Bata v Pathik
[2025] VSCA 156
•3 July 2025
| SUPREME COURT OF VICTORIA COURT OF APPEAL |
| S EAPCI 2025 0037 |
| MARK BATA | Applicant |
| v | |
| AMITABH PATHIK & ORS (ACCORDING TO THE ATTACHED SCHEDULE) | Respondents |
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| JUDGES: | LYONS and KENNY JJA |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 18 June 2025 |
| DATE OF JUDGMENT: | 3 July 2025 |
| MEDIUM NEUTRAL CITATION: | [2025] VSCA 156 |
| JUDGMENT APPEALED FROM: | [2025] VCC 43 (Judge Burchell) |
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PRACTICE AND PROCEDURE – Appeal – Application for stay of execution of judgment debt – Principles to be applied in stay applications pursuant to r 64.39 – Whether appeal will be rendered nugatory because real risk not restored to former position if appeal successful – Whether execution of judgment debt requires sale of ‘family home’ – Sale of family home if the subject matter of the proceedings may constitute special or exceptional circumstances to justify stay – Sale of family home may be relevant notwithstanding not subject matter of proceeding – Sale of family home to meet judgment debt not itself sufficient to justify special circumstances – Insufficient evidence of financial position and consequences of medical condition to give rise to special circumstances – Lack of candour – Stay refused.
Supreme Court (General Civil Procedure) Rules 2015, r 64.39.
Maher v Commonwealth Bank of Australia [2008] VSCA 122; Neate v Thoroughbred International Marketing Pty Ltd (2012) 34 VR 318; Sandri v O’Driscoll [2013] VSCA 281, distinguished; Ozden v Commonwealth Bank of Australia [2013] VSCA 195, distinguished.
PRACTICE AND PROCEDURE – Appeal – Stay of execution – Principles to be applied in stay applications pursuant to r 64.39 – Whether real risk that application for appeal stifled because real risk of bankruptcy – Service of bankruptcy notice not sufficient special circumstances – Insufficient evidence of financial position to conclude real likelihood applicant will be bankrupted or that appeal stifled because cannot meet judgment debt – Stay refused.
Supreme Court (General Civil Procedure) Rules 2015, r 64.39.
Narain v Euroasia (Pacific) Pty Ltd [2008] VSCA 195; Sami v Roads Corporation [2009] VSCA 44; Kairouz v Jasper Nominees Ltd [2024] VSCA 68.
PRACTICE AND PROCEDURE – Appeal – Security for costs of appeal – Whether financial position of applicant for leave to appeal problematic thereby creating a risk of non-satisfaction of costs order of respondent, if successful – Insufficient evidence of financial position such that financial position ‘problematic’ – Whether order for security for costs would stultify or stifle appeal – Evidence of access to third party funds unexplained and/or undisclosed source of funds to meet costs orders – Security granted.
Supreme Court (General Civil Procedure) Rules 2015, r 64.38(4).
Cwalina v Rose [2025] VSCA 53; Mikkelsen v Li (2022) 71 VR 232.
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| Counsel | |||
| Applicant: | A Bartzis | ||
| Respondents: | D Klempfner | ||
Solicitors | |||
| Applicant: | Starnet Legal Pty Ltd | ||
| Respondents: | Francke Lawyers Pty Ltd | ||
Hello
LYONS JA
KENNY JA:
In County Court proceedings, Mr Bata, the applicant in this Court, was found liable in the sum of $1,910,596.47 to the first respondent, Mr Pathik, for defective building work in the construction of two units on Mr Pathik’s land at 1 Kananook Avenue, Seaford (‘the Seaford Property’). Mr Bata now seeks leave to appeal against that judgment.
There are two applications before this Court. First, Mr Bata seeks a stay of the execution of the County Court judgment until the hearing and determination of his application for leave to appeal (the ‘stay application’) which Mr Pathik opposes. Second, Mr Pathik seeks security for his costs of the prospective appeal in the sum of $80,000 (‘the security for costs application’) which Mr Bata opposes. For the reasons that follow, we would refuse the stay application but grant the security for costs application.
The evidence
In the stay application, Mr Bata relied upon his affidavit sworn on 12 March 2025 (‘first Bata affidavit’) and Mr Pathik relied upon the affidavit of his solicitor, Mr Francke sworn on 24 April 2025 (‘first Francke affidavit’). At the hearing, Mr Bata sought leave to rely upon a further affidavit sworn by him on 17 June 2025 (‘second Bata affidavit’). As Mr Pathik did not oppose this application, we grant leave to Mr Bata to rely upon the second Bata affidavit.
In the security for costs application, Mr Pathik relied upon the affidavit of Mr Francke sworn on 28 April 2025 (‘second Francke affidavit’) and Mr Bata relied upon the affidavit of his solicitor, Kimani Boden, sworn on 12 May 2025 (‘Boden affidavit’).
We note, however, that the affidavits filed in each application were relevant to, and relied upon in argument on both applications. We determine both applications on that basis.
Background facts
In the County Court proceeding, Mr Pathik alleged that Mr Bata breached the terms of a domestic building contract between them for the construction of the two units on the Seaford property (the ‘building contract’). The breaches consisted of significant delays in completion and serious defects in the building works. Most significantly, unit 1 was three metres closer to the eastern boundary than the approved drawings allowed (which was in breach of the planning permit). This had a number of effects including that the rear of unit 1 encroached upon the proposed Lot 2 on the proposed plan of subdivision. Substantial rectification works were required to remedy these defects, including demolishing a garage. As a result, Mr Pathik purported to terminate the building contract on or about 10 August 2021. Mr Pathik was unable to finance rectification works, with the result that he sold the Seaford property on an ‘as is’ basis on 22 October 2022.
In the proceeding below, Mr Pathik sought declaratory relief in respect of the termination of the building contract and damages, being the difference between the amount he obtained from the sale of the Seaford property and the amount he would have obtained for that property if the works had been performed in accordance with the building contract. He also claimed the additional interest he was obliged to pay under loan agreements due to the delays in completion of the works.
Mr Bata denied liability on the basis that Mr Christopher Dimitriou, the third respondent, and/or his company, the second respondent (formerly Rethink Pty Ltd), actually carried out the works. Mr Bata also counterclaimed that Mr Pathik was liable to him for the sum of $456,811.00, paid by Mr Pathik to Mr Dimitriou which, so Mr Bata alleged, should have been paid to him directly. Mr Pathik denied liability on the counterclaim.
On 3 February 2025, the trial judge delivered judgment and reasons in favour of Mr Pathik in respect of the claim and counterclaim. The judge relevantly concluded that:
(a)Mr Bata breached the building contract by failing to complete the total build by 9 September 2018 and because the building works were seriously defective, including the misplacement of the unit 1 and the garage;
(b)Mr Bata did not carry out works to rectify the misplacement of unit 1; rather he left it to Mr Pathik to apply for amended permits and to complete the subdivision, rectification and sale of the Seaford property;
(c)Mr Pathik validly terminated the building contract by letter dated 10 August 2021 (the ‘Notice’);
(d)Mr Pathik did not fail to mitigate his losses by selling the Seaford property ‘as is’, in light of his difficult financial position at the time brought about by the breaches of contract and delays as found; and
(e)Mr Pathik was entitled to damages of the kind claimed.
On 27 March 2025, the judge ordered that Mr Bata pay Mr Pathik the sum of $1,910,596.47, inclusive of interest and minus settlement sums received (the ‘judgment debt’), plus costs, which were to be assessed on an indemnity basis from 11:00 am on 6 March 2023.
The application for leave to appeal was lodged on 4 April 2025. In summary, the applicant contends that:
(a)the judge erred in finding that the building contract was validly terminated by the Notice and in failing to find that the Notice did not comply with the requirements of the building contract (proposed ground 1);
(b)the judge erred in failing to find that Mr Pathik did not mitigate his loss (by undertaking rectification works prior to sale) (proposed ground 2);
(c)the judge erred in accepting Mr Pathik’s expert valuation evidence as reliable evidence of the loss and damage claimed by him (proposed ground 3); and
(d)the judge erred in omitting to make any finding as regards Mr Pathik’s claim against the second and third respondents (proposed ground 4).
Application for stay
Mr Bata’s evidence and submissions
In the first Bata affidavit, Mr Bata deposed to the following:
(a)he is 70 years old and in poor health, suffering from prostate cancer, severe blindness in one eye and limited vision in the other eye. He also exhibited letters from doctors prepared in March and August 2024;
(b)he, or one of his companies, are the registered proprietors of the following properties:
(i)1/13 Nerissa Grove, Oak Park, Victoria 3046, being the family home and residence of Mr Bata (‘Nerissa Grove property’);
(ii)45 Rhodes Parade, Oak Park, Victoria 3046, being an investment property; and
(iii)7 Billson Street, Brighton East, Victoria 3187, being a property that he apparently planned to develop in his retirement for his superannuation (‘Billson Street property’);
(together, ‘the Properties’);
(c)there are caveats placed on the Properties in favour of his wife, Mona Ismail, from whom he is separated; and
(d)save for ‘the properties and some debts which other parties owe’ to him, he does not have other substantial assets.
Mr Bata exhibited a personal balance sheet as at 22 October 2024 (‘October 2024 balance sheet’). In summary, it records assets valued at $6,001,000 and liabilities valued at $4,937,157, totalling a personal net worth of $1,063,843. This includes:
(a)the properties at:
(i)1/13 Nerissa Grove, Oak Park, Victoria 3046 valued at $1,250,000 with a liability to the ANZ Bank of $568,096 (presumably secured);
(ii)45 Rhodes Parade, Oak Park, Victoria 3046 valued at $1,250,000 with a liability to the ANZ Bank of $363,936 (presumably secured);
(iii)7 Billson Street, Brighton East, Victoria 3187 valued $3,500,000 with a liability to the ANZ Bank of $1,891,123 (presumably secured);
(b)$1,000 cash at bank;
(c)a personal loan, including interest, of $770,000; and
(d)outstanding bills of $1,344,002.
As to his family situation, Mr Bata deposed that:
(a)he has been married to Ms Ismail since July 1991;
(b)they have two adult children, both of whom live at the Nerissa Grove property;
(c)after experiencing matrimonial problems for some time, he and Ms Ismail entered into a binding financial agreement (‘BFA’) on or about 23 January 2020 pursuant to which he agreed to transfer all the Properties to Ms Ismail;
(d)while they continued to live together for a period, on or about 19 July 2024, he and Ms Ismail formally separated but lived under the same roof at the Nerissa Grove property;
(e)on 5 November 2024, Ms Ismail left the Nerissa Grove property and went to live in Egypt but she subsequently returned and they continue to live separately at the Nerissa Grove property; and
(f)Ms Ismail’s lawyers have advised that Ms Ismail expects Mr Bata to comply with the terms of the BFA by transferring the Properties to her.
As a result, Mr Bata deposed that the ‘only way’ that he will be able to satisfy the judgment debt will be by selling the Properties, the loss of which will be irreparable. He also referred to Ms Ismail’s ‘direct’ interest in the Properties as matrimonial assets.
Finally, Mr Bata also referred to a freezing order made by the judge on 11 October 2024 (and extended from time to time) not to dispose of, deal with or diminish his Australian assets up to an unencumbered value of $700,000 until the hearing and determination of the trial, or until further order of the court (‘the freezing order’). Mr Bata deposed that the freezing order ‘could be left undisturbed until the hearing of the appeal if leave is granted’.
In his second affidavit, Mr Bata exhibited a letter from Dr Merenstein, a general and endocrine surgeon, dated 16 June 2025. It records that:
(a)Mr Bata has diabetes and is being treated with Ozempic;
(b)Mr Bata has developed pain associated with nerve injury following a fracture of his right forearm which ‘impairs [his] ability to use the forearm’ particularly in cold weather, with Mr Bata attending a pain clinic;
(c)Mr Bata has prostate cancer under the care of urological specialist and ‘as yet a decision with respect to continuation of radioactive treatment or radical prostatectomy is being considered’;
(d)Mr Bata is ‘still troubled by … abdominal pains due to a stomal ulceration’;
(e)Mr Bata has ‘virtually no sight’ in his right eye and 75% of his vision in his left eye;
(f)Mr Bata is taking medication for his prostate and right forearm pain; and
(g)as a result, Mr Bata is suffering from ‘multiple co-morbidities which significantly impact his general physical state’.
In his second affidavit, Mr Bata also deposed that Ms Ismail has now issued a family law proceeding against him seeking to enforce the BFA, with the first return dated listed for 17 July 2025. No further details of that family law proceeding were provided.
In oral submissions, counsel for Mr Bata made plain that the principal basis of the stay application was that there are special circumstances in this case to justify a stay because:
(a)there are good prospects of success in the appeal; and
(b)unless a stay is granted, the appeal will be rendered nugatory in the sense that, as his only substantive assets are real property, including his family home and necessary place of convalescence from his medical condition, it will not be possible for Mr Bata to be restored substantially to his former position if a judgment against him is executed.
In his written submissions and oral reply submissions, however, Mr Bata also contended that, given his financial position and medical condition, unless a stay is ordered, the appeal will be stultified or stifled.
Mr Bata submitted that there is at least an arguable ground of appeal on the following basis:
(a)the issue of termination raises an arguable ground where termination was found without regard to cl 5 of the building contract which would have rendered the Notice void, and this issue raises an aspect of public interest, namely questions about ‘the stability of contracts in the building industry’;
(b)there are significant legal questions regarding the principles around mitigation; and
(c)there was an omission to adjudicate the core liability of co-defendants in the proceeding below.
As to the real risk that it will not be possible for the applicant to be restored substantially to his former position (ie if the Properties are sold), Mr Bata submitted that, given his medical condition, he is heavily reliant upon the Nerissa Grove property as a safe abode and ‘necessary place of convalescence’ for his illnesses. He relied on authorities which refer to the fact that a family home is or may be irreplaceable, giving rise to a special circumstance under which to grant a stay.0F[1] He submitted that the other two properties were investment properties, with one a ‘quasi-superannuation’ investment: if these are sold, he submitted that he will be ‘unable to effectively draw any income for his treatment and existence’.
[1]Relying on Maher v Commonwealth Bank of Australia [2008] VSCA 122, [24]–[26] (Dodds-Streeton JA) (‘Maher’); Sandri v O'Driscoll [2013] VSCA 281, [52] (Santamaria JA, Tate JA agreeing at [1]) (‘Sandri’); Ozden v Commonwealth Bank of Australia [2013] VSCA 340, [16] (Osborn JA, Beach JA agreeing at [17]).
In addition, Mr Bata referred to the BFA and submitted that the Properties are encumbered in various ways, including by way of caveats in favour of Ms Ismail. Mr Bata highlighted the uncertain nature of the ownership of the Nerissa Grove property, given it is considered a ‘matrimonial property’ and will be subject to the division of assets following the dissolution of the marriage between Mr Bata and Ms Ismail. He submitted that the Properties should not be sold until the true equity of ownership between him and Ms Ismail ‘is properly settled and known’ for the purpose of settling any payment of damages to Mr Pathik.
Further, Mr Bata submitted that it is unknown what Mr Pathik would do with the fruits of any judgment received.
In conclusion, Mr Bata submitted that the ‘overall interest of justice’ would be served if his assets are left undisturbed pending the appeal, particularly given his medical condition, as it would be far more disruptive to him that all the Properties be realised in order to pay the judgment sum now. By contrast, Mr Pathik ‘can merely wait a short period of time’ until the appeal is determined.
Mr Pathik’s evidence and submissions
There was a difference, at least in emphasis, between Mr Pathik’s written and oral submissions. It is appropriate to deal with each in turn.
In his written submissions, Mr Pathik contended that the stay application should be refused because:
(a)there is no reasonably arguable point on appeal and, in any event, no issue of public importance is raised;
(b)if leave is granted, refusing a stay will not render the appeal nugatory; and
(c)given the wide discretionary nature of the relief sought, Mr Bata’s improbity during the proceedings below, including a contempt which is now further compounded by his lack of candour in his evidence in this application (in particular as to his financial position and his recent reliance upon the BFA), ought to militate heavily against granting relief.
As to the prospects of success, Mr Pathik contended that the grounds of appeal merely sought to re-agitate the contested factual and legal issues determined by the judge. Mr Pathik contended that Mr Bata had not identified any clear error in the judge’s reasoning or approach.
We pause to note that, in oral argument, counsel for Mr Pathik addressed proposed ground 4 in detail, contending that there was no arguable appeal on this ground. The Court was taken to the judgment entered in favour of Mr Pathik against the third respondent in the amount of $40,000, plus interest and costs, on 11 August 2022. The Court was also taken to the County Court Notice dated 23 November 2023 dismissing the proceeding as against the second respondent. Our attention was drawn to order 5 in the orders of the County Court dated 27 March 2025, to the effect that Mr Bata has ‘leave to enter judgment in default of appearance against the third defendant for contribution and indemnity claimed in the third party notice’. In these circumstances, counsel for Mr Pathik contended that there was no sensible basis to assert that the judge erred in failing to address Mr Pathik’s pleaded claims against the second and third respondents. Counsel for Mr Pathik submitted that it remains open to Mr Bata to pursue his right against the third respondent but he has not done so. In his oral reply submissions, counsel for Mr Bata did not contest these matters.
In respect of Mr Bata’s contention that the appeal will be rendered nugatory, Mr Pathik challenged the nature and quality of the material relating to Mr Bata’s financial position in this application and in the freezing order applications, including as to the assets he owned. In summary, Mr Pathik submitted that the Court should have no confidence in Mr Bata’s evidence as to his financial or personal situation with the result that the Court could not be satisfied that special circumstances exist. This is in light of the first Francke affidavit which disclosed that:
(a)the existence of the BFA between Mr Bata and Ms Ismail was not raised in any of the numerous financial affidavits sworn by Mr Bata, Ms Ismail or her solicitor, Ms Dennaoui, during the course of the proceeding (including in relation to the freezing order) or in the proceedings successfully brought against Mr Bata for contempt;
(b)the BFA is inconsistent with:
(i)the dates in Mr Bata’s affidavit in respect of the date of separation;
(ii)the affidavit of Ms Dennaoui affirmed14 October 2024;
(iii)the caveats lodged on the properties during the third day of the trial below and claiming a ‘freehold estate’ encumbering the whole of the Properties without referring to the BFA; and
(c)the freezing order required Mr Bata not to dispose, deal with or diminish the value of his assets in Australia up to an unencumbered value for $700,000, such that if Mr Bata does not have an interest in the Properties, either his affidavit is inaccurate or he is non-compliant with the freezing order.
Mr Francke also referred to the findings of the judge that Mr Bata was not a reliable witness; that he was reluctant to give any concessions or qualifications; and that the judge referred Mr Bata’s conduct to Victoria Police and to the Victoria Building Authority to determine whether investigations were warranted.
As a result, Mr Pathik submitted that the evidence of Mr Bata on this application, particularly in relation to the BFA, should be approached with ‘great caution’ because Mr Bata had been repeatedly dishonest. He noted that it was only after judgment in Mr Pathik’s favour that Ms Ismail sought to enforce the BFA. Further, Mr Pathik submitted that Mr Bata’s evidence in relation to the disputed ownership of the Properties, as a result of the BFA, was irreconcilable with Mr Bata’s evidence in support of his stay application that ‘[t]he only way that I will be able to satisfy the respondent’s claim for loss and damage as well as costs will be by selling the said properties, including the family home’. Indeed, Mr Francke deposed that all these matters ‘evidence an intention … to put his assets beyond the reach of creditors’.
In addition, Mr Pathik submitted that there are two claims lodged with Mr Bata’s insurer VMIA, with the maximum payable being $600,000, and that the stay would result in the insurer ceasing to consider those claims.
Finally, Mr Pathik highlighted that Mr Bata does not give evidence that, unless a stay is granted, he may be bankrupted as a means of enforcement of the judgment or that, without a stay, he will be unable to afford to prosecute his appeal (if leave is granted).
By contrast, at the hearing, counsel for Mr Pathik contended that, if Mr Bata’s evidence were taken at its highest, particularly in relation to the BFA, the Properties no longer belonged to Mr Bata. This was because the terms of the BFA provided that Mr Bata agreed to transfer the Properties to Ms Ismail. Furthermore, based on the October 2024 balance sheet, Mr Bata’s liabilities would evidently exceed his assets.
Reference was also made to a bankruptcy notice dated 4 April 2025 and served on Mr Bata on 16 April 2025, which sought payment of the judgment debt. At the hearing, we were informed that the time for the payment of this bankruptcy notice had been extended to 3 July 2025. In this context, counsel for Mr Pathik submitted that, in the ordinary course, the fact that the execution of the judgment might result in bankruptcy was no reason to stay an appeal (although these matters were relevant to Mr Pathik’s security for costs application, which is considered below). Counsel for Mr Pathik noted that, if Mr Bata’s bankruptcy was the result, then it would be a matter for the trustee in bankruptcy (standing in the shoes of the bankrupt) to decide whether to pursue the appeal.
Be this as it may, counsel for Mr Pathik submitted that Mr Bata’s own evidence indicated that it might be possible for Mr Bata to raise sufficient funds from a third party, having regard to his ability to satisfy an earlier bankruptcy notice served 29 March 2025 and issued by Mr Pathik (‘first bankruptcy notice’), and his ability to offer $30,000 in respect of the security for costs application.
In reply, counsel for Mr Bata contended that, if the application for a stay were refused, it was very likely that he would be made bankrupt in light of his financial position. As a result, he contended that Mr Bata would be ‘at the mercy’ of the trustee in bankruptcy and would lose control of the conduct of the appeal. Counsel for Mr Bata contended that Mr Bata’s likely bankruptcy and its consequences, along with Mr Bata’s medical condition, would justify a finding of special circumstances to grant the application for a stay.
Relevant principles
The principles governing a stay application under r 64.39 of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’) are well-established and may be summarised as follows:
(a)the court has a broad discretion to grant a stay pending appeal;1F[2]
[2]Maher [2008] VSCA 122, [23] (Dodds-Streeton JA, Redlich JA agreeing at [1]).
(b)as the starting point is that a judgment creditor is entitled to the fruits of victory, an applicant for a stay must satisfy the Court that ‘special or exceptional circumstances’ exist before a stay will be granted;2F[3]
(c)a stay should not be granted unless there is at least an arguable ground of appeal: that is a relatively low bar. However, speculation as to the ultimate prospects of success is usually inappropriate;3F[4]
(d)the onus is on the applicant to demonstrate that a stay ought be granted;4F[5]
(e)even if special or exceptional circumstances are established by the applicant, the grant of a stay remains discretionary;5F[6]
(f)the categories of special or exceptional circumstances are not closed: it will depend on the facts of each particular case;6F[7]
(g)it is established that such circumstances would exist where there was a real risk that the appeal, if successful, would be rendered nugatory;7F[8] and
(h)an appeal might be rendered nugatory in a number of ways, including if a successful appellant could not be substantially restored to his or her former position if a stay were not granted.8F[9] This might include:
(i)a real risk that, if the judgment sum were paid, the successful plaintiff/respondent might put that sum beyond the reach of the applicant, for example by reason of the respondent’s financial state;9F[10] or
(ii)where, although the respondent is solvent, the subject matter of the appeal is irreplaceable.10F[11]
[3]Kairouz v Jasper Nominees Ltd [2024] VSCA 68, [8] (Walker JA, Kennedy JA agreeing at [1]) (‘Kairouz’).
[4]Ibid [10] (Walker JA, Kennedy JA agreeing at [1]).
[5]Ribbera v R [2014] VSCA 173, [26]–[27] (Garde AJA, Neave JA agreeing at [37]) (‘Ribbera’); Neate v Thoroughbred International Marketing Pty Ltd (2012) 34 VR 318, 320 [5] (Mandie JA and Cavanough AJA); [2012] VSCA 65 (‘Neate’).
[6]Neate (2012) 34 VR 318, 320 [6] (Mandie JA and Cavanough AJA); [2012] VSCA 65.
[7]Maher [2008] VSCA 122, [23] (Dodds-Streeton JA, Redlich JA agreeing at [1]).
[8]Cellante and Ors v G Kallis Industries Pty Ltd [1991] 2 VR 653, 657 (Young CJ, Brooking J agreeing at 658) (‘Cellante’).
[9]Neate (2012) 34 VR 318, 322 [1] (Mandie JA and Cavanough AJA); [2012] VSCA 65; Ribbera [2014] VSCA 173, [11] (Garde AJA and Neave JA agreeing at [37]).
[10]Cellante [1991] 2 VR 653, 657 (Young CJ, Brooking J agreeing at 658); Neate (2012) 34 VR 318, 322–323 [11] (Mandie JA and Cavanough AJA); [2012] VSCA 65.
[11]Maher [2008] VSCA 122 [26] (Dodds-Streeton JA, Redlich JA agreeing at [1]).
As to the principle in [39(d)] relating to onus, many applications for a stay fail because the applicant has not produced adequate or sufficient evidence as to special circumstances. We would, therefore, add only that there must be sufficient reliable evidence on which the Court can be satisfied that special circumstances exist and a stay should be granted.
Mr Bata’s primary contention was that the principle that a stay should be granted if the applicant could not be restored to his or her original position would apply if a judgment creditor is required to sell an irreplaceable asset such as an investment property or a family home. In our view, the authorities, including those referred at [39(h)] above, do not disclose any broad proposition that the Court will order a stay just because meeting the judgment debt may require the sale of real property. Rather, the authorities support the more limited proposition that a stay may be justified where an ‘irreplaceable’ property, such a family home, is the subject matter of the litigation.
That was so in each of the cases relied upon by Mr Bata in this connection: in Ozden v the Commonwealth Bank (‘Ozden’)11F[12] the bank was seeking possession of the family home pursuant to the order of the trial judge and in Sandri v O’Driscoll12F[13] the trial judge had made orders for the sale of the family home. These cases do not support the view that where the subject matter of the proceeding is an investment property, the required sale of the property to meet a judgment debt can be sufficient to justify a stay.
[12][2013] VSCA 195 (Hansen JA and Robson AJA) (‘Ozden’).
[13][2013] VSCA 281 (Tate and Santamaria JJA).
Further, these cases demonstrate that, even where the subject matter of the appeal is a family home, this is not itself sufficient to establish special circumstances. For example, in Ozden, this Court refused to stay an order for the possession of the family home, which was the subject matter of the appeal. The Court considered the applicants’ evidence, including as to their financial position, was insufficient to grant a stay. Relevantly, the Court referred to the fact that the applicants did not point to ‘any material or physical aspects of their home that they use or enjoy that would be lost if the home was sold and they were obliged to buy or rent another dwelling’.13F[14] Nor did the applicants claim to be rendered homeless if the house were sold.14F[15] As this Court said in Sandri v O’Driscoll, it is necessary to have evidence beyond ‘mere sentimental value’ of the family home to establish special circumstances.15F[16]
[14]Ozden [2013] VSCA 195 [85] (Hansen JA and Robson AJA).
[15]Ibid.
[16]Sandri [2013] VSCA 281 [56] (Tate and Santamaria JJA).
The subject matter of this proceeding is not a family home but loss and damages for breach of contract. However, we are conscious that the categories of special circumstances are not closed. As a result, we consider that in an appropriate case the fact that a family home may have to be sold to the meet a judgment debt may be relevant to an application to stay that judgment pending the appeal. Nevertheless, in our view and consistent with these cases, this fact alone cannot constitute special circumstances. Rather, it is necessary to have regard to all the relevant evidence relied upon (and the quality of that evidence) in determining whether special circumstances exist and whether the discretion to order a stay ought be exercised.
Consideration
As to the prospect of success, there is little information before the Court in relation to the merits of the proposed grounds. However, for the purpose of this application we are prepared to accept that Mr Bata has an arguable ground of appeal in respect of proposed ground 1. This is because cl 5.1 of the building contract as recorded in Mr Bata’s written case provides that ‘[i]f a notice does not comply with this clause, it cannot be relied upon and will not be taken to be a valid notice under the [building contract]’. While the judge states in the Reasons that Mr Bata relied upon cl 5, she does not appear to address that clause in the context of considering whether the Notice was a valid termination notice.16F[17] We do, however, reject any suggestion that proposed ground 1 raises a question or aspect of public importance. The legal principles relating to the enforceability of contractual notices are clear, and proposed ground 1 simply involves the application of those principles to the Notice in the context of the provisions of the building contract.
[17]See Reasons, [395]–[406].
Further, we have real concerns about the other proposed grounds, in particular proposed ground 4. However, on the basis of the argument and evidence before us, we cannot conclude that they are unarguable.
The difficulty for Mr Bata in this case is, however, that we consider his evidence is inadequate: his evidence in relation to his financial and personal position is clearly far from complete. Further and relatedly, we have reluctantly formed the view that there has been a lack of candour on the part of Mr Bata in the evidence he has given. We consider this lack of candour has also affected the submissions made on his behalf to this Court.
Most relevantly, Mr Bata has given very limited evidence about his financial position and affairs.
First, other than unsupported assertions in his affidavit about his ability to pay the judgment debt, the only document produced relating to his assets and liabilities is the October 2024 balance sheet. That is outdated by over eight months. The result is that Mr Bata has not in fact deposed to his current assets and liabilities. We cannot ascertain his current position at all.
Second, there is simply no evidence as to Mr Bata’s income, particularly in the last 12 months, whether by working as a builder and engineer, or from his investments.
Third and relatedly, while Mr Bata relies upon his medical condition in support of his special circumstances submission, he does not give any evidence as to the effect of his medical condition on his ability to earn income as a builder and engineer now or at all. Neither does the recent report of Dr Merenstein. While we are prepared to infer that Mr Bata’s medical condition would affect his ability to earn an income as a builder and engineer, based on the evidence before us, we are unable to determine the extent to which his ability to earn such income is impacted as a result of his medical condition.
In this context, it is significant that Mr Bata was on notice from the first Francke affidavit and the written submissions filed by Mr Pathik in connection with the present applications that Mr Pathik challenged the sufficiency of Mr Bata’s evidence as to his financial and personal position. Mr Bata said nothing more about his financial position, however, in the second Bata affidavit; and in these circumstances, it would appear that he deliberately chose not give further evidence about his financial position.
The absence of evidence in relation to the income or current assets and liabilities of the person against whom a stay of judgment is sought in circumstances such as these is significant for any stay application. It is all the more significant where it is evident that Mr Bata has funds or a source of funds to meet his liabilities from time to time but has not identified the source of those funds or even the basis upon which those funds have been provided in his affidavit evidence.
For example, on 14 April 2025, Mr Bata paid the amount owing under the first bankruptcy notice in the sum of $18,300, which related to Mr Pathik’s outstanding costs order relating to the trial of the proceeding. Mr Bata has not given evidence in relation to the source of those funds.
In addition, Mr Bata offered to pay $30,000 to resolve the security for costs application based on an undertaking of Mr Mohamed Omara of Omara Import and Export Pty Ltd. However, the basis upon which this undertaking was procured was not disclosed. In the course of argument, counsel for Mr Bata submitted that such an offer ‘would point towards the propensity to be able to pay and satisfy costs order’.17F[18]
[18]We note that the October 2024 balance sheet records that Mr Bata owed Mr Omara $770,000 in respect of a loan of $500,000 made in May 2020.
These examples indicate that Mr Bata does in fact have funds or a source of funds available to him to meet his liabilities, although there is no evidence as to their nature or the source. This is quite apart from the basis upon which Mr Bata is able to fund this appeal and his representation on these applications.
At the hearing, Mr Bata sought to rely upon the BFA as affecting his asset position. In earlier written submissions, Mr Bata relied upon the BFA to contend that there was a dispute with his wife as to the ownership of the Properties based on the BFA. Based on the second Bata affidavit, in oral argument, counsel for Mr Bata submitted that this dispute had been crystallised as a consequence of the recent institution of the Family Court proceeding by Ms Ismail, and that those proceedings ought be allowed to run their course before the judgment debt is executed due to the uncertainty as to the ownership of relevant assets.
As already noted, Mr Pathik submitted that the terms of the BFA provided that the Properties now ought to be transferred to Ms Ismail. In Mr Pathik’s submission, under the BFA, they were no longer assets of Mr Bata. In response to a question from the Court, however, counsel for Mr Bata was unwilling or unable to confirm that this was so. Further, Mr Bata did not indicate whether he would accept that the BFA was binding and enforceable, including for the purpose of the Family Court proceeding.
Given that the onus is on Mr Bata to establish the factual basis to justify a stay, including that special circumstances exist, in our view Mr Bata needed to be a good deal more forthcoming about his financial and personal affairs than he has been. Indeed, in all these circumstances, we have reluctantly formed the view that Mr Bata has not been candid in the evidence given and submissions made on his behalf about his financial position, particularly in respect of the BFA and whether he accepts that the Properties now ought be transferred to Ms Ismail in accordance with its terms. This conclusion as to a lack of candour is consistent with the unchallenged findings of the judge referred to above that Mr Bata’s evidence at the trial lacked both credibility and reliability.
In respect of Mr Bata’s primary contention, we are not satisfied that he has established that special circumstances exist on the basis that, absent a stay of judgment, he will be required to sell the Nerissa Grove property in light of his medical condition. This is for a number of reasons. For the most part, however, this relates to our finding that Mr Bata has given very limited evidence about his financial and personal position.
First, the evidence does not allow us to conclude that Mr Bata is the equitable owner of the Nerissa Grove property. In this regard, we refer to our observations in [73]–[80] below.
Second, on the assumption that he is the equitable owner of that property:
(a)the evidence does not allow us to ascertain his current assets, liabilities and income. This is quite apart from our conclusion that there has been a lack of candour on the part of Mr Bata in this application;
(b)while Mr Bata’s counsel submitted that Mr Bata is reliant upon the Nerissa Grove property as a ‘necessary place of convalescence’ for his illnesses, the evidence as to his medical conditions does not allow us to conclude or infer that there is a need for convalescence from any current or future treatment or condition. This is notwithstanding that we acknowledge and understand why Mr Bata would prefer to remain in that property in light of his current medical condition;
(c)as to the significance of the ‘family home’, Mr Bata has deposed only that he and Ms Ismail live separately in the Nerissa Grove property with his two adult children. Nothing more is deposed (although, as noted in (b) above, there is limited evidence in relation to his medical condition and its effects); and
(d)Mr Bata has not deposed as to his ability to obtain alternative accommodation even if he is required to recuperate or convalesce ‘at home’. Nor has he deposed that he would be rendered homeless if the Nerissa Grove Property were sold.
In these circumstances, Mr Bata has not demonstrated any special circumstances to justify a stay of execution of the judgment debt on the basis that he may need to sell the Nerissa Grove property to pay the judgment debt.
There is Mr Bata’s further submission that the appeal will be stifled unless a stay is granted because he has insufficient assets to meet the judgment debt; and, in consequence, he would be unable to pursue the appeal. As noted above, in this case a bankruptcy notice in respect of the judgment debt was served on 16 April 2025 and the time for payment extended to 3 July 2025.
While Mr Bata did not refer to authority in support of this submission, in Narain v Euroasia (Pacific) Pty Ltd18F[19] this Court concluded that special circumstances may include the foreshadowed making of a bankruptcy order, having regard to the effect of such an order not only on the ability to prosecute an appeal but also on the reputation of the applicant.19F[20] However, this Court made plain that, even in the case of a foreshadowed bankruptcy, the Court must take into account all the relevant circumstances (in addition to reputational issues) as to whether the insolvency of an applicant is likely to prevent the appeal being prosecuted.20F[21] This requires consideration of such matters as the likelihood of bankruptcy and the particular consequences for the appeal.21F[22] For example, in Sami,22F[23] a stay of execution was refused because there was no evidence about the assets and financial situation of the applicants and insufficient information as to whether any bankruptcy would result in the trustee declining to prosecute the appeal.
[19][2008] VSCA 195 (Maxwell P and Ashley JA) (‘Narain’).
[20]Ibid [21] (Ashley JA, Maxwell P agreeing at [37]); Sami v Roads Corporation [2009] VSCA 44 (Redlich JA and Williams AJA) (‘Sami’); Kairouz [2024] VSCA 68 (Kennedy and Walker JJA).
[21]Sami [2009] VSCA 44 [32] (Williams AJA) and [45] (Redlich JA).
[22]Ibid [34]–[36] (Williams AJA); Kairouz [2024] VSCA 68 [23] (Kennedy and Walker JJA).
[23][2009] VSCA 44 (Redlich JA and Williams AJA).
We have formed the view that Mr Bata has not established that the appeal will be stifled either because Mr Bata will or might be made bankrupt or because any trustee in bankruptcy would decline to purse the appeal. Once again, the primary reason for this conclusion relates to our finding that Mr Bata has given very limited evidence about his financial and personal position. We refer to [49]–[59] and [62(b)] above. This Court has no reliable evidence as to Mr Bata’s current financial position and cannot therefore conclude that Mr Bata will not be able to meet the judgment debt either from his own funds or, indeed, from some other source. We note that Mr Bata did not rely upon any reputational damage which might arise if he were made bankrupt.
In any event, it may be that on the return of the bankruptcy petition on 3 July 2025, Mr Bata seeks or obtains an adjournment or, even if he is found to be bankrupt, that no formal order as to bankruptcy is made until the application for leave to appeal is determined.
Even if a bankruptcy order were made in the near future, this Court is unable to form any view as to whether a trustee in bankruptcy would decline to pursue the appeal on the proposed grounds. No doubt Mr Bata, who asserted in this application that he has very good prospects of success on the proposed grounds, will make the same submissions should a trustee in bankruptcy be appointed.
Finally, we are concerned that, if a stay is granted, Mr Pathik’s insurer, VMIA, is unlikely to continue to investigate whether it is obliged to indemnify Mr Pathik for Mr Bata’s defective work, the serious nature of which is not challenged. The pursuit of this claim would not appear to affect Mr Bata’s financial position. By contrast, the inability of Mr Pathik to pursue any insurance claim would result in a serious injustice to him. In this context, Mr Bata did not put forward any means by which this injustice might be overcome. Of course, if VMIA were to acknowledge a liability to Mr Pathik and pay the maximum amount $600,000, that would substantially reduce the amount to be recovered from Mr Bata to satisfy the judgment debt.
For completeness, we wish to address to two issues. First, there was no evidence that if the judgment sum was paid, Mr Pathik would not be in a position to repay it in the event the appeal was successful.
Second, as noted above, Mr Bata submitted that a stay ought be granted pending this determination of the rights of Mr Bata and Ms Ismail in relation to the Properties. In our view, the determination of any such rights does not constitute a sufficient factor to justify a stay either alone or in conjunction with the other matters relied upon by Mr Bata. We note that although Ms Ismail’s interest in the Properties appear to have arisen since at least October 2024,23F[24] Ms Ismail did not issue any proceedings to enforce any such rights until the very recent Family Court proceedings. As set out above and by contrast, Mr Pathik has successfully brought proceedings and is prima facie entitled to the fruits of his judgment against Mr Bata.
[24]As discussed, there are two purported and inconsistent dates of separation. In the BFA itself, Mr Bata declares that Mr Bata and Ms Ismail ‘have separated and are living separately’ as at 23 January 2020. Taking the later date of separation deposed to in the first Bata affidavit as accurate, being 19 July 2024, the interest would have crystallised on 19 October 2024 at the latest.
In these circumstances and notwithstanding that there is an arguable appeal at least in respect of proposed ground 1, Mr Bata has not demonstrated any special circumstances to justify a stay of execution of the judgment debt.
There is an additional matter to raise. As noted above, Mr Pathik contended the Court should conclude that the BFA is a device created to defeat creditors. It is not necessary to form any such view in the stay or security for costs applications. But we wish to record that, in our opinion, the evidence before the Court raises serious issues about the circumstances leading to the creation of the BFA and its purpose.
Mr Bata relied upon the BFA (which is dated 23 January 2020) for the first time in the stay application. However, he did not refer to the existence of, or produce, the BFA when filing affidavits in relation to the freezing order in late 2024 or his affidavit in opposition to the contempt charge, sworn on 8 November 2024.
As to his evidence in relation to the freezing order:
(a)in his affidavit sworn 24 October 2024, Mr Bata also exhibited the October 2024 balance sheet recording that he owned the Properties either by himself or via corporate entities which he controlled. Notwithstanding that he deposed in that affidavit that he and his wife separated on 19 July 2024, he did not refer to or produce the BFA or refer to any consequent interest of his wife in these Properties; and
(b)in his affidavit sworn 28 October 2024, Mr Bata referred to Ms Ismail filing caveats over the Properties (which occurred on 8 October 2024 and after the third adjournment of the trial was refused). Notwithstanding that he gave evidence as to his understanding of the basis of Ms Ismail’s caveats over these properties, he did not refer to, or produce, the BFA or suggest any consequent interest of his wife in these Properties based on the BFA.24F[25]
[25]However, Mr Bata did depose at [5] of his 28 October 2024 affidavit that he and Ms Ismail agreed that in the event of separation Ms Ismail would receive the Properties in his name.
As to his affidavit sworn 8 November 2014 in defending the contempt charges, Mr Bata deposed that ‘[Ms Ismail’s] caveatable interest is based on her status as my wife pursuant to the Family Law Act’. However, he did not refer to or produce the BFA or suggest any consequent interest of his wife in the Properties at that time.
Further, it is of significance that neither Ms Ismail nor her solicitor (Ms Dennaoui) referred to or produced the BFA when each of them swore an affidavit in relation to the freezing order. This is notwithstanding we have formed the view that the BFA was relevant to the evidence they gave.
As to Ms Ismail, Ms Ismail did not refer to the BFA in her affidavit of 28 October 2024, notwithstanding:
(a)there is evidence she and Mr Bata separated on 19 July 2024;
(b)she deposed that she intended to issue family law proceedings; and
(c)she deposed that she sought advice from Ms Dennaoui in early October 2024 to discuss her rights and instructed her to place caveats over the Properties.
In addition, Ms Dennaoui (who provided advice to Ms Ismail in relation to BFA and provided a relevant certification forming part of that agreement) did not refer to the BFA notwithstanding that she deposed that Ms Ismail received advice from her and instructed to her lodge caveats ‘based on an Implied, Resulting or Constructive Trust based on her contribution to the marriage’. The failure to refer to or rely upon the BFA in the context of the caveats is of significance.
As a consequence, we have formed the view that the evidence before the Court, including the timing of disclosing the BFA, raises serious issues about the circumstances leading to the creation of the BFA and its purpose.
We will now address the security for costs application.
The security for costs application
Mr Pathik seeks an order pursuant to r 64.38(4) of the Rules that Mr Bata to pay into Court the sum of $80,000 as security for Mr Pathik’s costs or provide such other security or bank guarantee for that sum.
Facts relevant to the application for security for costs
As noted in [5] above, the affidavits filed in support of each of the stay application and security for costs application were relevant to and relied upon in the course of argument on both applications.
In the second Francke affidavit, Mr Francke relied upon the matters deposed to in the first Francke affidavit. He also exhibited his letter to the solicitors for Mr Bata dated 15 April 2025, in which Mr Francke:
(a)advised that, on the basis of the first Bata affidavit, it appeared that Mr Bata would not be able to satisfy an adverse costs order in the amount of $85,000; and
(b)requested Mr Bata ‘urgently provide evidence of Mr Bata’s own financial position and specific ability to meet an adverse cost order, or alternatively a reasonable proposal for security for costs, within the next 7 days’.
Mr Francke deposed that, at the time of swearing the second Francke affidavit (being 28 April 2025), there had been no response to his 15 April 2025 letter. The second Francke affidavit also exhibited an itemised estimate of Mr Pathik’s costs of approximately $80,000 made by Mr Bellamy of Bellamy Legal Cost Lawyers.
The Boden affidavit exhibited the letter to Mr Francke dated 2 May 2025 in response to the 15 April 2025 letter. The response is headed ‘Without Prejudice Save as to Costs’. In that response, Mr Boden:
(a)maintained that the security for costs application was ‘doomed to failure’;
(b)did not provide any details of Mr Bata’s financial position or of his ability to meet an adverse costs order; and
(c)as noted in [55] above, offered security in the form a third party guarantee of Mr Omara of Omara Import and Export Pty Ltd in the sum of $30,000, which was described by Mr Bata’s solicitors as ‘a well-known company in Australia with a long trading history, assets and significant cashflow’ and annexed a ‘Proof of account balance’ of $35,008.74 in a Westpac account of that company.
Neither Mr Boden nor Mr Bata deposed to the nature of Mr Bata’s relationship with Mr Omara or Omara Import and Export Pty Ltd, or the basis upon which the proposed third party guarantee was being proffered for Mr Bata.
Mr Boden also exhibited a letter from Mr Francke dated 6 May 2025 in which Mr Francke stated that the offer was ‘not capable of acceptance’ and that the ‘bare assertion’ of the lower figure of $30,000 was not accepted.
Parties’ submissions
In summary, Mr Pathik submitted that:
(a)relying upon the first and second Bata affidavits, Mr Bata’s financial position is ‘problematic’, and the Court may draw an inference that the applicant’s financial position creates a risk of non-satisfaction of a costs order if his appeal (including his pending application for leave to appeal) is unsuccessful;
(b)given the uncertainty inherent in Mr Bata’s financial evidence and his lack of honesty, the risk of non-satisfaction of a costs order is highly likely;
(c)Mr Bata paid the costs orders below only after being served with the first bankruptcy notice. Mr Bata paid the relevant amount without any explanation as to his source of funds. This tends to suggest that Mr Bata does have access to financial resources, such that providing security would not be oppressive and would not stifle or stultify his ability to prosecute his appeal; and
(d)Mr Bata has not demonstrated any arguable grounds of appeal and there is no public interest aspect in his proposed grounds of appeal.
In summary, for Mr Bata, it was submitted that:
(a)Mr Pathik had failed to discharge his burden of proof that there is an ‘unacceptable risk’ of impecuniosity;25F[26]
(b)it is ‘difficult to ascertain the exact level of equity’ in the Properties given the separation between Mr Bata and his wife;
(c)Mr Bata has been able to meet all prior costs orders;
(d)Mr Bata’s medical condition (ie, his ‘critically bad health’) was a relevant factor;
(e)granting security would stultify or stifle a reasonable arguable claim and that the proposed security of $85,000 is ‘extremely high’ for Mr Bata as viewed against his own disclosed financial position; and
(f)he has already offered $30,000 security.
Relevant legal principles
[26]Citing VS Property and Holding Pty Ltd v Zurzolo [2024] VSCA 154, [6] and [23]–[26] (Niall CJ and Lyons JA); Djordjevich v Rohrt [2021] VSCA 279, [9]–[15] (McLeish and Macaulay JJA).
On application by a party, the Court of Appeal has the power under r 64.38(4) of the Rules to order security ‘for the whole or any part of the costs of an application or appeal as it thinks fit’. The principles concerning the grant of security for costs are well-established.26F[27]
[27]See, eg, Wu v Bi [2022] VSCA 22 [9]–[18] (McLeish and Emerton JJA); Mikkelsen v Li (2022) 71 VR 232, 235 [11] (Kyrou and Walker JJA) (‘Mikkelsen’); [2022] VSCA 126; Cwalina & Anor v Rose [2025] VSCA 53, [23] (Beach and Kennedy JJA) (‘Cwalina’).
As this Court noted in Cwalina & Anor v Rose (‘Cwalina’):27F[28]
(a)the applicant for security bears the onus of persuading the Court that it should exercise its discretion to order security;28F[29] and
(b)the discretion will ordinarily be exercised if there is an unacceptable risk that a successful respondent will be unable to recover costs against an unsuccessful applicant and there are no other considerations which weigh against an order of security for costs.29F[30]
[28][2025] VSCA 53, [22]–[23] (Beach and Kennedy JJA).
[29]Ibid [21] (Beach and Kennedy JJA); See also Mikkelsen (2022) 71 VR 232, 235 [10] (Kyrou and Walker JJA); [2022] VSCA 126.
[30]Cwalina [2025] VSCA 53 [22] (Beach and Kennedy JJA); See also Mikkelsen (2022) 71 VR 232, 235 [9] (Kyrou and Walker JJA); [2022] VSCA 126.
Further, in Cwalina, the Court accepted that the following factors may inform the exercise of the Court’s discretion to order security for costs in an appellate context:
(a)the prospects of success of the appeal;
(b)the magnitude of risk that a costs order would not be satisfied;
(c)whether the giving of security would be oppressive in that it would stifle a reasonably arguable claim;
(d)whether there are aspects of the public interest which ought to be taken into consideration in deciding whether security should be provided; and
(e)whether there are particular discretionary matters that are relevant in the case.30F[31]
[31]Cwalina [2025] VSCA 53 [23] (Beach and Kennedy JJA). There are other factors also listed in Cwalina which are not relied upon here.
Plainly enough, a party’s impecuniosity can give rise to the risk that a costs order will go unsatisfied.31F[32] However, ‘impecuniosity’ is not synonymous with insolvency in bankruptcy law. Rather, ‘impecuniosity’ in this context is intended to signify that the financial position of the leave applicant/appellant is ‘problematic’ and creates an unacceptable risk that a costs order might not be satisfied.32F[33] That might be inferred from a refusal to disclose the nature and extent of the true financial position of the leave applicant/appellant. While the finding that the leave applicant/appellant is currently impecunious is usually the most reliable basis for assessing the risk that a successful respondent’s costs of the appeal will be unsatisfied and for assessing the magnitude of that risk, such a finding is not a precondition to making an order for security.33F[34]
Consideration
[32]Wu v Bi [2022] VSCA 22, [10]–[11] (McLeish and Emerton JJA).
[33]Mikkelsen (2022) 71 VR 232, 239 [27] (Kyrou and Walker JJA); [2022] VSCA 126.
[34]Ibid [28] (Kyrou and Walker JJA).
In summary, we have formed the view that Mr Bata’s financial position is problematic and creates an unacceptable risk that an adverse costs order might not be satisfied. This is due to the very limited information about his financial and personal position referred to above. This is quite apart from our conclusion that Mr Bata lacked candour in providing evidence about his financial and personal position.
Most relevantly, the absence of evidence in relation to his income or current assets and liabilities is significant in a security for costs application, especially where Mr Francke (Mr Pathik’s solicitor) requested that Mr Bata provide evidence of his financial position and specific ability to meet an adverse costs order, and Mr Bata failed to do so. As a consequence, and in light of the limited information in relation to Mr Bata’s financial position that has been provided to the Court, we have concluded that Mr Bata’s current financial position is uncertain and thus problematic. As a result, we consider there is an unacceptable risk that an adverse costs order might not be satisfied.
Further, contrary to the submissions of Mr Bata, in light of the issues raised by the proposed grounds, in our view, the amount of security sought in the sum of $80,000 is reasonable. It is supported by the expert opinion of Bellamy Legal Cost Lawyers who have produced an itemised estimate.
Relatedly, we reject the submission that an order for security will stifle the application for leave to appeal. As we have noted above, there is evidence that Mr Bata has funds or a source of funds to meet some of his liabilities from time to time, but has not deposed to the source of those funds and/or the basis upon which those funds have been provided. As counsel for Mr Bata stated, it appears that when ‘push comes to shove’, Mr Bata has access to people who will support him to pay the security for costs. Thus we cannot conclude that an order for security will, or there is a real risk an order for security will, stifle the application for leave to appeal.
We have also taken into account Mr Bata’s prospects of success and that there are no issues of public importance that arise. We refer to our comment in [45] above.
In all these circumstances, we have determined to exercise our discretion by ordering that Mr Bata provide security for costs in the sum of $80,000 in favour of Mr Pathik within 14 days and that the application for leave to appeal be stayed until security is provided.
We shall hear form the parties regarding the form of order and costs of these applications.
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SCHEDULE OF PARTIES
MARK BATA Applicant and AMITABH PATHIK First respondent ACN 162 737 322 Pty Ltd (formerly known as Rethink Pty Ltd) Second respondent CHRIS DIMITRIOU Third respondent
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