Background
The applicants, Offer Vince Shlomi and Square One Entertainment Inc, are US residents without assets in Australia. The respondents, Anything4Views Pty Ltd and Chad Lance Roberts, sought security for costs based on the applicants’ foreign residency and inability to satisfy any adverse costs order in Australia.
On 4 November 2025, after negotiations, the parties entered into consent orders agreeing that the applicants would pay $77,000 into court as security for costs in three tranches: $7,000 immediately, $26,000 after service of the applicants’ evidence, and $44,000 no later than 30 days before the hearing date. Importantly, the consent orders granted the respondents liberty to seek further security only after filing their own expert and lay evidence, and no later than 45 days before the hearing.
On 10 June 2026, before any party had filed evidence, the respondents filed an interlocutory application seeking an additional $50,000 in security. They argued that discovery costs—totalling approximately $17,000—had been incurred beyond what was contemplated when the consent orders were made.
The Court’s Holding
Justice Jackman dismissed the respondents’ application. The court first established that the consent orders of 4 November 2025 constituted a binding contractual agreement to compromise the parties’ dispute over security for costs. Although courts retain power to vary consent orders, such variation requires sufficient justification—a principle the court acknowledged but found absent here.
The court found no material change in circumstances warranting variation. While the respondents incurred additional costs through discovery, the court held these to be ordinary vicissitudes of litigation that any experienced solicitor would have anticipated when agreeing to the security regime. Discovery is a standard feature of Federal Court litigation, and the respondents’ failure to account for it in their original cost calculations did not establish that they had not contemplated the risk. Critically, the $17,000 in discovery costs bore no reasonable relationship to the $50,000 being sought.
Justice Jackman also noted that the first applicant had made significant financial decisions based on reliance that the 4 November orders would remain in effect. Additionally, the court flagged a further issue for future determination: whether security should be limited to the amount reasonably necessary to recognize and enforce an Australian judgment in the relevant US state, a consideration the respondents had not adequately addressed.
Key Takeaways
- Consent orders compromising disputes over security for costs are binding contractual agreements, not merely procedural arrangements subject to casual variation.
- Respondents cannot obtain additional security by invoking ordinary costs incurred during normal litigation progression—discovery, expert reports, and other expected steps must be anticipated when parties agree to security arrangements.
- Courts will not vary consent orders absent material change in circumstances or other sufficient justification; reliance interests and the bargained-for compromise carry significant weight.
- The court hinted that security for costs in cross-border disputes may be calibrated to the practical enforceability threshold (e.g., amount needed to enforce a judgment in the applicant’s home jurisdiction), not unlimited ordinary litigation costs.
Why It Matters
This decision provides certainty to foreign litigants seeking to pursue claims in Australia. Once security for costs is agreed by consent—particularly when negotiated by experienced legal representatives—respondents cannot unilaterally escalate the burden mid-litigation simply because expenses have exceeded informal estimates. The judgment protects applicants who have structured their participation and finances around an agreed security regime and ensures that consent orders reflect genuine compromise rather than provisional estimates subject to revision.
The court’s suggestion that security might be capped at the amount needed to enforce a judgment abroad could have broader implications for cross-border litigation. Rather than security tied to estimated total costs (which are difficult to predict), an enforceability-based cap would align security with its practical purpose and may reduce friction in international proceedings. The decision thus advances both certainty and fairness in security for costs practice.