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Botsman v Bolitho

Botsman v Bolitho

Case [2018] VSCA 111 7 May 2018

Jurisdiction

Security for Costs

Appeal

Civil Litigation & Procedure

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2018 0037

WENDY DIANE BOTSMAN	Applicant
V
LAURENCE JOHN BOLITHO (and others according to the attached Schedule)	Respondents

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JUDGES:	WHELAN and NIALL JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	30 April 2018
DATE OF JUDGMENT:	7 May 2018
MEDIUM NEUTRAL CITATION:	[2018] VSCA 111
JUDGMENT APPEALED FROM:	Re Banksia Securities Limited (Rec & Mgr Apptd) (in liq) (No 2) [2018] VSC 47 (Croft J)

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PRACTICE AND PROCEDURE – Application by first respondent for security for costs of application for leave to appeal and appeal – Where evidence that applicant owns real property unencumbered by registered interest – Where proposed grounds of appeal reasonably arguable and may raise issues of general application – Where order for security may stultify appeal – Application refused – Rule 64.38 Supreme Court (General Civil Procedure) Rules 2015.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr C H Withers	--
For the First Respondent	Mr N J O’Bryan SC with Mr M W L Symons	Portfolio Law

WHELAN JA

NIALL JA:

Introduction

On 10 April 2018, the first respondent, Laurence Bolitho, applied for an order that the applicant, Wendy Botsman, provide security for his costs in respect of her application for leave to appeal and, if leave is granted, the appeal. Leave to appeal is sought from a decision of a judge in the Trial Division to approve the settlement of a group proceeding brought following the collapse of Banksia Securities Limited (‘Banksia’). Mr Bolitho seeks security in the amount of $184,630.60.

Banksia was a non-bank property lender which had failed and, as a result, owed some $663 million to approximately 15,622 debenture holders and had 956 loans outstanding to third party borrowers totalling approximately $527 million. Both Ms Botsman and Mr Bolitho were amongst the debenture holders. The Trust Company (Nominees) Limited (‘Trust Co’) had been appointed by Banksia as trustee and held a fixed and floating charge over the assets of Banksia on trust for the debenture holders.

There are some features of the application for leave to appeal that have some unusual dimensions. It is necessary in order to resolve the present application to refer to the broader context of the litigation and the approval decision.

The settlement approval decision

There were two proceedings before the primary judge which were the subject of an application for approval.

The first proceeding was brought on behalf of debenture holders as a class action in which Mr Bolitho was the lead plaintiff (‘Bolitho group proceeding’). Ms Botsman was a member of the class. Damages and interest was claimed against both Banksia and Trust Co and a number of other defendants, including legal and financial advisers. The Bolitho group proceeding was funded by a litigation funder, BSL Litigation Partners Limited (‘BSLLP’). As at the date of settlement, the claim was for a maximum sum of approximately $222 million.

The second proceeding was brought by Banksia through its special purpose receivers, John Lindholm and Peter McCluskey (‘SPRs’),…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Botsman v Bolitho

Details

AGLC: Botsman v Bolitho [2018] VSCA 111
Case: [2018] VSCA 111
Decision Date: 7 May 2018

CaseChat Overview and Summary

The case of Botsman v Bolitho involved an application by the first respondent for security for costs of an application for leave to appeal and the subsequent appeal. The applicant, Botsman, sought an order for security for costs from the respondent, Bolitho, in relation to the costs of the application for leave to appeal and the appeal itself. The application was heard in the Supreme Court of New South Wales. The dispute centred around whether the applicant should be required to provide security for the respondent's costs in the event that the application for leave to appeal and the appeal were unsuccessful.

The legal issues the court needed to decide included whether the applicant's ownership of unencumbered real property was sufficient to satisfy the court that the applicant would be able to meet any costs order made against them, and whether the proposed grounds of appeal were reasonably arguable and had the potential to raise issues of general application. The court also had to consider whether an order for security might stultify the appeal, potentially depriving the applicant of their right to appeal.

The court found that the applicant owned real property that was unencumbered by any registered interest, which was a factor that weighed in favour of refusing the application for security. Additionally, the proposed grounds of appeal were considered to be reasonably arguable and had the potential to raise issues of general application. The court was also of the view that an order for security might stultify the appeal, potentially depriving the applicant of their right to appeal. Therefore, the application for security for costs was refused.

As a result of the court's decision, the first respondent's application for security for costs was dismissed. The orders made by the court were that the applicant was not required to provide security for the costs of the application for leave to appeal and the appeal. This decision highlights the importance of considering the potential impact of an order for security on the right to appeal and the need to balance the interests of both parties in such matters.

Orders