Mathew (SA) Nominees Pty Ltd v Belconnen Automotive Pty Ltd - [2019] SASC 39

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
MATHEW (SA) NOMINEES PTY LTD v BELCONNEN AUTOMOTIVE PTY LTD
[2019] SASC 39
Judgment of The Honourable Justice Doyle
21 March 2019
PROCEDURE - COSTS - SECURITY FOR COSTS
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT - PRINCIPLES ON WHICH COURT ACTS - INTERFERENCE WITH DISCRETION
The plaintiff seeks permission to appeal against orders of a Magistrate granting the defendant’s application for security for costs, and declining to award the plaintiff its costs of an unsuccessful challenge to jurisdiction by the defendant. The application for permission and the appeal itself were heard together.
The plaintiff’s proposed appeal raises a number of grounds, including a ground alleging that the Magistrate provided inadequate reasons for his decisions, and several grounds alleging that the Magistrate erred by attaching no weight, or insufficient weight, to various considerations.
Held (Per Doyle J):
1.       No error in the sense required by House v The King has been established in relation to the Magistrate’s exercise of his discretion to order security for costs.
2.       While some of the proposed grounds of appeal were arguable, the plaintiff did not establish that there was the potential for substantial injustice were permission to be refused and the orders for security and adjourning the issue of cost left to stand.
3.       Permission to appeal refused.
Corporations Act 2001 (Cth) s 1335; Magistrates Court (Civil) Rules 2013 (SA) r 81, referred to.
Viscariello v Tamasauskas [2018] SASC 111; ACN 115 722 248 Pty Ltd v Milligan [2011] SASC 239; Landmark Operations Ltd v J Tiver Nominees Pty Ltd [2009] SASC 185; Harris Scarfe Ltd v Ernst & Young (No 2) (2005) 240 LSJS 17; [2005] SASC 168; House v The King (1936) 55 CLR 499; AK v Western Australia (2008) 232 CLR 438; R v Keyte (2000) 78 SASR 68; Resi Corporation v Munzer [2016] SASCFC 15; Luxmore Pty Ltd v Hydedale Pty Ltd (2008) 20 VR 481; Proude v Visic (No 2) [2012] SASC 233; Jadwan Pty Ltd v Rae & Partners [2015] TASSC 11; Laundry Coin-Wash Nominees Pty Ltd v Dunlop Olympic Ltd (1985) 7 ATPR 40-584; Pitcairn Investments Pty Ltd v Birwick March Pty Ltd [1993] FCA 327; SAS Global Forrestdale Pty Ltd v Samsera Pty Ltd [2010] WASC 309; ACN 105921962 Pty Ltd v Wiggett [2012] NSWSC 1526; In the matter of Eastmark Holdings Pty Ltd [2015] NSWSC 2071; Livingspring Pty Ltd v Kliger Partners (2008) 20 VR 377; Olivaylle Pty Ltd v Flottweg GMBH & Co KGAA [2007] FCA 56; Jones v Dunkel (1959) 101 CLR 298; Amcor Ltd v Barnes [2015] VSC 90; Christou v Stanton Partners Australasia Pty Ltd [2011] WASCA 176; Oswal v Australia and New Zealand Banking Group Ltd [2016] VSC 52; James v Australia and New Zealand Banking Group Ltd (No 1) (1985) 9 FCR 442; Eddy v Mac Audio Pty Ltd [2000] SASC 145; Ross Ambrose Group Pty Ltd v Renkon Pty Ltd (2007) 17 Tas R 23; Litmus Australia Ltd v Canty [2007] NSWSC 670; O & D Pty Ltd v Pangalos [2015] ACTCA 4; Karl Suleman Enterprizes Pty Ltd v Pham [2010] NSWSC 886; Narradine Pty Ltd v Mascot Steel & Tools Pty Ltd [2012] NSWSC 385; Mecrus Pty Ltd v Industrial Energy Pty Ltd (2015) 327 ALR 523; Re Will of Gilbert (1946) 46 SR (NSW) 318; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; Hamra v The Queen (2017) 260 CLR 479, considered.

MATHEW (SA) NOMINEES PTY LTD v BELCONNEN AUTOMOTIVE PTY LTD
[2019] SASC 39
Magistrates Appeal: Civil

DOYLE J: The plaintiff seeks permission to appeal against orders of a Magistrate granting the defendant’s application for security for costs in the amount of $30,000, and declining to award the plaintiff its costs of an unsuccessful challenge to jurisdiction by the defendant. The application for permission and the appeal itself were heard together.
The plaintiff’s proposed appeal raises a number of grounds. They include a ground alleging that the Magistrate provided inadequate reasons for his decisions, and several grounds alleging that the Magistrate erred by attaching no weight, or insufficient weight, to various considerations.
It is convenient to commence by outlining the nature of the proceedings, and something of the procedural history of the matter, before then addressing the merits of the application for permission and the various grounds of appeal.
The plaintiff’s claim
The plaintiff’s claim relates to its purchase of three high performance motor vehicles from the defendant: a 2016 HSV Clubsport and two 2017 Holden Commodores.
The purchases were made in the name of the plaintiff company, but were negotiated on behalf of the plaintiff by Mr Mazzacano, Mr Loprete and Mr Hipner. The purchase price for each of the cars was discounted by reason an employee discount scheme known as the EPSA scheme. There does not appear to be any dispute that Mr Mazzacano (as a former Holden employee) was entitled to access the EPSA scheme. However, the defendant contends that the plaintiff company was not entitled to access the discounts available under that scheme; at least not in circumstances where (as the defendant contends) the purchase was not intended for the benefit of Mr Mazzacano.
The first vehicle, the 2016 HSV Clubsport, was paid for by the plaintiff and delivered by the defendant, and so does not form part of the plaintiff’s claim. The plaintiff’s claim relates only to the two 2017 Holden Commodores. In respect of those vehicles, the plaintiff pleads that he ordered the vehicles, was invoiced for each by the defendant (the prices being $42,927 and $44,467 respectively), paid deposits for each and then subsequently paid the balance owing in respect of each. However, the defendant did not deliver the two vehicles. Instead, it returned the purchase monies to the plaintiff.
The plaintiff seeks specific performance of its contracts with the defendant in respect of the two 2017 Holden Commodores. In particular, in its prayer for relief, the plaintiff seeks orders that the defendant deliver the vehicles to the plaintiff, on condition that the plaintiff pay the defendant $42,927 and $44,467 for the vehicles.
The defence and counterclaim
In its second amended defence and counterclaim, the defendant largely admits the factual basis for the plaintiff’s claims. However, it then pleads various matters arising out of the negotiations for the purchase of the three vehicles. It pleads in particular that it was told that the vehicles were being purchased for Mr Mazzacano, and that the name of the plaintiff was only being used in order to satisfy a financier, whereas the reality was that the vehicles were being bought for the benefit of the plaintiff itself or persons (other than Mr Mazzacano) associated with the plaintiff. The defendant contends that neither the plaintiff itself nor those other persons associated with it were entitled to the benefit of the EPSA scheme, and on that basis denies that the plaintiff is entitled to an order for specific performance in respect of the two 2017 Holden Commodores.
In its counterclaim, the defendant alleges that by representing that the vehicles were being purchased for the benefit of Mr Mazzacano, the plaintiff engaged in misleading and deceptive conduct. The defendant further pleads that by reason of this misleading conduct it suffered loss of slightly in excess of $25,000, comprising amounts of $13,000 (being the EPSA scheme discount on the HSV Clubsport), and smaller amounts by way of depreciation and finance costs on the two 2017 Holden Commodores.
In answer to the defendant’s allegations, the plaintiff denies that it engaged in any misleading conduct in connection with the purchase of the vehicles, and indeed contends that the defendant not only acquiesced in the use of the plaintiff company to access the EPSA scheme, but positively suggested or encouraged it.
Procedural chronology
The plaintiff paid for the two 2017 Holden Commodores in late June 2017, and the defendant returned the purchase monies soon thereafter.
The plaintiff issued these proceedings on 19 July 2017, seeking orders for delivery of the two 2017 Holden Commodores by way of specific performance. On 8 September 2017, the plaintiff filed an application for summary judgment on its claim.
On 13 September 2017, the defendant filed a defence. While it did not go into the purchase negotiations to the extent contained in the current version of the defence, the essence of the defence was similar; namely, that while Mr Mazzacano was entitled to the benefit of a discount under the EPSA scheme, the plaintiff company was not. However, at that point there was no counterclaim for misleading conduct in respect of the purchase negotiations.
At a directions hearing on 20 September 2017, the defendant was given 21 days to file an amended defence and counterclaim, and any material in opposition to the plaintiff’s application for summary judgment. The matter was adjourned to a further directions hearing on 14 November 2017.
The defendant subsequently filed three affidavits in opposition to the plaintiff’s application for summary judgment.[1]
[1] Those affidavits were sworn 30 October 2017, although they appear not to have made it onto the Magistrates Court file until 19 December 2017.
The directions hearing scheduled for 14 November 2017 was subsequently adjourned by consent to 5 December 2017, and then to 12 December 2017.
At the directions hearing on 12 December 2017, the matter was adjourned to a two day trial starting 20 February 2018. The Magistrate also made orders (i) that the plaintiff’s application for summary judgment be adjourned to the start of the trial; (ii) that the defendant file its amended defence and counterclaim within 14 days; (iii) that the parties make mutual discovery by 22 January 2018; (iv) that the defendant file any request for interrogatories by 2 February 2018; and (v) that the plaintiff file a trial plan and list of witnesses not later than 14 days prior to trial.
On 21 December 2017, the defendant filed its amended defence and counterclaim. The defence was amended to plead further detail in respect of the purchase negotiations, and to include the claim for misleading conduct by way of counterclaim.
On 31 January 2018, the defendant filed its interrogatories. They relevantly included interrogatory number 4, which asked “what is the nature of the business that was being operated by the plaintiff during 2017?”
The defendant filed its list of documents on 2 February 2018, and its trial plan on 7 February 2018. In the latter it indicated that it intended to call two witnesses, being Mr Wilson (who handled the negotiations in relation to the purchase of the three vehicles for the defendant) and Mr Croft (the defendant’s financial controller, who was to give evidence about the EPSA scheme and the losses claimed by the defendant in its counterclaim).
On 15 February 2018, the defendant filed an application seeking orders that the plaintiff provide affidavit answers to its interrogatories, provide discovery and file a trial plan; and that in default of compliance with the above the plaintiff’s claim be dismissed. Noting the impending commencement of the trial, the defendant sought an urgent hearing of its application.
On 16 February 2018, the plaintiff filed its list of documents. At a hearing on the same day, the Magistrate ordered that the plaintiff file its trial plan and affidavit answers to the interrogatories by 19 February 2018. The matter was adjourned to 20 February 2018 for trial.
The plaintiff filed its trial plan on 19 February 2018. It identified three potential witnesses, being Mr Loprete, Mr Hipner and Mr Mazzacano.
On the same day, the plaintiff also filed an affidavit of Mr Loprete in answer to the interrogatories. In answer to interrogatory number 4, Mr Loprete deposed that “in order to advance the litigation the plaintiff’s solicitors have asked me to assume the interrogatory is asking what is the plaintiff’s business in 2017. The answer to that question is that it is a trustee.”
The jurisdictional challenge
Also on 19 February 2018, and so the day before the scheduled commencement of the trial, the defendant filed an application seeking dismissal of the plaintiff’s claim on the basis of lack of jurisdiction. In an affidavit of the defendant’s solicitor (Mr Quinn) in support of the application, it was explained that the basis for the application was its contention that the jurisdiction of the Magistrates Court did not extend to making orders for specific performance; and that, in any event, the claim could not succeed because the two 2017 Holden Commodores were not unique or valuable chattels of the type that could render damages an inadequate remedy and hence sustain orders for specific performance.
On 20 February 2018, instead of commencing the trial, the Magistrate heard argument on the defendant’s jurisdictional challenge. Reference was made to several authorities addressing the limits of the Magistrates Court’s equitable jurisdiction. The Magistrate reserved his decision on the application and adjourned the matter to the following day, 21 February 2018.
On the morning of 21 February 2018, the matter was administratively adjourned to 1 March 2018 for directions and a listing conference. The trial dates that had been set aside were thus vacated, or at least lost to the jurisdictional challenge.
There were subsequent further administrative adjournments of the matter to 27 March 2018. On that occasion, the Magistrate dismissed the defendant’s challenge to the Court’s jurisdiction. His Honour published reasons for so deciding.[2] The matter was listed for trial a second time, this time on a revised estimate of four days commencing on 2 July 2018. A directions hearing was scheduled for 13 April 2018.
[2] Although I note the reasons are dated the following day.
On 13 April 2018, the plaintiff’s application for costs in respect of the defendant’s unsuccessful jurisdictional challenge was set down for argument on 1 June 2018. The defendant filed two affidavits of Mr Quinn (dated 9 April 2018 and 2 May 2018 respectively) in opposition to the plaintiff’s application for costs. The hearing on 1 June 2018 was administratively vacated and adjourned to 12 June 2018.
The application for security for costs
On 2 May 2018, the defendant filed an application for security for costs. The application was brought under r 81 of the Magistrates Court (Civil) Rules 2013 (SA) and/or s 1335 of the Corporations Act 2001 (Cth). It sought security for the defendant’s costs of the plaintiff’s claim up to the end of the first day of the trial, in the sum of $30,000. The application sought that the security be provided by way of payment into court, or in such other manner as the Court may order; or in the alternative, that the plaintiff obtain a guarantee for any costs ordered in the defendant’s favour. The application sought a stay pending the provision of security.
The application was supported by an affidavit of the defendant’s solicitor, Mr Quinn, sworn 2 May 2018. In that affidavit Mr Quinn set out various matters relevant to the issue of security for costs. He attached a company search of the plaintiff that disclosed that the sole director and shareholder of the plaintiff was Mr Loprete, and that the paid up capital of the plaintiff was only $20, consisting of 20 ordinary shares held beneficially by Mr Loprete. Mr Quinn also attached a letter he had written to the plaintiff’s solicitors on 14 December 2017 requesting that they provide the financial records of the plaintiff, and foreshadowing a potential application for security for costs. The plaintiff did not respond to this letter. Mr Quinn deposed that he was on annual leave from 22 December 2017 to 22 January 2018. He explained that as the trial was by then fast approaching, and he did not have any direct evidence of the plaintiff’s financial position, the defendant decided not to proceed with an application for security for costs at that time.
However, Mr Quinn referred to the answer to interrogatory number 4, which the defendant had received on 19 February 2018, and in which Mr Loprete said the plaintiff company was a trustee company. He said that the defendant had previously had no knowledge of this. Mr Quinn also attached searches revealing that the plaintiff was the registered proprietor of two properties, referred to as the Grange Road property and the Orsmond Street property. The former was the subject of a mortgage in favour of Westpac Banking Corporation. Both properties were the subject of caveats lodged by the Commissioner of State Taxation.
The May 2018 Quinn affidavit exhibited a letter dated 11 April 2018 from Mr Quinn to the plaintiff’s solicitors referring to the relevance of the plaintiff’s status as a trustee company to the issue of costs, requesting financial information in relation to the plaintiff and foreshadowing an application for security for costs. By letter dated 11 April 2018, the plaintiff’s solicitors responded, in effect declining to provide any of the information sought and indicating opposition to any application for security for costs for various reasons, including its late timing.
Mr Quinn then set out the basis for the quantum of security sought. He noted that the plaintiff’s claim had been quantified in the sum of $100,000 (this was a reference to the endorsement on the first page of the statement of claim to the effect that the amount claimed was $100,000). Mr Quinn then referred to the costs scale in the third schedule to the Magistrates Court (Civil) Rules 2013 (SA). Applying the percentages in this scale to the sum of $100,000, Mr Quinn calculated recoverable costs to the end of the first day of the trial to be $34,700. He said that having regard to the present and likely future legal fees of the defendant, the actual legal fees of the defendant up to the first day of the trial would considerably exceed that amount. Finally, Mr Quinn undertook that the defendant would not pursue its counterclaim in the event that security for costs was ordered and not provided by the plaintiff.
At a directions hearing on 14 May 2018, the plaintiff was ordered to file any affidavit material in relation to the application for security for costs within 14 days. The application was set down for argument on 12 June 2018.
On 12 June 2018, the plaintiff filed an affidavit of Mr Loprete. He deposed that the plaintiff had no intention of selling, dealing with or further encumbering either the Grange Road property or the Orsmond Street property, and would not do so without first notifying the Court. He said that the plaintiff had held the former since 1998, adding that it was a substantial warehouse that he estimated was valued at $580,000 (with a government assessed capital value of the land of $425,000); and that the plaintiff had held the latter since 2006, adding that it consisted of a substantial warehouse, workshop and residence that he estimated was valued at $720,000 (with a government assessed capital value of the land of $305,000). Mr Loprete also deposed that the caveats related merely to unpaid amounts by way of Land Tax of $1,400 and an Emergency Services Levy of $1,700 which would be paid.
Argument on applications for security and costs of the jurisdictional challenge
Argument on the defendant’s application for security for costs commenced on 12 June 2018. Unfortunately argument on this issue, and on the plaintiff’s application for costs in respect of the jurisdictional challenge, was not able to be completed in the time that was available on that day. It was agreed that submissions would be completed in writing. The Magistrate had only limited availability around the time due to the personal circumstances referred to in his reasons. On 15 June 2018, the plaintiff filed fairly detailed written submissions, and on 19 June 2018 the defendant filed responding submissions.
The Magistrate’s reasons

On 22 June 2018, the Magistrate ordered security for costs. In particular, he ordered:
1.The plaintiff shall within seven days provide security for the costs of the defendant by paying into court the sum of $30,000 or otherwise providing security for that amount in a manner satisfactory to the defendant.
2.That until the security is given, there be a stay of proceedings.
3.Liberty to apply.
4.Question of costs is adjourned to the end of the trial.
The Magistrate’s reasons were brief. They were as follows:
Because of my present personal circumstances and the imminent trial, these reasons will be brief. I reserve the right however to prepare more detailed reasons if called upon, time and my personal situation permitting.
Introduction
The defendant’s application is brought pursuant to rule 81 of the Magistrates Court (Civil) Rules 2013 (MCR) and section 1335 of the Corporations Act 2001 (CTH).
The reason the defendant seeks security for costs is the recent revelation by the plaintiff that it acts (or at least has acted) as a trustee. The plaintiff has since revealed in an affidavit that it owns real estate and it has no intention of disposing of that real estate. In submissions, plaintiff’s counsel makes no admissions about the plaintiff’s status other than to say that the plaintiff had in the past acted as a trustee.
Mr Loprete’s affidavit is notable more for what it does not address rather than what it says. It does not provide details of the plaintiffs overall financial position nor does it clarify the plaintiff’s status as a trustee or otherwise. It is entirely possible the plaintiff may still be acting as a trustee and if so, there must always be a possibility the trustee may be replaced or retire with a result the plaintiff may not be able to meet an adverse cost order. In my view there is a good case for security and the jurisdiction to grant the security is enlivened.
Delay
The application is made just weeks before the trial and the plaintiff submits this is the result of unnecessary delay by the defendant. According to the defendant the delay is explained by the late discovery of the plaintiff’s status as a trustee and in view of other developments in the progress of the file I am not prepared to conclude that the delay should preclude the defendant from seeking security.
Quantum
Because of the late discovery of the plaintiff’s trustee status, I take the view that the security should extend the defendants past costs which the defendant submits are approximately $30,000.
The Magistrate’s decision was delivered within three days of the conclusion of submissions, but nevertheless only nine days prior to the scheduled commencement of the trial on 2 July 2018. As security was not provided within this timeframe, the trial was for the second time vacated.
On 13 July 2018, the plaintiff filed an appeal against the Magistrate’s four orders made on 22 June 2018.
The solicitors for the defendant subsequently wrote to the Magistrates Court seeking clarification of order 4, being the order in relation to costs. This prompted the Magistrate to deliver the following supplementary reasons dated 6 September 2018:
The plaintiff’s[3] solicitors have written to the court requesting a clarification of my orders of 22 June 2018. By order 4 the issue of costs was adjourned to the end of the trial. The plaintiff’s solicitors ask if this order contemplates all costs involved in the action including the plaintiff’s application for costs in relation to the adjournment of the trial previously listed for 20 February 2018.
I consider the appropriate time to consider any applications for costs is at the end of the trial and for the avoidance of doubt I confirm all costs, including costs associated with the defendant’s application to adjourn the trial,[4] the costs of the application for security for costs and the trial generally will be considered at the end of the trial.
[3] In fact the request came from the defendant’s solicitors.
[4] Strictly speaking there was no application; but the need for the adjournment arose from the defendant’s application to challenge the Court’s jurisdiction.
The appeal
In its appeal, the plaintiff contends that the Magistrate erred not only in granting the defendant’s security for costs application, but also in adjourning determination of its application for costs in respect of the defendant’s jurisdictional challenge until the end of trial.
The plaintiff acknowledges that as the orders appealed from are interlocutory in nature, it needs permission to appeal. However, the parties agreed to have the issue of permission heard in conjunction with the appeal, and so that is what happened.
The plaintiff’s notice of appeal identifies 14 grounds of appeal, two of which have several sub-grounds. I consider that the detail of these grounds can be distilled as follows:
1.   The Magistrate’s reasons are inadequate in that they fail to address various of the issues raised by the plaintiff.
2.   The Magistrate erred in his decision to order security for costs in giving no weight, or insufficient weight, to the following matters:
a.      the evidence did not establish that the plaintiff was a trustee company or had always acted as a trustee, and that this was not in any event a sufficient basis for an order for security;
b.      the plaintiff had two warehouse landholdings, which it had owned for a significant period and had no intention of selling, dealing with or encumbering;
c.      the factual detail relevant to the defendant’s delay in bringing the application for security for costs;
d.      given that the plaintiff had been a company with paid up capital of only $20 since its incorporation, the defendant could have brought its application earlier;
e.      the plaintiff paid in full for the motor vehicles the subject of the claim, which had then been returned by the defendant (allegedly in breach of contract);
f.       the defendant’s pursuit of a counterclaim which is not merely defensive in nature;
g.      the real amount in issue on the claim and counterclaim is only approximately $26,000; and
h.      the defendant had put the director and shareholder of the plaintiff (Mr Loprete) on notice that it would seek costs from him, and did not disclose this to the Magistrate.
3.   The Magistrate erred in ordering security for costs in an excessive amount, in particular having regard to the true quantum of the dispute, the inclusion of past costs, and the failure to make reductions for the costs of the counterclaim and the interruption caused by the failed jurisdiction application.
4.   The Magistrate erred in failing to make an order (in respect of the defendant’s failed jurisdictional challenge) that the defendant pay the plaintiff’s costs of that application and thrown away by reason of the consequential adjournment of the trial, and further erred in not taking into account the offsetting effect of such a costs order in determining whether to order security and, if so, in what amount.
Permission to appeal
The plaintiff’s proposed appeal is against orders granting security for costs, and declining to order costs in relation to the defendant’s jurisdictional challenge. As such, it is an appeal against interlocutory orders by the Magistrate involving the exercise of discretions in relation to matters of practice and procedure.
Ordinarily, and for sound reasons, this Court will be reluctant to grant permission to appeal in such matters, let alone interfere with the exercise of the Magistrate’s discretion. Permission to appeal will not be granted unless there is not only arguable merit in the proposed appeal, but also the prospect of substantial injustice to the appellant were permission refused and the decision below allowed to stand.[5]
[5] Viscariello v Tamasauskas [2018] SASC 111 at [85]-[86]; ACN 115 722 248 Pty Ltd v Milligan [2011] SASC 239 at [9]; Landmark Operations Ltd v J Tiver Nominees Pty Ltd [2009] SASC 185 at [21]; Harris Scarfe Ltd v Ernst & Young (No 2) (2005) 240 LSJS 17; [2005] SASC 168 at [4]-[11].
Of course, in considering whether there is arguable merit in the appeal, it is relevant that the discretionary nature of the decisions means that in order to succeed on appeal, the plaintiff would need to establish error in the sense required by House v The King.[6] That is, the appellant would need to establish that the Magistrate acted on a wrong principle, allowed extraneous or irrelevant matters to guide or affect him, mistook the facts or did not take into account some material consideration. Alternatively, the appellant must establish that the result embodied in the order made is, upon the facts, unreasonable or plainly unjust, such that it can be inferred that there has been a failure to properly exercise the relevant discretion despite the precise nature or scope of the error not being identifiable. This last form of error is sometimes described as an outcome error; and the earlier forms of error as process errors.
[6] House v The King (1936) 55 CLR 499 at 504-505.
It follows from the above that an allegation merely that the Magistrate attached insufficient weight to a particular consideration is not, by itself, an allegation of error in the sense required by House v The King. Unless the allegation rises as high as one that the Magistrate overlooked or gave no weight to that consideration, or misunderstood it so as to give rise to an error of principle, it is at most a submission or particular that might be advanced in support of an allegation of outcome error.
The reasons for observing these principles of appellate restraint are obvious. In affirming the “truly exceptional” nature of appellate intervention in interlocutory decision making, and the importance of keeping a “tight rein” upon such interference, the Victorian Court of Appeal in Livingspring v Kliger[7] (in what also happens to have been an application for permission to appeal from an exercise of the discretion to order security for costs) was guided by the following passage from the reasons of Sir Frederick Jordan in Re Will of Gilbert:[8]
[I]f a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications for a Judge in Chambers to a Court of Appeal.
[7] Livingspring Pty Ltd v Kliger Partners (2008) 20 VR 377 at [7]-[9].
[8] Re Will of Gilbert (1946) 46 SR (NSW) 318 at 323.
Against this background, it is convenient to consider the errors alleged by the plaintiff in its proposed grounds of appeal.
Alleged inadequacy of reasons
In proposed ground of appeal 1, the plaintiff contends that the Magistrate gave inadequate reasons for his decisions in relation to both security for costs, and the costs of the failed jurisdiction application.
It is trite that judges are required to provide adequate reasons for their decisions. The difficulty comes in the application of this requirement. At a general level, it may be accepted that judges are required to do more than simply state the outcome; they must identify their findings and reasoning in relation to the matters in dispute and critical to that outcome.[9] However, the content of the requirement in any given case will depend very much upon the nature of the issue to be resolved and the circumstances of the case more generally.[10]
[9] AK v Western Australia (2008) 232 CLR 438 at [44]; R v Keyte (2000) 78 SASR 68 at [48]-[58]; Resi Corporation v Munzer [2016] SASCFC 15 at [71]-[72]; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 259 (Kirby P), 280 (McHugh JA).
[10] Hamra v The Queen (2017) 260 CLR 479 at [42], citing Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 270, 272-273 (Mahoney JA).
In the case of interlocutory disputes, little by way of reasoning may be required.[11] Certainly reasoning that is brief and to the point is to be encouraged. That is particularly so in relation to issues of costs.[12] In an interlocutory context, as long as the key planks in the judge’s reasoning process leading to the relevant decision are apparent, that will generally suffice. And in the case of relatively simple interlocutory disputes, little more than the judge’s conclusion on the key issue or issues leading to the outcome may be required. It will not generally be necessary to refer to each and every aspect or nuance of the submissions put by the parties. Nor will it be necessary to refer to every factor that was relevant to the exercise of an interlocutory discretion.[13] While it is important that the parties (and in particular the losing party) and the appellate court understand why the judge has reached a particular outcome, the adequacy of the reasons must be assessed in the context of the sometimes competing need to enable and encourage the efficient disposition of interlocutory disputes.
[11] Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 260 (Kirby P), 279 (McHugh JA).
[12] Luxmore Pty Ltd v Hydedale Pty Ltd (2008) 20 VR 481 at [12].
[13] Hamra v The Queen (2017) 260 CLR 479 at [42], citing Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 270, 272-273 (Mahoney JA).
Here, the Magistrate delivered his reasons for ordering security for costs within a few days of the close of submissions, presumably in the expectation that by doing so the trial might still proceed. His reasons were admirably brief and to the point. While his Honour did not refer to every consideration that was relevant or otherwise mentioned in the arguments put by the parties, his Honour did set out his reasoning in relation to the key matters. His Honour identified the significance of the plaintiff’s status as a trustee company (and why it remained significant despite the countervailing consideration that it owned real estate that it had no intention of disposing), and the defendant’s delay in bringing the application; and stated his conclusions in relation to the availability of security for past costs, and in relation to the quantum of the security to be provided more generally. As will be seen from my reasoning below, I do not think that the matters relied upon by the plaintiff that were not expressly addressed by Magistrate were of much significance in the context of the present case.
In summary, I am not satisfied that the Magistrate’s reasons were inadequate.
The trustee status and financial position of the plaintiff
In proposed grounds of appeal 2(a) and (b), the plaintiff complains, in effect, that the Magistrate erred in his reliance upon the plaintiff’s status as a trustee to order security, particularly in circumstances where the plaintiff owned two substantial properties and had given an assurance that he would not dispose of them without giving notice of his intention to do so.
The evidence as to the plaintiff’s trustee status and financial position, and hence its likely ability to meet an adverse costs order, was incomplete and uncertain. It was not clear from the evidence whether the plaintiff is pursuing these proceedings in its own right, or in its capacity as a trustee; and the only evidence as to assets owned or available to the plaintiff was the evidence I have summarised above in relation to the two properties it holds. However, that evidence did not make it clear whether those properties are held by the plaintiff beneficially or on trust, let alone reveal anything more comprehensive about the financial position of either the plaintiff or the trust.
The plaintiff did not concede that it was pursuing these proceedings in its capacity as a trustee. However, in answer to interrogatory 4, Mr Loprete swore that the plaintiff “is a trustee”. Given that the answer was addressing an interrogatory in relation to the nature of the plaintiff’s business in 2017, I consider that this answer can only fairly be interpreted as a statement that the plaintiff, in its dealings with the defendant, was acting as a trustee. If so, then any claim arising out of those dealings must (in order to succeed) have been brought by the plaintiff in its capacity as trustee. In the circumstances, and where the plaintiff has declined to say whether or not it is pursuing these proceedings in its capacity as trustee, I consider it was appropriate to approach the application for security for costs on the basis that the plaintiff was acting in that capacity (or at least on the basis that this may very well be the case).
I do not think it matters for present purposes that the statement of claim was not endorsed as brought by the plaintiff in that capacity. The plaintiff did not suggest that anything should be made (in its favour) of the absence of such endorsement. Indeed, it may be that an endorsement of this nature, while common place, was not necessary.[14]
[14] Proude v Visic (No 2) [2012] SASC 233 at [29]; cf Jadwan Pty Ltd v Rae & Partners [2015] TASSC 11 at [28]-[29].
I observe in passing that because I am persuaded that it was appropriate to proceed on the basis that the plaintiff has (or may very well have) brought these proceedings in its capacity as trustee, I do not consider it necessary to address the defendant’s application to adduce fresh evidence on the appeal in relation to the plaintiff’s status as a trustee.
There is no doubt that the fact that a plaintiff is pursuing proceedings in its capacity as trustee is a significant consideration, both in terms of determining whether the threshold requirement of s 1335 has been made out, and in the exercise of the discretion to order security more generally. As Smithers J said in Laundry Coin-Wash Nominees Pty Ltd v Dunlop Olympic Ltd:[15]
Where the only tangible assets of an applicant company are held in trust for another entity and its solvency depends on its right as trustee to indemnity against that entity it is necessary for the court to have in mind the difficulties which a successful respondent would face in attempting to execute in respect of an order for costs. Indeed, unless some step is taken to alleviate those difficulties it is reasonable and just to treat the applicant company as if it were without assets to meet such a liability.
[15] Laundry Coin-Wash Nominees Pty Ltd v Dunlop Olympic Ltd (1985) 7 ATPR 40-584 at 46,729.
This passage has been cited with approval on many occasions, with a number of authorities emphasising that it is not generally a sufficient answer to an application for security for costs for a trustee plaintiff to merely point to its right of indemnity out of trust assets.[16]
[16] See, for example, Pitcairn Investments Pty Ltd v Birwick March Pty Ltd [1993] FCA 327 at [9]; Jadwan Pty Ltd v Rae & Partners [2015] TASSC 11 at [10]; SAS Global Forrestdale Pty Ltd v Samsera Pty Ltd [2010] WASC 309 at [29]; ACN 105921962 Pty Ltd v Wiggett [2012] NSWSC 1526 at [10]; In the matter of Eastmark Holdings Pty Ltd [2015] NSWSC 2071 at [3]-[4].
Consistent with the above passage, the reason ordinarily given for this approach to trustee plaintiffs is that a successful defendant should not be subjected to the potential complexity, and hence expense and uncertainty, associated with having to resort to derivative rights in order to recover any costs to which it might be entitled. This has been held to be so even in situations where there is evidence of significant trust assets against which the right of indemnity might be exercised; the reason being that there is a risk those assets may become unavailable, for example, by reason of them being distributed to beneficiaries prior to the conclusion of the proceedings.[17]
[17] SAS Global Forrestdale Pty Ltd v Samsera Pty Ltd [2010] WASC 309 at [30]; Livingspring Pty Ltd v Kliger Partners (2008) 20 VR 377 at [55]-[57].

While it is thus significant, in the context of an application for security, that a plaintiff is suing as trustee, it does not follow automatically that it will be appropriate that there be an order for security. The onus remains on the defendant to establish both that the threshold requirement has been made out (in the case of an application under s 1335), and that the interests of justice will be best served by making an order for security.
However, given the significance of a plaintiff’s status as a trustee, it may, for practical purposes, become incumbent upon a trustee plaintiff seeking to resist an order for security to adduce some evidence as to the likely availability and value of its right of indemnity, or to otherwise take steps to alleviate the potential difficulties for the defendant associated with reliance upon the plaintiff’s right of indemnity to recover its costs. Smithers J said as much in the last sentence from the passage from his reasons in Laundry Coin-Wash Nominees Pty Ltd v Dunlop Olympic Ltd extracted above. His Honour later added:[18]
I have concluded that an applicant being a trustee company which desires to resist an order for security for costs should establish that recourse to property held by or for it will be available to the party against whom it has brought its action and be adequate, at the appropriate time, to meet the possible liability for costs.
[18] Laundry Coin-Wash Nominees Pty Ltd v Dunlop Olympic Ltd (1985) ATPR 40-584 at 46,731.
Here, there was some evidence, and the plaintiff (through Mr Loprete) did take some steps, to alleviate the concerns that the defendant might have about being forced to rely upon the plaintiff’s right of indemnity.
The evidence established that the plaintiff is the registered proprietor of two properties. While I cannot attach much weight to the particular values attributed to these properties by Mr Loprete (being $580,000 for the Grange Road property and $720,000 for the Orsmond Street property), it is plain from the description of these properties, and the government assessed capital values for the land of $425,000 and $305,000 respectively, that they are substantial properties. It is true that the Grange Road property is subject to a mortgage in favour of Westpac Banking Corporation for an undisclosed sum. But the other property is unencumbered. And while both properties are subject to caveats lodged by the Commissioner of State Taxation, the plaintiff adduced evidence to the effect that the caveats relate to very modest debts (for Land Tax of $1,400 and an Emergency Services Levy of $1,700) which Mr Loprete indicated he would pay.
Were it not for the trustee status of the plaintiff, the evidence in the preceding paragraph would likely have been sufficient to dispel any significant doubt about the plaintiff’s capacity to meet an adverse costs order. It suggests assets worth several hundred thousands of dollars in circumstances where the defendant’s own estimate of the costs to which it might be entitled if it ultimately succeeds in these proceedings will be only slightly in excess of $30,000.[19]
[19] Although given this estimate was only to the end of the first day of trial, the ultimate figure may be closer to $40,000.
As Mr Loprete’s affidavit does not set out the plaintiff’s financial position in its totality, there is the potential that it has other significant debts. However, putting to one side for the moment the plaintiff’s status as a trustee, I do not think the state of the evidence was such as to give rise to the need for the plaintiff to provide evidence of its full financial position in order to avoid a finding that there was a risk that it will be unable to meet an adverse costs order.[20]
[20] Olivaylle Pty Ltd v Flottweg GMBH & Co [2007] FCA 56 at [12]-[13], [16]; Amcor Ltd v Barnes [2015] VSC 90 at [39]-[45].
That said, for the reasons set out above, the Magistrate was right to approach the matter on the basis that the plaintiff’s status as a trustee did alter the analysis to some extent. It made it relevant to consider the extent to which the evidence alleviated concerns about the defendant being forced to rely upon the plaintiff’s right of indemnity in order to recover any costs ordered in its favour.
The first matter of significance in this respect was that the evidence did not reveal whether the Grange Road and Orsmond Street properties are held by the plaintiff in its own right or as trustee. If the former, then the issue of the availability and value of the right of indemnity would not squarely arise. The plaintiff would have sufficient assets of its own available to meet any adverse costs order, or at least there would be no basis to infer a risk that those assets will not be sufficient. However, as the plaintiff has not identified the basis on which it holds the properties, I do not consider it appropriate to assume (in the plaintiff’s favour) that it has assets of its own sufficient to meet an adverse costs order, and hence to avoid an order for security on that basis. Rather, I consider it appropriate to proceed on the basis that the properties may well be held by the plaintiff in its capacity as trustee. This then makes the likely availability and value of the plaintiff’s right of indemnity a matter of significance.
As the authorities cited above make plain, the court will not generally assume the availability and value of a right of indemnity, even in cases where there are substantial trust assets. However, in this case, in addition to the evidence establishing that the properties have a substantial value, and that one of them is unencumbered, the plaintiff (through an affidavit of its sole director and shareholder, Mr Loprete) said that it has no intention of selling, dealing with or further encumbering the properties, and that it will not do so without first notifying the Court. The effect of this will be to ensure that the properties will not (without notice) be dealt with in any way that might prejudice the defendant’s recovery of any costs ordered in its favour. The plaintiff will be prevented, for example, from distributing the properties (or proceeds from any sale of them) to a beneficiary or beneficiaries of the trust.
On the other hand, the plaintiff in this case did not go as far as giving any assurance or undertaking, whether through Mr Loprete or otherwise, that it would take the steps necessary to exercise its right of indemnity for the defendant’s benefit to the extent that might be necessary to meet any costs order in the defendant’s favour.[21]
[21] Livingspring Pty Ltd v Kliger Partners (2008) 20 VR 377 at [55]-[57].
In summary, it was relevant that the plaintiff was, or may very well have been, acting as a trustee. The Magistrate plainly attached significance to that consideration. While the significance of this consideration needed to be assessed in the context of the evidence of the plaintiff’s ownership of the two properties, and assurance that it would not deal with or dispose of those properties, the Magistrate also plainly took account of this evidence. His Honour mentioned it in the same paragraph as his reference to the plaintiff’s (potential) status as a trustee. As mentioned, the properties and assurance provided by Mr Loprete did provide some measure of protection, but on the authorities I have mentioned, I do not think it can be said that they entirely neutralised, or rendered irrelevant, the plaintiff’s trustee status. While a different Magistrate might have attached less weight to the plaintiff’s trustee status in light of this evidence, that is not enough to establish error in the sense required by House v The King. I am not satisfied that error has been established in respect of proposed grounds of appeal 2(a) or (b).
Delay
In proposed ground of appeal 2(c), the plaintiff complains that the Magistrate gave no weight, or insufficient weight, to the detail in relation to the defendant’s delay in bringing the application for security.
As the Magistrate noted in his reasons, the plaintiff relied in its opposition to the application for security upon the defendant’s delay in bringing the application. However, the Magistrate accepted the defendant’s submission that the delay was explained by its late discovery of the plaintiff’s status as a trustee. The Magistrate held that in view of this explanation and “other developments in the progress of the file”, he was not prepared to conclude that the delay should preclude the defendant from seeking security.
It is well established that applications for security should be brought promptly, and hence that delay in making the application is an important, and often critical, factor in the court’s exercise of its discretion.[22] The rationale for its relevance is the potential unfairness or prejudice associated with a plaintiff proceeding with its case and incurring costs on the assumption that no application is being made. It follows that the longer the delay, and the greater the work and expense incurred by the plaintiff, the greater the potential unfairness to the plaintiff and hence significance to be attached to the delay.
[22] Oswal v Australia and New Zealand Banking Group Ltd [2016] VSC 52 at [34]-[44], and the cases referred to therein.
For similar reasons, the late timing of the application in terms of the progress of the proceedings and the proximity of trial is also a significant factor. The unfairness to the plaintiff of making an order when a trial is imminent has been given as a reason to refuse to order security in a number of cases.[23]
[23] See, for example, James v Australia and New Zealand Banking Group Ltd(No 1) (1985) 9 FCR 442 at 446; Eddy v Mac Audio Pty Ltd [2000] SASC 145 at [47]-[49].
In considering the significance of the delay in bringing, or late timing of, an application for security, it is relevant to take account of any explanation for the delay and timing, and to weigh this against the extent of the unfairness to the plaintiff. In a case where there is only minimal delay, or an adequate explanation for the delay, and the unfairness is limited, it may nevertheless be in the interests of justice that there be an order for security. The unfairness might be limited, for example, because there is no reason to think that plaintiff is unable to provide security, and hence no reason to think that the plaintiff would have avoided the costs it has incurred had the application been brought earlier, or no reason to think that a ‘late’ order for security will frustrate the proceedings.[24]
[24] Ross Ambrose Group Pty Ltd v Renkon Pty Ltd (2007) 17 Tas R 23 at [26]; Litmus Australia Ltd v Canty [2007] NSWSC 670 at [26]; O & D Pty Ltd v Pangalos [2015] ACTCA 4 at [43]-[44].
However, even if the defendant’s delay, or the late timing, is not a sufficient basis to decline to make an order for security, it may nevertheless be a strong factor against ordering that the security extend to past costs.[25]
[25] Karl Suleman Enterprizes Pty Ltd v Pham [2010] NSWSC 886 at [57]-[58]; Narradine Pty Ltd v Mascot Steel & Tools Pty Ltd [2012] NSWSC 385 at [22]; Oswal v Australia and New Zealand Banking Group Ltd [2016] VSC 52 at [34], [44].
Ultimately it is difficult to generalise about the significance of delay and late timing in a particular case, beyond that it is a factor that must be weighed in determining what is just between the parties, and in particular whether it is in the interests of justice that there be an order for security, and if so whether the quantum of any security ordered should extend to past costs.
Here, the proceedings were commenced in July 2017. In December 2017, they were listed for trial in February 2018 (with a two day estimate). Interrogatories were administered and answered, disclosure occurred and trial plans were filed. But the February trial was ultimately vacated as a result of the defendant’s (late and unsuccessful) jurisdictional challenge. In March 2018, the trial was again listed for trial, this time commencing on 2 July 2018 (with a four day estimate).
The application for security was filed on 2 May 2018, being slightly less than nine weeks before the scheduled commencement of the trial. After allowing time for the plaintiff to file its evidence in response to the application for security, the application was listed for hearing on 12 June 2018. As the argument was not able to be completed on that day, written submissions were filed on 15 and 19 June 2018.
The Magistrate delivered reasons, and ordered security, on 22 June 2018, only nine days prior to the scheduled commencement of the trial on 2 July 2018. As the plaintiff did not provide the security ordered, the proceedings were stayed and the trial vacated.
There is no doubt the application was brought very late in the progress of the proceedings. It was brought after the date when the matter was first scheduled to have gone to trial. It was brought at a time when significant work and expense in progressing the proceedings had been undertaken and incurred. While it was brought a couple of months ahead of the rescheduled trial date, there was a risk that it would not be able to be heard and determined until the commencement of trial was relatively proximate.
The defendant’s explanation for its delay in bringing the proceedings was that it did not have any reason to suspect that the plaintiff was suing in its capacity as trustee prior to receipt of Mr Loprete’s answer to its interrogatories on 19 February 2018.
The plaintiff contended that even accepting that to be true, the defendant could have and should have brought its application earlier. It relied in support of this contention upon the defendant’s letter of 14 December 2017 in which it had foreshadowed an application for security. However, I accept the defendant’s answer to this contention in Mr Quinn’s May 2018 affidavit; namely, that as the plaintiff had declined to provide any of the financial information requested, and had not revealed its trustee status, it was reasonable for it to not pursue an application at that time.
Contrary to proposed ground of appeal 2(d), I also accept that the defendant’s knowledge that the plaintiff’s paid up capital was only $20 was no real indicator of the plaintiff’s asset position,[26] and hence of no material significance in terms of the decision whether to pursue an application for security for costs.
[26] Olivaylle Pty Ltd v Flottweg GMBH & Co [2007] FCA 56 at [12].
I accept that the defendant’s explanation for the delay and late timing of its application did not entirely neutralise their significance. The delay and timing remained relevant considerations. However, there is no doubt the Magistrate took these matters into account, both in determining whether to order security, and in determining whether the quantum of the security should include an amount reflecting past costs. The weight to be attached to them remained a matter for the Magistrate in the exercise of his discretion. While a different Magistrate might have attached more weight to the delay in bringing, or late timing of, the application, I do not think the plaintiff has established error in the sense required by House v The King in the Magistrate’s approach to these issues.
The defendant’s counterclaim
In considering proposed grounds of appeal 2(f) and (g), it was relevant that the defendant is pursuing a counterclaim.
This is not a case where the plaintiff’s claim is essentially a defensive one, with the defendant being, in effect, the ‘real plaintiff’. However, it was relevant to both whether security should be ordered, and if so in what amount, that the defendant is pursuing a counterclaim which has a significant factual overlap with the matters raised by the plaintiff’s claim (or at least the defendant’s defence to that claim), and is not entirely defensive in nature.[27] The counterclaim extends beyond a mere attempt to resist delivery up of the two 2017 Holden Commodores, and includes a claim for damages in respect of not only the transactions involving those cars, but also the 2016 HSV Clubsport. It is also relevant that the potential value of this counterclaim is about $25,000, which (as explained below) is approximately the same as the (net) economic value of the plaintiff’s claim.
[27] Mecrus Pty Ltd v Industrial Energy Pty Ltd (2015) 327 ALR 523 at [20], [60]-[67].
On the other hand, it is also relevant that the defendant undertook not to pursue its counterclaim if security were ordered and not provided. It is generally accepted that an undertaking of this nature significantly reduces, if not eliminates, the potential prejudice associated with requiring the plaintiff to provide security for costs on the application of a defendant with a counterclaim.[28]
[28] SAS Global Forrestdale Pty Ltd v Samsera Pty Ltd [2010] WASC 309 at [36]-[43].
The Magistrate did not mention the defendant’s counterclaim in his reasons. However, given the limited significance of this consideration in the context of the defendant’s undertaking not to pursue that claim if security were ordered and not provided, I do not consider that this discloses error on the part of the Magistrate.
Other matters
There are several other matters that were of some relevance to the discretion to order security in this case.
The first is the absence of any suggestion by, let alone evidence from, the plaintiff to the effect that it would not be able to provide security or that an order for security would otherwise stultify the proceedings. While not mentioned by the Magistrate, this is a matter that weighed in favour of an order being made.
It is relevant that there was no challenge to the bona fides or arguable merit of the plaintiff’s claim. However, I do not consider it appropriate to go further and hold that the plaintiff’s case was of such simplicity or strength that this was a factor weighing against an order for security. I am simply not in a position, on the material before me, to make any informed assessment of the strength of the plaintiff’s claim. Contrary to the plaintiff’s proposed ground of appeal 2(e), I do not think that the fact that the plaintiff had paid for the cars (before having its money returned) was a matter of any significance in considering the issue of security for costs.
Turning to the matter raised in proposed ground of appeal 2(h), I do not think the fact that the defendant had put Mr Loprete on notice of the potential for it to seek to recover costs from him personally was a matter of any great significance. That was a legitimate step for the defendant to have taken, and did not in my view constitute a reason not to order security. The plaintiff complains that the defendant did not disclose its letter to Mr Loprete to the Court, but I do not think this complaint goes anywhere. I do not think the defendant had any obligation to disclose the letter to the Court. Further, and in any event, the plaintiff was able to, and did, seek to use the letter on the application. I do not think the Magistrate’s failure to mention this issue in his reason discloses error.
Quantum of security
In proposed ground of appeal 3, the plaintiff complains that the Magistrate erred in ordering security in an excessive amount, in particular having regard to the true quantum of the dispute, the inclusion of past costs, and the failure to make reductions for the costs of the counterclaim and the interruption caused by the failed jurisdiction application.
The Magistrate held that the late discovery of the plaintiff’s trustee status justified extending the amount of security to include past costs. His Honour then accepted the defendant’s submission that the defendant’s (recoverable) costs were likely to be approximately $30,000.
In light of the authorities I have mentioned earlier in these reasons, the delay in bringing the application for security would have justified the Magistrate in declining to order security for past costs. However, it did not preclude him from doing so. And it cannot be said that he overlooked the issue or otherwise fell into error in the sense required by House v The King.

In arriving at the figure of $30,000 for security, the Magistrate used the defendant’s estimate of its recoverable costs, which was in turn based upon the costs scale in the third schedule to the Magistrates Court (Civil) Rules, and an assumption of a monetary claim of $100,000. It was understandable that the quantification was approached in this way given that the plaintiff’s statement of claim was endorsed with a value of $100,000. While it was perhaps relevant that the true (net) economic value of the claim was merely the value of the discounts on the two 2017 Holden Commodores, or about $25,000, it was also relevant that the plaintiff was seeking delivery to it of two vehicles with a combined value of more than $100,000.
While the resulting quantum of security was perhaps on the high side in the circumstances of this case, I am not persuaded that it was beyond the range of amounts that the Magistrate might reasonably have ordered.
It would have been open to the Magistrate to make some reduction in the quantum of security on account of the existence of the counterclaim, or some prediction as to the likely net effect of interlocutory costs orders.[29] However, given the broad discretion reposed in the Magistrate as to the quantum of security, I am not satisfied that the amount ordered was erroneously high, or that the Magistrate otherwise erred in the sense required by House v The King.
[29] While this would include the plaintiff’s likely entitlement to costs flowing from the defendant’s unsuccessful jurisdictional challenge (see later in these reasons), it would also likely include an allowance the other way for the costs of the security for costs application.
Conclusion in relation to security for costs
While not ultimately persuaded that the Magistrate erred in the exercise of his discretion in relation to security for costs, I accept that several of the proposed grounds of appeal (particularly grounds 2(a)/(b), 2 (c) and 3) were at least arguable. However, I am not inclined to grant permission to appeal in relation to even these grounds because I am not satisfied that the plaintiff has established the potential for substantial injustice were permission to be refused and the decision below allowed to stand.
The plaintiff did not submit, and did not adduce any evidence to suggest, that it was unable to provide security in the amount ordered by the Magistrate. Certainly the security was not provided, and I can perhaps infer that it would have involved at least some inconvenience and burden for the plaintiff. But, in my view, this is not sufficient to establish that there was the potential for substantial injustice. The order requiring the plaintiff to provide security did not affect the plaintiff’s substantive rights. It did not prevent it from having its claim determined. If the security is provided, and the plaintiff ultimately succeeds in its claim, then it will of course have the security released or returned to it. If the plaintiff fails in its claim, the security will likely be called upon to meet a costs order in favour of the defendant. But I do not think that the plaintiff having to meet its costs obligations flowing from the litigation constitutes an injustice or prejudice in the relevant sense.
For these reasons, I would decline to grant permission to appeal against the Magistrate’s orders in relation to security for costs.
Costs of the unsuccessful challenge to jurisdiction
Proposed ground of appeal 4 involves a challenge to the Magistrate’s decision to adjourn the plaintiff’s application for the costs of the defendant’s unsuccessful jurisdictional challenge to the end of the trial.
I accept that the basis for challenging jurisdiction only came to the attention of the defendant’s legal advisors relatively close to the commencement of trial. I also accept that the issue was not a straightforward one, and that it was reasonable and appropriate for the defendant to have ventilated the issue, and to seek to have the issue determined before embarking upon the trial.
However, as the application was unsuccessful and resulted in the trial being vacated, I consider that the plaintiff had a strong basis for contending for an order that the defendant pay not only its costs of the application, but also the costs thrown away by reason of the vacation of the trial. The plaintiff referred to authorities in which costs have been ordered on an indemnity, or solicitor and client, basis in the circumstances of late applications resulting in trials being vacated. While I am not persuaded that the plaintiff would necessarily be entitled to costs on other than a party and party basis in the present case, I accept there is arguable merit in such a submission.
The defendant sought to resist the plaintiff’s challenge to the Magistrate’s approach to costs by contending that his Honour’s deferral of the issue of costs to the end of trial was an approach that was within his Honour’s discretion.
It is true that judges have a very broad discretion in relation to issues of costs, particularly in relation to interlocutory matters. In many situations it will be appropriate to reserve the issue of costs to be dealt with at some later or more convenient time. Often parties will consent to, or acquiesce in, such an approach. However, I am not persuaded such an approach was appropriate here. The defendant had acknowledged the appropriateness of an order that it pay the plaintiff’s costs of the jurisdiction application. The only matters in dispute were whether those costs should extend to the plaintiff’s costs thrown away by reason of the vacation of the trial, and whether some or all of those costs should be paid on an indemnity basis. The parties made written submissions addressing these issues. Neither of the parties sought or supported a deferral of the determination of these issues. Nor was this a situation where the nature of the order to be made would be informed or influenced by the ultimate outcome at trial. The issue of the Court’s jurisdiction was determined on the application, and was not to be revisited at trial.
In the circumstances, I consider that it is at least arguable that the Magistrate erred in the exercise of his discretion in relation to costs in ordering that the issue be addressed at the end of trial. However, I am nevertheless not persuaded that this is an appropriate matter in which to grant permission to appeal. Again, I am not satisfied that the plaintiff would suffer any substantial injustice or prejudice were permission to be refused. To the extent that the making of an interlocutory costs order could ever give rise to substantial injustice, this is not such a case. The plaintiff did not even have the issue of costs determined against it. The effect of the decision was merely to defer determination of that issue until the end of the trial. Given that an interlocutory costs order would not ordinarily be enforceable until the end of a trial, it is difficult to see what prejudice the plaintiff might suffer from being refused permission to appeal.
Conclusion
For the reasons set out, I decline the plaintiff’s application for permission to appeal.