Litigation Fund WCX Pty Ltd v Darren Mitchell - [2025] NSWCA 27

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Litigation Fund WCX Pty Ltd v Darren Mitchell [2025] NSWCA 27
Hearing dates: 24 February 2025
Date of orders: 28 February 2025
Decision date: 28 February 2025
Before: Griffiths AJA
Decision:
(1) Grant leave under r 7.1(2)(a) of the Uniform Civil Procedure Rules 2005 (NSW) for Mr Robert Coshott to represent Litigation Fund WCX Pty Ltd.
(2) The time for the first respondents to file and serve a short affidavit by Mr Trevor Withane responding to exhibits 1, 2 and 3 together with short accompanying submissions be extended to 4:00pm on 25 February 2025 nunc pro tunc.
(3) Order Litigation Fund WCX Pty Ltd to provide security for the costs of the first respondents in proceedings no 2024/00351500 in the amount of $70,022.50 (incl GST), such sum to be paid into Court within 14 days.
(4) Those proceedings be stayed until such time as the applicant has provided security for costs in accordance with order 3.
(5) The orders dated 11 December 2024 be stayed pending the hearing and determination of the applicant’s summons seeking leave to appeal, on condition that within 14 days hereof the applicant pay into Court the amount of $134,607.95 plus GST.
(6) Within 7 days hereof, the parties are each to provide brief submissions and any evidence concerning the costs of the first respondents’ notice of motion filed 24 January 2025 and the applicant’s notice of motion filed 14 January 2025.
(7) The issue of costs of the two motions will be determined on the papers and without a further oral hearing.

Catchwords:
COSTS — security for costs — relevant factors — where no evidence of financial capacity — where trust monies used to pay costs of earlier application — whether special circumstances required under s 1335 of the Corporations Act 2001 (Cth)
CIVIL PROCEDURE — stay of proceedings — pending application for leave to appeal — where trust monies used to pay costs of earlier application — whether stay should be conditional on payment into Court of the amount of previous unpaid costs order

Legislation Cited:
Civil Procedure Act 2005 (NSW), s 183
Corporations Act 2001 (Cth), s 1335
Roads Act 1993 (NSW), s 179
Uniform Civil Procedure Rules 2005 (NSW), rr 7.1, 51.50

Cases Cited:
Antov v Bokan [2019] NSWCA 40
Flynn v PPK Mining Equipment Pty Ltd [2023] NSWCA 151
Kimberly Developments Pty Ltd v Bale [2024] NSWCA 12
Litigation Fund WCX Pty Ltd v Aversa [2024] NSWSC 1348
Litigation Fund WCX Pty Ltd v Homebuilding Pty Ltd [2025] NSWCA 16
Michael Hill Jeweller (Australia) Pty Ltd v Gispac Pty Ltd [2024] NSWCA 128
Mitchell v Roads and Maritime Services (now known as Transport for NSW) (No 2) [2024] NSWSC 1165
Mitchell v Roads and Maritime Services (now known as Transport for NSW) (No 3) [2024] NSWSC 1593
Suchand Pty Ltd v Jonathon Kingsley Colbran and Richard Stone as Receivers and Managers of Suchand Pty Ltd [2024] NSWCA 250
TomanovicMultiown…

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.

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Details

Case: [2025] NSWCA 27
Decision Date: 28 February 2025

CaseChat Overview and Summary

In the proceedings before Griffiths AJA, Litigation Fund WCX Pty Ltd (the applicant) sought to continue its action against the first respondents. The dispute concerned an application for security for costs and a related application to stay proceedings pending an appeal. The applicant had previously been ordered to pay costs to the first respondents, and trust monies had been used to satisfy part of that earlier costs order.

The court was required to determine whether to grant the application for security for costs and, if so, in what amount. It also had to consider whether to grant a stay of proceedings pending the applicant's application for leave to appeal, and if so, on what conditions. A further issue was whether special circumstances were required under s 1335 of the Corporations Act 2001 (Cth) for the security for costs order, given the use of trust monies.

Griffiths AJA reasoned that the applicant had not provided evidence of its financial capacity to meet potential costs orders. The use of trust monies to pay previous costs orders was a significant factor, suggesting a lack of readily available funds. The court applied the principles relating to security for costs, considering the applicant's financial position and the potential prejudice to the respondents. The court also considered the principles governing stays of proceedings, particularly where an appeal is contemplated and there is an outstanding costs order.

The court ordered Litigation Fund WCX Pty Ltd to provide security for the first respondents' costs in the amount of $70,022.50, to be paid into court within 14 days, and stayed the proceedings until this security was provided. Additionally, the court stayed the orders dated 11 December 2024 pending the determination of the applicant’s summons seeking leave to appeal, conditional upon the applicant paying $134,607.95 plus GST into court within 14 days. The court also made directions regarding submissions and evidence concerning the costs of two notices of motion.

Orders

Orders of the court

(1) Grant leave under r 7.1(2)(a) of the Uniform Civil Procedure Rules 2005 (NSW) for Mr Robert Coshott to represent Litigation Fund WCX Pty Ltd.

(2) The time for the first respondents to file and serve a short affidavit by Mr Trevor Withane responding to exhibits 1, 2 and 3 together with short accompanying submissions be extended to 4:00pm on 25 February 2025 nunc pro tunc.

(3) Order Litigation Fund WCX Pty Ltd to provide security for the costs of the first respondents in proceedings no 2024/00351500 in the amount of $70,022.50 (incl GST), such sum to be paid into Court within 14 days.

(4) Those proceedings be stayed until such time as the applicant has provided security for costs in accordance with order 3.

(5) The orders dated 11 December 2024 be stayed pending the hearing and determination of the applicant’s summons seeking leave to appeal, on condition that within 14 days hereof the applicant pay into Court the amount of $134,607.95 plus GST.

(6) Within 7 days hereof, the parties are each to provide brief submissions and any evidence concerning the costs of the first respondents’ notice of motion filed 24 January 2025 and the applicant’s notice of motion filed 14 January 2025.

(7) The issue of costs of the two motions will be determined on the papers and without a further oral hearing.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

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Medium Neutral Citation:	Litigation Fund WCX Pty Ltd v Darren Mitchell [2025] NSWCA 27
Hearing dates:	24 February 2025
Date of orders:	28 February 2025
Decision date:	28 February 2025
Before:	Griffiths AJA
Decision:	(1) Grant leave under r 7.1(2)(a) of the Uniform Civil Procedure Rules 2005 (NSW) for Mr Robert Coshott to represent Litigation Fund WCX Pty Ltd. (2) The time for the first respondents to file and serve a short affidavit by Mr Trevor Withane responding to exhibits 1, 2 and 3 together with short accompanying submissions be extended to 4:00pm on 25 February 2025 nunc pro tunc. (3) Order Litigation Fund WCX Pty Ltd to provide security for the costs of the first respondents in proceedings no 2024/00351500 in the amount of $70,022.50 (incl GST), such sum to be paid into Court within 14 days. (4) Those proceedings be stayed until such time as the applicant has provided security for costs in accordance with order 3. (5) The orders dated 11 December 2024 be stayed pending the hearing and determination of the applicant’s summons seeking leave to appeal, on condition that within 14 days hereof the applicant pay into Court the amount of $134,607.95 plus GST. (6) Within 7 days hereof, the parties are each to provide brief submissions and any evidence concerning the costs of the first respondents’ notice of motion filed 24 January 2025 and the applicant’s notice of motion filed 14 January 2025. (7) The issue of costs of the two motions will be determined on the papers and without a further oral hearing.
Catchwords:	COSTS — security for costs — relevant factors — where no evidence of financial capacity — where trust monies used to pay costs of earlier application — whether special circumstances required under s 1335 of the Corporations Act 2001 (Cth) CIVIL PROCEDURE — stay of proceedings — pending application for leave to appeal — where trust monies used to pay costs of earlier application — whether stay should be conditional on payment into Court of the amount of previous unpaid costs order
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 183 Corporations Act 2001 (Cth), s 1335 Roads Act 1993 (NSW), s 179 Uniform Civil Procedure Rules 2005 (NSW), rr 7.1, 51.50
Cases Cited:	Antov v Bokan [2019] NSWCA 40 Flynn v PPK Mining Equipment Pty Ltd [2023] NSWCA 151 Kimberly Developments Pty Ltd v Bale [2024] NSWCA 12 Litigation Fund WCX Pty Ltd v Aversa [2024] NSWSC 1348 Litigation Fund WCX Pty Ltd v Homebuilding Pty Ltd [2025] NSWCA 16 Michael Hill Jeweller (Australia) Pty Ltd v Gispac Pty Ltd [2024] NSWCA 128 Mitchell v Roads and Maritime Services (now known as Transport for NSW) (No 2) [2024] NSWSC 1165 Mitchell v Roads and Maritime Services (now known as Transport for NSW) (No 3) [2024] NSWSC 1593 Suchand Pty Ltd v Jonathon Kingsley Colbran and Richard Stone as Receivers and Managers of Suchand Pty Ltd [2024] NSWCA 250 TomanovicMultiown…