Blaikie v Chelliah

Case [2023] SASCA 143

SUPREME COURT OF SOUTH AUSTRALIA

(Court of Appeal: undefined)

BLAIKIE v CHELLIAH

[2023] SASCA 143

Judgment of the Honourable Justice Doyle  

22 December 2023

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - FACTORS RELEVANT TO EXERCISE OF DISCRETION - JUSTICE OF CASE

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - POWER TO ORDER

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - OTHER MATTERS

Application for security for costs of appeal.

The appellant is appealing a decision of a Master of this Court requiring that the appellant pay the respondent $570,000 plus interest.  The judgment relates to monies lent by the respondent to the appellant.

Held, granting the application for security for costs:

1.      Consideration of the principles governing security for the costs of an appeal.

2.While it is not established that the appellant is impecunious, there remains a risk that the respondent will be put to delay and cost in seeking to enforce any adverse costs order on the appeal.

3.      The appellant’s prospects of success on appeal are weak.

4.      It is in the interests of justice that the appellant provide security for costs.

5.      Security should be provided in the amount of $22,000.

Uniform Civil Rules 2020 (SA) rr 214.1, 215.3, referred to.
Australian Dream Homes Pty Ltd v Stojanovski [2016] VSCA 38; Davey v Herbst (No 2) [2012] ACTCA 19; Diakos v Mason [2010] SASC 108; Draoui v Le [2020] SASC 155; Frigger v Kitay (No 9) [2016] WASC 92; H, AW v K, S (No 2) [2022] SASCA 88; Lesses v Maras [2016] SASC 117; Logue v Hansen Technologies Ltd (2003) 125 FCR 590; Maher v Commonwealth Bank of Australia [2008] VSCA 122; Miranda v Victuallers Suppliers (SA) Pty Ltd [1999] SASC 11; Nanosecond Corporation Pty Ltd v Glen Carron Pty Ltd [2019] SASC 124, considered.

BLAIKIE v CHELLIAH

[2023] SASCA 143

Court of Appeal – Civil:

  1. DOYLE JA:     On 29 August 2023, the primary judge entered judgment in favour of the respondent (Mr Chelliah) against the appellant (Mr Blaikie), in the amount of $570,000 plus interest.  The judgment relates to monies lent by Mr Chelliah to Mr Blaikie.  Mr Blaikie has filed an appeal against that judgment. 

  2. Mr Chelliah seeks an order requiring that Mr Blaikie provide security for his costs of the appeal.  For the reasons which follow, I have decided that it is appropriate that Mr Blaikie provide security in the amount of $22,000.

    Factual background

  3. As at 2011, Mr Chelliah owned a classic car dealership in Sydney.  Mr Blaikie was a collector of classic cars, and prior to 2011 had purchased several cars from Mr Chelliah’s dealership.  By 2011, Mr Chelliah and Mr Blaikie had known each other for a number of years.

  4. In early 2011, Mr Blaikie contacted Mr Chelliah, seeking financial assistance from him to enable him to pay for costs…

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AGLC
Blaikie v Chelliah [2023] SASCA 143
Case
[2023] SASCA 143
Decision Date

CaseChat Overview and Summary

In this matter before the Honourable Justice Doyle, Mr Chelliah sought an order for security for his costs of an appeal to be provided by Mr Blaikie. The dispute arose from a loan agreement where Mr Chelliah advanced $135,000 to Mr Blaikie for property rezoning and subdivision, with repayment terms and interest stipulated, secured by a mortgage over the Angle Vale property. Subsequent correspondence and transactions indicated a significant outstanding debt, with Mr Chelliah continuing to demand repayment of the balance.

The court was required to determine whether to order Mr Blaikie to provide security for Mr Chelliah's costs of the appeal. This involved considering the factors relevant to the exercise of the court's discretion in ordering security for costs, including the justice of the case, the prospects of success on appeal, and any history of delay or failure to meet financial obligations. The court also had to assess the appropriate amount of security to be ordered, based on the estimated costs of the appeal.

Justice Doyle reasoned that Mr Blaikie's history of delay and deflection in meeting his financial and legal obligations, coupled with weak prospects of success on appeal, raised concerns about the genuineness of the appeal and its potential to defer payment of the judgment sum. The court found that there was no indication that an order for security would prevent Mr Blaikie from pursuing the appeal. Consequently, the interests of justice favoured making an order for security. After considering the estimated costs of the appeal, which were deemed generous, the court ordered Mr Blaikie to provide security for Mr Chelliah's costs in the amount of $22,000.

Orders

Orders of the court

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Background

Background to the litigation

Mr Chelliah seeks an order requiring that Mr Blaikie provide security for his costs of the appeal. For the reasons which follow, I have decided that it is appropriate that Mr Blaikie provide security in the amount of $22,000.Factual background As at 2011, Mr Chelliah owned a classic car dealership in Sydney. Mr Blaikie was a collector of classic cars, and prior to 2011 had purchased several cars from Mr Chelliah’s dealership. By 2011, Mr Chelliah and Mr Blaikie had known each other for a number of years. In early 2011, Mr Blaikie contacted Mr Chelliah, seeking financial assistance from him to enable him to pay for costs associated with rezoning and subdividing a property he had purchased some years earlier in Angle Vale. Mr Blaikie told Mr Chelliah that he expected that the property would “double in value” if he could achieve the rezoning and subdivision, and that if Mr Chelliah were prepared to lend him $150,000, then he too could double his money. In February 2011, Mr Chelliah agreed to advance Mr Blaikie $150,000 to fund the rezoning and subdivision of his Angle Vale property. The loan agreement, which was in writing and signed by both parties (the 2011 loan agreement), provided that Mr Blaikie would repay the sum of $150,000, plus an additional $150,000, on or before 15 November 2011. It further provided that if Mr Blaikie did not repay the initial $150,000 by 15 November 2011, then Mr Blaikie would repay $150,000 plus an additional $200,000 (instead of an additional $150,000) by 1 March 2012. The 2011 loan agreement also provided that if the total of $350,000 was not repaid by 1 March 2012, then interest would accumulate on that sum. As security, Mr Blaikie granted Mr Chelliah a registrable mortgage over the Angle Vale property. In the event, Mr Chelliah lent Mr Blaikie the sum of $135,000 rather than the $150,000 initially contemplated. At some point during 2011, Mr Blaikie sent Mr Chelliah a Bentley motor vehicle on the basis that he could sell it, and retain $23,600 in reduction of Mr Blaikie’s indebtedness. Correspondence from Mr Blaikie confirmed that the outstanding amount at that point was $111,400 (being the principal sum of $135,000 less the payment of $23,600) “plus interest as agreed in the initial document” (being a reference to the 2011 loan agreement). Mr Blaikie did not repay the loan prior to the originally stipulated date of 15 November 2011, and subsequent correspondence between the parties in December 2011, and during 2012, referred to an outstanding sum at that time of $290,000. Mr Chelliah agreed not to lodge a caveat over the Angle Vale property if Mr Blaikie paid him $290,000, plus interest at commercial rates, by 1 November 2012. In around July 2012, Mr Blaikie agreed to sell Mr Chelliah four classic cars for $160,000, to be offset against Mr Blaikie’s debt to Mr Chelliah. Mr Chelliah subsequently sold these cars for a total of slightly less than $160,000. Mr Chelliah continued to demand repayment of the balance outstanding, referring during 2013 to an amount of “about” $220,000 that was said to be owing at that point in time.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

As Mr Jelbert submitted, there is a difference between delay in the progress of litigation, and delay in meeting (let alone a refusal to meet) court orders for the payment of money. Whilst I accept the relevance of this distinction, I observe that the certificate of title for the Angle Vale property suggests that Mr Blaikie may well have failed to meet a court order in favour of PMG Geological Services – although it is difficult for me to attach any significant weight to this when I know nothing about the circumstances or status of that court order.Conclusion In light of the above, I do not have confidence that, in the event of an adverse costs order on appeal, Mr Blaikie will pay it in a manner that will not occasion Mr Chelliah undue delay and expense. Further, I am satisfied that Mr Blaikie’s prospects of success on appeal are weak. Indeed, bearing in mind the combination of Mr Blaikie’s history of delay and deflection in meeting his financial and legal obligations, I have concerns as to the genuineness of his appeal. It has the hallmarks of an appeal issued more out of a desire to defer payment of the judgment sum than an informed view that there is a proper basis for challenging the judgment under appeal. In circumstances where there is no basis for suggesting that an order for security for costs would prevent Mr Blaikie from pursuing his appeal, I am persuaded that the interest of justice favour making an order that Mr Blaikie provide security. As to the amount of the security to be provided, Mr Chelliah seeks $25,000. This was supported by evidence to the effect that his solicitor’s estimate of Mr Chelliah’s solicitor and own client costs will be in the order of about $40,000. This estimate is premised upon figures of $8,000 for the costs associated with the interlocutory issues associated with the appeal, $12,000 for the instructing solicitor’s work preparing for, and attending at, the appeal, and $20,000 for senior counsel to prepare for, and argue, the appeal. The appeal will involve some work to get across the factual material, but will ultimately be relatively narrow in scope and straightforward in nature. In my view, the estimate of $40,000 is generous. Bearing in mind the amounts ordered in other cases, and the nature of the present appeal, I consider an order for $22,000 by way of security for Mr Chelliah’s costs of the appeal is appropriate.

Ratio Decidendi

Legal Principle Established

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