Background
White Oak Commercial Finance Europe (Non-Levered) Ltd brought claims against Insurance Australia Ltd (IAL), BCC Trade Credit Pty Ltd and related Tokio Marine entities. After related Credit Suisse proceedings settled, White Oak was the sole remaining applicant in a trial expected to continue for the balance of 2026.
BCC/TM and IAL sought further security for their costs. The parties agreed that further security was appropriate; the dispute concerned its amount and form. BCC/TM sought approximately $10.9 million and IAL sought $5.07 million, while White Oak argued for materially lower amounts and proposed an undertaking to maintain cash in the United Kingdom.
The Court’s Holding
Thawley J ordered White Oak to provide further security of $2.5 million for IAL and $5.5 million for BCC/TM, payable into the District Registrar’s nominated interest-bearing account within seven days. Together with interim security ordered on 6 October, the Court considered appropriate total security to be $5 million for IAL and $8 million for BCC/TM.
The Court assessed the amounts broadly rather than attempting to predict the precise sum recoverable on a costs assessment. It accepted that the remaining litigation was still legally and factually complex, that the defence teams and counsel were not unreasonable in context, and that no additional global discount beyond recoverability adjustments was warranted. It nevertheless allowed a notional reduction for uncertainty concerning the recoverability of Kennedys London’s fees. White Oak’s proposed UK cash-fund undertaking was rejected because it did not create effective segregated security; payment into Court was ordered instead.
Key Takeaways
- Further security for costs may be recalibrated after related proceedings settle and alter the remaining litigation.
- The Court may fix security by a broad, impressionistic assessment rather than a line-by-line costs determination.
- Security held overseas through an undertaking may be inadequate where it is not segregated and depends on a foreign entity’s compliance.
Why It Matters
The decision confirms that settlement of companion claims does not necessarily make a complex remaining proceeding inexpensive. Courts will assess the real demands of the trial, including pleadings, factual issues and necessary legal resourcing.
It also illustrates the importance of providing readily enforceable security. A foreign claimant that does not show stultification may be required to pay funds into Court rather than rely on overseas assets or an undertaking.