Cassaniti v Katavic

In *Cassaniti v Katavic*, the Court of Appeal of the Supreme Court of New South Wales was required to determine an application for security for costs of an appeal. The application was brought by the respondents, who sought an order that the appellants provide security for their costs of the appeal and the related application for leave to appeal. The respondents contended that special circumstances existed, justifying the order, including allegations of fraudulent activity by one of the appellants and doubt as to the appellants' ability to satisfy any adverse costs order.

The primary legal issue before the Court was whether "special circumstances" were established under rule 51.50 of the Uniform Civil Procedure Rules 2005 (NSW) to warrant an order for security for costs. This involved assessing the evidence presented regarding the financial standing of the appellants and the nature of their involvement in the proceedings, particularly the alleged fraudulent conduct of one appellant and the representative capacity of the other.

Macfarlan JA found that special circumstances did exist. His Honour noted that one appellant was acting solely in a representative capacity, and crucially, that there was evidence and findings of fraudulent activity by the other appellant. This, combined with doubt that the appellants could satisfy an adverse costs order, led the Court to conclude that an order for security was appropriate.

Consequently, the Court ordered the appellants to provide security for the respondents’ costs of and incidental to the concurrent hearing of the appeal and the application for leave to appeal by payment into Court of the sum of $75,000 (including GST) within 10 working days. The Court also made orders releasing a second respondent from an undertaking regarding the use of funds paid into Court and permitting those funds to be used for the second respondent's reasonable legal costs of the appeal. The costs of the respondents' notice of motion were made costs in the appeal.