Melbourne Rebels Rugby Union Pty Limited v Rugby Australia Limited, in the matter of Melbourne Rebels Rugby Union Pty Limited

This Federal Court decision is about additional security for costs in an ongoing commercial proceeding. It is not the final judgment on the parties' underlying dispute. Rugby Australia sought about $2.94 million in further security from Melbourne Rebels shortly before trial. Melbourne Rebels accepted that some further security should be provided, but argued the amount sought was too high.

Moore J ordered a further tranche of security of $2,120,507.52, made up of $1,190,000 for pre-trial costs and $930,507.52 for trial costs. The plaintiff had to pay that amount into court by 4:00 pm on 17 April 2026. The court also ordered the plaintiff to give a copy of the order to its funder, and ordered that the proceeding be stayed if the security was not provided.

The available reasons do not set out the full commercial story behind the substantive claims between Melbourne Rebels and Rugby Australia. What they do show clearly is the procedural position by April 2026. There was already an active Federal Court proceeding, an earlier security order had been made in February 2025, and the matter was approaching a three-week trial listed to begin on 18 May 2026.

The earlier order required Melbourne Rebels to provide $555,000 as an initial tranche of security. That amount covered discovery, lay evidence and mediation. Rugby Australia had reserved its right to seek more later. By March 2026, it did exactly that, applying for a further tranche of approximately $2.9 million.

The parties were not fighting about whether any further security should be ordered. Melbourne Rebels conceded that some additional security should be provided. The real dispute was over quantum. Rugby Australia said it needed $1.7 million for further pre-trial costs and $1,240,676.69 for trial costs. Melbourne Rebels said those figures were excessive and unreasonable.

The reasons also show that the parties had been trying to resolve the amount for months. On 27 March 2026, Melbourne Rebels offered $2.2 million in additional security, split evenly between pre-trial and trial costs. Rugby Australia rejected that offer. Because the hearing date was close, the judge proposed deciding the issue on the papers unless either side wanted an oral hearing. Neither side did, so the application was determined from affidavits, annexures and written submissions.

A major part of the judgment concerns the quality of Rugby Australia's evidence. Moore J described the evidence as being in an unorthodox form. There was no affidavit from the responsible solicitor providing a schedule of estimated legal expenses. Instead, the schedules were set out in correspondence and were not stated in sworn evidence to represent reasonable estimates. The judge said there was no table or schedule setting out the pre-trial amounts and that the figures had to be gleaned from a number of sources. The court described that as a somewhat unhelpful way of presenting evidence.

That criticism mattered because security for costs applications depend heavily on the court being able to assess whether the amounts claimed are reasonable and properly supported. If a party wants a large order, it needs to show the court clearly what is being claimed, how the figures were calculated, and why the assumptions are justified.

The court then identified specific weaknesses in the claimed pre-trial amounts. A claimed $60,000 for costs thrown away by amendments to the statement of claim was not sufficiently explained. A claimed $500,000 for excess costs above the initial security was supported only by a bare assertion in a letter that the total had been spent, without evidence of the amount or its composition. A further claimed $150,000 for additional costs arising from amendments, privilege disputes and particulars had some evidence as to the cause of the costs, but the calculation itself was not otherwise explained. The judge said these insufficiencies were relevant to the appropriate approach.

The trial estimates also attracted criticism. Rugby Australia's counsel fees included three senior counsel, including tax senior counsel, and two junior counsel, including tax junior counsel. The judge did not consider the use of tax counsel for limited work to be excessive, especially because tax issues had been added to the proceeding. But the daily rates were high. The reasons give the example that the two leading senior counsel had a combined daily rate of $56,000. The court also noted that the estimated disbursements were at the higher end, including hotel rooms assumed at $805 per night and flights assumed at $955 each.

Melbourne Rebels argued that the estimates showed a "Rolls-Royce" approach to litigation. The judge said that may be going too far, but accepted that the estimates were not modest. The court did not accept every criticism made by Melbourne Rebels. In particular, the judge rejected the submission that the court should second-guess the division of tasks between solicitors and counsel except in a clear case. But the judge did accept in part that the resourcing was at the higher end of the spectrum, and treated that as a reason for discounting.

The legal issue was the proper quantum of additional security for costs. Because Melbourne Rebels accepted that some further security should be ordered, the court did not need to decide whether security should be granted in principle. Instead, it had to decide how much was appropriate in light of the parties' competing estimates, the quality of the evidence, and the usual approach that security for costs is not complete security for every potentially recoverable dollar.

The reasons identify an important point of principle. Rugby Australia's figures had already been discounted for recoverability, using 60% for solicitors' costs and 85% for barristers' costs. But the court said that was not the end of the exercise. There was no further allowance for the usual position that appropriate security is not complete security. Moore J said it would not ordinarily be appropriate to provide complete security for all costs estimated to be recoverable, and did not think it was appropriate in this case.

The court also had to deal with the practical limits of the material before it. Melbourne Rebels raised some new points in submissions, including that some amounts claimed appeared to include allowances for tasks such as discovery and lay evidence that had already been completed. The judge said the evidence and submissions did not entirely join issue and that it was impossible on the material before the court to assess the validity of those particular new points. That is another useful procedural lesson. If a party wants the court to rely on a criticism of the other side's estimate, it needs to make sure the point is properly supported and squarely raised in time for response.

Moore J ordered Melbourne Rebels to provide a further tranche of security for Rugby Australia's costs in the amount of $2,120,507.52. That amount was split into $1,190,000 for pre-trial costs and $930,507.52 for trial costs. The security had to be paid into court by 4:00 pm on 17 April 2026.

The court also ordered Melbourne Rebels to provide a copy of the order to its funder, Mr Leigh Clifford, by 10 April 2026. If the plaintiff failed to comply with the security order, the proceeding would be stayed until payment was made or until further order of the court. That means the case could not continue in the ordinary way unless the security was provided.

The defendant's interlocutory application dated 9 March 2026 was otherwise dismissed. On the costs of that application, Rugby Australia was ordered to pay Melbourne Rebels' costs incurred after 27 March 2026. Apart from that, the parties were otherwise to bear their own costs of the interlocutory application. The court also gave each party liberty to apply in respect of those costs orders.

The reasons make clear why Rugby Australia did not receive the full amount it sought. The court considered that further discounting was appropriate for several reasons. The claimed figures had been discounted for recoverability, but not otherwise discounted to reflect that security should not ordinarily amount to complete security. Some costs were not elucidated or evidenced in proper form. Some assumptions, especially around rates and disbursements, were at the higher end. The result was still a substantial order, but one materially below the amount requested.

For businesses bringing claims, this case is a reminder that litigation is not just about the merits. Funding capacity and cost exposure can shape whether the case gets to trial at all. If there is a real risk your company will not be able to satisfy an adverse costs order, the defendant may seek security for costs. If the court makes that order and you cannot comply, the proceeding may be stayed. That can create serious commercial pressure, especially when trial is close and the amount required is large.

The case also shows that a plaintiff should not assume defects in the defendant's evidence will defeat the application entirely. Here, the court criticised the way Rugby Australia's evidence was assembled and found several claimed items insufficiently explained. Even so, the court still ordered more than $2.12 million in additional security. In other words, evidentiary weaknesses may reduce the amount, but they may not remove the obligation.

For defendants, the message is equally practical. If you want security for costs, present the evidence properly. A clear affidavit from the responsible solicitor, with a coherent schedule of estimated legal expenses and a transparent explanation of assumptions, is likely to be more persuasive than figures scattered through correspondence. If your estimates include premium staffing, high counsel rates, or expensive travel assumptions, expect the court to scrutinise them. The court may accept that a complex case justifies strong resourcing, but it may still discount the amount sought if the estimates are not modest.

The order requiring the plaintiff to provide a copy of the decision to its funder is also commercially significant. The judgment does not make broader findings about the funder's legal position, but it does show that funding arrangements can become operationally important. If your litigation is being backed by a director, investor or other supporter, that person may need to be ready to respond quickly if a security order is made.

Security for costs applications often arise as a practical funding issue rather than a pure legal argument. This case shows that the court will take a broad-brush approach, but it still expects proper evidence. A party seeking security should not assume that recoverability discounts alone are enough. A party resisting security should not assume that pointing out defects in the evidence will avoid a substantial order.

The costs orders on the application itself are also worth noting. Rugby Australia obtained a significant security order, but it did not get everything it asked for and was ordered to pay Melbourne Rebels' costs of the application incurred after 27 March 2026, with the parties otherwise bearing their own costs. That is a reminder that overreaching on quantum can have consequences even where the application succeeds in part.

The judgment was delivered on 8 April 2026 by Moore J in the Federal Court of Australia. The application was determined on the papers. The trial in the underlying proceeding was listed to commence on 18 May 2026 for an estimated three weeks, with a related tax proceeding to be heard concurrently on the first day.

This page should be read as a case note on an interlocutory security for costs decision. It does not summarise the final merits outcome of the broader dispute between the parties.