must have a director identification number (Director ID).
Any existing directors of a company must ensure that they apply for a Director ID by no later than 30 November 2022, to avoid facing both criminal and civil penalties. Any person, not already a director, but intending to become a director, must ensure they apply for a Director ID before appointment as a director.
A Director ID is unique 15-digit number provided to a director or a prospective director, which is used to verify the identity of a director. A director is only required to apply for a Director ID once, and that number will be permanently retained by that director forever. The single unique number will be used by a director, even if that director is a director of multiple entities.
Director ID’s have been implemented as a means of authenticating the identity of a director, and enabling a mechanism for tracking a director’s involvement in and relationship across various entities. By having a verified and traceable uniform system, which requires directors to be transparent about their identities, and which identifies a director’s interest as officeholder across various entities, this will hopefully assist to decrease the number of false or fraudulent director identities, as well as attempt to eliminate certain illegal activities by company directors, such as phoenixing. For more information on pheonixing, see our article Restructuring and Anti-Phoenixing Regimes.
A Director ID is applied for through the Australian Business Registry Services (ABRS). You can apply online through the ABRS or over the phone. The ABRS will require a director to prove their identity and will request information, including a director’s tax file number, residential address, identification documents (e.g driver licenses and passports), and secondary information (which can include, bank account details, superannuation account details, PAYG payment summary details etc). A director will need to ensure this information is available, in order to complete the application process. A director must apply for their Director ID themselves. There is no cost in applying for a director ID.
The requirement for a Director ID was first introduced in November 2021. Since the requirement was implemented, there has been a transition period for existing directors to apply. The deadline for all existing directors to apply for a Director ID is 30 November 2022. Any new directors intending to become a director of a company, must apply before becoming a director.
What happens if I don’t apply for a Director ID?
Directors who do not apply for a Director ID, or who do not apply for a Director ID within the relevant timeframes, may face civil and criminal sanctions. Sanctions under the Corporations Act 2001 (Cth) for failing to have a Directors ID when required, include criminal penalties of up to $13,200 and civil penalties of up to $1,100,000.
If you are a director of a company and you have not already applied for a Director ID, then you should attend to this urgently. If you, or anyone you know, has any questions, then you can contact our office on (02) 6188 3600.