Under s 1335(1) of the Corporations Law, an applicant for security for costs is not required to prove that the plaintiff corporation will be unable to pay costs; the applicant need only place credible testimony on the record that gives rise to a reason to believe that the corporation will be unable to pay. The rule in Jones v Dunkel does not apply to the threshold inquiry. The inquiry involves two stages: a jurisdictional threshold (credible testimony giving reason to believe) and an unlimited discretion. Murray J dissented, holding that the applicant bears an onus of proof and that 'credible' requires testimony with the quality of cogency.
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