Dubow v Official Receiver (NSW)

This appeal arises from proceedings in the Federal Magistrates Court concerning Ms Dubow's application to have her bankruptcy annulled. The Official Receiver has now appealed to this Court, seeking security for costs of the appeal. The Official Receiver argues that Ms Dubow should provide security for costs to the Official Receiver, her trustee in bankruptcy. Ms Dubow opposes the application for security for costs on the basis that the Official Receiver did not enter an appearance or file evidence at trial. This Court must determine whether the Official Receiver is entitled to security for costs of the appeal and, if so, the appropriate amount.

In determining whether to order security for costs of an appeal, this Court must consider various discretionary factors. These include the risk that the costs order will not be satisfied and the duties of the trustee in bankruptcy. The Official Receiver argues that Ms Dubow, who is insolvent, should provide security for costs of the appeal. The Official Receiver contends that it is not necessary for the Official Receiver to have entered an appearance or filed evidence at trial in order to be entitled to security for costs of the appeal. Ms Dubow argues that the Official Receiver's failure to enter an appearance or file evidence at trial means that the Official Receiver should not be entitled to security for costs of the appeal.

This Court finds that the Official Receiver is entitled to security for costs of the appeal. This Court considers that the Official Receiver has discharged the onus of establishing that there is a risk that the costs order will not be satisfied. This Court also considers that the Official Receiver's duties as trustee in bankruptcy are relevant to the question of whether security for costs should be ordered. This Court finds that the Official Receiver's failure to enter an appearance or file evidence at trial is not a bar to the Official Receiver being entitled to security for costs of the appeal. This Court orders that Ms Dubow provide security for the costs of the appeal in the amount of $25,000.00 within 21 days of the date of this judgment.

Accordingly, pursuant to rule 36.09 of the Federal Court Rules 2011 (Cth), within 21 days of the date of these orders Ms Dubow must provide security for the costs of the appeal of the second respondent in the amount of $25,000.00 in a form acceptable to the Registrar of the Court. The appeal is to be stayed until security is provided. If Ms Dubow fails to provide the security in accordance with Order 1 the appeal will be dismissed. Ms Dubow must also pay the costs of the second respondent of the amended interlocutory application for security for costs filed on 18 July 2013. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.