On an application for security for costs under s 1335(1) of the Corporations Act 2001 (Cth), the threshold question is simply whether there is reason to believe the corporation will be unable to pay the defendant's costs — a risk assessment requiring a practical, commonsense approach. There is no warrant for substituting the Beach Petroleum formulation for the statutory language. Once the threshold is satisfied, the burden remains on the defendant throughout to persuade the court that security should be ordered; the onus does not shift to the plaintiff. Section 1305 of the Corporations Act does not establish a presumption that company accounts are accurate. The existence of a defendant's professional indemnity insurance is irrelevant to the application.
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