Ruling finds statements of future intention to retain counsel unhelpful
In a defendant’s application for security for the costs of engaging legal representation in proceedings, the Australian Capital Territory Supreme Court said she could not recover legal costs until she actually engaged lawyers, with statements of future intention being unhelpful.
In Qiu v Zhang [2026] ACTSC 129, the parties disputed the ownership of five residential properties purchased in the defendant’s name.
According to the plaintiff, between June 2021 and August 2025, he and the defendant were in a de facto relationship and agreed to jointly operate a cleaning business, with the proceeds of its operations partially used to fund the property purchases.
The defendant disputed the character of their relationship and the business agreement’s terms, as asserted by the plaintiff.
In his claim on 6 February 2026, the plaintiff sought a declaration of an equitable interest of a half-share in the properties under a resulting trust as common tenants. According to him, under an oral contract with the defendant, they agreed to:
The plaintiff registered caveats, set to expire on 11 March 2026, over four of the properties. The fifth property had already been sold.
On 10 March 2026, the plaintiff applied to extend the caveats registered on the properties until the determination of his claim in equity. That same day, on an interim basis, Justice Baker ordered the caveats to remain until further court order.
In the present proceeding, the plaintiff applied to extend the caveats on the properties, while the defendant applied for security for her costs of $80,000. The defendant cited her estimated costs of engaging legal representation in the proceedings.
The Supreme Court of the Australian Capital Territory continued the 10 March 2026 order for the caveats to remain registered until further court order.
The court saw a serious question for trial. If it accepted the plaintiff’s factual version, the court would see a basis for his equitable interest in the land and a proper connection between the caveats lodged and the interest claimed.
Specifically, the court considered the plaintiff’s evidence about the nature of the parties’ relationship, their discussions leading to the cleaning business plan, and their intention to utilise the business profits to purchase investment properties.
The court also found that the balance of convenience favoured maintaining the caveats over other options. If the plaintiff failed to establish his equitable interest, the court would see no risk of damage to the properties registered in the defendant’s name.
The court noted that the plaintiff expressed a willingness to accommodate any refinancing, subject to the maintenance of the caveats.
The court acknowledged that the caveats posed an obstacle to any efforts to sell the properties. However, the court held that the defendant apparently had no present plans to sell the properties, had leasing arrangements for each property, and intended to maintain those arrangements.
The court dismissed the defendant’s application for security for costs upon seeing no basis to order such security.
Based on the evidence, the court accepted that the plaintiff might have to leave Australia due to his visa difficulties.
However, the court ruled that the defendant’s application would be stronger if the plaintiff had already left, and if the defendant, who remained self-represented, had already engaged lawyers who estimated the likely defence costs.
Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29; 269 CLR 333, established Australia’s general rule that a self-represented litigant would not be entitled to indemnification for loss of time even if they were a lawyer.
