Ballard v Brookfield Australia Investments Ltd

[2013] NSWCA 82

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Ballard v Brookfield Australia Investments Ltd [2013] NSWCA 82

Hearing dates:

8 April 2013

Decision date:

16 April 2013

Before:

Ward JA

Decision:

Appellant's application to set aside security for costs orders made in December 2012 dismissed. Respondents' applications for summary dismissal granted. Appeal dismissed with costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

PRACTICE AND PROCEDURE - application to set aside earlier orders for security of costs on basis of change of circumstances - applications for summary dismissal due to non-compliance with security for costs orders

Legislation Cited:

Civil Procedure Act 2005 (NSW)
Supreme Court Act 1970 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Bell Wholesale Co Limited v Gates Export Corporation [1984] FCA 34; (1984) 2 FCR 1
Brimaud v Honeyset Instant Print Pty Ltd (1988) 217 ALR 44
PS Chellaram & Co Ltd v China Ocean Shipping Co And Another (1991) 102 ALR 321
Dae Boong International Co Pty Ltd v Gray [2009] NSWCA 11
Director, Office of the Fair Work Building Industry Inspectorate v CDMEU [2013] FCAFC 8
Douglass v Gillman (1990) 19 NSWLR 570
Farnell v Penhalluriack [2010] 29 VR 727
Fiduciary v Morningstar Research Pty Ltd [2004] NSWSC 664
Fletcher v Besser [2010] NSWCA 30
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397
Green (As Liquidator of Arimco Mining Pty Ltd) v CGU Insurance Ltd [2008] NSWCA 148
Hession v Century 21 South Pacific (in liq) (1992) 28 NSWLR 120
Idoport Pty Ltd v National Australia Bank Ltd [2002] NSWCA 271
Idoport v National Australia Bank [2002] NSWSC 18
Levy v Bablis [2012] NSWCA 77
Levy v Bablis [2012] NSWCA 128
Merribee Pastoral Industries Pty Ltd v Australia & New Zealand Banking Group Ltd [1998] HCA 41; 193 CLR 502
Nominal Defendant v Manning [2000] NSWCA 80; (2000) 50 NSWLR 139
KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189
Pioneer Park Pty Ltd (in Liq) v Australia and New Zealand Banking Group Ltd [2007] NSWCA 344
Porter v Gordian Runoff Ltd (No 3) [2005] NSWCA 377
Programmed Solutions Pty Ltd v Dectar Pty Ltd [2007] QCA 385
Republic of Kazahstan v Istil Group Inc [2006] 1 WLR 596
Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125
Yandil Holdings Pty Ltd v Insurance Co of North America (1985) 3 ACLC 542

Category:

Interlocutory applications

Parties:

David Ballard (Appellant/Applicant on security for costs motion)
Brookfield Australia Investments Ltd (First Respondent/Applicant on motion for summary dismissal of appeal)
Multiplex Corporate Agency Ltd (Second Respondent/Applicant on motion for summary dismissal of appeal)
Construction Forestry Mining and Energy Union (Third Respondent/Applicant on motion for summary dismissal of appeal)
Construction Forestry Mining and Energy Union (New South Wales Branch) (Fourth Respondent/Applicant on motion for summary dismissal of appeal)
Andrew Ferguson (Fifth Respondent/Applicant on motion for summary dismissal of appeal)

Representation:

Counsel:
D Murr SC (Appellant/Applicant on security for costs motion)
I Pike SC (First & Second Respondents/Applicants on motion for summary dismissal of appeal)
BC Oslington QC with M Condon SC (Third, Fourth & Fifth Respondents/Applicants on motion for summary dismissal of appeal)
Solicitors:
Russell Byrnes (Appellant)
Clayton Utz (First & Second Respondents)
Taylor & Scott Lawyers (Third, Fourth & Fifth Respondents)

File Number(s):

CA 12/169375

 Decision under appeal 

Citation:

[2011] NSWSC 426

Date of Decision:

2012-05-03 00:00:00

Before:

McDougall J

File Number(s):

07/266587

Judgment

1. HER HONOUR: Before me in the referrals list on 8 April 2013 were applications by the various parties to this appeal consequent upon the making of orders by me on 18 December 2012 for the provision by Mr Ballard (on a staged basis) of security for the respondents' costs of the appeal. The appeal is from the dismissal by McDougall J in May 2012 ([2012] NSWSC 426) of conspiracy claims brought by Mr Ballard against the respondents (the Brookfield/Multiplex parties and the CFMEU parties).

1. The first tranche of payments by way of security for the respective respondents' costs were due by 15 January 2013. Subsequent payments were due on 28 and 31 March 2013, with the last two payments to be paid at times referable to the commencement of the hearing of Mr Ballard's appeal (which was then provisionally listed for a two week hearing in June this year but which is now listed to commence on 22 July this year). No sum has been paid by way of security for costs in accordance with those orders and the evidence on Mr Ballard's present application is that he is not (and will not be) able to meet the security for costs orders. The appeal (though a date for hearing has been fixed) is currently stayed, having regard to Mr Ballard's non-compliance to date with the security for costs regime ordered late last year.

1. In early March this year, the respective sets of respondents each filed applications for the summary dismissal of the appeal proceedings on the basis of non-compliance with the security for costs orders (the Brookfield/Multiplex parties by Notice of Motion filed 4 March 2013, the CFMEU parties by Notice of Motion filed 5 March 2013). Mr Ballard then filed his Notice of Motion on 18 March 2013 seeking an order setting aside the security for costs orders.

1. At the outset I note that Senior Counsel appearing for Mr Ballard on this occasion, Mr Murr SC, made it clear that the application made by Mr Ballard is not for a review of my earlier orders pursuant to s 46(4) of the Supreme Court Act 1970. (Had that been the case, the application would have been referred to other judges of this Court to determine.) Rather, this is an application based on what is said to have been a material change of circumstances since the orders were made in December last year, as a result of which it is contended that the security for costs orders should now be set aside.

1. Rule 36.16(3) of the Uniform Civil Procedure Rules 2005 (NSW) permits the court to set aside or vary any judgment or order, except so far as it either determines a claim for relief (or a question arising on a claim for relief) or dismisses the proceedings, in whole or part. The power is analogous, but not confined, to that applicable in instances of accidental mistake or omission. It permits the discharge of an existing order and its substitution by a different order in an appropriate case (Douglass v Gillman (1990) 19 NSWLR 570).

Background

1. The background to the present applications is set out in my earlier reasons ([2012] NSWCA 434). Briefly, Mr Ballard's claim at first instance was based on an alleged conspiracy between the Brookfield/Multiplex parties and the CFMEU parties as a consequence of which he alleged that he had been forced out of the demolition industry and had suffered substantial damages for loss of his livelihood and for psychological harm.

1. After a lengthy hearing, in which the Brookfield/Multiplex respondents and the CFMU respondents incurred costs in the order of some $4.5 million and $2.2 million respectively, Mr Ballard was unsuccessful in establishing each of the critical elements of his claim. The primary judge did not accept that the meeting at which the alleged conspiracy was said to have been formed or agreed had in fact occurred ([478]). His Honour also concluded that the factual basis for Mr Ballard's claim for damages had not been made good and that the way damages for loss of earnings had been calculated was fundamentally flawed ([724]). His Honour further found against Mr Ballard on his response to the limitations defence raised by the respondents. Adverse credit findings were made against Mr Ballard and witnesses called on his behalf (in particular, Mr Bates, Mr Widdup and Mr Anthony, to whom reference will be made later in these reasons).

1. The outcome of the decision is such that, in order successfully to appeal the judgment and to recover the substantial damages he claims, Mr Ballard will have to overcome a number of obstacles (not simply the factual findings as to the alleged conspiracy meeting). With respect, the submissions made for Mr Ballard on his present application as to the prospects of his appeal do not in my view grapple with that fundamental difficulty.

1. In his Notice of Appeal, Mr Ballard raises the same factual and legal issues that were considered at first instance. This approach was acknowledged by Counsel appearing for him in December last year (Mr Tregenza) to be an "in globo" approach. As a consequence, ten days has been set down for the hearing of the appeal. Although Mr Murr conceded, in effect, that it would be in the interests of all concerned if the appeal could be narrowed, he had only recently been briefed in the matter and no step has yet been taken to do so. The written submissions served by Mr Ballard's former solicitors on 8 January 2013 in relation to the appeal comprise some 69 pages and do not appear to narrow in any way the ambit of the appeal. I make no criticism of Mr Ballard's current legal representatives in that regard. However, the fact remains, as was the case in December last year, that the grounds on which Mr Ballard presently seeks to overturn the judgment will require a re-hearing of all of the factual and legal issues at the trial and will mean that the cost of the appeal will be not inconsiderable, as outlined in the material before me late last year.

1. I turn then to the respective applications and will deal first with that of Mr Ballard, since the outcome of his application will be of critical relevance to the summary dismissal applications brought by the respondents.

Mr Ballard's application to set aside the security for costs orders

1. Mr Murr accepts that an application to set aside, vary or discharge an interlocutory order of a substantive nature (which has been made in contemplation that it will operate until the final disposition of the proceedings) must be based on a material change of circumstances since the original application was heard or on the discovery of new material which could not reasonably have been put before the court on the hearing of the original application (referring to Brimaud v Honeyset Instant Print Pty Ltd (1988) 217 ALR 44, at p 46 per McLelland CJ in Eq).

1. This principle was confirmed more recently in Levy v Bablis [2012] NSWCA 77, where Young JA referred by way of example to Republic of Kazahstan v Istil Group Inc [2006] 1 WLR 596 at 604 and noted the rationale for this as being that reviews of interlocutory orders should be limited as a matter of judicial policy (citing Programmed Solutions Pty Ltd v Dectar Pty Ltd [2007] QCA 385).

1. The change of circumstances on which Mr Ballard relies for the present application is the withdrawal by Sagacious Legal (the lawyers who acted for him in the course of the first instance proceedings and on the commencement of the appeal proceedings) of their services. As I understand it, that is said to have two consequences: first, that Mr Ballard will not have the benefit of the provision by them of legal services in relation to the appeal at no cost to him (as was effectively the position under a Funding and Priority Deed entered into in February 2012) and, second, that there is now no practical likelihood that security for costs will be funded by his former solicitors (that being a possibility to which I had adverted in my December reasons having regard to the terms of the Funding and Priority Deed).

1. For the reasons I will explore shortly, the respondents contend that the withdrawal of the former solicitors' legal services is not a material change in circumstances but that, even if it were, the security for costs orders should not be set aside.

• Evidence relied upon in support of Mr Ballard's application

1. In support of Mr Ballard's application, affidavits were sworn by each of Mr Ballard, Mr Roy Thompson and Mr Matthew Byrnes, a solicitor in the employ of the solicitors now acting for Mr Ballard (Russell Byrnes). Mr Thompson is the managing director of RF Thompson (Qld) Pty Ltd. That company has, from 2010, lent money to Mr Ballard both for the purposes of the first instance proceedings and more recently in connection with the appeal.

1. Mr Byrnes annexed to his affidavit a redacted copy of a letter dated 10 January 2013 from Sagacious Legal to Mr Ballard in which Mr Ballard was notified that Sagacious Legal could not continue to act for him. (This was two days after Mr Ballard's written submissions on the appeal had been filed (out of time) in Court before me and after the determination of the respondents' application for costs of the December security for costs application.)

1. In the 10 January 2013 letter, reference was made to the Funding and Priority Deed entered into between Mr Ballard, RF Thompson (Qld), Sagacious Legal and the managing director of Sagacious Legal (Mr O'Shanassy) in February 2012 (to which I had referred in my December reasons and to which I will again refer shortly).

1. The letter stated that, whilst Sagacious Legal had provided their services for no charge "and [had] assisted in the funding for Counsel", they were no longer able to assist in this way. That decision is explained in the letter by reference to comments said to have been made by Mr Ballard to the effect that he would be reporting Sagacious Legal to the Legal Services Commission [sic] (and the conflict that would pose). Reference was also made to the fact that the appeal had "from a budget estimate perspective, extended beyond our original financial commitment". There was no monetary limit on the provision of services and payment of Counsel's fees or other costs contained in the Funding and Priority Deed. Mr Murr suggested that the reference to an original financial commitment may have related to the initial arrangements entered into with Mr Ballard.

1. A formal Notice of Intention to File Notice of Ceasing to Act was served on Mr Ballard on 31 January 2013. Thereafter another firm (DC Legal) filed a notice of appearance but apparently did so only on a limited basis in order to act on a costs assessment application for Mr Ballard in relation to the costs of Sagacious Legal of the proceedings. DC Legal are not acting on the appeal. Another firm (Russell Byrnes) has recently become involved for that purpose.

1. No objection was taken by the respective respondents to Mr Byrnes' affidavit. Objection was, however, taken (on the basis of relevance) to much of the material contained in the affidavits of Mr Ballard and Mr Thompson. In particular, it was said that the material in those affidavits relating to the previous funding arrangements was material that was known (or ought reasonably to have been known) to Mr Ballard as at the time of the December security for costs application and was not put before the Court on that occasion. I did not rule on the objections as such but read the paragraphs to which objection was taken subject to relevance.

1. By way of summary, in the paragraphs to which objection is taken in Mr Ballard's affidavit of 21 March 2013 (paras [1]-[20], [22]-[24], [26]-[30], [32]-[33], [48]-[50] and [51]-[54]), Mr Ballard deposes to: the basis on which he has funded the proceedings to date (including loans from Mr Thompson secured by mortgages over property; Mr Ballard's savings; the sale of a property and borrowings from ANZ Bank); Mr Ballard's asset position when he commenced the proceedings in 2007; the early conduct of his case; the circumstances in which, in early 2010, Mr Thompson agreed to lend him money to finish the proceedings, which by then Mr Ballard described as a nightmare; the provision and expenditure of the funds lent by Mr Thompson's company and further funding by the company; advice by Mr Rod Freeman of Counsel (not presently acting on this application) that he had a "very strong appeal"; the sale of various properties to repay some of the moneys borrowed from the Thompson company; and as to his then current financial position. None of that material was put before me when the respondents' security for costs application was heard in December last year.

1. Objection is not taken to the evidence given by Mr Ballard as to the loan agreement entered into in February 2010 with RF Thompson (Qld); its variation in or about August/September 2010; the Funding and Priority Deed entered into in February 2012; and as to what has happened after the security for costs application, including Sagacious Legal ceasing to act in late January 2013, the involvement of new lawyers (DC Legal) to act in relation to the lodgement of a costs assessment application in relation to the costs of Sagacious Legal, and the assistance of Mr Ballard's current solicitor (Mr Russell Byrnes) in relation to the present application.

1. As to Mr Ballard's current financial position, in summary, what he says is that: he no longer has any equity in his remaining properties; the amount he owes to Mr Thompson (said in [50] to be about $4.6m) is far more than those properties are worth; he has no money to pay for the appeal; if the present motion in relation to the security for costs orders is successful, Mr Thompson has agreed to advance a further (capped) sum to cover further costs of the appeal and "may" agree to advance more if Senior Counsel confirms the (seemingly rather broad-brush) advice already given to Mr Ballard on the prospects of success by Mr Freeman.

1. Mr Ballard has also deposed (at [37]) that no one from Sagacious Legal had suggested to him that he could appeal the December security for costs decision or apply to have it varied.

1. Mr Ballard deposes that if he cannot continue with the appeal, or if the appeal is unsuccessful, he will probably be forced into bankruptcy ([58]). (In a paragraph to which objection was taken, [54], he deposes that he has no possible means of providing any money for security for costs.)

1. As to Mr Thompson's affidavit of 26 March 2013, objection was taken (again on the basis of relevance) to paragraphs [1]-[31], which relate to the circumstances in which his company had provided funding for some of the costs of the proceedings. That was material that Mr Ballard could have put before the Court in December last year.

1. Objection was not taken to paragraphs [32] onwards, in which Mr Thompson (who is in his early 80's) explains that: he has lent about $4.7 million to Mr Ballard; his original agreement was to lend $500,000; he is now owed about $4.5 million plus interest; if he were to sell all Mr Ballard's properties he would be at least $1.5 million, and probably more than $2 million, short; he has paid the sum of $20,000 for the present motion and has agreed to give a further amount of $80,000 towards the appeal; his loans to Mr Ballard were not conditional on him winning the case "or on anything else"; and, at [42], that:

It was never suggested to me that I would be asked to lend Ballard any money for security for costs, and I am not prepared to do this. (my emphasis)

1. As noted above, the basis of the respondents' evidentiary objections is that this material was known, or ought reasonably to have been known, by Mr Ballard when he resisted the security for costs application in December last year. For Mr Ballard it is submitted, in effect, that if the remainder of the material in the affidavits (to which objection is not taken) establishes a material change in circumstances (so as to enliven the fresh exercise of discretion in relation to the question of security for costs), then that other material can be received in the fresh exercise of discretion whether or not it was available on the previous occasion.

1. In Levy v Bablis [2012] NSWCA 128, on an application to review an earlier decision of Young JA to which I have already referred, Barrett JA noted the observation by Heydon JA, as his Honour then was, in Nominal Defendant v Manning [2000] NSWCA 80; (2000) 50 NSWLR 139 to the effect that a litigant bringing a second application, where circumstances have not changed, on evidence available earlier "is facing serious and self-created risks of an adverse exercise of judicial discretion". Barrett JA went on to refer (at [20], by reference to Fletcher v Besser [2010] NSWCA 30 at [17]) to the real question as to whether a second application based on evidence available at the time of the earlier unsuccessful application should ever be granted (having regard to the operation of ss 56-60 of the Civil Procedure Act 2005 (NSW)).

1. While this is not a second application by Mr Ballard in relation to security for costs, it is the case that much of the material on which he now seeks to rely to set aside the earlier costs orders is material that could have been put before the Court last year when he resisted the respondents' application for security for costs, including: the history of the funding arrangements (said by the respondents to be irrelevant in any event to the current application) and the attitude of the solicitors and Mr Thompson or his company to the provision of security for costs of the appeal (including, in the solicitors' case, whether they accepted that they might be bound under the Funding and Priority Deed to do so).

1. Enquiries as to the matters now the subject of evidence on the present application (i.e. as to the resources of those standing behind the litigant or that are otherwise available for the litigant to call upon) are enquiries of the kind that it is recognised (albeit generally in the context of claims brought by liquidators on behalf of an insolvent company) are enquiries that should be made if it is suggested that a security for costs order would stifle prosecution of a deserving claim (Hession v Century 21 South Pacific (in liq) (1992) 28 NSWLR 120; Kavcor Pty Ltd (in liq) & Anor v Kavanagh [2005] NSWSC 1163). The position in relation to the evidence now sought to be relied upon by Mr Ballard that could have been put before the Court last year is not dissimilar to that considered by Young JA in Levy at [22], where his Honour noted that a litigant "is expected to put forward at the first hearing of an application all the material that is relevant for the judge to rule on the application".

1. The only evidence adduced by Mr Ballard at the time of the December application was an affidavit by Ms Grounds, a solicitor at Sagacious Legal, seeking to support a claim (ultimately unsuccessful) for legal professional privilege in relation to an unredacted copy of the Funding and Priority Deed. That affidavit deposed to the provision by RF Thompson (Qld) of moneys used towards the legal costs of the proceedings below, ms Grounds referring to mortgages in exchange for which funds were provided and stating that the funds made available to Mr Ballard "were vital for his continued representation in the Proceedings below". There was no evidence of the kind contained in Mr Ballard and Mr Thompson's respective affidavits on this application as to the funding arrangements or as to Mr Ballard's financial position.

1. The only matter on which Mr Ballard now seeks to rely that could not have been known (or reasonably ascertained by enquiries made either of Sagacious Legal or Mr Thompson) as at December 2012 is the decision by Sagacious Legal in January 2013 to withdraw their legal services altogether. To that extent, at least, Mr Ballard's application is clearly based on evidence that would not have been available earlier and hence it is not an abuse of process in the sense in which it was suggested that such an application would be if supported by no more than evidence that was already available as at December 2012.

1. The relevance of the evidence to which objection was taken is a different issue. Ultimately, for the reasons I set out shortly, that evidence (i.e. the evidence that could have been, but was not, put before me in December 2012) does not in my view take the position very far. I accepted for the purposes of the application last year that there was doubt as to the potential impact of the orders on the ongoing conduct of the appeal (and hence recognised the possibility that the orders would stifle the appeal). The furthest that the latest information takes this is that it seems almost inevitable that the security for costs orders (coupled with the refusal of Mr Thompson to fund those orders) will stultify the appeal.

• Has there been a material change in circumstances?

1. Mr Murr submits that the withdrawal by Sagacious Legal from the proceedings is a material change in circumstances because it means that the arrangement for funding the appeal (which was taken into account in my December reasons) is no longer in place. The respondents contend, to the contrary, that there has been no material change of circumstance because all that was taken into consideration on the last occasion was the possibility that funding might be available from the solicitors (and because the evidence put forward by Mr Thompson goes not to the ability of he or his company to provide funding for the security for costs ordered but to his preparedness to do so).

1. I accept that, in one sense, the only evidence on this application that was not available earlier is evidence that does not directly relate to the provision of security for costs (since it relates to the withdrawal of the no charge, or no cost, arrangement that was in place in relation to the funding of the appeal itself). It does not, for example, answer the question whether, under the Funding and Priority Deed, Sagacious Legal may be contractually obliged to provide security for costs (irrespective of whether Sagacious Legal is acting on the appeal). Nor does it address the question whether Sagacious Legal is contractually entitled to withdraw its services at this stage.

1. Clause 5(a) of the Funding and Priority Deed contains an agreement by the solicitor to act on behalf of the client in any appeal "until the conclusion of the Appeal". Clause 5(f)(ii) contains an agreement by the solicitor (subject to clause 5(g)) "to pay, and not charge the Client for, all expenses and disbursements connected with any Appeal including the costs of counsel retained for any Appeal".

1. Nevertheless, I accept that the practical reality exposed by the new evidence is that Mr Ballard must now not only find funding for any security for costs he is required to provide but must also find funding (beyond the limited further funding which Mr Thompson has agreed to provide) for the appeal itself (or otherwise procure the pro bono assistance of legal representatives to conduct the appeal or represent himself on the appeal).

1. The need for Mr Ballard now to find funding for the appeal costs themselves (or at least that amount over and above the further $80,000, or perhaps $100,000, that Mr Thompson is still prepared to make available for that purpose if the current application were to be successful) is something that might reasonably be expected to impact adversely on Mr Ballard's ability at the same time to obtain funding for the provision of security for costs (having regard to the evidence of his current financial position). Although there was almost nothing in the way of evidence from Mr Ballard as to his financial position in December last year, the applications for security for costs were predicated on the likelihood that Mr Ballard would be bankrupt if the adverse costs orders remained in force against him at the end of the appeal.

1. Therefore, I accept that the withdrawal by Sagacious Legal of its services is a material change in circumstances so as to warrant the fresh consideration of whether Mr Ballard should be subject to orders for the provision of security for costs. I will approach that consideration on the basis that, although there might theoretically be an ability on the part of Mr Ballard to enforce a contractual obligation on the part of Sagacious Legal to meet the costs of the appeal (assuming for present purposes that clause 5 would oblige it to do so, which is by no means beyond doubt), there is now no realistic practical prospect (whatever may previously have been the position) that (at least without action to compel it to do so) Sagacious Legal will fund the provision of security for the respondents' costs of the appeal.

• Should the security for costs orders be set aside?

1. In effect, Mr Ballard's application requires consideration as to whether, in light of the change in circumstances since December last year, on an application of the relevant principles outlined in my December reasons, the orders for security for costs remain appropriate (there being no application for review of, and therefore no challenge to, the appropriateness of those orders as initially made).

1. Significantly, Mr Murr has acknowledged in his written and oral submissions that this is "undoubtedly" a case in which "special circumstances" exist for the purposes of Rule 50.8. That remains my view for the reasons set out in my earlier judgment. The question then is whether, in the exercise of the Court's discretion, those orders should remain on foot. As noted in Kirby J in Merribee Pastoral Industries Pty Ltd v Australia & New Zealand Banking Group Ltd [1998] HCA 41; 193 CLR 502 at [26] (referred to as an authoritative statement by Hodgson JA in Green (As Liquidator of Arimco Mining Pty Ltd) v CGU Insurance Ltd [2008] NSWCA 148 at [37]), there is no absolute rule to control the exercise of the discretion to order security for costs and the governing consideration is what is required by the justice of the matter.

1. Here the orders for the provision of security for costs were made in the exercise of the statutory power under Rule 50 and I set out in my December reasons the principles that have been recognised as relevant to take into account in that context.

1. The impecuniosity of the party against whom such an order is sought and whether the making of such an order would stultify the appeal are important matters to take into account. Mr Ballard now squarely puts before the Court the basis on which he says that he is unable to provide security for the respondents' costs and I accept that the evidence put before me on the present application makes almost certain the prospect that orders for security for costs in the present case will stultify the appeal. Ordinarily that is a powerful factor that will tell against an order for security for costs against an individual plaintiff.

1. However, there are two matters that must be taken into account when weighing the above against the potential prejudice or unfairness to the respondents of disturbing the existing security for costs orders: first, the position of those (if any) standing behind Mr Ballard in this litigation and, second, the relative prospects of the appeal.

(i) Financial position of those standing to benefit from appeal

1. As to the first, it is contended for the respondents that what is fatal to Mr Ballard's present application is that Mr Thompson (or, more precisely, his company) stands to benefit from, and has an interest in the outcome of, the present litigation and has not demonstrated an inability to provide security for costs (but simply an unwillingness to do so).

1. It is noted by Senior Counsel for the Brookfield/Multiplex parties (Mr Pike SC) that those who stand behind a plaintiff/appellant for this purpose have been recognised as including his or its creditors (citing Bell Wholesale Co Limited v Gates Export Corporation [1984] FCA 34; (1984) 2 FCR 1 at 2) and by Mr Oslington QC, appearing with Mr Condon SC for the CFMEU parties, that nowhere in his affidavit does Mr Thompson say that he or his company does not have the financial capacity to provide security. Mr Oslington submits that the contrary inference (namely that it does have the capacity to do so) would be open having regard to the large loans made to date and Mr Thompson's willingness to continue lending some moneys for the appeal.

1. Apart from Yandil Holdings Pty Ltd v Insurance Co of North America (1985) 3 ACLC 542; KP CableInvestments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189, to which I referred in my December reasons, there are a number of cases in which courts have recognised that it is appropriate to take into account, when determining whether orders for security for costs should be made, the position of those who stand behind the plaintiff or will benefit from the litigation.

1. In Fiduciary v Morningstar Research Pty Ltd [2004] NSWSC 664, Austin J said (at [83]):

It would be unrealistic for the court to decline to order security on the ground that to do so would stultify the litigation, if it took into account only the financial ability of the plaintiff, and disregarded the financial ability of those who would benefit from the plaintiff's success and who would therefore have an economic incentive to bear the burden of a security order. More broadly, it is fair for the courts to proceed on a basis which reflects the proposition that those who seek to benefit from litigation should bear the risks and burdens that the process entails. That notion appealed to Young CJ in Eq in Chartspike Pty Ltd (in liq) v Chahoud [2001] NSWSC 585 at [5], where his Honour observed that where a plaintiff contracts to have the litigation funded by a third party, in return for the third party receiving a share of the verdict, "it is appropriate that the third party bear part of the risk". (my emphasis)

1. In Bell Wholesale, the Full Court of the Federal Court, considering the position of a corporate litigant, said at p 4:

In our opinion a court is not justified in declining to order security on the ground that to do so will frustrate the litigation unless a company in the position of the appellant here establishes that those who stand behind it and who will benefit from the litigation if it is successful (whether they be shareholders or creditors or, as in this case, beneficiaries under a trust) are also without means. It is not for the party seeking security to raise the matter; it is an essential part of the case of a company seeking to resist an order for security on the ground that the granting of security will frustrate the litigation to raise the issue of the impecuniosity of those whom the litigation will benefit and to prove the necessary facts.

1. In PS Chellaram & Co Ltd v China Ocean Shipping Co And Another (1991) 102 ALR 321, McHugh J adopted a similar approach, there noting that there was no evidence before him that the shareholders in the corporate appellant were not in a position to provide the appellant with sufficient funds to enable for the purposes of the provision of the security sought by the respondent.

1. In Dae Boong International Co Pty Ltd v Gray [2009] NSWCA 11, Hodgson JA, noting that the statement in Bell had been approved in a number of cases, including Pioneer Park Pty Ltd (in Liq) v Australia and New Zealand Banking Group Ltd [2007] NSWCA 344, said that the effect of Bell was that where a company resists an order for security on the ground that the order would stultify litigation, the company has the onus to show that the persons who stand behind it, and who would benefit from the litigation if it is successful, are without means, though noting at [26] that the court has a general discretion whether or not to order security for costs, and failure to prove stultification would not necessarily mean that an order would be made. His Honour went on to say:

... but Bell Wholesale does indicate that if a company wishes to have the benefit of a finding that litigation will be stultified, the company must prove that the persons who substantially stand to benefit are unable to provide the security. If that is not proved, it does not necessarily make the impecuniosity of the company and difficulties with providing security irrelevant; and if it can be shown that those persons are reasonably unwilling, even though possibly able, to provide the security, that may be a factor that would be taken into account. (my emphasis)

1. Mr Murr emphasises the concept of reasonableness in assessing the willingness of Mr Thompson to provide funding for the security for costs in the present case. However, in Green v CGU, there was no such qualification referred to by Hodgson JA, who said at [8]-[9]:

To the extent that a party asserts that an order that security be provided would stultify the proceedings, it must satisfy the Court that those who stand behind it or stand to benefit from its success in the proceedings are unable to provide security for costs: Idoport Pty Ltd v National Australia Bank Limited [2001] NSWSC 744 at [66]; Bell Wholesale Co Pty Ltd v Gates Export Corporation (No 2) (1984) 52 ALR 176 at 179. A proceeding cannot be regarded as stultified unless those who stand behind the impecunious plaintiff are unable (not unwilling) to provide the requisite security for costs. (my emphasis)

An important factor informing the exercise of the discretion is the existence of persons who stand behind an impecunious plaintiff who seek to take the benefit of our system of justice (ie share of the proceeds of victory) without the corresponding burden (ie a potential adverse costs order): Rosenfield Nominees Pty Ltd v Bain & Co (1988) 14 ACLR 467 at 472-3 (Giles J); Crypta Fuels Pty Ltd v Svelte Corporation Pty Ltd (1995) 19 ACSR 68 at 70 (Lehane J); Maronis Holdings Ltd v Nippon Credit Australia Ltd [2000] NSWSC 994 (Bryson J); Chartspike Pty Ltd v Chahoud [2001] NSWSC 585 at [5] (Young CJ in Eq); Northern Southern Western Supermarkets Pty Ltd v HIH Casualty and General Insurance Ltd (in liq) [2002] NSWSC 541 (Einstein J); Rickard Constructions Pty Ltd v Allianz Australia Insurance Ltd [2002] NSWSC 1162 (McClellan J); Fiduciary Ltd v Morningstar Research Pty Ltd (2004) 208 ALR 564 at 584 ([83]) (Austin J); Benzlaw & Assoc Pty Ltd v Medi-Aid Centre Foundation Ltd [2007] QSC 009 at [15]-[16] (Douglas J). ...

1. Kirby J in Merribee, noted that the inability of a party to meet the costs of an unsuccessful proceeding was not irrelevant to the exercise of the jurisdiction to award security for costs, acknowledging that litigation is inevitably expensive and burdensome (as is clearly the case in the present proceedings having regard to the considerable sums incurred in costs to date) and saying that "[t]o add to the burdens of a party successful in the outcome, those of paying its costs with little or no prospect of recovery under an order for costs may, in particular circumstances, be a reason for offering a measure of protection to that party by way of security for costs".

1. Mr Pike points to the fact that, under that Deed, RF Thompson (Qld) has an equitable interest in any amount recovered pursuant to the appeal (clause 2(c)(iii)(A)); it has a first ranking entitlement to be repaid out of the proceeds of a successful appeal the amount of funding that he has advanced and any amounts received by way of a successful appeal are to be held on trust for it until the amount of his funding has been repaid (clauses 2(c)(iii)(B) and (C) and 3).

1. Having regard to the terms of the Funding and Priority Deed, it is clear that Mr Thompson's company stands to benefit from a successful outcome in the appeal to the extent that if there is a successful appeal the company will be in a position to recover funds that have been lent to Mr Ballard and that, absent a successful appeal, it is unlikely that the company will be able to recover the whole of its loans from a realisation of the securities held by it.

1. It is submitted for the respondents that unless it can be established by Mr Ballard that Mr Thompson or his company is unable (as opposed to unwilling) to provide the security, the Court cannot be satisfied that an order for security would stifle the appeal.

1. Mr Murr sought to distinguish Bell on the basis that Mr Thompson (or his company) does not seek to profit from the outcome of the appeal, in the sense that a commercial litigation funder taking a share of the judgment would do, but merely seeks to recoup his actual expenditure on the costs to date (presumably with any applicable interest).

1. Hodgson JA in Green v CGU said (at [51]):

... in my opinion a court should be readier to order security for costs where the non-party who stands to benefit from the proceedings is not a person interested in having rights vindicated, as would be a shareholder or creditor of a plaintiff corporation, but rather is a person whose interest is solely to make a commercial profit from funding the litigation. Although litigation funding is not against public policy (Campbells Cash and Carry Pty Limited v Fostif Pty Limited [2006] HCA 41; 229 CLR 386 at [87]-[95]), the court system is primarily there to enable rights to be vindicated rather than commercial profits to be made; and in my opinion, courts should be particularly concerned that persons whose involvement in litigation is purely for commercial profit should not avoid responsibility for costs if the litigation fails.

1. I accept that there, and at [61] in Green v CGU, his Honour was contrasting the position of a commercial litigation funder (which, on Mr Thompson's evidence, RF Thompson (Qld) clearly is not) and a shareholder or creditor with an interest in the company's rights being vindicated. However, I do not consider that the circumstances in which the Court will look to the financial position of the party lending funds to enable the continuation of the litigation are limited to the case where there is a commercial litigation funder. Indeed, the authorities to which I have referred (and to which Hodgson JA made reference in Dae Boong) extend the operation of the principle to cases where the relevant enquiry is to be made of shareholders or creditors who stand in some way to benefit from litigation by an insolvent company. There is no suggestion that they need to be so doing purely for commercial profit. Here, Mr Thompson or his company has an interest in the vindication of Mr Ballard's claimed rights in circumstances where that is the only likely way in which the company's debt will be repaid in full.

1. Insofar as reference is made in Dae Boong to a "reasonable" unwillingness to fund litigation, Mr Murr submitted that in circumstances where Mr Thompson is in his 80's, is a person with no interest in the outcome of the actual litigation (by which I understand him to mean no interest other than to recoup his money) and has already lent a considerable sum of money, a desire to limit any further exposure was reasonable. That may well be a reasonable view to take from the perspective of the company in circumstances where the appeal will itself be costly and success is by no means assured (it might be thought that further funding was akin to throwing good money after bad). However, the reasonableness or otherwise of the company's unwillingness to fund security for costs must be considered in the context that Mr Thompson is still prepared to fund the or at least some of the costs of the appeal.

1. I consider there to be force in the submission for the respondents that the position now is that, if the appeal goes forward, it will be because Mr Thompson's company is prepared to fund Mr Ballard's costs (with the prospect, of successful, of recouping the money lent to Mr Ballard) and hence take the benefit but not be subject to the burdens of that ongoing litigation. In those circumstances, if reasonableness is a relevant part of the consideration I consider that the unwillingness to fund security for costs is unreasonable.

(ii) Prospects of appeal

1. The second relevant consideration on the present application is the question of the prospects of the appeal (as they appear at this stage).

1. In Merribee, Kirby J noted that a relevant consideration on an application for security for costs is the strength of the case of the party resisting an order that it provide security for costs and an evaluation (albeit one that was recognised would necessarily be tentative) of its prospects of success. There, his Honour said:

... Similarly, if a proceeding appeared hopeless and such as was bound to fail, the lack of apparent merit in a party's case might be a reason for ordering it to provide security for the costs to which, it appears, it is needlessly putting its opponent. Such a consideration would need to be exercised with care, given that the real merits of a case might not emerge until the final hearing or might not sufficiently emerge in the necessarily brief proceedings typically involved in an application for security for costs. Furthermore, if a party asserts that its opponent's proceedings are manifestly lacking in legal merit, other remedies are available to it to protect it from needless vexation. ...

1. I expressed the view in my December reasons that the prospects of the appeal might fairly be described as slim. What Mr Murr sought to emphasise on the present application was that there was a reasonably arguable ground of appeal in relation to the issue as to whether or not there was a conspiracy, that being the contention that the primary judge had failed properly to consider the cumulative effect of some of the evidence said to be corroborative of that as to the alleged conspiracy meeting. This was described as the central issue.

1. The complaint now made is that his Honour erred in the way in which he approached the consideration of the evidence of three principal witnesses (Mr Bates, the Assistant Secretary of the CFMEU; Mr Anthony, an employee of Stoneglow (Mr Ballard's company); and Mr Widdup, a former director of Multiplex). It is said that his Honour rejected the evidence in relation to the conspiracy meeting on the basis of individual findings of credit, rather than assessing the cumulative effect of the evidence of the three witnesses (and, in particular, the corroboration of Mr Bates' evidence as to the disputed conspiracy meeting that Mr Ballard contends is provided by reference to the contents of a statutory declaration made by Mr Anthony at a time much earlier than the commencement of the proceedings).

1. Focussing on the particular example by reference to which Mr Murr's central contention was put, the statutory declaration in question was dated 10 December 1996 (approximately one month after the termination of Stoneglow's contract) and recounted a meeting to which Mr Anthony says he was invited and in which he says that he was told by the secretary of the Federal Union (Mr Sharkey) and Mr Ferguson that it had been agreed with Multiplex that Stoneglow's contractual relationship would not continue and that Stoneglow and Ballard were 'finished'.

1. His Honour considered at some length (from around [178]) the evidence of Mr Anthony in relation to the meeting recounted in the statutory declaration and the circumstances in which that declaration was made. His Honour also considered carefully the evidence given by the solicitor who witnessed the declaration and the former principal of the legal firm at which the declaration was witnessed. His Honour noted various matters that cast doubt in relation to the statutory declaration, including unchallenged evidence of Mr Leo Muggleton (the then principal of the relevant firm of solicitors) to the effect that the statutory declaration was not in a form which suggested that it had been prepared at his office. His Honour noted that Mr Johnson (the solicitor who witnessed the statutory declaration) gave evidence that he had no recollection of witnessing the statutory declaration, but accepted that he had done so; that the place and date of execution, and his capacity as a witness, were in his handwriting; and confirmed the matters that Mr Muggleton had pointed to as suggesting that the statutory declaration was not such in a form or of such a kind that would ordinarily have been produced in that office at the time.

1. At [186] (or [187]), his Honour concluded that the evidence given by Messrs Muggleton and Johnson was directly inconsistent with Mr Anthony's account of the circumstances in which the statutory declaration was prepared and that this inconsistency suggested "at the very least, that Mr Anthony was entirely mistaken as to how the document came into existence".

1. His Honour also referred to aspects of Mr Anthony's account that seemed to him to be surprising, including his account of what he did with the statutory declaration. Those aspects included that, on Mr Anthony's evidence Mr Ballard was not told of the existence or contents of the declaration even though Mr Anthony's non-disclosure to Stoneglow would have been in breach of a duty of loyalty to Stoneglow to bring to its attention matters that had come to him that were relevant to his employment or duties (Mr Anthony by then being retained as a consultant to Mr Ballard's company); Mr Anthony's presence at such a meeting in the first place (given the seniority of the attendees and his very recent membership of the union or with the company); his non-disclosure of the meeting to his fellow workers when, according to Mr Anthony, he was summoned to the meeting because he was the delegate of those workers and the matter was likely adversely to affect them. His Honour noted the inconsistency between Mr Anthony's evidence as to his behaviour and Mr Anthony's understanding of his role and obligations as a union delegate.

1. Ultimately, his Honour concluded (at around [198] that the matters his Honour had carefully recounted (which were all matters his Honour described as being directly associated either with events on which the declaration is said to have been founded or with the preparation with the declaration) cast very grave doubts on the reliability of Mr Anthony and his statutory declaration.

1. In those circumstances, the suggestion that his Honour erred in not treating the contents of the declaration as corroborative of evidence by another witness (Mr Bates, who was himself subject to very adverse credit findings) of the alleged conspiracy meeting is one that at the very least seems to be attended by difficulty.

1. His Honour expressed major concerns with Mr Anthony's credibility, both in relation to the central matters with which his evidence was concerned and more generally; and was not satisfied that Mr Anthony's evidence was reliable. It was on that basis that his Honour was not satisfied that it provided acceptable corroboration for the evidence of Mr Bates.

1. Mr Murr places reliance on the decision of the Full Court of the Federal Court in Director, Office of the Fair Work Building Industry Inspectorate v CDMEU [2013] FCAFC 8, in which complaint was made as to the failure of the primary judge in that case to have regard to the cumulative (allegedly corroborative) effect of certain evidence. (There, the Full Court noted (at [73]) that a central strength of the appellant's case was that it had the word of three people against one. In circumstances where there was no allowance for, or consideration of, that corroborative matter in the trial judge's reasons in that case, there was found to be appellable error.)

1. A similar argument as to the manner in which the evidence was to be approached had been put to his Honour in submissions during the hearing below. His Honour addressed this submission at [111] to [121] of his Honour's reasons. At [112]-[113] (on the Red Book version of the judgment, which appears as [113]-[114] in the on-line version), his Honour said:

I accept, of course, that an assessment of the credibility of any particular witness must take into account the extent to which the testimony of that witness is, or is not, conformable to other evidence in the case: particularly where that evidence comprises contemporaneous documents unlikely to have been prepared in an atmosphere that might lead to some partisan or partial statement of the relevant facts, or where that evidence appears, for a variety of reasons, to be credible. To take an example from this case: the evidence of Mr Bates (which, as I shall show, must be regarded as untrustworthy, having regard to admissions as to dishonest, discreditable and corrupt conduct in which he engaged and to admissions of serial perjury) may, nonetheless, find corroboration in other parts of the evidence, such as that of Mr Len Anthony.

However, that does not mean that the evidence of each witness should not be assessed, on its own merits, for credibility. It means, at most, that in assessing the credibility of any particular part of the evidence, due regard must be paid to the extent to which it is conformable to, or corroborated by, other parts of the evidence.

1. Having referred to the principles relating to the assessment of a case based on circumstantial evidence as considered by the Court of Appeal of the Supreme Court of Victoria in Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125, his Honour concluded that reliance on those principles was misplaced in the present case. At [120] ([121] on-line), his Honour noted that:

... the court is required to assess the evidence relating to the conspiracy, or coffee shop, meeting, and to consider whether that evidence, considered in the context of the evidence as a whole, should be taken to prove, on the balance of probabilities, that the meeting occurred, and that at the meeting words substantially to the effect of those said by Mr Bates to have been uttered, were uttered. In undertaking that process the court necessarily must consider the credibility of the competing accounts. As I have now said more than once, in doing so the court must take into account the extent to which those competing accounts are or are not consistent with other (acceptable) evidence. But it cannot defer resolution of the question of credibility until all the facts have been found; that process is at best circular.

1. His Honour thus recognised the need to consider the cumulative effect of all of the evidence. The respondents contend that his Honour did consider the cumulative effect of all the evidence and did not err in the manner in which he approached the question as to whether the evidence in question was corroborative of the evidence given by Mr Bates of the disputed meeting in which Mr Ballard alleges the conspiracy was formed.

1. The complaint by Mr Ballard seems to be that his Honour either did not do what his Honour had emphasised was necessary or did not do so in a manner that produced the findings for which Mr Ballard contended. I was referred to, and have had regard to, the manner in which the following evidence was dealt with: Mr Bates at [150] to [173] of the judgment; Mr Anthony [174] to [209]; Mr Widdup at [210] to [271]. For present purposes it is not necessary to comment on the process by which his Honour reached those findings. I have previously noted the obstacles that Mr Ballard is likely to face in overturning the findings as to credibility. (I also noted in the course of argument on the present application that his Honour at [209] appears to have engaged in just such an exercise in relation to the evidence of Mr Anthony as that which it is sought to be contended on appeal that he did not do.)

1. However, even accepting for present purposes that Mr Ballard has raised a reasonably arguable ground of appeal in relation to the manner in which the factual findings were reached, the difficulty remains that overturning the credibility findings (and the factual findings based thereon) is just one hurdle to be met on the appeal. Mr Ballard's prospects of success on the appeal must also take into account the findings made in relation to his damages claim and in relation to the respondents' limitations defence (all of which must be overturned for Mr Ballard to obtain a judgment in his favour for any substantial amount on appeal).

1. For the Brookfield/Multiplex parties it is contended by Mr Pike that the case in favour of security is now even stronger having regard to the content of the written submissions for appeal. In particular, it is submitted by Mr Pike that these submissions address only briefly the issue as to whether the alleged wrongful conduct caused any loss to Mr Ballard and do not address either the findings made by the primary judgment at [725] to [784] as to loss or the findings made by his Honour in rejecting the expert evidence at [785]-[811]. A brief review of the 69 pages of submissions supports such a conclusion.

1. Emphasis was placed by Mr Oslington on the fact that the findings that Mr Ballard was not disabled from work from November 1996 due to a depressive illness were against the background that there was no evidence of any consultation or treatment for depression or mental illness with any doctor after the termination of the Stoneglow contract and no evidence called from Mr Ballard's second wife or his sons to corroborate from a lay perspective the evidence he gave as to this issue. The appeal submissions do little more than repeat the assertions as to the findings for which Mr Ballard contends and, at least in relation to the finding made by his Honour as to a disputed telephone conversation between Mr Ballard and Mr Rech (in which Mr Ballard says that Mr Rech told him that Mr Ferguson had said that he and Mr Ballard was not to be employed in the industry again) they appear to be inconsistent with his Honour's actual findings. The evidence of the Rech conversation is dealt with at [730] to [750] of his Honour's judgment. Mr Oslington notes that, again, Mr Ballard's second wife (who is said to have overheard the telephone conversation) was not called to give evidence on this issue. The appeal submissions assert that Mr Rech was proven not to be a credible witness ([240]-[241]). I can find no such finding in his Honour's reasons. At [739], his Honour noted that Mr Rech was cross-examined and that it was not put to him directly that his account of either of the telephone conversations was incorrect. His Honour noted that, in the course of cross-examination, Mr Rech had said that he did not recall ever having a conversation with Mr Ferguson about Stoneglow or any other company. There is no basis in the reasons for the submission that his Honour found Mr Rech not to be a credible witness.

1. As to the limitation issue dealt with by the primary judge (the only challenge there being as to a factual finding, not as to the principles articulated by his Honour), it is submitted that the appeal is hopeless given that there was no dispute that the handwritten note on which his Honour's finding was based was written by Mr Ballard some time before the limitation period expired. His Honour referred to this note at [701] of his reasons. It was undated. It stated:

We were working for approximately two years and were owed a large amount of money with no dispute at all, and also Grace House in the City with no dispute, when Multiplex refused to pay us at Pitt Street Mall, and was [sic] told we would not get paid, because the union wanted us out of business.

1. At [702], his Honour observed that a reading of Mr Ballard's cross-examination left him with the very strong impression that Mr Ballard was deliberately evasive and non-responsive when faced with this document in cross-examination. His Honour considered that this reflected Mr Ballard's appreciation that the document was fatal to his limitation point.

1. On appeal, Mr Ballard raises the limitation issue in ground [7] of his appeal but does not address in submissions the difficulty of maintaining such a ground in the face of the findings as to Mr Ballard's handwritten note.

1. The difficulty for Mr Ballard's claim occasioned by the findings made as to damages and the limitations defence demonstrates that even if there is a reasonably arguable ground of appeal in relation to the factual findings relating to the formation of a conspiracy, the prospects of success on the appeal for Mr Ballard (even on the cursory view possible on an application of this kind) remain problematic.

Conclusion as to Mr Ballard's application

1. I accept that the withdrawal of Sagacious Legal as solicitors on the record is a material change in circumstances from those that applied in December last year (since it means that the ability to obtain funding for the provision of security is likely to be adversely affected).

1. What is contended by Mr Murr is that, in circumstances where Mr Ballard's financial resources are exhausted and there is nobody standing behind him who has the means to provide security and who is willing to do so, an order for security for costs will stifle Mr Ballard's appeal and that (although perhaps capable of being narrowed) the appeal as presently framed raises a reasonably arguable ground of appeal in relation to the central issue of the formation of the conspiracy.

1. Insofar as criticism is made by Mr Oslington that the evidence does not support a finding that RF Thompson (QLD) lacks the means (but only the willingness) to fund the provision of security, Mr Murr maintains that it is not unreasonable for the company not to wish to provide further funding in the circumstances to which Mr Thompson deposes (which I note could have been, but were not, put before me on the last occasion).

1. The Court is reluctant in the ordinary course to make an order for security for costs that will stultify an appeal. Moreover, any assessment of the prospects of success of the appeal can at this stage only be made in a cursory or limited way.

1. However, here there is no question as to the existence of special circumstances for an order for security for costs to be made in respect of the appeal; the appeal is of an extensive nature (in the light of the factual issues sought to be litigated in the appeal); there are very substantial obstacles to be overcome in order for the appeal to succeed (even if Mr Ballard were to overturn the finding as to the disputed conspiracy meeting); and the party funding the appeal (or part of the costs of the appeal) has not been shown to be unable to provide funding for the security for costs. In those circumstances, I am of the view that this is an appropriate case for the provision of security for costs and that the orders that were made last year should stand.

1. In Dae Boong, Hodgson JA concluded at [27] that:

Ultimately it seems to me the question to be determined by the court is whether it is fair that the person being sued by the company should be in the position of having to incur substantial costs, in this case perhaps tens of thousands of dollars of costs, and being at risk of liability for the company's costs, and yet have no real chance of recovering costs even if the action is unsuccessful, when there are persons who would benefit from the proceedings, who face no risk of liability for costs themselves and are either unwilling or unable to provide security.

1. RF Thompson (Qld) is prepared to stand behind Mr Ballard (at least to the tune of funding up to another $100,000) for the costs of running the appeal and stands to benefit from a successful appeal (in recovering loan moneys that may otherwise be irrecoverable) but is not prepared to provide security for the respondents' costs of that appeal. This throws into sharp perspective the unfairness to the respondents (who were comprehensively successful in the first instance and have incurred substantial costs defending the very serious allegations made by Mr Ballard) being exposed to the very real risk (acknowledged in effect by Mr Ballard) that they will not recover their costs of the appeal (let alone those of the first instance proceedings).

1. Therefore, while I accept on the present evidence that the orders for security for costs will in all likelihood stifle the appeal, the unwillingness of RF Thompson (Qld) to stand behind Mr Ballard for the provision of security for costs (though standing to benefit in a material way from a successful appeal) is a powerful factor weighing in favour of the orders for security not being disturbed.

1. For those reasons I dismiss the application by Mr Ballard for orders setting aside the orders made in December last year for security for costs.

Applications for summary dismissal

1. I turn then to the applications by the respective respondents for the summary dismissal of the appeal. Those applications are put on the basis of Rule 42.21 of the Rules and/or the inherent jurisdiction of the Court. Reliance is placed by the Brookfield/Multiplex parties on the affidavit of Ms Nina Merlino sworn 4 March 2013 and by the CMFEU parties on an affidavit from Mr Lachlan Riches sworn 5 March 2013. Ms Merlino and Mr Riches are the solicitors who have day to day conduct of the appeal proceedings for the respective respondents.

1. Ms Merlino deposes to the fact that no security has been provided in accordance with the orders I made in December (a fact not in dispute) and to the communications made with Sagacious Legal (and later with DC Legal) seeking confirmation as to whether Mr Ballard intended to comply with the orders. I note that the response by Sagacious Legal to the first query, by letter dated 22 January 2013 simply referred to a difficulty obtaining instructions (though by that time Sagacious Legal had already informed Mr Ballard that they could not continue to act for him); the (somewhat surprising on its face) response to a second query (also of the same day) was that they had "taken every step to ensure that our client complies with the timetable set by the Court". No further communication was received from Sagacious Legal in relation to security for costs.

1. Once Clayton Utz received a Notice of Change of Solicitor on 11 February 2013, Clayton Utz advised DC Legal that they held instructions to apply for a dismissal of the proceedings if security was not provided by 28 February 2013. Similarly, Mr Riches communicated with DC Legal after receipt of the Notice of Change of Solicitor, advising that if security were not provided by that date a motion for dismissal would be filed.

1. Rule 42.21(3) provides that if a plaintiff fails to comply with an order made under that rule, the court may order that the proceeding on the plaintiff's claim for relief in the proceedings be dismissed. In the present case, the orders for security for costs were made pursuant to Rule 51.50 but there is inherent jurisdiction to dismiss an appeal where the appellant has failed to comply with an order to provide security for costs.

1. Exercise of the power to dismiss requires consideration of various factors, as set out in Idoport Pty Ltd v National Australia Bank Ltd [2002] NSWCA 271: the time that has passed since security was ordered; the likely ability to provide security; the extent to which the plaintiff has been on notice of the dismissal application; the likelihood of prejudice to the defendant as a result of continuing the stay; the impact on the court of continuing the stay; the ability of the plaintiff to commence new proceedings and the prejudice to the plaintiff (such as the expiry of a relevant limitation period).

1. Here, security was ordered some 4 months ago. The security was ordered to be provided in stages referable to the then proposed timetable for the proceedings. The respondents' lawyers were unable for some 2 months to obtain any indication as to whether Mr Ballard intended (or was able) to comply with the orders (even at a time by which Sagacious Legal had told Mr Ballard they could not continue to act for him).

1. Although I take into account the fact that Mr Ballard deposes he was not told about the avenue for review of the December security for costs orders, he has had the benefit of legal advice throughout. Mr Ballard's former lawyers alerted him in January 2013 to the likelihood of a dismissal application if the security was not provided.

1. The appeal proceedings have been set down for ten days commencing on 22 July 2013. From the Court's perspective, the maintenance of court hearing dates in circumstances where it seems increasingly unlikely that the appeal will be able to commence on the date fixed (even if the security for costs orders were to be discharged) will inevitably prejudice other litigants whose appeals are ready to proceed.

1. The unfortunate position for Mr Ballard is that he has no funding for an appeal if (as it has been) the outcome of his motion is unsuccessful and on that basis has no prospect of being able to continue with the appeal. In Porter v Gordian Runoff Ltd (No 3) [2005] NSWCA 377, it was said that if a significant sum is ordered by way of security and the plaintiff with due notice of the dismissal application fails to satisfy the court that there is any prospect of complying with the order, the proceedings should ordinarily be dismissed. (See also Idoport v National Australia Bank [2002] NSWSC 18 at [24] per Einstein J; Idoport v National Australia Bank [2002] NSWCA 271 at [48]ff per Mason P (with whom Stein and Giles JJA on this issue agreed); Farnell v Penhalluriack [2010] 29 VR 727 at [19] per Mandie JA with whom Harper JA agreed.)

1. As to the prejudice to the respondents of the proceedings remaining on foot, the Brookfield/Multiplex respondents maintain that the continued existence of the appeal (in which serious allegations are made against them) is, in itself, serious prejudice to them. Although there was no evidence as to any particular prejudice, I accept that allegations of conspiracy are serious allegations for entities and individuals to have remain on foot. Reference was made in submissions to the likely delay in enforcement of the costs order from the trial and to the disruption arising from the need to maintain availability for the July hearing dates. While the last matter would be accommodated simply by vacating the July hearing dates, it seems to me that there is no utility in so doing where there seems to be no prospect that Mr Ballard will be able to provide security for costs and no submission was made that with further time he would be able or likely to be able to do so.

1. The position of Mr Ballard, through his Counsel, was that if the outcome of his present application to set aside the orders for security for costs were to be unsuccessful, he would not be in a position to comply with them. On that basis, I was informed that Mr Ballard did not oppose orders for the dismissal of the proceedings but did not accept that such orders should be made. In those circumstances, the appropriate order is to dismiss the appeal proceedings and I will now do so and vacate the hearing dates.

1. Finally, as to costs, indemnity costs were sought by the respective respondents. Counsel did not address me specifically on the application for indemnity costs when the matter was in the referrals list. Mr Pike's written submissions refer to the history of the matter. Insofar as I know about the history of the matter from the recent applications I am not inclined to order indemnity costs either of the applications before me on 8 April or consequent upon the dismissal of the appeal since I am not presently persuaded that this falls within the category of case considered in Fountain Selected Meats(Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397 (notwithstanding that my assessment at this stage of the prospects of the appeal is that they are slim). If the respondents press for other orders then Mr Ballard should be heard on that issue and I will either list the matter for further submissions or deal with any further written submissions on the papers.

Orders

1. For the reasons set out above, I propose to make the following orders:

1. Dismiss with costs the application by Mr Ballard to set aside the security for costs orders made on 18 December 2012.

2. Dismiss the appeal proceedings for failure of the appellant to comply with the orders made on 18 December 2012 for the provision of security for the respondents' costs.

3. Order the appellant to pay the respondents' costs of the appeal.

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Decision last updated: 16 April 2013