Commonwealth Bank of Australia v Psevdos

In the matter of Commonwealth Bank of Australia v Psevdos, the Commonwealth Bank of Australia (CBA) sought a declaration that its equitable interest in a mortgage had priority over any equitable interest held by Mr Psevdos, who was acting as trustee for Orio Investment Trust. The dispute arose over which mortgage had priority over real property known as the Schutara property. The Supreme Court found in favour of the CBA, ordering Mr Psevdos to pay the CBA’s costs on an indemnity basis. Mr Psevdos appealed the decision, prompting the CBA to apply for security for costs of the appeal. The court had to determine whether special circumstances existed that would justify ordering Mr Psevdos to pay security for costs.

The legal issues before the court were whether the CBA had established special circumstances warranting the making of an order for security for costs and whether it was appropriate for the court to exercise its discretion in that regard. The court considered the reasons for the indemnity costs order, Mr Psevdos’ financial position, and the dishonour of a cheque tendered to the Registry as potential special circumstances. The court also noted the grounds of appeal as being largely without merit or potentially an abuse of process.

The court concluded that the special circumstances did justify the ordering of security for costs. The CBA had established that there were special circumstances warranting the making of the order and that it was appropriate for the court to exercise its discretion. The court ordered Mr Psevdos to pay security in the sum of $15,000. The appeal is stayed pending payment of the security.