Energy Efficient Premium Houses Pty Ltd v Myers [2026] QMC 12

MAGISTRATES COURTS OF QUEENSLAND CITATION: Energy Efficient Premium Houses Pty Ltd v Myers & Myers [2026] QMC 12 PARTIES: Energy Efficient Premium Houses Pty Ltd (Plaintiff) v Rachel Jane Myers (First Defendant) & Lawrence Ralph Myers (Second Defendant) FILE NO/S: M8224/24 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: Brisbane Magistrates Court DELIVERED ON: 19/06/2026 DELIVERED AT: Brisbane Magistrates Court HEARING DATE: 21/07/25 MAGISTRATE: Pinder ORDER: 1) Pursuant to r 670 of the UCPR the plaintiff provide security for the first and second defendants costs of and incidental to this proceeding in the amount of $89,501.71. 2) The security be provided within 14 days of the making of this order via payment into court in the amount of $89,501.71. 3) If the plaintiff does not give security for costs in accordance with paragraphs 1 and 2 of these orders, the proceedings against the defendants is stayed so far as it concerns steps to be taken by the plaintiff pursuant to r 674(4) of the UCPR. 4) The plaintiff application filed 18/06/25 is dismissed -- 1 of 11 -- 2 5) The plaintiff pay the first and second defendants’ costs of and incidental to the application for security for costs filed 9 May 2025 and the application for further disclosure filed 18 June 2025 on a standard basis to be assessed. CATCHWORDS: APPLICATION FOR SECURITY FOR COSTS – COSTS – FIXING COSTS Uniform Civil Procedure Rules 1999 (Qld) r 670, r 681, r 693, r 702 Corporations Act 2001 (Cth) s 1335 CASES: Robson v Robson & Anor [2008] QCA 36 Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744 Wollongong City Council v Legal Business Centre Pty Ltd [2012] NSWCA 245 Monto Coal 2 Pty Ltd v Sanrus Pty Ltd [2018] QCA 309 DGR Global Ltd v PT Ltd [2025] QCA 122 Skytraders Pty Ltd [2024] NSWSC 984 General Trade Industries Pty Ltd v AGL Energy Ltd [2023] FCA 556 Suncare Constructions Australia Pty Ltd v Gainspace (Mackay) Pty Ltd [2016] QSC 67 Mio Art Pty Ltd v Mango Boulevard Pty Ltd [2018] QSC 31 Peter Carter Transport Pty Ltd v Swansway No 2 Pty Ltd [2021] QDC 109 COUNSEL: Plaintiff – Mr W. Davis (solicitor) First and second defendants – Mr M. Ziebell SOLICITORS Plaintiff – Stonegate Legal Pty Ltd First and second defendant – Mills Oakley Introduction [1] The plaintiff brings suit claiming as a debt or in the alternative, damages, $81,664.80. The plaintiff pleads that it and the first and second defendants entered into a building contract for the completion of building work at a property located at 130 Weller Road Tarragindi and through the course of construction the parties agreed to vary the contract for the completion of additional works (variations) and that the defendants have failed to make payment for the variations with the amount outstanding being $81,664.80. -- 2 of 11 -- 3 [2] The claim is defended upon the basis that the defendants allege the variations are invalid and unenforceable amongst other bases because the work was undertaken when the plaintiff was unlicensed pursuant to the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act). [3] The defendants further plead that the action bringing the claims is statute-barred pursuant to the provisions of the Limitations of Actions Act 1974 (Qld). The Applications The Defendant’s Application [4] The defendant has applied for orders that 1) The plaintiff provide security for the first and second defendants costs in the amount of $95,586.12. 2) If the plaintiff does not give security for costs, the proceeding against the defendants be stayed. 3) Costs The Plaintiff’s Application [5] The plaintiff has applied for orders that 1) Pursuant to r 223 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) the first and second defendants provide disclosure of all documents. 2) The first and second defendants pay the plaintiffs costs of the application on an indemnity basis. [6] The defendants’ application was filed first in time, but the registry directed that both applications be listed for hearing on the same date. [7] The plaintiff’s solicitor has conceded that in the event that the defendants succeeded on their application for security for costs, the plaintiff’s application (for disclosure) ought simply be dismissed.1 The Parties’ Material [8] The applicant defendants’ material is - Application filed 9 May 2025 - Affidavit Gregory David James Richards filed 9 May 2025 [9] The Plaintiffs’ material is - Affidavit Wayne Philip Davis sworn 20 July 2025 and filed by leave 21 July 2025 1 Transcript of Proceedings Energy Efficient Premium Houses v Myers (Magistrates Court of Queensland, Pinder J) 1–8 [20]. -- 3 of 11 -- 4 [10] Pursuant to directions made (without opposition from the plaintiff) at the hearing, the plaintiff’s solicitors emailed the registry of the court to confirm what portions of the affidavit of Mr Davis the plaintiff did not rely upon. [11] By email dated 22 July 2025 the plaintiff’s solicitors confirmed that the plaintiff would not rely upon the following paragraphs in the affidavit of Mr Davis - Paragraph 5 and exhibits WPD1 - Paragraph 5 and exhibits WPD2 - Paragraph 7 and exhibits WPD4 - Paragraph 8 [12] Both the defendants’ counsel and the plaintiff’s solicitor conveniently provided written outlines of argument. The Application for Security for Costs [13] The defendants in applying for an order for security for costs rely in the alternative on either - Rule 670 – UCPR - Section 1335 – Corporations Act 2001 (Cth) Corporations Act [14] Section 1335 of the Corporations Act 2001 (Cth) provides 1335 Costs 1) Where a corporation is plaintiff in any action or other legal proceeding, the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his, her or its defence, require sufficient security to be given for those costs and stay all proceedings until the security is given. Uniform Civil Procedure Rules [15] Rule 670 of the UCPR relevantly provides 670 Security for costs 1) On application by a defendant, the court may order the plaintiff to give the security the court considers appropriate for the defendant’s costs of an incidental to the proceeding. [16] The rule applies subject to prerequisite for security for costs2 and discretionary factors for security for costs.3 2 Uniform Civil Procedure Rules 1999 (Qld) r 671. 3 Uniform Civil Procedure Rules 1999 (Qld) r 672. -- 4 of 11 -- 5 [17] The parties’ outlines accept that r 671 UCPR and s 1335 of the Corporations Act 2001 (Cth) are in materially the same terms and engage the same principles and considerations. Relevant Principles [18] The UCPR relevantly provides - A power for the court to order security for costs.4 - The material prerequisites to consider the exercise of that discretion.5 - The discretionary factors for security for costs.6 [19] In terms of approach to an application for security for costs, a two-stage process was endorsed by the Court of Appeal in Robson v Robson & Anor.7 The first stage involved a consideration of whether the court was satisfied in terms of r 671. The second, which would be undertaken only if the court was satisfied, required consideration of whether security should be granted having regard to the factors in r 672. [20] The applicant’s outline contends for a three-step enquiry, the third and final step being a determination as to what quantum of security should be ordered. [21] The plaintiff’s outline of argument and written submissions do not cavil with that approach but contend - That the plaintiff does not accept that the defendants have met the threshold requirement – that there is reason to believe that the plaintiff will not be able to pay the defendant’s costs if ordered to pay them. - However, if the court is so satisfied that a number of the discretionary factors pursuant to r 672 agitate against the exercise of the discretion in favour of the defendants. [22] The applicant defendants acknowledge that the applicant has an evidentiary burden of leading cogent evidence to establish a prima facie entitlement to an order.8 [23] The applicant in seeking to establish the threshold rely in respect of prerequisites pursuant to r 671 relevantly a) The plaintiff is a corporation and there is reason to believe the plaintiff will not be able to pay the defendant’s costs if ordered to pay them; or b) The plaintiff is suing for the benefit of another person, rather than for the plaintiff’s own benefit, and there is reason to believe the plaintiff will not be able to pay the defendant’s costs if ordered to pay them. 4 Uniform Civil Procedure Rules 1999 (Qld) r 670. 5 Uniform Civil Procedure Rules 1999 (Qld) r 671. 6 Uniform Civil Procedure Rules 1999 (Qld) r 672. 7 [2008] QCA 36. 8 Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744. -- 5 of 11 -- 6 [24] The applicant correctly submits that - Whilst the defendant bears the onus of establishing that a prerequisite for making an order for security for costs exists, here, that there is reason to believe the plaintiff would not be able to pay the defendants’ costs if ordered to do so, if that onus is discharged the evidentiary onus shifts to the plaintiff to establish a reason why security for costs should not be granted.9 - The words ‘reason to believe’ involve an assessment of whether the objective circumstances were sufficient to incline the mind to accepting rather than rejecting that the fact will exist.10 - That likelihood need not be proved on the balance of probabilities.11 - The expression ‘will not be able to pay’ permits the court to consider whether the company is likely to be able to pay within a reasonable amount of time.12 [25] In considering the threshold requirement for an order for security under s 1335(1) of the Corporations Act 2001 (Cth) the New South Wales Supreme Court in Re Skytraders Pty Ltd13 described it as ‘an undemanding test.’ [26] The plaintiff (respondent’s) response in the outline of argument limits its response to this The court does not require conclusive proof of insolvency. Instead, the defendant must present credible testimony that gives rise to a genuine belief supported by evidence that the plaintiff is impecunious or financially unstable. Mere suspicion is not enough, but balance of probabilities proof isn’t required either. [27] That purported statement of principle is inconsistent with the established requirements in respect of the satisfaction by the applicant defendants in respect of the prerequisites under r 671. [28] The evidence in relation to the prerequisite requirements are - Uncontroversially, the plaintiff is a corporation (r 671(a)). - There is reason to believe that the plaintiff will not be able to pay the defendants’ costs if ordered to pay them is established as follows i) The plaintiff refused to provide copies of relevant documents in relation to its current financial position or the financial position of its sole director, Mr Richard Eaton.14 ii) The defendants’ enquiries have revealed that the plaintiff has no assets, current or non-current as follows 9 Wollongong City Council v Legal Business Centre Pty Ltd [2012] NSWCA 245. 10 Monto Coal 2 Pty Ltd v Sanrus Pty Ltd [2018] QCA 309 [43]. 11 DGR Global Ltd v PT Ltd [2025] QCA 122 [64]. 12 Monto Coal 2 Pty Ltd v Sanrus Pty Ltd [2018] QCA 309 [50]. 13 Skytraders Pty Ltd [2024] NSWSC 984. 14 Affidavit G. Richard [54], [56]. -- 6 of 11 -- 7 - A company search with ASIC shows the company has a current share capital of $416 consisting of 416 fully paid ordinary shares held by Richard Eaton.15 - A search of the personal property security register shows the plaintiff does not have any granted security interests.16 - A Queensland property search reveals the plaintiff does not own any real property in Queensland.17 [29] The plaintiff which traded as a building contractor previously held a QBCC licence. The defendants’ enquiries have established - A search of the QBCC shows the plaintiff does not currently hold a building licence. - The previous QBCC builder’s licence was suspended and cancelled as a result of non-payment of the annual licence fee in 2018. - The plaintiff, not holding a current builder’s licence, would no longer be able to trade as a building contractor in Queensland.18 [30] I am satisfied on the applicant defendants’ evidence that the plaintiff has no assets and is not trading, and accordingly, there is reason to believe that the plaintiff will not be able to pay the defendants’ costs if ordered to do so. [31] The plaintiff, both in its written outline and its submissions to the court, does nothing to respond or assuage the clear and direct evidence adduced by the defendants that it has no assets. [32] The applicant defendants having established the first limb of the test, it is necessary to consider the discretionary factors under r 672 (UCPR). Discretionary Factors for Security for Costs [33] The discretionary factors which are relevant to consider are as follows The means of those standing behind the proceedings (r 672(a)) - The sole shareholder and director is Mr Richard Eaton.19 - A Queensland property search reveals that Mr Richard Eaton holds a fee simple title with Edwin Jill Coghlan and that there is a mortgage registered to the title.20 - Mr Richard Eaton has refused to produce any of his own financial information.21 15 Affidavit G. Richard [30]. 16 Affidavit G. Richard [31]. 17 Affidavit G. Richard [33]. 18 Affidavit G. Richard [34]–[36]. 19 Affidavit G. Richard [39]–[40]. 20 Affidavit G. Richard [41]. 21 Affidavit G. Richard [54]. -- 7 of 11 -- 8 [34] The plaintiff (a corporation) has no assets. The director and shareholders liability in the plaintiff is limited to the issued shares. [35] In General Trade Industries Pty Ltd v AGL Energy Ltd Derrington J observed The policy objective served by s 335(1) and its antecedents have been explained on a number of occasions as being essentially to ensure that the privilege of limited liability is not misused in such a way as to make the company a stalking horse, enabling those to stand behind it, and those who are liable to benefit from the proceedings that it has brought to pursue their own interests in the action without facing any risks as to costs.22 [36] The evidence establishes here that those standing behind the corporation and who potentially benefit in the proceedings commenced by the plaintiff have refused to provide particulars of their own financial information. The Impecuniosity of the Corporation – r 672(d) UCPR [37] The applicants’ evidence uncontroversially establishes that the plaintiff corporation does not have any current or non-current assets and is not trading and is accordingly impecunious. The Prospects of Success or Merit – r 672(b) – (c) UCPR [38] The parties pleaded case and the evidence established by the applicant as to the QBCC building licence status of the plaintiff lead to the inevitable conclusion that the plaintiff has poor prospects of succeeding on its case as pleaded. [39] The plaintiff’s response is simply that the court should not conduct a ‘mini trial’ and should not go into the merits of the claim in detail.23 [40] However, whilst the plaintiff had an entitlement to recover for construction work undertaken while it was not the holder of a licence (s 42(4) QBCC Act), the plaintiff does not plead that any work was undertaken during the period of the suspension or cancellation of the licence. Any claim based on s 42(4) of the QBCC Act is now more than 6 years prior to the commencement of the proceedings and the defendants plead is statute-barred pursuant to s 10(1)(d) of the Limitation of Actions Act 1974 (Qld). [41] The defence pleads that the additional amounts claimed by alleged variation are not recoverable as the variations are invalid, ineffective, or not in fact variations but within the scope of works of the contract. [42] The plaintiff, whilst seeking to plead to those allegations in its reply, does not address that in its outline or oral submissions and the pleaded contentions in relation to the entitlement to recover under s 42(4) of the QBCC Act and the pleaded statute-barred claims I find support the proposition that the plaintiff has a poor case. 22 [2023] FCA 556 [33]. 23 Suncare Constructions Australia Pty Ltd v Gainspace (Mackay) Pty Ltd [2016] QSC 67. -- 8 of 11 -- 9 The Application was Brought Promptly – r 672(k) [43] The affidavit of Mr Richards deposes to the procedural history and the correspondence raising the issues of concern of the defendants with the plaintiff’s solicitors and the absence of any substantive response. [44] The application for security for costs was brought promptly by the defendants after failing to receive a response to their last request in time. [45] The plaintiff seeks to advance as discretionary factors pursuant to r 672 the following - The genuineness of the proceedings – r 672(c) - Oppression – r 672(g) - An order for security would stifle proceedings – r 672(h) [46] Noting the effect that the evidential onus shifts to the plaintiff to establish a reason why security should not be granted24 the plaintiff has put on no evidence which properly supports it being in a position to establish that any of those discretionary factors agitate against the exercise of discretion in favour of the defendants. [47] Upon a consideration of all of the discretionary factors for security for costs under r 672 to which the court should have regard, the discretion to order security for costs ought be exercised in favour of the applicant defendants. Quantum of Security for Costs [48] The plaintiff’s outline and oral submissions do not cavil with or seek to challenge the quantification by the applicant defendants as to the likely costs of defending the claim to the first day of a trial. [49] The affidavit of Mr Richards provides at paragraph 16 a detailed assessment of his estimate of the professional costs and outlays which total $132,000. [50] The applicant defendants seek only a portion of those costs in seeking an order of $89,500 (inclusive of GST). [51] In assessing quantum of security for costs the court should adopt a broad-brush approach.25 [52] I am satisfied that the applicant defendants’ material properly establishes that an appropriate assessed quantum for the security for costs that ought be ordered should be fixed in the sum of $89,501.71. Costs [53] The first and second defendants have succeeded in respect of the application for security for costs. 24 Wollongong City Council v Legal Business Centre Pty Ltd [2012] NSWCA 245. 25 Mio Art Pty Ltd v Mango Boulevard Pty Ltd [2018] QSC 31. -- 9 of 11 -- 10 [54] The plaintiff has conceded that in the event that the defendants were successful in the security for costs application, the plaintiff’s application for disclosure ought be dismissed. [55] The general rule is that costs follow the event26 and a successful party would obtain an order that the unsuccessful party pay its costs on a standard basis.27 [56] The first and second defendants having succeeded in respect of their application for security for costs and the plaintiff having been unsuccessful in its application for disclosure, the plaintiff ought be ordered to pay - The first and second defendants’ costs on their application for security for costs on a standard basis. - The first and second defendants’ costs on the plaintiff’s application for disclosure on a standard basis. Fixing Costs [57] In the Magistrates Court the court may order the costs of proceedings be assessed by a costs assessor – if the Magistrate considers it appropriate because of the nature and complexity of the proceedings.28 [58] There is a presumption in favour of a Magistrate fixing costs of proceedings and it is only when a case falls into an exceptional category because of its nature and complexity that there might be an order for assessment of costs.29 [59] Having regard to the nature and complexity of the pleaded case, the amount sought to be recovered by the plaintiff of $81,000 and the nature and complexity of the application for security for costs, I find that it is appropriate to order that the costs be assessed. Disposition [60] I therefore make the following orders (1) Pursuant to r 670 of the UCPR the plaintiff provide security for the first and second defendants costs of and incidental to this proceeding in the amount of $89,501.71. (2) The security be provided within 14 days of the making of this order via payment into court in the amount of $89,501.71. (3) If the plaintiff does not give security for costs in accordance with paragraphs 1 and 2 of these orders, the proceedings against the defendants is stayed so far as it concerns steps to be taken by the plaintiff pursuant to r 674(4) of the UCPR. (4) The plaintiff application filed 18/06/25 is dismissed 26 Uniform Civil Procedure Rules 1999 (Qld) r 681. 27 Uniform Civil Procedure Rules 1999 (Qld) r 702. 28 Uniform Civil Procedure Rules 1999 (Qld) 693(3). 29 Peter Carter Transport Pty Ltd v Swansway No 2 Pty Ltd [2021] QDC 109. -- 10 of 11 -- 11 (5) The plaintiff pay the first and second defendants’ costs of and incidental to the application for security for costs filed 9 May 2025 and the application for further disclosure file 18 June 2025 on a standard basis to be assessed. Magistrate J N L Pinder 19/06/2026 -- 11 of 11 --