Blaikie v Chelliah - [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:

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.
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.
On 9 May 2014, Mr Blaikie and Mr Chelliah signed a further loan agreement, entitled “Deed of Secured Loan” (the 2014 loan agreement). In the recitals, Mr Blaikie confirmed that he was indebted to Mr Chelliah in the sum of $300,000 and, in the body of the deed, Mr Blaikie agreed to repay the applicant $300,000 plus interest of $30,000 by 30 November 2014. If the debt was not discharged by this date, interest was to accrue at the rate of 10 per cent per annum.
Mr Blaikie did not repay the monies owed to Mr Chelliah and, on 3 June 2015, Mr Chelliah commenced these proceedings against Mr Blaikie.
Procedural history
Having issued these proceedings on 3 June 2015, Mr Chelliah served Mr Blaikie with the summons and statement of claim. Mr Blaikie failed to file a defence.
On 24 August 2015, a default judgment was entered on behalf of Mr Chelliah in the sum of $290,988.07. The default judgment was served on Mr Blaikie by email at [email protected], and by post at his residential address at the Angle Vale property.
Mr Blaikie says he does not recall being served with the judgment. But on Mr Chelliah’s evidence, Mr Blaikie telephoned him in late August or September 2015 and pleaded with him not to enforce the judgment. Mr Blaikie assured him that the rezoning of the Angle Vale property was progressing and that once the rezoning and subdivision had occurred there would be more than enough money to repay him all that he was owed. On that basis, Mr Chelliah held off enforcing the default judgment until further notice, and on condition that Mr Blaikie agreed he would continue to be liable for interest at the rate of 10 per cent per annum in accordance with the terms of the 2014 loan agreement. On at least a couple of occasions over the following years, Mr Chelliah advanced Mr Blaikie some further funds to enable him to meet expenses or financial commitments that he said he was not otherwise able to meet.
Eventually Mr Chelliah moved to enforce the default judgment, serving Mr Blaikie with a warrant of sale in respect of the Angle Vale property in late 2020. This prompted Mr Blaikie to seek legal advice, and on about 21 June 2021 he applied to set aside the default judgment.
Argument on Mr Blaikie’s application to set aside the default judgment was heard on 26 August 2021. For reasons delivered on 1 March 2022 (the March 2022 reasons), the primary judge declined to set aside the default judgment. However, as there was an issue about the amount of the indebtedness upon which it was based, her Honour varied the default judgment so that there was judgment in favour of Mr Chelliah with the quantum to be assessed.
In coming to this conclusion, the primary judge commenced her March 2022 reasons by setting out the factual background in terms similar to the above. Her Honour then summarised Mr Blaikie’s evidence and submissions by way of explanation for his delays in the matter, and to the effect that he had a reasonable defence to Mr Chelliah’s claim.
Mr Blaikie’s evidence was that, when served with the proceedings back in June 2015, he met with Mr Chelliah’s then solicitors on 1 July 2015, and as a result of that meeting believed they would put an end to the legal proceedings. He claimed not to have been aware of the default judgment until late 2020 when Mr Chelliah’s solicitors moved to enforce it. He said that he did not use his street address for mail; rather he used a post box. And he said that he did not use technology much, and was not aware of any emailed copy of the default judgment.
As to his proposed defence of Mr Chelliah’s claim, Mr Blaikie argued that the terms of the signed documents (the 2011 and 2014 loan agreements) did not reflect the terms of the arrangements between him and Mr Chelliah. He said that despite signing the documents, he did not read them. He only signed them because he assumed they reflected his understanding of what he had agreed. He said that he only agreed to pay Mr Blaikie double the amount he lent (and any interest) in the event that he was successful in doubling his own investment in the Angle Vale property when he sold it, and indeed that he had not agreed any date for repayment. Mr Blaikie also argued that he had had only given Mr Chelliah the four cars he delivered to him by way of security; that he had not given him permission to sell them. Further, and in any event, he said that the indebtedness claimed by Mr Chelliah did not reflect the proceeds of the sale of those cars, which Mr Chelliah had sold at an undervalue. Mr Blaikie argued that he would be substantially prejudiced if the default judgment was not set aside, because he would be forced to sell the Angle Vale property and would have nowhere to store his collection of vintage cars.
The primary judge rejected Mr Blaikie’s evidence and submissions to the effect that he had a reasonable excuse for failing to file a defence:[1]
On the basis of the affidavit material before me, I do not consider that Mr Blaikie has demonstrated a reasonable excuse for failing to file a defence. He has not produced any evidence to support the contention that his “understanding” of the outcome of the meeting of 1 July 2015 was reasonably held, or that it was in any way induced by the words or actions of [the solicitors present]. I also do not accept that he received neither the letters sent by post nor the ones emailed to him. His evidence in respect of the letters sent by email was equivocal; it goes not further than his inability to recall having received them. He accepted that the letters were sent to his email address. While he said, “I’m not into technology. I don’t understand it and I don’t use it”, he has put his email address as [email protected] on his recently filed court documents in this action. As a result, I have no reason not to infer that he uses email and that his email address is the address to which messages and letters have been sent since 2011. If this were not the case, there would be no purpose in recording that information on the cover sheet of his court documents.
I do not accept Mr Blaikie’s evidence that he did not receive the correspondence from [Mr Chelliah’s solicitor]. I accept [the solicitor’s] evidence that he received a telephone call from Mr Blaikie on 2 December 2011. The obvious inference is that Mr Blaikie made that call on receiving [the solicitor’s] letter of 27 November 2011.
In light of this, I find that Mr Blaikie was aware, or should have been aware from late 2011 that Mr Chelliah was seeking the recovery of his monies. I find that, from the date of the meeting on 1 July 2015, Mr Blaikie was aware, or should have been aware, that, if he did not file a defence within the time required, a default judgment would be sought. Mr Blaikie has not demonstrated a reasonable excuse for failing to file a defence to the action.
[1] March 2022 reasons at [45]-[47].
The primary judge added that, even if she were wrong about the above, she had reached the conclusion that Mr Blaikie did not have a reasonable defence to Mr Chelliah’s claim. In so concluding, her Honour again rejected key aspects of Mr Blaikie’s evidence:[2]
Even if I am wrong about this, I have reached the conclusion that Mr Blaikie does not have a reasonable defence to the claim. His failure to read the documents before signing them is not a defence for a breach of those agreements. In any event, Mr Blaikie’s evidence that the oral agreement did not include a payment date and that the interest was conditional on the sale of the Angle Vale property is not supported by the other evidence before me. …
As to the 2014 document, I do not accept Mr Blaikie’s evidence that he did not read it. It is a one page document, and he has initialled it in five different places. Two of the amendments that he has initialled are in his favour. As a result, I reject his evidence that he did not read it before signing it.
[2] March 2022 reasons at [48]-[49].
Despite concluding that Mr Blaikie did not have a reasonable defence to a claim based on the 2014 loan agreement, the primary judge was nevertheless satisfied that there was an issue as to the quantum for which judgment should be entered.[3] The issue related to the terms on which Mr Blaikie had provided Mr Chelliah with the four cars he had sold. On Mr Chelliah’s case, Mr Blaikie had sold him the cars at an agreed value of $160,000,[4] and that agreed sum had been deducted from, and hence was already reflected in, the sum agreed in the 2014 loan agreement. However, the primary judge was satisfied that there was a genuine issue in relation to this matter. Her Honour therefore ordered that the default judgment be varied on the basis that there be judgment for Mr Chelliah, but for a quantum to be assessed.
[3] March 2022 reasons at [50].
[4] Which happened to reflect the value at which Mr Chelliah had earlier sold them to Mr Blaikie.
Following delivery of her March 2022 reasons, the primary judge made orders timetabling the matter for an assessment of quantum hearing. In particular, on 24 August 2022, her Honour made orders that Mr Chelliah file his lay and expert evidence within eight weeks, and that Mr Blaikie file his lay and expert evidence within eight weeks of the receipt of Mr Chelliah’s evidence.
Mr Chelliah filed his lay evidence on 10 October 2022, but Mr Blaikie did not file any evidence in conformity with the primary judge’s orders.
On 31 January 2023, the primary judge made orders extending the time for Mr Chelliah to serve an expert report to 28 February 2023, and giving Mr Blaikie leave to file any responding report by 20 March 2023. She listed the assessment of quantum for hearing on 18 April 2023.
On 28 February 2023, Mr Chelliah filed and served an expert report from Mr Cuthbert as to the value of the four classic cars that Mr Chelliah had received from Mr Blaikie and sold. Mr Blaikie did not file any evidence in advance of the hearing on 18 April 2023.
The hearing commenced on 18 April 2023, and Mr Chelliah and Mr Cuthbert both gave evidence, and were cross-examined. At the conclusion of the hearing that day, the primary judge gave Mr Chelliah permission to amend his statement of claim, and gave Mr Blaikie 14 days to file an interlocutory application and affidavit material seeking leave to rely on further evidence, if so advised. The hearing was adjourned to 8 May 2023.
On 19 April 2023, Mr Chelliah filed an amended statement of claim, in which he claimed the sum of $570,000, plus interest at the rate of 10 per cent per annum from 1 December 2022. The $570,000 was comprised of:
·$300,000 (being the indebtedness in the 2014 loan agreement);
·$30,000 (by way of interest provided for in that loan agreement); and
·$240,000 (being interest at a rate of $30,000 per annum as provided for in that loan agreement for the period 1 December 2014 to 1 December 2022).
Mr Blaikie did not file any application or evidence within the 14 days contemplated by the primary judge’s orders. However, on 5 May 2023 he filed affidavits setting out the evidence sought to be given by him and his solicitor.
At the hearing on 8 May 2023, the primary judge declined to receive the evidence from Mr Blaikie’s solicitor. However, Mr Blaikie was permitted to give evidence and was cross-examined.
In his evidence, Mr Blaikie repeated his earlier version of events to the effect that he never agreed to repay any money to Mr Chelliah until he sold the Angle Vale land, and that he had signed the 2011 and 2014 loan agreements without reading them. As for the four cars that he sent to Mr Chelliah in 2012, he said that he sent them to Mr Chelliah for him to hold them as security. He said that he did not give Mr Chelliah permission to sell them; that they were, in any event, worth more than $160,000; and that Mr Blaikie had not given him credit in the 2014 loan agreement for the amount he received for selling them, let alone their true value.
For reasons delivered on 29 August 2023 (the August 2023 reasons), the primary judge rejected Mr Blaikie’s evidence and arguments. After summarising the background and evidence, her Honour commenced her consideration of the issues to be determined by indicating that she had accepted the evidence of Mr Chelliah and rejected the evidence of Mr Blaikie:[5]
I consider that the applicant was a credible witness, whose evidence was, in the main, supported by contemporaneous documents, including documents produced by his lawyer. The respondent, on the other hand, was not a credible witness. I consider that at times he was evasive, deliberately failed to answer the questions asked and willfully misconstrued the evidence put before him.
[5] August 2023 reasons at [57].
The primary judge summarised the findings she had previously made in her March 2022 reasons,[6] before setting out some additional findings that she was now in a position to make.[7] These additional findings included:
·finding that in July 2012, Mr Blaikie had agreed to sell Mr Chelliah the four cars for $160,000, to be offset against the loan balance;
·rejecting Mr Blaikie’s evidence that he only sent the cars to Mr Chelliah for him to use as security, and did not give him any authority to sell them;
·reasoning that the expert evidence of Mr Cuthbert was of no relevance given the agreement in relation to the four cars;
·finding that the 2014 loan agreement was signed after lengthy telephone calls between them in relation to its terms; and
·finding that the 2014 loan agreement took into account the value of the cars, which had been offset against the debt owed by Mr Blaikie.
[6] August 2023 reasons at [58].
[7] August 2023 reasons at [59]-[61].
After setting out her reasons for rejecting some other arguments raised by Mr Blaikie, her Honour concluded:[8]
Finally, I have formed the view that the respondent has simply chosen not to repay the applicant the amounts lent by him. At all times, the respondent has been the registered proprietor of a valuable parcel of land that he could have sold to repay the loan. Further, he clearly retains a number of motor vehicles of some value. …
It is clear to me that the respondent has, at all times, had sufficient assets to pay the applicant the amount promised in 2011. Between late 2011 and July 2012, he sold motor vehicles worth $183,600, but still retains a “collection” of vintage cars. Further, he has, at all times been the registered proprietor of the Angle Vale land, a property of substantial value. I do not, therefore, accept that the respondent was in a weaker bargaining position than the applicant, that he had terms imposed on him against his will, or that the applicant otherwise took advantage of him. I conclude that he willingly entered into all of the agreements that he reached with the applicant and is now bound by them.
I am satisfied that the debt owed by the respondent is as set out in the revised statement of claim, and that the value of the four cars sold by the respondent to the applicant was accounted for appropriately.
[8] August 2023 reasons at [66]-[68].

The primary judge ordered that there be judgment for Mr Chelliah in the amount of $570,000, with interest on the sum of $300,000 from 1 December 2022 to the date of judgment.
The appeal
Under r 214.1(1) of the Uniform Civil Rules 2020 (SA), any appeal was required to be filed within 21 days.
Judgment below having been delivered on 29 August 2023, the time within which to appeal expired on 19 September 2023.
On 26 September 2023, Mr Blaikie filed a notice of appeal, identifying six grounds of appeal, and seeking an extension of the time within which to appeal. The grounds of appeal are that the primary judge erred:
1.in fact, by finding that the respondent agreed to sell four cars that he previously owned for $160,000 or at all;
2.in fact by finding the respondent authorised the sale of four vehicles he previously owned;
3.in fact by finding the 2014 deed was signed by the parties after a number of lengthy phone calls between them in relation to the deed’s terms;
4.in law by finding the applicant did not take advantage of the respondent in their commercial dealings;
5. in law by finding the respondent is bound by the 2014 deed; and
6.by finding the respondent owes the applicant the sum of $570,000, and interest on the sum of $300,000.
The basis upon which an extension of time was sought was identified as follows:
1.the respondent did not have the ability to retain advice and preparation for lodging the appeal within the timeframe allowed due to the legal practitioner’s capacity to counsel within that time;
2.the time for extension is proportionate and reasonable to the time allowed and does not cause prejudice to the applicant or the Court;
3.if there is a cost calculable on any prejudice found in favour of the applicant or the Court, the respondent is able to meet that cost and discharge the prejudice; and
4.it is within the good administration of justice to allow an extension to hear the appeal for the reasons set out above.
On 7 November 2023, Mr Chelliah filed an application in the appeal proceedings seeking a preliminary hearing of Mr Blaikie’s application for an extension of time, an order for security for costs, and an order that Ground 5 (which seeks to challenge the enforceability of the 2014 loan agreement) be struck out as an impermissible (late) attempt to appeal the primary judge’s earlier March 2022 judgment.
The appeal was called over on 1 December 2023. Mr Chelliah, through his solicitor (Mr Whitington), indicated an intention to pursue all three limbs of his application prior to the hearing of the appeal. However, after it was pointed out that a single judge could not determine the application for an extension of time, Mr Chelliah took the pragmatic approach of seeking that the appeal be listed for hearing before the Court of Appeal, leaving his opposition to an extension of time, and his challenge to Ground 5, to be determined in conjunction with the appeal. However, he pressed for a date for his application for security for costs, emphasising that he intended to rely in support of that application upon both (i) the need for, and lack of any apparent basis for, an extension of time; and (ii) the lack of merit in the proposed appeal, including in respect of Ground 5.
As the judge presiding over the callover, I acceded to this approach, and made orders listing the appeal for hearing in May 2024, but listing Mr Chelliah’s application for security for costs for hearing on 18 December 2023. I made timetabling orders which required that Mr Chelliah file any evidence and submissions in support of his application for security for costs by 7 December 2023, and that Mr Blaikie file any evidence and submissions in opposition to the application for security, and in support of his application for an extension of time, by 12 December 2023.
Mr Chelliah filed his submissions on 7 December 2023. He relied upon the affidavit of his solicitor that had been filed back on 7 November 2023. At the hearing, he also tendered two further affidavits filed earlier in the proceedings.
Mr Blaikie, however, did not file any evidence in relation to the applications for security for costs or an extension of time. On the eve of the hearing, he filed a two paragraph submission, which did no more than point out that Mr Blaikie owned the Angle Vale property, and contend that whilst it was encumbered, it was nevertheless agreed to be valuable, such that Mr Chelliah was “secured for the sought after amount, however imponderable”. At the hearing, he also tendered a certificate of title search for the Angle Vale property, which indicated several encumbrances or dealings in respect of that title.
At the commencement of argument on 18 December 2023, I expressed my surprise to Mr Blaikie’s solicitor (Mr Jelbert) that his client had not only failed to file any submissions of assistance in relation to the application for security for costs in a timely way, but had also not filed any evidence at all in support of his application for an extension of time in the appeal. Whilst only a short extension was sought – and I had indicated at the callover that an extension would likely be forthcoming if some explanation for the delay were proffered – Mr Jelbert offered nothing by way of explanation for the delay in filing the appeal and in meeting the timetable I had ordered, other than a general assertion from the bar table that he had had competing work commitments and had been trying to retain counsel.
Security for costs of an appeal
The application for security for costs is brought pursuant to r 215.3 of the Uniform Civil Rules 2020 (SA). Under this rule, the discretion to order security for the costs of an appeal is not conditioned upon a finding of special circumstances. Rather, the court has an unfettered discretion, albeit one that must, of course, be exercised judicially and having regard to established principles.[9]
[9] H, AW v K, S (No 2) [2022] SASCA 88 at [6] (Bleby JA); Draoui v Le [2020] SASC 155 at [29] (Bleby JA); Nanosecond Corporation Pty Ltd v Glen Carron Pty Ltd [2019] SASC 124 at [30] (Peek J); Lesses v Maras [2016] SASC 117 at [5] (Doyle J).
In accordance with these established principles, it is significant that the application is for security for the costs of an appeal rather than a trial. It is well recognised that courts will more readily order security for costs in the former category of case because the appellant has already had the opportunity to have the matter litigated, and has had the benefit of a judicial determination of underlying controversy.[10] On the other hand, it is also a relevant factor (and to some extent weighs against an order for security) that the appellant here was the defendant below and not the plaintiff.[11]
[10] Diakos v Mason [2010] SASC 108 at [10] (Kourakis J); applied, for example, in H, AW v K, S(No 2) [2022] SASCA 88 at [7] (Bleby JA); Lesses v Maras [2016] SASC 17 at [7] (Doyle J).
[11] Lesses v Maras [2016] SASC 17 at [7] (Doyle J).
Whilst it is important to emphasise the unfettered nature of the discretion, it is relevant to bear in mind the broad statements of principle that inform the discretion. For example, in Australian Dream Homes Pty Ltd v Stojanovski,[12] the Victorian Court of Appeal said:
The basis for making an order for security for the costs of an appeal lies in identifying a risk, which is unacceptable in all the circumstances, that the respondent to the appeal may be put to the expense of defending the judgment or decision in its favour without the benefit of expecting that, in the usual course, if it is successful in doing so, the unsuccessful appellant will be required to pay the respondent’s costs of the appeal. As already observed, the considerations that may bear on the Court’s discretion to order security are of many kinds, depending on the features of the particular case. But it is fundamental to the resolution of any application for security to identify the nature and extent of the risk in question (usually, as here, the risk as to the appellant’s impecuniosity).
[12] Australian Dream Homes Pty Ltd v Stojanovski [2016] VSCA 38 at [40] (Santamaria and McLeish JJA); applied in H, AW v K, S (No 2) [2022] SASCA 88 at [8] (Bleby JA).
Although the focus of the above passage is upon a risk as to the appellant’s impecuniosity, I consider that in some cases it will be relevant to address the matter in terms of a slightly broader consideration; namely, the risk that an appellant may not be able to – or be prepared to – meet an adverse costs order without the respondent being subjected to undue delay and expense in the enforcement of that order. This was a matter emphasised by Bleby JA in H, AW v K, S (No 2), and explains the references in several other authorities to the relevance of previous defaults and delays, of both a substantive and procedural nature.[13]
[13] For example, Maher v Commonwealth Bank of Australia [2008] VSCA 122 at [109] (Dodds-Streeton JA, Redlich JA agreeing); Frigger v Kitay (No 9) [2016] WASC 92 at [30] (Allanson J).
In H, AW v K, S (No 2), Bleby JA ordered that the appellant provide security for the respondent’s costs of the appeal. While there was no suggestion that the appellant was impecunious, Bleby JA was influenced by an analogous concern as to the adequacy of the appellant’s assets within the jurisdiction and against which any adverse costs order might be enforced. The concern was as to both the value, and ready accessibility, of those assets.[14] While this concern was the primary basis for the order for security, Bleby JA also relied upon “certain aspects of the appellant’s conduct to date constituting noncompliance with his obligations in the course of the litigation”, which it was submitted were “demonstrative of the risk of future noncompliance”.[15] His Honour accepted that the appellant’s “ongoing attitude to his obligations in this litigation is extremely poor” and that this gave “good reason to think that he will continue to delay and deflect from meeting his financial obligations in the litigation”.[16] His Honour regarded this as a relevant discretionary factor that informed and heightened the risks associated with the timely and efficient enforcement of any adverse costs order.[17] His Honour summarised:[18]
In my view, the respondent has demonstrated that there is an unacceptable risk that she will not be able to enforce a costs order in the event of success on the appeal or, in the alternative, her attempts to do so would be subject to an unacceptable risk of delay and obstruction that would require her to incur yet more costs.
[14] H, AW v K, w (No 2) [2022] SASCA 88 at [22]-[28] (Bleby JA), relay also at [39] upon Weinberg J’s reference in Logue v Hansen Technologies Ltd (2003) 125 FCR 590 at [18] to “the risks, uncertainties and delays of attempting to enforce such a judgment in the applicant’s claimed country of residence.”
[15] H, AW v K, S(No 2) [2022] SASCA 88 at [29] (Bleby JA).
[16] H, AW v K, S(No 2) [2022] SASCA 88 at [34] (Bleby JA).
[17] H, AW v K, S(No 2) [2022] SASCA 88 at [34]-[35] (Bleby JA).
[18] H, AW v K, S(No 2) [2022] SASCA 88 at [40] (Bleby JA).
Having added that there was no risk than an order for security would stifle the appeal, Bleby JA was prepared to order security for costs, despite being satisfied that the appeal was reasonably arguable and, indeed, that there was some degree of public importance to the issues raised.[19]
[19] H, AW v K, S(No 2) [2022] SASCA 88 at [41] (Bleby JA).
The authorities accept that it will generally be relevant to consider the merits of the proposed appeal.[20] The extent to which it will be possible or appropriate to do so will depend upon the nature of the case and the issues raised, although it will often be possible to attach greater significance to an assessment of the merits of an appeal than might be attached to an assessment of the merits of a plaintiff’s claim in the context of an application for security for the costs at first instance. In a case where the Court is in a position to form a view that the prospects of success on appeal are weak, or where the Court has concerns about the genuineness or bona fides of the appeal, then this may be a significant consideration in favour of an order for security.[21]
[20] Lesses v Maras [2016] SASC 17 at [13] (Doyle J).
[21] Maher v Commonwealth Bank of Australia [2008] VSCA 122 at [109] (Dodds-Streeton JA, Redlich JA agreeing).
Other considerations relevant to the justice or injustice associated with an order for security of the costs of an appeal will often be relevant. These may include any risk that the appeal would be stifled by an order for security. While the predominant considerations will often be the risk associated with enforcement of an adverse costs order and the merits of the appeal, it is to be emphasised that neither of these is necessarily decisive. In particular, impecuniosity, while often very significant, is not necessarily decisive one way or the other.[22]
[22] Davey v Herbst (No 2) [2012] ACTCA 19 at [48] (Refshauge J).
Lack of apparent merit in the appeal
The essential reasoning underpinning the primary judge’s decision under appeal has been summarised earlier in these reasons. I have also set out the six grounds of appeal relied upon by Mr Blaikie.
Despite the relevance of some assessment of the merits of appeal – particularly in circumstances where I made plain my concerns about its apparent lack of merit – Mr Jelbert, who appeared for Mr Blaikie, did not advance any meaningful submissions in support of the merits of the appeal.
Mr Jelbert referred to a suggested incongruity or implausibility of an advance of $135,000 resulting in an ultimate judgment sum of $570,000. However, this submission carries little, if any, force in circumstances where the indebtedness relates to a sum advanced over 12 years ago, and where the judgments below contain a detailed consideration of the explanation for the sum ultimately arrived at by the primary judge. The difficulty with this submission having been pointed out to him, Mr Jelbert did not advance any further submissions in support of the merits of the appeal.
In addition to the lack of any submissions in support of the merits of the appeal, there are two further considerations that have left me with significant concerns about the merits of the appeal, and indeed some reservations about its genuineness.
The first is that the appeal is only against the second of the primary judge’s decisions, which related only to the quantum of Mr Blaikie’s indebtedness, and even then was largely confined to the issue which had arisen in relation to the four classic cars provided to Mr Chelliah in July 2012. There is no appeal against the primary judge’s first decision, and hence against the finding that Mr Blaikie is bound by the terms of the 2014 loan agreement (with the quantum owing subject only to adjustment, for example, by reference to the parties’ dealings in relation to the four cars). While Ground 5 of the appeal against the second decision purports to address this matter, Mr Jelbert did not articulate any basis upon which his client was entitled to challenge the binding force of the 2014 loan agreement in circumstances where he has not sought to appeal the primary judge’s first decision.
The second is that, in any event, the primary judge’s conclusions in both her first and second decisions were based heavily upon her impressions and findings as to the credibility of the parties. As summarised earlier in these reasons, she accepted the credit and reliability of Mr Chelliah, and largely rejected the credit and reliability of Mr Blaikie.
To the extent that it is possible to discern much at all from Mr Blaikie’s grounds of appeal, it would appear that his appeal involves a general challenge to the factual findings made by the primary judge. But any such challenge will need to confront the appellate task that usually attaches to a challenge to factual findings based upon credit. To succeed in this task, it will usually be necessary to persuade the appellate court that the critical findings were contrary to some incontrovertible evidence or compelling inference, or were otherwise inherently improbable or implausible. Mr Blaikie has not given me any indication of how this task is to be undertaken upon appeal. And in circumstances where, as the primary judge emphasised, the inferences to be drawn from the contemporaneous documents and communications supported the judge’s findings, it is difficult to see, on the material before me, how that task could be successfully undertaken.
For these reasons, I consider it appropriate to proceed on the basis that Mr Blaikie’s prospects of success on appeal are very weak. Indeed, particularly in light of the history of this matter – elaborated upon below – I have reservations as to the genuineness of the appeal. It has some of the hallmarks of an appeal filed in the hope of continuing to defer the day when Mr Blaikie will be forced to meet his financial obligations to Mr Chelliah.[23]
[23] Miranda v Victuallers Suppliers (SA) Pty Ltd [1999] SASC 11 at [19] (Perry J).
Risks associated with recovery of adverse costs order
Mr Whitington, for Mr Chelliah, accepted that Mr Blaikie owns assets of significant value. In particular, the evidence reveals that he owns the Angle Vale property and a collection of classic cars. I was not taken to any evidence that would enable me to place a value on these assets, although it appears to be accepted that the Angle Vale property is worth at least a few million dollars, and I would be prepared to infer that his collection of classic cars is likely to be worth many tens of thousands of dollars, and perhaps some hundreds of thousands of dollars.
In addition to the lack of evidence as to the value of these assets, there is the additional complication that the certificate of title for the Angle Vale property reveals several encumbrances or dealings which may be relevant to any attempt to enforce the judgment debt and any adverse costs against that property.
In particular, the certificate of title lists the following:
·a registered mortgage in favour of AMP Bank Limited, lodged on 5 September 2006;
·a registered mortgage in favour of Ms Marshall, lodged on 4 July 2013;
·a caveat in favour of Mr Chelliah, lodged on 1 November 2013. I was told this relates to the equitable mortgage granted over the Angle Vale property under the 2011 loan agreement, and that it was assumed – although it is perhaps not clear – that it extended to the indebtedness under the 2014 loan agreement;
·an “order of court” in favour of PMG Geological Services Pty Ltd, lodged on 1 December 2017;
·a warrant of sale in favour of Mr Chelliah, lodged on 5 November 2020;
·a caveat in favour of the Commissioner of State Taxation, lodged on 30 November 2020; and
·a caveat in favour of Mr Koutsoukos, lodged on 22 November 2023.
I was not taken to any evidence as to the nature of the interests of, or dealings with, AMP Bank, Ms Marshall, PMG Geological Services, the Commissioner of State Taxation or Mr Koutsoukos, and so have no way of meaningfully assessing their value and the extent to which they might jeopardise Mr Chelliah’s ability to recover in full any amount (inclusive of costs) he is ultimately held to be entitled to recover.
Despite this uncertainty, and the potential risks (including the potential complications, and hence cost and delay) associated with any recovery against the Angle Vale property, Mr Chelliah did not suggest that Mr Blaikie was impecunious in the sense that term is generally used in the authorities. He did not contend that the evidence established a basis for me to conclude that there was not sufficient value, or net equity, in Mr Blaikie’s assets (the property and cars) for him to meet any sum ultimately owed to Mr Chelliah, including any adverse costs order on the appeal.

However, as my earlier review of the authorities demonstrates, that is not the end of the matter. As Mr Chelliah argued, it is relevant that Mr Blaikie, while apparently “asset rich”, appears to be “cash poor”. It is also relevant that in this litigation, and in his commercial dealings generally, Mr Blaikie has conducted himself in a manner that demonstrates a tendency to ignore, or at least delay and deflect, his financial and legal obligations. It was submitted that the combination of these matters is sufficient to undermine any confidence that Mr Chelliah might otherwise have had that Mr Blaikie could and would meet any adverse costs order without subjecting Mr Chelliah to undue delay and expense.
As to Mr Blaikie being “cash poor”, this is demonstrated through his dealings with Mr Chelliah in the context of this case. Even accepting Mr Blaikie’s version of events, it is apparent that he has experienced regular cash flow difficulties. In any event, Mr Jelbert accepted that it was appropriate that I proceed on the basis that Mr Blaikie is “cash poor”, and in particular did not have the cash, or other liquid assets, to meet an adverse costs order.
Mr Jelbert’s initial submission in response to this issue was to the effect that the Court need not be concerned about Mr Blaikie’s ability to meet an adverse costs order because it could simply be added to the judgment sum and interest already owed, and be paid out of the equity that exists in the Angle Vale property. To my mind, this submission was telling. It reflected an assumption, if not an attitude – which I apprehend may be shared by his client – that it is enough that he is prepared to meet his financial obligations to Mr Chelliah once his subdivision of the Angle Vale property is complete and he is in a position to realise the proceeds in the ordinary way.
Even putting to one side the unsatisfactory nature of this approach to his underlying indebtedness, this is not an adequate response to the application for security for costs of his appeal. Mr Chelliah is entitled to demand confidence that any adverse costs order on the appeal will not merely be met “in due course”; rather, he is entitled to demand confidence that it will be met within a reasonable period of time, and in a way that does not cause him undue cost and delay in enforcing that order.
When confronted with this concern, Mr Jelbert said that his client would be prepared to sell one or more of his classic cars if that turned out to be necessary. Whilst I take account of this, I remain concerned about Mr Blaikie’s ability and preparedness to meet an adverse costs order in a timely and efficient way. He has previously shown a reluctance to face up to his financial difficulties by selling his cars, and there is good reason to be concerned that this might be the case in the future.
Further, as alluded to already, I consider that these concerns are exacerbated by Mr Blaikie’s more general reticence to face up to his financial and legal commitments.
It is significant that the judgment sum sought to be appealed relates to monies initially advanced over 12 years ago. Even putting to one side the issues that Mr Blaikie might seek to ventilate upon appeal about his dealings with Mr Chelliah, there is no doubt that he has shown a long-standing inability or refusal to comply with his obligations in a timely way. It is true that there have been periods of time when Mr Chelliah has apparently been prepared to wait, or to extend their arrangements in return for interest. But that is far from a complete explanation for what has occurred.
Further, in the context of this litigation, Mr Blaikie has not paid attention to his legal obligations. He failed to file a defence in circumstances which the primary judge held were not adequately explained, and then tried to avoid the consequences of this by giving false evidence about it. In the context of the assessment of quantum hearing, he failed to file his evidence in a timely manner. His appeal was filed late, as were his submissions in opposition to this application. Whilst these recent delays were not lengthy, they have not been explained in evidence. Even accepting that the blame for these recent delays may well lie with his solicitor, there is nevertheless a pattern of delay in Mr Jelbert’s commercial and legal dealings.
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.